News Details

Pacific Premier Bancorp, Inc. Announces First Quarter 2022 Financial Results and a Quarterly Cash Dividend of $0.33 Per Share

Company Release - 4/26/2022

First Quarter 2022 Summary

  • Net income of $66.9 million, or $0.70 per diluted share
  • Return on average assets of 1.28%, return on average equity of 9.34%, and return on average tangible common equity of 14.66%(1)
  • Diversified loan growth of $438.6 million, or 12.3% annualized
  • Deposit growth of $573.6 million, or 13.4% annualized
  • Net interest margin of 3.41%, and core net interest margin of 3.33%(1)
  • Cost of deposits remained unchanged at 0.04%
  • Noninterest-bearing deposits increased to 40.2% of total deposits
  • Nonperforming assets to total assets of 0.26%, and classified assets to total assets of 0.57%

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 $66.9 million, or $0.70 per diluted share, for the first quarter of 2022, compared with net income of $84.8 million, or $0.89 per diluted share, for the fourth quarter of 2021, and net income of $68.7 million, or $0.72 per diluted share, for the first quarter of 2021.

For the quarter ended March 31, 2022, the Company’s return on average assets (“ROAA”) was 1.28%, return on average equity (“ROAE”) was 9.34%, and return on average tangible common equity (“ROATCE”)(1) was 14.66%, compared to 1.63%, 11.90%, and 18.66%, respectively, for the fourth quarter of 2021, and 1.37%, 9.99%, and 16.21%, respectively, for the first quarter of 2021. Total assets increased to $21.62 billion at March 31, 2022, compared to $21.09 billion at December 31, 2021, and $20.17 billion at March 31, 2021.

Steven R. Gardner, Chairman, President, and Chief Executive Officer of the Company, commented, “We delivered a high level of performance in the first quarter driven by strong loan and deposit production. The first quarter's results reflect the success of our technology-driven growth strