News Details

Pacific Premier Bancorp, Inc. Announces Third Quarter 2021 Financial Results and a Quarterly Cash Dividend of $0.33 Per Share

Company Release - 10/21/2021

Third Quarter 2021 Summary

  • Net income of $90.1 million, or $0.95 per diluted share
  • Total revenue increased to $199.2 million, compared with $187.7 million in the prior quarter
  • Return on average assets of 1.73%, return on average equity of 12.67%, and return on average tangible common equity of 19.89%(1)
  • Pre-provision net revenue ( PPNR) on average assets of 1.98%, annualized, and efficiency ratio of 47.5%(1)
  • Loan and deposit growth of 11.5% and 10.7%, annualized, respectively
  • Net interest margin of 3.51%, compared with 3.44% in the prior quarter
  • Cost of deposits of 0.06% in the third quarter compared with 0.08% in the prior quarter
  • Tangible book value per diluted share increased to $19.75, compared with $19.38 at prior quarter(1)

IRVINE, Calif.--(BUSINESS WIRE)-- Pacific Premier Bancorp, Inc. (NASDAQ: PPBI) (the “Company” or “Pacific Premier”), the holding company of Pacific Premier Bank (the “Bank”), reported net income of $90.1 million, or $0.95 per diluted share, for the third quarter of 2021, compared with net income of $96.3 million, or $1.01 per diluted share, for the second quarter of 2021, and net income of $66.6 million, or $0.70 per diluted share, for the third quarter of 2020.

For the quarter ended September 30, 2021, the Company’s return on average assets (“ROAA”) was 1.73%, return on average equity (“ROAE”) was 12.67%, and return on average tangible common equity (“ROATCE”) was 19.89%, compared to 1.90%, 14.02%, and 22.45%, respectively, for the second quarter of 2021 and 1.31%, 9.90%, and 16.44%, respectively, for the third quarter of 2020. Total assets were $21.01 billion at September 30, 2021, compared to $20.53 billion at June 30, 2021, and $19.84 billion at September 30, 2020. A reconciliation of the non-U.S. generally accepted accounting principles (“GAAP”) measure of ROATCE to the GAAP measure of ROAE is set forth at the end of this press release.

Steven R. Gardner, Chairman, President, and Chief Executive Officer of the Company, commented, “Our teams continue to drive positive results and deliver a high level of profitability, which we have done consistently over time and throughout varying economic cycles. While the resurgence of COVID-19 cases slowed the pace of the economic recovery during the third quarter, our dynamic business development capabilities coupled with our proprietary technology enabled us to generate high quality loan and deposit growth, increase revenue, and achieve higher positive operating leverage. These efforts further improved our core earnings power.

“The experience and expertise we have built across the organization provides consistently strong loan production and inflows of low-cost deposits. During the third quarter, we generated $1.46 billion in new loan commitments, resulting in 11.5% annualized loan growth and a favorable mix shift in earning assets. Combined with the positive impact of eliminating higher cost funding sources, these efforts led to net interest income growth of 20.2%, annualized, and net interest margin expansion during the third quarter.

“Our new business pipelines remain healthy, which we anticipate contributing to solid organic growth and strong financial performance, while also remaining well positioned to take advantage of strategic growth opportunities that create long-term value for our shareholders and further enhance our franchise,” said Mr. Gardner.

______________________________

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

FINANCIAL HIGHLIGHTS

 

 

Three Months Ended

 

 

September 30,

 

June 30,

 

September 30,

(Dollars in thousands, except per share data)

 

2021

 

2021

 

2020

Financial highlights (unaudited)

 

 

 

 

 

 

Net income

 

$

90,088

 

 

$

96,302

 

 

$

66,566

 

Diluted earnings per share

 

0.95

 

 

1.01

 

 

0.70

 

Common equity dividend per share paid

 

0.33

 

 

0.33

 

 

0.25

 

Return on average assets

 

1.73

%

 

1.90

%

 

1.31

%

Return on average equity

 

12.67

 

 

14.02

 

 

9.90

 

Return on average tangible common equity (1)

 

19.89

 

 

22.45

 

 

16.44

 

Pre-provision net revenue on average assets (1)

 

1.98

 

 

1.84

 

 

1.92

 

Net interest margin

 

3.51

 

 

3.44

 

 

3.54

 

Core net interest margin (1)

 

3.30

 

 

3.22

 

 

3.23

 

Cost of deposits

 

0.06

 

 

0.08

 

 

0.20

 

Efficiency ratio (1)

 

47.5

 

 

49.4

 

 

47.4

 

Noninterest expense (excluding merger-related expense) as a percent of average assets (1)

 

1.85

%

 

1.86

%

 

1.88

%

Total assets

 

$

21,005,211

 

 

$

20,529,486

 

 

$

19,844,240

 

Total deposits

 

17,469,999

 

 

17,015,097

 

 

16,330,807

 

Loans to deposit ratio

 

80.0

%

 

79.9

%

 

82.4

%

Non-maturity deposits as a percent of total deposits

 

93.6

 

 

92.6

 

 

89.5

 

Book value per share

 

$

30.08

 

 

$

29.72

 

 

$

28.48

 

Tangible book value per share (1)

 

19.75

 

 

19.38

 

 

18.01

 

Total risk-based capital ratio

 

14.56

%

 

15.61

%

 

16.11

%

______________________________

(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 $169.1 million in the third quarter of 2021, an increase of $8.1 million, or 5.1%, from the second quarter of 2021. The increase in net interest income reflected higher average interest-earning assets, higher loan fees, one more day of interest, and a lower cost of funds as compared to the prior quarter, partially offset by lower average investment and loan yields.

The net interest margin for the third quarter of 2021 was 3.51%, compared with 3.44% in the prior quarter. Our core net interest margin, which excludes the impact of $9.4 million loan accretion income, compared to $9.5 million in the prior quarter, certificates of deposit mark-to-market amortization, and other adjustments, increased 8 basis points to 3.30%, reflecting lower cost of funds and higher loan fees, partially offset by lower average investment and loan yields.

Net interest income for the third quarter of 2021 increased $2.5 million, or 1.5%, compared to the third quarter of 2020. The increase was attributable to lower cost of funds, a $1.52 billion increase in average investment securities, and a $377.5 million decrease in average interest-bearing liabilities, which primarily resulted from the redemptions of subordinated debentures, partially offset by lower average interest-earning assets yields and lower average loan balances.

PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED AVERAGE BALANCES AND YIELD DATA

(Unaudited)

 

 

Three Months Ended

 

 

September 30, 2021

 

June 30, 2021

 

September 30, 2020

(Dollars in thousands)

 

Average Balance

 

Interest Income/Expense

 

Average

Yield/

Cost

 

Average Balance

 

Interest Income/Expense

 

Average

Yield/

Cost

 

Average Balance

 

Interest Income/Expense

 

Average Yield/ Cost

Assets

 

 

Cash and cash equivalents

 

$

663,076

 

 

$

195

 

 

0.12

%

 

$

1,323,186

 

 

$

315

 

 

0.10

%

 

$

1,388,897

 

 

$

305

 

 

0.09

%

Investment securities

 

4,807,854

 

 

18,827

 

 

1.57

 

 

4,243,644

 

 

18,012

 

 

1.70

 

 

3,283,840

 

 

14,231

 

 

1.73

 

Loans receivable, net (1) (2)

 

13,660,242

 

 

157,025

 

 

4.56

 

 

13,216,973

 

 

152,365

 

 

4.62

 

 

14,034,868

 

 

167,455

 

 

4.75

 

Total interest-earning assets

 

$

19,131,172

 

 

$

176,047

 

 

3.65

 

 

$

18,783,803

 

 

$

170,692

 

 

3.64

 

 

$

18,707,605

 

 

$

181,991

 

 

3.87

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits

 

$

10,536,091

 

 

$

2,432

 

 

0.09

 

 

$

10,395,002

 

 

$

3,265

 

 

0.13

 

 

$

10,703,431

 

 

$

8,509

 

 

0.32

 

Borrowings

 

332,245

 

 

4,546

 

 

5.43

 

 

486,718

 

 

6,493

 

 

5.35

 

 

542,437

 

 

6,936

 

 

5.09

 

Total interest-bearing liabilities

 

$

10,868,336

 

 

$

6,978

 

 

0.25

 

 

$

10,881,720

 

 

$

9,758

 

 

0.36

 

 

$

11,245,868

 

 

$

15,445

 

 

0.55

 

Noninterest-bearing deposits

 

$

6,809,211

 

 

 

 

 

 

$

6,341,063

 

 

 

 

 

 

$

5,877,619

 

 

 

 

 

Net interest income

 

 

 

$

169,069

 

 

 

 

 

 

$

160,934

 

 

 

 

 

 

$

166,546

 

 

 

Net interest margin (3)

 

 

 

 

 

3.51

 

 

 

 

 

 

3.44

 

 

 

 

 

 

3.54

 

Cost of deposits (4)

 

 

 

 

 

0.06

 

 

 

 

 

 

0.08

 

 

 

 

 

 

0.20

 

Cost of funds (5)

 

 

 

 

 

0.16

 

 

 

 

 

 

0.23

 

 

 

 

 

 

0.36

 

Ratio of interest-earning assets to interest-bearing liabilities

 

176.03

 

 

 

 

 

 

172.62

 

 

 

 

 

 

166.35

 

____________________________________

(1) Average balance includes loans held for sale and nonperforming loans and is net of deferred loan origination fees/costs and discounts/premiums.

(2) Interest income includes net discount accretion of $9.4 million, $9.5 million, and $12.2 million, 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.

Provision for Credit Losses

For the third quarter of 2021, the Company recorded a $19.7 million provision recapture, compared to a $38.5 million provision recapture for the second quarter of 2021, and a $4.2 million provision expense for the third quarter of 2020. The provision recapture for the third quarter of 2021 was comprised of a $19.5 million provision recapture for loan losses, a $194,000 provision recapture for unfunded commitments, and $11,000 provision expense for held-to-maturity securities that were transferred from available-for-sale during the third quarter. The provision recaptures for loans and unfunded commitments during the third quarter of 2021 were reflective of improving economic forecasts employed in the Company’s current expected credit losses (“CECL”) model relative to prior periods and the favorable asset quality profile of the loan portfolio, partially offset by an increase in loans held for investment. The provision expense in the third quarter of 2020 reflected the impact of changes in economic forecasts related to the COVID-19 pandemic.

 

 

Three Months Ended

 

 

September 30,

 

June 30,

 

September 30,

(Dollars in thousands)

 

2021

 

2021

 

2020

Provision for credit losses

 

 

 

 

 

 

Provision for loan losses

 

$

(19,543)

 

 

$

(33,131)

 

 

$

4,702

 

Provision for unfunded commitments

 

(194)

 

 

(5,345)

 

 

(492)

 

Provision for held-to-maturity securities

 

11

 

 

 

 

 

Total provision for credit losses

 

$

(19,726)

 

 

$

(38,476)

 

 

$

4,210

 

Noninterest Income

Noninterest income for the third quarter of 2021 was $30.1 million, an increase of $3.4 million from the second quarter of 2021. The increase was primarily due to a $3.5 million increase in trust custodial account fees and a $987,000 increase in earnings on bank-owned life insurance ("BOLI"), partially offset by a $895,000 decrease in net gain from sales of investment securities. Also, other income included a $970,000 net gain on debt extinguishment compared to a $647,000 loss in the prior quarter, partially offset by $1.1 million lower CRA investment income and $483,000 lower Small Business Administration (“SBA”) Paycheck Protection Program (“PPP”) loan referral fees.

During the third quarter of 2021, the Bank sold $12.0 million of SBA loans for a net gain of $1.2 million, compared to the sales of $14.7 million of SBA loans for a net gain of $1.5 million in the second quarter of 2021.

Additionally, during the third quarter of 2021, the Bank sold $161.6 million of investment securities for a net gain of $4.2 million, compared to the sales of $280.2 million of investment securities for a net gain of $5.1 million in the second quarter of 2021.

Noninterest income for the third quarter of 2021 increased $3.3 million, or 12.5%, compared to the third quarter of 2020. The increase was primarily due to a $4.5 million increase in trust custodial account fees, a $3.0 million increase in net gain from sales of investment securities, a $1.9 million increase in other income, and a $996,000 increase in earnings on BOLI, partially offset by a $8.4 million decrease in net gain from sales of loans.

The net gain from sales of loans for the third quarter of 2021 decreased from the same period last year reflecting lower net gain from the sales of $12.0 million of SBA loans for a net gain of $1.2 million, compared with the sales of $1.16 billion SBA PPP loans for a net gain of $19.0 million in the third quarter of 2020, offset by sales of $96.2 million of other loans for a net loss of $9.4 million during the third quarter of 2020.

 

 

Three Months Ended

 

 

September 30,

 

June 30,

 

September 30,

(Dollars in thousands)

 

2021

 

2021

 

2020

Noninterest income

 

 

 

 

 

 

Loan servicing income

 

$

536

 

 

$

622

 

 

$

481

 

Service charges on deposit accounts

 

2,375

 

 

2,222

 

 

1,593

 

Other service fee income

 

350

 

 

352

 

 

487

 

Debit card interchange fee income

 

834

 

 

1,099

 

 

944

 

Earnings on BOLI

 

3,266

 

 

2,279

 

 

2,270

 

Net gain from sales of loans

 

1,187

 

 

1,546

 

 

9,542

 

Net gain from sales of investment securities

 

4,190

 

 

5,085

 

 

1,141

 

Trust custodial account fees

 

11,446

 

 

7,897

 

 

6,960

 

Escrow and exchange fees

 

1,867

 

 

1,672

 

 

1,142

 

Other income

 

4,049

 

 

3,955

 

 

2,198

 

Total noninterest income

 

$

30,100

 

 

$

26,729

 

 

$

26,758

 

Noninterest Expense

Noninterest expense totaled $96.0 million for the third quarter of 2021, an increase of $1.5 million compared to the second quarter of 2021, primarily driven by a $531,000 increase in data processing expense and a $518,000 increase in marketing expense.

Noninterest expense decreased by $2.5 million compared to the third quarter of 2020. The decrease was primarily due to $3.0 million of merger-related expense for the third quarter of 2020 relating to the Opus Bank acquisition. Excluding merger-related expense, noninterest expense increased $449,000 compared to the third quarter of 2020, primarily due to a $2.6 million increase in compensation and benefits, offset by a $1.3 million decrease in office expense.

 

 

Three Months Ended

 

 

September 30,

 

June 30,

 

September 30,

(Dollars in thousands)

 

2021

 

2021

 

2020

Noninterest expense

 

 

 

 

 

 

Compensation and benefits

 

$

53,592

 

 

$

53,474

 

 

$

51,021

 

Premises and occupancy

 

12,611

 

 

12,240

 

 

12,373

 

Data processing

 

6,296

 

 

5,765

 

 

6,783

 

Other real estate owned operations, net

 

 

 

 

 

(17)

 

FDIC insurance premiums

 

1,392

 

 

1,312

 

 

1,145

 

Legal and professional services

 

4,563

 

 

4,186

 

 

5,108

 

Marketing expense

 

2,008

 

 

1,490

 

 

1,718

 

Office expense

 

1,076

 

 

1,589

 

 

2,389

 

Loan expense

 

1,332

 

 

1,165

 

 

802

 

Deposit expense

 

3,974

 

 

3,985

 

 

4,728

 

Merger-related expense

 

 

 

 

 

2,988

 

Amortization of intangible assets

 

3,912

 

 

4,001

 

 

4,538

 

Other expense

 

5,284

 

 

5,289

 

 

5,003

 

Total noninterest expense

 

$

96,040

 

 

$

94,496

 

 

$

98,579

 

Income Tax

For the third quarter of 2021, our income tax expense totaled $32.8 million, resulting in an effective tax rate of 26.7%, compared with income tax expense of $35.3 million and an effective tax rate of 26.8% for the second quarter of 2021, and income tax expense of $23.9 million and an effective tax rate of 26.5% for the third quarter of 2020. Based on our actual and projected level of earnings for 2021, our estimated effective tax rate for the full year is expected to be in the range of 26 to 27%.

BALANCE SHEET HIGHLIGHTS

Loans

Loans held for investment totaled $13.98 billion at September 30, 2021, an increase of $388.3 million, or 2.9%, from June 30, 2021, and an increase of $532.0 million, or 4.0%, from September 30, 2020. The increase from June 30, 2021 was primarily driven by loan fundings, slightly higher line utilization rates, and lower prepayments and maturities. The increase in loans held for investment from September 30, 2020 was primarily driven by higher loan production, partially offset by loan amortizations, prepayments, and maturities, as well as loan sales.

During the third quarter of 2021, the Bank generated $1.46 billion of loan commitments and funded $1.10 billion of new loans, compared with $1.58 billion in loan commitments and $1.15 billion in funded loans for the second quarter of 2021, and $360.0 million in loan commitments and $280.8 million in funded loans for the third quarter of 2020. Business line commitments totaled $2.75 billion with an average utilization rate of 33.12% for the third quarter of 2021, compared with business line commitments of $2.59 billion with an average utilization rate of 31.96% for the second quarter of 2021, and business line commitments of $2.11 billion with an average utilization rate of 36.37% for the third quarter of 2020.

At September 30, 2021, the ratio of loans held for investment to total deposits was 80.0%, compared with 79.9% and 82.4% at June 30, 2021 and September 30, 2020, respectively.

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

 

Three Months Ended

 

September 30,

 

June 30,

(Dollars in thousands)

2021

 

2021

Beginning loan balance

$

13,599,312

 

 

$

13,124,703

 

New commitments

1,459,201

 

 

1,576,884

 

Unfunded new commitments

(359,000)

 

 

(423,797)

 

Net new fundings

1,100,201

 

 

1,153,087

 

Amortization/maturities/payoffs

(762,795)

 

 

(821,502)

 

Net draws on existing lines of credit

69,141

 

 

161,273

 

Loan sales

(12,258)

 

 

(14,959)

 

Charge-offs

(2,640)

 

 

(3,290)

 

Net increase

391,649

 

 

474,609

 

Ending loan balance

$

13,990,961

 

 

$

13,599,312

 

The following table presents the composition of the loan portfolio as of the dates indicated:

 

 

September 30,

 

June 30,

 

September 30,

(Dollars in thousands)

 

2021

 

2021

 

2020

Investor loans secured by real estate

 

 

 

 

 

 

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

 

$

2,823,065

 

 

$

2,810,233

 

 

$

2,707,930

 

Multifamily

 

5,705,666

 

 

5,539,464

 

 

5,142,069

 

Construction and land

 

292,815

 

 

297,728

 

 

337,872

 

SBA secured by real estate (1)

 

49,446

 

 

53,003

 

 

57,610

 

Total investor loans secured by real estate

 

8,870,992

 

 

8,700,428

 

 

8,245,481

 

Business loans secured by real estate (2)

 

 

 

 

 

 

CRE owner-occupied

 

2,242,164

 

 

2,089,300

 

 

2,119,788

 

Franchise real estate secured

 

354,481

 

 

358,120

 

 

359,329

 

SBA secured by real estate (3)

 

69,937

 

 

72,923

 

 

84,126

 

Total business loans secured by real estate

 

2,666,582

 

 

2,520,343

 

 

2,563,243

 

Commercial loans (4)

 

 

 

 

 

 

Commercial and industrial

 

1,888,870

 

 

1,795,144

 

 

1,820,995

 

Franchise non-real estate secured

 

392,950

 

 

401,315

 

 

515,980

 

SBA non-real estate secured

 

12,732

 

 

13,900

 

 

16,748

 

Total commercial loans

 

2,294,552

 

 

2,210,359

 

 

2,353,723

 

Retail loans

 

 

 

 

 

 

Single family residential (5)

 

144,309

 

 

157,228

 

 

243,359

 

Consumer

 

6,426

 

 

6,240

 

 

45,034

 

Total retail loans

 

150,735

 

 

163,468

 

 

288,393

 

Gross loans held for investment (6)

 

13,982,861

 

 

13,594,598

 

 

13,450,840

 

Allowance for credit losses for loans held for investment

 

(211,481)

 

 

(232,774)

 

 

(282,503)

 

Loans held for investment, net

 

$

13,771,380

 

 

$

13,361,824

 

 

$

13,168,337

 

 

 

 

 

 

 

 

Total unfunded loan commitments

 

$

2,504,188

 

 

$

2,345,364

 

 

$

1,868,264

 

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

 

$

8,100

 

 

$

4,714

 

 

$

1,032

 

______________________________

(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 unaccreted fair value net purchase discounts of $85.0 million, $94.4 million, and $126.3 million as of September 30, 2021, June 30, 2021, and September 30, 2020, respectively.

The total end-of-period weighted average interest rate on loans, excluding fees and discounts, at September 30, 2021 was 4.03%, compared to 4.11% at June 30, 2021, and 4.34% at September 30, 2020. The quarter-over-quarter and year-over-year decreases reflect the continued impact from prepayments of higher rate loans and lower rates on new originations.

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

 

 

September 30,

 

June 30,

 

September 30,

(Dollars in thousands)

 

2021

 

2021

 

2020

Investor loans secured by real estate

 

 

 

 

 

 

CRE non-owner-occupied

 

$

105,792

 

 

$

181,995

 

 

$

40,518

 

Multifamily

 

613,640

 

 

631,360

 

 

182,575

 

Construction and land

 

99,943

 

 

148,422

 

 

37,087

 

SBA secured by real estate (1)

 

1,410

 

 

 

 

 

Total investor loans secured by real estate

 

820,785

 

 

961,777

 

 

260,180

 

Business loans secured by real estate (2)

 

 

 

 

 

 

CRE owner-occupied

 

256,269

 

 

181,385

 

 

30,594

 

Franchise real estate secured

 

19,207

 

 

39,320

 

 

 

SBA secured by real estate (3)

 

15,065

 

 

13,445

 

 

799

 

Total business loans secured by real estate

 

290,541

 

 

234,150

 

 

31,393

 

Commercial loans (4)

 

 

 

 

 

 

Commercial and industrial

 

310,985

 

 

316,162

 

 

56,959

 

Franchise non-real estate secured

 

21,654

 

 

41,501

 

 

9,665

 

SBA non-real estate secured

 

 

 

1,000

 

 

 

Total commercial loans

 

332,639

 

 

358,663

 

 

66,624

 

Retail loans

 

 

 

 

 

 

Single family residential (5)

 

14,782

 

 

14,744

 

 

 

Consumer

 

454

 

 

7,550

 

 

1,825

 

Total retail loans

 

15,236

 

 

22,294

 

 

1,825

 

Total loan commitments

 

$

1,459,201

 

 

$

1,576,884

 

 

$

360,022

 

______________________________

(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 weighted average interest rate on new loan commitments was 3.66% in the third quarter of 2021, compared with 3.59% in the second quarter of 2021, and 3.61%, in the third quarter of 2020.

Asset Quality and Allowance for Credit Losses

At September 30, 2021, our allowance for credit losses (“ACL”) on loans held for investment was $211.5 million, a decrease of $21.3 million from June 30, 2021, and a decrease of $71.0 million from September 30, 2020. The provision for credit loss recapture during the current quarter was reflective of improving economic forecasts employed in the Company's CECL model relative to the prior quarter and the favorable asset quality profile of the loan portfolio, partially offset by an increase in loans held for investment during the quarter. The decrease from September 30, 2020 was primarily due to changes in economic forecasts employed in the Company's CECL model related to the COVID-19 pandemic.

During the third quarter of 2021, the Company incurred $1.8 million of net charge-offs, compared to $1.1 million and $4.5 million during the second quarter of 2021 and the third quarter of 2020, 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 September 30, 2021

(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

$

47,112

 

 

$

 

 

$

 

 

$

(4,645)

 

 

$

42,467

 

Multifamily

59,059

 

 

 

 

 

 

(6,895)

 

 

52,164

 

Construction and land

9,548

 

 

 

 

 

 

(1,531)

 

 

8,017

 

SBA secured by real estate (1)

4,681

 

 

(158)

 

 

 

 

(644)

 

 

3,879

 

Business loans secured by real estate (2)

 

 

 

 

 

 

 

 

 

CRE owner-occupied

35,747

 

 

 

 

14

 

 

(2,082)

 

 

33,679

 

Franchise real estate secured

11,436

 

 

 

 

 

 

(1,810)

 

 

9,626

 

SBA secured by real estate (3)

6,317

 

 

 

 

50

 

 

(1,263)

 

 

5,104

 

Commercial loans (4)

 

 

 

 

 

 

 

 

 

Commercial and industrial

39,879

 

 

(84)

 

 

729

 

 

(2,929)

 

 

37,595

 

Franchise non-real estate secured

17,313

 

 

(2,398)

 

 

80

 

 

2,523

 

 

17,518

 

SBA non-real estate secured

730

 

 

 

 

15

 

 

(113)

 

 

632

 

Retail loans

 

 

 

 

 

 

 

 

 

Single family residential (5)

670

 

 

 

 

2

 

 

(143)

 

 

529

 

Consumer loans

282

 

 

 

 

 

 

(11)

 

 

271

 

Totals

$

232,774

 

 

$

(2,640)

 

 

$

890

 

 

$

(19,543)

 

 

$

211,481

 

______________________________

(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 allowance for credit losses to loans held for investment at September 30, 2021 was 1.51%, compared to 1.71% at June 30, 2021 and 2.10% at September 30, 2020. The fair value net discount on loans acquired through total bank acquisitions was $85.0 million, or 0.60% of total loans held for investment, as of September 30, 2021, compared to $94.4 million, or 0.69% of total loans held for investment, as of June 30, 2021, and $126.3 million, or 0.93% of total loans held for investment, as of September 30, 2020.

Nonperforming assets totaled $35.1 million, or 0.17% of total assets, at September 30, 2021, compared with $34.4 million, or 0.17% of total assets, at June 30, 2021, and $27.5 million, or 0.14% of total assets, at September 30, 2020. Total loan delinquencies were $20.2 million, or 0.14% of loans held for investment, at September 30, 2021, compared to $19.3 million, or 0.14% of loans held for investment, at June 30, 2021, and $29.4 million, or 0.22% of loans held for investment, at September 30, 2020.

Classified loans totaled $124.5 million, or 0.89% of loans held for investment, at September 30, 2021, compared with $131.4 million, or 0.97% of loans held for investment, at June 30, 2021, and $136.7 million, or 1.02% of loans held for investment, at September 30, 2020. The quarter-over-quarter and year-over-year decrease was primarily driven by the net changes in risk ratings.

Interest is not typically accrued on loans 90 days or more past due or when, in the opinion of management, there is reasonable doubt as to the timely collection of principal or interest. There were no loans 90 days or more past due and still accruing interest at September 30, 2021. There were six troubled debt restructured loans belonging to two borrower relationships totaling $17.6 million at September 30, 2021, compared to $17.8 million troubled debt restructured loans comprised of the same six loans to the two borrower relationships reported at June 30, 2021, and no troubled debt restructured loans at September 30, 2020.

At September 30, 2021, there were no COVID-19 loan modifications remaining within their modification period and no loans were in-process for potential modification. At June 30, 2021, there was one residential loan for $819,000 classified as a COVID-19 modification under Section 4013 of the Coronavirus Aid, Relief and Economic Security Act (the "CARES Act") and no loans were in-process for potential modification.

 

 

September 30,

 

June 30,

 

September 30,

(Dollars in thousands)

 

2021

 

2021

 

2020

Asset quality

 

 

 

 

 

 

Nonperforming loans

 

$

35,090

 

 

$

34,387

 

 

$

27,214

 

Other real estate owned

 

 

 

 

 

334

 

Nonperforming assets

 

$

35,090

 

 

$

34,387

 

 

$

27,548

 

 

 

 

 

 

 

 

Total classified assets (1)

 

$

124,506

 

 

$

131,350

 

 

$

137,042

 

Allowance for credit losses

 

211,481

 

 

232,774

 

 

282,503

 

Allowance for credit losses as a percent of total nonperforming loans

 

603

%

 

677

%

 

1,038

%

Nonperforming loans as a percent of loans held for investment

 

0.25

 

 

0.25

 

 

0.20

 

Nonperforming assets as a percent of total assets

 

0.17

 

 

0.17

 

 

0.14

 

Classified loans to total loans held for investment

 

0.89

 

 

0.97

 

 

1.02

 

Classified assets to total assets

 

0.59

 

 

0.64

 

 

0.69

 

Net loan charge-offs for the quarter ended

 

$

1,750

 

 

$

1,094

 

 

$

4,470

 

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

 

0.01

%

 

0.01

%

 

0.03

%

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

 

1.51

 

 

1.71

 

 

2.10

 

Loans modified under the CARES Act

 

$

 

 

$

819

 

 

$

118,298

 

Loans modified under the CARES Act as a percent of loans held for investment

 

%

 

0.01

%

 

0.88

%

Delinquent loans

 

 

 

 

 

 

30 - 59 days

 

$

728

 

 

$

207

 

 

$

7,084

 

60 - 89 days

 

936

 

 

83

 

 

1,086

 

90+ days

 

18,514

 

 

19,045

 

 

21,206

 

Total delinquency

 

$

20,178

 

 

$

19,335

 

 

$

29,376

 

Delinquency as a percentage of loans held for investment

 

0.14

%

 

0.14

%

 

0.22

%

______________________________

(1) Includes substandard loans and other real estate owned.

(2) At September 30, 2021, 40% of loans held for investment include a fair value net discount of $85.0 million, or 0.60% of loans held for investment. At June 30, 2021, 45% of loans held for investment include a fair value net discount of $94.4 million, or 0.69% of loans held for investment. At September 30, 2020, 58% of loans held for investment include a fair value net discount of $126.3 million, or 0.93% of loans held for investment.

Investment Securities

During the third quarter of 2021, the Company transferred $157.6 million of municipal bonds from available-for-sale to held-to-maturity at fair value. At September 30, 2021, investment securities available-for-sale were $4.71 billion and investment securities held-to-maturity were $170.6 million. In total, investment securities were $4.88 billion at September 30, 2021, an increase of $374.0 million from June 30, 2021, and an increase of $1.25 billion from September 30, 2020. The increase in the third quarter of 2021 compared to the prior quarter was primarily the result of $735.3 million in purchases, partially offset by $161.6 million in sales and $167.3 million in principal payments, amortization, and redemptions, a $32.4 million decrease in mark-to-market fair value adjustment, and an $11,000 ACL on held-to-maturity securities. The Company’s assessment of available-for-sale investment securities indicated that no ACL was required as of September 30, 2021.

The increase in investment securities from September 30, 2020 was primarily the result of $2.72 billion in purchases, partially offset by $819.7 million in sales, $586.3 million in principal payments, amortization, and redemptions, a $59.3 million decrease in mark-to-market fair value adjustment, and an $11,000 ACL on held-to-maturity securities.

Deposits

At September 30, 2021, deposits totaled $17.47 billion, an increase of $454.9 million, or 2.7%, from June 30, 2021, and an increase of $1.14 billion, or 7.0%, from September 30, 2020. At September 30, 2021, non-maturity deposits totaled $16.36 billion, or 93.6% of total deposits, an increase of $601.5 million, or 3.8%, from June 30, 2021, and an increase of $1.74 billion, or 11.9%, from September 30, 2020. During the third quarter of 2021, deposit increases included $374.6 million in interest-bearing checking deposits, $153.9 million in money market and savings deposits, and $73.1 million in noninterest-bearing deposits, primarily driven by an increase in business deposit account balances, partially offset by a decrease of $146.6 million in retail certificates of deposits, as compared to the second quarter of 2021.

The weighted average cost of deposits for the third quarter of 2021 was 0.06%, compared to 0.08% for the second quarter of 2021, and 0.20% for the third quarter of 2020, including the favorable impact of the acquired certificates of deposit mark-to-market amortization of 0.01%, 0.02%, and 0.07%, respectively. The decrease in the weighted average cost of deposits in the third quarter of 2021 compared to the prior quarters was driven by lower pricing as well as deposit mix.

The end of period weighted average rate of deposits at September 30, 2021 was 0.04%.

 

 

September 30,

 

June 30,

 

September 30,

(Dollars in thousands)

 

2021

 

2021

 

2020

Deposit accounts

 

 

 

 

 

 

Noninterest-bearing checking

 

$

6,841,495

 

 

$

6,768,384

 

 

$

5,895,744

 

Interest-bearing:

 

 

 

 

 

 

Checking

 

3,477,902

 

 

3,103,343

 

 

2,937,910

 

Money market/savings

 

6,037,532

 

 

5,883,672

 

 

5,778,688

 

Retail certificates of deposit

 

1,113,070

 

 

1,259,698

 

 

1,542,029

 

Wholesale/brokered certificates of deposit

 

 

 

 

 

176,436

 

Total interest-bearing

 

10,628,504

 

 

10,246,713

 

 

10,435,063

 

Total deposits

 

$

17,469,999

 

 

$

17,015,097

 

 

$

16,330,807

 

 

 

 

 

 

 

 

Cost of deposits

 

0.06

%

 

0.08

%

 

0.20

%

Noninterest-bearing deposits as a percentage of total deposits

 

39.2

 

 

39.8

 

 

36.1

 

Non-maturity deposits as a percent of total deposits

 

93.6

 

 

92.6

 

 

89.5

 

Core deposits as a percent of total deposits (1)

 

97.0

 

 

96.5

 

 

96.0

 

______________________________

(1) Core deposits are all transaction accounts and non-brokered certificates of deposit less than $250,000.

Borrowings

At September 30, 2021, total borrowings amounted to $480.4 million, an increase of $3.8 million from June 30, 2021, and a decrease of $62.0 million from September 30, 2020. Total borrowings at September 30, 2021 were comprised of $150.0 of Federal Home Loan Bank of San Francisco (“FHLB”) advances and $330.4 million of subordinated debt. The increase in borrowings at September 30, 2021 as compared to June 30, 2021 was primarily due to an increase of $150.0 million in FHLB advances, offset by redemptions of $135.0 million in subordinated notes and $10.4 million in junior subordinated debt securities with an aggregate net book value totaling $146.4 million. The decrease in borrowings at September 30, 2021 as compared to September 30, 2020 was primarily due to the redemption of $160.0 million in subordinated notes and $10.4 million junior subordinated debt securities, offset by an increase of $109.0 million in FHLB advances.

Capital Ratios

At September 30, 2021, our common stockholder's equity was $2.84 billion, or 13.51% of total assets, compared with $2.81 billion, or 13.70%, at June 30, 2021, and $2.69 billion, or 13.55%, at September 30, 2020, with a book value per share of $30.08, compared with $29.72 at June 30, 2021, and $28.48 at September 30, 2020. At September 30, 2021, our ratio of tangible common equity to total assets was 9.30%, compared with 9.38% at June 30, 2021, and 9.01% at September 30, 2020, with a tangible book value per share of $19.75, compared with $19.38 at June 30, 2021, and $18.01 at September 30, 2020. Reconciliations of the non-GAAP measures of tangible common equity ratio and tangible book value per share to the GAAP measures of common stockholders' equity and book value per share, respectively, are set forth at the end of this press release.

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. At September 30, 2021, the Company had a tier 1 leverage ratio of 9.85%, common equity tier 1 capital ratio of 11.96%, tier 1 capital ratio of 11.96%, and total capital ratio of 14.56%. At September 30, 2021, the Bank had a tier 1 leverage ratio of 11.38%, common equity tier 1 capital ratio of 13.81%, tier 1 capital ratio of 13.81%, and total capital ratio of 14.61%. The decrease in total capital ratio from prior quarters was primarily driven by the redemptions of subordinated debentures during the current quarter.

The capital ratios of the Company and the Bank exceeded the “well capitalized” standards defined by the federal banking regulators of 5.00% for tier 1 leverage ratio, 6.50% for common equity tier 1 capital ratio, 8.00% for tier 1 capital ratio, and 10.00% for total capital ratio and exceeded the minimum capital ratio levels inclusive of the fully phased-in capital conservation buffer of 4.00%, 7.00%, 8.50%, and 10.50%, respectively.

 

 

September 30,

 

June 30,

 

September 30,

Capital ratios

 

2021

 

2021

 

2020

Pacific Premier Bancorp, Inc. Consolidated

 

 

 

 

 

 

Tier 1 leverage ratio

 

9.85

%

 

9.83

%

 

9.09

%

Common equity tier 1 risk-based capital ratio

 

11.96

 

 

11.89

 

 

11.79

 

Tier 1 capital ratio

 

11.96

 

 

11.89

 

 

11.79

 

Total capital ratio

 

14.56

 

 

15.61

 

 

16.11

 

Tangible common equity ratio (1)

 

9.30

 

 

9.38

 

 

9.01

 

 

 

 

 

 

 

 

Pacific Premier Bank

 

 

 

 

 

 

Tier 1 leverage ratio

 

11.38

%

 

11.31

%

 

10.33

%

Common equity tier 1 risk-based capital ratio

 

13.81

 

 

13.67

 

 

13.40

 

Tier 1 capital ratio

 

13.81

 

 

13.67

 

 

13.40

 

Total capital ratio

 

14.61

 

 

15.44

 

 

15.48

 

 

 

 

 

 

 

 

Share data

 

 

 

 

 

 

Book value per share

 

$

30.08

 

 

$

29.72

 

 

$

28.48

 

Tangible book value per share (1)

 

19.75

 

 

19.38

 

 

18.01

 

Common equity dividends declared per share

 

0.33

 

 

0.33

 

 

0.25

 

Closing stock price (2)

 

41.44

 

 

42.29

 

 

20.14

 

Shares issued and outstanding

 

94,354,211

 

 

94,656,575

 

 

94,375,521

 

Market capitalization (2)(3)

 

$

3,910,039

 

 

$

4,003,027

 

 

$

1,900,723

 

______________________________

(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, respectively, 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 October 19, 2021, the Company's Board of Directors declared a $0.33 per share dividend, payable on November 12, 2021 to stockholders of record as of November 1, 2021. In January 2021, the Company’s Board of Directors approved a new stock repurchase program, which authorized the repurchase of up to 4,725,000 shares of its common stock. During the third quarter of 2021, the Company repurchased 280,270 shares of common stock at an average price of $39.82 per share with a total market value of $11.2 million under this program.

Conference Call and Webcast

The Company will host a conference call at 9:00 a.m. PT / 12:00 p.m. ET on October 21, 2021 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 28, 2021 at (877) 344-7529, conference ID 10160294.

About Pacific Premier Bancorp, Inc.

Pacific Premier Bancorp, Inc. (Nasdaq: PPBI) is the parent company of Pacific Premier Bank, a California-based commercial bank focused on serving small, middle-market, and corporate businesses throughout the western United States in major metropolitan markets in California, Washington, Oregon, Arizona, and Nevada. Founded in 1983, Pacific Premier Bank has grown to become one of the largest banks headquartered in the western region of the United States, with $21 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 over $17 billion of assets under custody and approximately 44,000 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, 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. Given the ongoing and dynamic nature of the COVID-19 pandemic, the ultimate extent of the impacts on our business, financial position, results of operations, liquidity and prospects remain uncertain. Continued deterioration in general business and economic conditions, including further increases in unemployment rates, or turbulence in domestic or global financial markets could adversely affect our revenues and the values of our assets and liabilities, reduce the availability of funding, lead to a tightening of credit, and further increase stock price volatility, which could result in impairment to our goodwill in future periods. In addition, changes to statutes, regulations, or regulatory policies or practices as a result of, or in response to the COVID-19 pandemic, could affect us in substantial and unpredictable ways, including the potential adverse impact of loan modifications and payment deferrals implemented consistent with recent regulatory guidance. Other 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/deflation, interest rate, market, and monetary fluctuations; 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; 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; the effectiveness of our risk management framework and quantitative models; changes in the level of our nonperforming assets and charge-offs; the transition away from USD LIBOR and uncertainty regarding potential alternative reference rates, including 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, including ASU 2016-13 (Topic 326), “Measurement of Credit Losses on Financial Instruments,” commonly referenced as the CECL model, which has changed how we estimate credit losses and may further increase the required level of our allowance for credit losses in future periods; possible credit related impairments of securities held by us; possible impairment charges to goodwill; the impact of governmental efforts to restructure the U.S. financial regulatory system; 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; our ability to attract deposits and other sources of liquidity; the possibility that we may reduce or discontinue the payments of dividends on our common stock; the possibility that we may discontinue our stock repurchase program or reduce or otherwise limit the level of repurchases of our common stock we may make from time to time pursuant to such 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, which could impact business and economic conditions in the United States and abroad; public health crisis and pandemics, including the COVID-19 pandemic, and their effects on the economic and business environments in which we operate, including on our credit quality and business operations, as well as the impact on general economic and financial market conditions; cybersecurity threats and the cost of defending against them, including the costs of compliance with potential legislation to combat cybersecurity at a state, national, or global level; 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 2020 Annual Report on Form 10-K filed with the SEC and available at the SEC’s Internet site (http://www.sec.gov).

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

PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(Unaudited)

 

 

September 30,

 

June 30,

 

March 31,

 

December 31,

 

September 30,

(Dollars in thousands)

 

2021

 

2021

 

2020

 

2020

 

2020

ASSETS

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

322,320

 

 

$

631,888

 

 

$

1,554,668

 

 

$

880,766

 

 

$

1,103,077

 

Interest-bearing time deposits with financial institutions

 

2,708

 

 

2,708

 

 

2,708

 

 

2,845

 

 

2,845

 

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

 

170,576

 

 

18,933

 

 

21,931

 

 

23,732

 

 

27,980

 

Investment securities available-for-sale, at fair value

 

4,709,815

 

 

4,487,447

 

 

3,857,337

 

 

3,931,115

 

 

3,600,731

 

FHLB, FRB, and other stock, at cost

 

118,399

 

 

117,738

 

 

117,843

 

 

117,055

 

 

116,819

 

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

 

8,100

 

 

4,714

 

 

7,311

 

 

601

 

 

1,032

 

Loans held for investment

 

13,982,861

 

 

13,594,598

 

 

13,117,392

 

 

13,236,433

 

 

13,450,840

 

Allowance for credit losses

 

(211,481)

 

 

(232,774)

 

 

(266,999)

 

 

(268,018)

 

 

(282,503)

 

Loans held for investment, net

 

13,771,380

 

 

13,361,824

 

 

12,850,393

 

 

12,968,415

 

 

13,168,337

 

Accrued interest receivable

 

63,228

 

 

67,529

 

 

65,098

 

 

74,574

 

 

73,112

 

Other real estate owned

 

 

 

 

 

 

 

 

 

334

 

Premises and equipment

 

72,850

 

 

73,821

 

 

76,329

 

 

78,884

 

 

80,326

 

Deferred income taxes, net

 

83,432

 

 

81,741

 

 

104,450

 

 

89,056

 

 

108,050

 

Bank owned life insurance

 

447,135

 

 

444,645

 

 

292,932

 

 

292,564

 

 

290,875

 

Intangible assets

 

73,451

 

 

77,363

 

 

81,364

 

 

85,507

 

 

90,012

 

Goodwill

 

901,312

 

 

901,312

 

 

900,204

 

 

898,569

 

 

898,434

 

Other assets

 

260,505

 

 

257,823

 

 

240,730

 

 

292,861

 

 

282,276

 

Total assets

 

$

21,005,211

 

 

$

20,529,486

 

 

$

20,173,298

 

 

$

19,736,544

 

 

$

19,844,240

 

LIABILITIES

 

 

 

 

 

 

 

 

 

 

Deposit accounts:

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing checking

 

$

6,841,495

 

 

$

6,768,384

 

 

$

6,302,703

 

 

$

6,011,106

 

 

$

5,895,744

 

Interest-bearing:

 

 

 

 

 

 

 

 

 

 

Checking

 

3,477,902

 

 

3,103,343

 

 

3,155,071

 

 

2,913,260

 

 

2,937,910

 

Money market/savings

 

6,037,532

 

 

5,883,672

 

 

5,911,417

 

 

5,662,969

 

 

5,778,688

 

Retail certificates of deposit

 

1,113,070

 

 

1,259,698

 

 

1,353,431

 

 

1,471,512

 

 

1,542,029

 

Wholesale/brokered certificates of deposit

 

 

 

 

 

17,385

 

 

155,330

 

 

176,436

 

Total interest-bearing

 

10,628,504

 

 

10,246,713

 

 

10,437,304

 

 

10,203,071

 

 

10,435,063

 

Total deposits

 

17,469,999

 

 

17,015,097

 

 

16,740,007

 

 

16,214,177

 

 

16,330,807

 

FHLB advances and other borrowings

 

150,000

 

 

 

 

10,000

 

 

31,000

 

 

41,000

 

Subordinated debentures

 

330,408

 

 

476,622

 

 

501,611

 

 

501,511

 

 

501,443

 

Accrued expenses and other liabilities

 

216,688

 

 

224,348

 

 

218,582

 

 

243,207

 

 

282,905

 

Total liabilities

 

18,167,095

 

 

17,716,067

 

 

17,470,200

 

 

16,989,895

 

 

17,156,155

 

STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

Common stock

 

929

 

 

931

 

 

931

 

 

931

 

 

930

 

Additional paid-in capital

 

2,347,626

 

 

2,352,112

 

 

2,348,445

 

 

2,354,871

 

 

2,351,532

 

Retained earnings

 

488,385

 

 

433,852

 

 

368,911

 

 

330,555

 

 

289,960

 

Accumulated other comprehensive income (loss)

 

1,176

 

 

26,524

 

 

(15,189)

 

 

60,292

 

 

45,663

 

Total stockholders' equity

 

2,838,116

 

 

2,813,419

 

 

2,703,098

 

 

2,746,649

 

 

2,688,085

 

Total liabilities and stockholders' equity

 

$

21,005,211

 

 

$

20,529,486

 

 

$

20,173,298

 

 

$

19,736,544

 

 

$

19,844,240

 

PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

 

Three Months Ended

 

Nine Months Ended

 

 

September 30,

 

June 30,

 

September 30,

 

September 30,

 

September 30,

(Dollars in thousands, except per share data)

 

2021

 

2021

 

2020

 

2021

 

2020

INTEREST INCOME

 

 

 

 

 

 

 

 

 

 

Loans

 

$

157,025

 

 

$

152,365

 

 

$

167,455

 

 

$

464,615

 

 

$

414,059

 

Investment securities and other interest-earning assets

 

19,022

 

 

18,327

 

 

14,536

 

 

55,118

 

 

35,843

 

Total interest income

 

176,047

 

 

170,692

 

 

181,991

 

 

519,733

 

 

449,902

 

INTEREST EXPENSE

 

 

 

 

 

 

 

 

 

 

Deposits

 

2,432

 

 

3,265

 

 

8,509

 

 

10,123

 

 

28,651

 

FHLB advances and other borrowings

 

1

 

 

 

 

113

 

 

66

 

 

1,411

 

Subordinated debentures

 

4,545

 

 

6,493

 

 

6,823

 

 

17,889

 

 

13,827

 

Total interest expense

 

6,978

 

 

9,758

 

 

15,445

 

 

28,078

 

 

43,889

 

Net interest income before provision for credit losses

 

169,069

 

 

160,934

 

 

166,546

 

 

491,655

 

 

406,013

 

Provision for credit losses

 

(19,726)

 

 

(38,476)

 

 

4,210

 

 

(56,228)

 

 

190,299

 

Net interest income after provision for credit losses

 

188,795

 

 

199,410

 

 

162,336

 

 

547,883

 

 

215,714

 

NONINTEREST INCOME

 

 

 

 

 

 

 

 

 

 

Loan servicing income

 

536

 

 

622

 

 

481

 

 

1,616

 

 

1,395

 

Service charges on deposit accounts

 

2,375

 

 

2,222

 

 

1,593

 

 

6,629

 

 

4,707

 

Other service fee income

 

350

 

 

352

 

 

487

 

 

1,175

 

 

1,095

 

Debit card interchange fee income

 

834

 

 

1,099

 

 

944

 

 

2,720

 

 

1,749

 

Earnings on BOLI

 

3,266

 

 

2,279

 

 

2,270

 

 

7,778

 

 

4,920

 

Net gain from sales of loans

 

1,187

 

 

1,546

 

 

9,542

 

 

3,094

 

 

8,281

 

Net gain from sales of investment securities

 

4,190

 

 

5,085

 

 

1,141

 

 

13,321

 

 

8,880

 

Trust custodial account fees

 

11,446

 

 

7,897

 

 

6,960

 

 

26,565

 

 

9,357

 

Escrow and exchange fees

 

1,867

 

 

1,672

 

 

1,142

 

 

5,065

 

 

1,407

 

Other income

 

4,049

 

 

3,955

 

 

2,198

 

 

12,606

 

 

6,340

 

Total noninterest income

 

30,100

 

 

26,729

 

 

26,758

 

 

80,569

 

 

48,131

 

NONINTEREST EXPENSE

 

 

 

 

 

 

 

 

 

 

Compensation and benefits

 

53,592

 

 

53,474

 

 

51,021

 

 

159,614

 

 

128,408

 

Premises and occupancy

 

12,611

 

 

12,240

 

 

12,373

 

 

36,831

 

 

30,028

 

Data processing

 

6,296

 

 

5,765

 

 

6,783

 

 

17,889

 

 

14,501

 

Other real estate owned operations, net

 

 

 

 

 

(17)

 

 

 

 

6

 

FDIC insurance premiums

 

1,392

 

 

1,312

 

 

1,145

 

 

3,885

 

 

2,358

 

Legal and professional services

 

4,563

 

 

4,186

 

 

5,108

 

 

12,684

 

 

11,328

 

Marketing expense

 

2,008

 

 

1,490

 

 

1,718

 

 

5,096

 

 

4,449

 

Office expense

 

1,076

 

 

1,589

 

 

2,389

 

 

4,494

 

 

5,025

 

Loan expense

 

1,332

 

 

1,165

 

 

802

 

 

3,612

 

 

2,447

 

Deposit expense

 

3,974

 

 

3,985

 

 

4,728

 

 

11,818

 

 

14,674

 

Merger-related expense

 

 

 

 

 

2,988

 

 

5

 

 

44,058

 

Amortization of intangible assets

 

3,912

 

 

4,001

 

 

4,538

 

 

12,056

 

 

12,567

 

Other expense

 

5,284

 

 

5,289

 

 

5,003

 

 

15,041

 

 

11,331

 

Total noninterest expense

 

96,040

 

 

94,496

 

 

98,579

 

 

283,025

 

 

281,180

 

Net income (loss) before income taxes

 

122,855

 

 

131,643

 

 

90,515

 

 

345,427

 

 

(17,335)

 

Income tax expense (benefit)

 

32,767

 

 

35,341

 

 

23,949

 

 

90,369

 

 

(10,550)

 

Net income (loss)

 

$

90,088

 

 

$

96,302

 

 

$

66,566

 

 

$

255,058

 

 

$

(6,785)

 

EARNINGS (LOSS) PER SHARE

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.95

 

 

$

1.02

 

 

$

0.71

 

 

$

2.70

 

 

$

(0.10)

 

Diluted

 

$

0.95

 

 

$

1.01

 

 

$

0.70

 

 

$

2.68

 

 

$

(0.10)

 

WEIGHTED AVERAGE SHARES OUTSTANDING

 

 

 

 

 

 

 

 

 

 

Basic

 

93,549,639

 

 

93,635,392

 

 

93,529,967

 

 

93,571,468

 

 

74,391,688

 

Diluted

 

94,060,724

 

 

94,218,028

 

 

93,719,167

 

 

94,090,407

 

 

74,391,688

 

SELECTED FINANCIAL DATA

PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED AVERAGE BALANCES AND YIELD DATA

(Unaudited)

 

 

 

 

 

Three Months Ended

 

 

September 30, 2021

 

June 30, 2021

 

September 30, 2020

(Dollars in thousands)

 

Average Balance

 

Interest Income/Expense

 

Average Yield/Cost

 

Average Balance

 

Interest Income/Expense

 

Average Yield/Cost

 

Average Balance

 

Interest Income/Expense

 

Average Yield/Cost

Assets

 

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

663,076

 

 

$

195

 

 

0.12

%

 

$

1,323,186

 

 

$

315

 

 

0.10

%

 

$

1,388,897

 

 

$

305

 

 

0.09

%

Investment securities

 

4,807,854

 

 

18,827

 

 

1.57

 

 

4,243,644

 

 

18,012

 

 

1.70

 

 

3,283,840

 

 

14,231

 

 

1.73

 

Loans receivable, net (1)(2)

 

13,660,242

 

 

157,025

 

 

4.56

 

 

13,216,973

 

 

152,365

 

 

4.62

 

 

14,034,868

 

 

167,455

 

 

4.75

 

Total interest-earning assets

 

19,131,172

 

 

176,047

 

 

3.65

 

 

18,783,803

 

 

170,692

 

 

3.64

 

 

18,707,605

 

 

181,991

 

 

3.87

 

Noninterest-earning assets

 

1,673,731

 

 

 

 

 

 

1,506,612

 

 

 

 

 

 

1,659,156

 

 

 

 

 

Total assets

 

$

20,804,903

 

 

 

 

 

 

$

20,290,415

 

 

 

 

 

 

$

20,366,761

 

 

 

 

 

Liabilities and equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest checking

 

$

3,383,219

 

 

$

290

 

 

0.03

%

 

$

3,155,935

 

 

$

336

 

 

0.04

%

 

$

3,001,738

 

 

$

1,191

 

 

0.16

%

Money market

 

5,554,881

 

 

1,309

 

 

0.09

 

 

5,558,790

 

 

2,002

 

 

0.14

 

 

5,490,541

 

 

4,855

 

 

0.35

 

Savings

 

401,804

 

 

58

 

 

0.06

 

 

384,376

 

 

84

 

 

0.09

 

 

357,768

 

 

109

 

 

0.12

 

Retail certificates of deposit

 

1,196,187

 

 

775

 

 

0.26

 

 

1,294,544

 

 

839

 

 

0.26

 

 

1,587,712

 

 

1,857

 

 

0.47

 

Wholesale/brokered certificates of deposit

 

 

 

 

 

 

 

1,357

 

 

4

 

 

1.18

 

 

265,672

 

 

497

 

 

0.74

 

Total interest-bearing deposits

 

10,536,091

 

 

2,432

 

 

0.09

 

 

10,395,002

 

 

3,265

 

 

0.13

 

 

10,703,431

 

 

8,509

 

 

0.32

 

FHLB advances and other borrowings

 

1,670

 

 

1

 

 

0.24

 

 

6,303

 

 

 

 

 

 

41,041

 

 

113

 

 

1.10

 

Subordinated debentures

 

330,575

 

 

4,545

 

 

5.50

 

 

480,415

 

 

6,493

 

 

5.41

 

 

501,396

 

 

6,823

 

 

5.44

 

Total borrowings

 

332,245

 

 

4,546

 

 

5.43

 

 

486,718

 

 

6,493

 

 

5.35

 

 

542,437

 

 

6,936

 

 

5.09

 

Total interest-bearing liabilities

 

10,868,336

 

 

6,978

 

 

0.25

 

 

10,881,720

 

 

9,758

 

 

0.36

 

 

11,245,868

 

 

15,445

 

 

0.55

 

Noninterest-bearing deposits

 

6,809,211

 

 

 

 

 

 

6,341,063

 

 

 

 

 

 

5,877,619

 

 

 

 

 

Other liabilities

 

282,556

 

 

 

 

 

 

320,324

 

 

 

 

 

 

553,407

 

 

 

 

 

Total liabilities

 

17,960,103

 

 

 

 

 

 

17,543,107

 

 

 

 

 

 

17,676,894

 

 

 

 

 

Stockholders' equity

 

2,844,800

 

 

 

 

 

 

2,747,308

 

 

 

 

 

 

2,689,867

 

 

 

 

 

Total liabilities and equity

 

$

20,804,903

 

 

 

 

 

 

$

20,290,415

 

 

 

 

 

 

$

20,366,761

 

 

 

 

 

Net interest income

 

 

 

$

169,069

 

 

 

 

 

 

$

160,934

 

 

 

 

 

 

$

166,546

 

 

 

Net interest margin (3)

 

 

 

 

 

3.51

%

 

 

 

 

 

3.44

%

 

 

 

 

 

3.54

%

Cost of deposits (4)

 

 

 

 

 

0.06

 

 

 

 

 

 

0.08

 

 

 

 

 

 

0.20

 

Cost of funds (5)

 

 

 

 

 

0.16

 

 

 

 

 

 

0.23

 

 

 

 

 

 

0.36

 

Ratio of interest-earning assets to interest-bearing liabilities

 

176.03

 

 

 

 

 

 

172.62

 

 

 

 

 

 

166.35

 

______________________________

(1) Average balance includes loans held for sale and nonperforming loans and is net of deferred loan origination fees/costs and discounts/premiums.

(2) Interest income includes net discount accretion of $9.4 million, $9.5 million, and $12.2 million, 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.

PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES

LOAN PORTFOLIO COMPOSITION

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

September

 

June 30,

 

March 31,

 

December 31,

 

September 30,

(Dollars in thousands)

 

2021

 

2021

 

2021

 

2020

 

2020

Investor loans secured by real estate

 

 

 

 

 

 

 

 

 

 

CRE non-owner-occupied

 

$

2,823,065

 

 

$

2,810,233

 

 

$

2,729,785

 

 

$

2,675,085

 

 

$

2,707,930

 

Multifamily

 

5,705,666

 

 

5,539,464

 

 

5,309,592

 

 

5,171,356

 

 

5,142,069

 

Construction and land

 

292,815

 

 

297,728

 

 

316,458

 

 

321,993

 

 

337,872

 

SBA secured by real estate (1)

 

49,446

 

 

53,003

 

 

56,381

 

 

57,331

 

 

57,610

 

Total investor loans secured by real estate

 

8,870,992

 

 

8,700,428

 

 

8,412,216

 

 

8,225,765

 

 

8,245,481

 

Business loans secured by real estate (2)

 

 

 

 

 

 

 

 

 

 

CRE owner-occupied

 

2,242,164

 

 

2,089,300

 

 

2,029,984

 

 

2,114,050

 

 

2,119,788

 

Franchise real estate secured

 

354,481

 

 

358,120

 

 

340,805

 

 

347,932

 

 

359,329

 

SBA secured by real estate (3)

 

69,937

 

 

72,923

 

 

73,967

 

 

79,595

 

 

84,126

 

Total business loans secured by real estate

 

2,666,582

 

 

2,520,343

 

 

2,444,756

 

 

2,541,577

 

 

2,563,243

 

Commercial loans (4)

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

1,888,870

 

 

1,795,144

 

 

1,656,098

 

 

1,768,834

 

 

1,820,995

 

Franchise non-real estate secured

 

392,950

 

 

401,315

 

 

399,041

 

 

444,797

 

 

515,980

 

SBA non-real estate secured

 

12,732

 

 

13,900

 

 

14,908

 

 

15,957

 

 

16,748

 

Total commercial loans

 

2,294,552

 

 

2,210,359

 

 

2,070,047

 

 

2,229,588

 

 

2,353,723

 

Retail loans

 

 

 

 

 

 

 

 

 

 

Single family residential (5)

 

144,309

 

 

157,228

 

 

184,049

 

 

232,574

 

 

243,359

 

Consumer

 

6,426

 

 

6,240

 

 

6,324

 

 

6,929

 

 

45,034

 

Total retail loans

 

150,735

 

 

163,468

 

 

190,373

 

 

239,503

 

 

288,393

 

Gross loans held for investment (6)

 

13,982,861

 

 

13,594,598

 

 

13,117,392

 

 

13,236,433

 

 

13,450,840

 

Allowance for credit losses for loans held for investment

 

(211,481)

 

 

(232,774)

 

 

(266,999)

 

 

(268,018)

 

 

(282,503)

 

Loans held for investment, net

 

$

13,771,380

 

 

$

13,361,824

 

 

$

12,850,393

 

 

$

12,968,415

 

 

$

13,168,337

 

 

 

 

 

 

 

 

 

 

 

 

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

 

$

8,100

 

 

$

4,714

 

 

$

7,311

 

 

$

601

 

 

$

1,032

 

______________________________

(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 unaccreted fair value net purchase discounts of $85.0 million, $94.4 million, $103.9 million, $113.8 million, and $126.3 million as of September 30, 2021, June 30, 2021, March 31, 2021, December 31,2020, and September 30, 2020, respectively.

PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES

ASSET QUALITY INFORMATION

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30,

 

June 30,

 

March 31,

 

December 31,

 

September 30,

(Dollars in thousands)

 

2021

 

2021

 

2021

 

2020

 

2020

Asset quality

 

 

 

 

 

 

 

 

 

 

Nonperforming loans

 

$

35,090

 

 

$

34,387

 

 

$

38,909

 

 

$

29,209

 

 

$

27,214

 

Other real estate owned

 

 

 

 

 

 

 

 

 

334

 

Nonperforming assets

 

$

35,090

 

 

$

34,387

 

 

$

38,909

 

 

$

29,209

 

 

$

27,548

 

 

 

 

 

 

 

 

 

 

 

 

Total classified assets (1)

 

$

124,506

 

 

$

131,350

 

 

$

134,667

 

 

$

128,332

 

 

$

137,042

 

Allowance for credit losses

 

211,481

 

 

232,774

 

 

266,999

 

 

268,018

 

 

282,503

 

Allowance for credit losses as a percent of total nonperforming loans

 

603

%

 

677

%

 

686

%

 

918

%

 

1,038

%

Nonperforming loans as a percent of loans held for investment

 

0.25

 

 

0.25

 

 

0.30

 

 

0.22

 

 

0.20

 

Nonperforming assets as a percent of total assets

 

0.17

 

 

0.17

 

 

0.19

 

 

0.15

 

 

0.14

 

Classified loans to total loans held for investment

 

0.89

 

 

0.97

 

 

1.03

 

 

0.97

 

 

1.02

 

Classified assets to total assets

 

0.59

 

 

0.64

 

 

0.67

 

 

0.65

 

 

0.69

 

Net loan charge-offs for the quarter ended

 

$

1,750

 

 

$

1,094

 

 

$

1,334

 

 

$

6,406

 

 

$

4,470

 

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

 

0.01

%

 

0.01

%

 

0.01

%

 

0.05

%

 

0.03

%

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

 

1.51

 

 

1.71

 

 

2.04

 

 

2.02

 

 

2.10

 

Loans modified under the CARES Act

 

$

 

 

$

819

 

 

$

 

 

$

79,465

 

 

$

118,298

 

Loans modified under the CARES Act as a percent of loans held for investment

 

%

 

0.01

%

 

%

 

0.60

%

 

0.88

%

Delinquent loans

 

 

 

 

 

 

 

 

 

 

30 - 59 days

 

$

728

 

 

$

207

 

 

$

13,116

 

 

$

1,269

 

 

$

7,084

 

60 - 89 days

 

936

 

 

83

 

 

61

 

 

57

 

 

1,086

 

90+ days

 

18,514

 

 

19,045

 

 

9,410

 

 

11,996

 

 

21,206

 

Total delinquency

 

$

20,178

 

 

$

19,335

 

 

$

22,587

 

 

$

13,322

 

 

$

29,376

 

Delinquency as a percent of loans held for investment

 

0.14

%

 

0.14

%

 

0.17

%

 

0.10

%

 

0.22

%

______________________________

(1) Includes substandard loans and other real estate owned.

(2) At September 30, 2021, 40% of loans held for investment include a fair value net discount of $85.0 million, or 0.60% of loans held for investment. At June 30, 2021, 45% of loans held for investment include a fair value net discount of $94.4 million, or 0.69% of loans held for investment. At September 30, 2020, 58% of loans held for investment include a fair value net discount of $126.3 million, or 0.93% 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

September 30, 2021

 

 

 

 

 

 

 

 

 

 

 

 

Investor loans secured by real estate

 

 

 

 

 

 

 

 

 

 

 

 

CRE non-owner-occupied

 

$

12,179

 

 

$

571

 

 

$

 

 

$

 

 

$

12,179

 

 

$

4,563

 

SBA secured by real estate (2)

 

976

 

 

 

 

 

 

 

 

976

 

 

976

 

Total investor loans secured by real estate

 

13,155

 

 

571

 

 

 

 

 

 

13,155

 

 

5,539

 

Business loans secured by real estate (3)

 

 

 

 

 

 

 

 

 

 

 

 

CRE owner-occupied

 

4,978

 

 

 

 

 

 

 

 

4,978

 

 

4,978

 

SBA secured by real estate (4)

 

604

 

 

 

 

 

 

 

 

604

 

 

604

 

Total business loans secured by real estate

 

5,582

 

 

 

 

 

 

 

 

5,582

 

 

5,582

 

Commercial loans (5)

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

1,816

 

 

 

 

443

 

 

 

 

2,259

 

 

2,259

 

Franchise non-real estate secured

 

1,086

 

 

 

 

12,333

 

 

 

 

13,419

 

 

13,419

 

SBA not secured by real estate

 

664

 

 

 

 

 

 

 

 

664

 

 

664

 

Total commercial loans

 

3,566

 

 

 

 

12,776

 

 

 

 

16,342

 

 

16,342

 

Retail loans

 

 

 

 

 

 

 

 

 

 

 

 

Single family residential (6)

 

11

 

 

 

 

 

 

 

 

11

 

 

11

 

Total retail loans

 

11

 

 

 

 

 

 

 

 

11

 

 

11

 

Totals nonaccrual loans

 

$

22,314

 

 

$

571

 

 

$

12,776

 

 

$

 

 

$

35,090

 

 

$

27,474

 

______________________________

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

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

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

PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES

PAST DUE STATUS

(Unaudited)

 

 

 

 

 

Days Past Due

 

 

(Dollars in thousands)

 

Current

 

30-59

 

60-89

 

90+

 

Total

September 30, 2021

 

 

 

 

 

 

 

 

 

 

Investor loans secured by real estate

 

 

 

 

 

 

 

 

 

 

CRE non-owner-occupied

 

$

2,812,797

 

 

$

 

 

$

 

 

$

10,268

 

 

$

2,823,065

 

Multifamily

 

5,705,666

 

 

 

 

 

 

 

 

5,705,666

 

Construction and land

 

292,815

 

 

 

 

 

 

 

 

292,815

 

SBA secured by real estate (1)

 

48,470

 

 

 

 

629

 

 

347

 

 

49,446

 

Total investor loans secured by real estate

 

8,859,748

 

 

 

 

629

 

 

10,615

 

 

8,870,992

 

Business loans secured by real estate (2)

 

 

 

 

 

 

 

 

 

 

CRE owner-occupied

 

2,237,186

 

 

 

 

 

 

4,978

 

 

2,242,164

 

Franchise real estate secured

 

354,481

 

 

 

 

 

 

 

 

354,481

 

SBA secured by real estate (3)

 

69,496

 

 

 

 

 

 

441

 

 

69,937

 

Total business loans secured by real estate

 

2,661,163

 

 

 

 

 

 

5,419

 

 

2,666,582

 

Commercial loans (4)

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

1,886,386

 

 

654

 

 

14

 

 

1,816

 

 

1,888,870

 

Franchise non-real estate secured

 

392,950

 

 

 

 

 

 

 

 

392,950

 

SBA not secured by real estate

 

11,701

 

 

74

 

 

293

 

 

664

 

 

12,732

 

Total commercial loans

 

2,291,037

 

 

728

 

 

307

 

 

2,480

 

 

2,294,552

 

Retail loans

 

 

 

 

 

 

 

 

 

 

Single family residential (5)

 

144,309

 

 

 

 

 

 

 

 

144,309

 

Consumer loans

 

6,426

 

 

 

 

 

 

 

 

6,426

 

Total retail loans

 

150,735

 

 

 

 

 

 

 

 

150,735

 

Total loans

 

$

13,962,683

 

 

$

728

 

 

$

936

 

 

$

18,514

 

 

$

13,982,861

 

______________________________

(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.

PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES

CREDIT RISK GRADES

(Unaudited)

 

(Dollars in thousands)

 

Pass

 

Special

Mention

 

Substandard

 

Total Gross

Loans

September 30, 2021

 

 

 

 

 

 

 

 

Investor loans secured by real estate

 

 

 

 

 

 

 

 

CRE non-owner-occupied

 

$

2,773,609

 

 

$

18,206

 

 

$

31,250

 

 

$

2,823,065

 

Multifamily

 

5,703,795

 

 

 

 

1,871

 

 

5,705,666

 

Construction and land

 

292,815

 

 

 

 

 

 

292,815

 

SBA secured by real estate (1)

 

39,502

 

 

1,510

 

 

8,434

 

 

49,446

 

Total investor loans secured by real estate

 

8,809,721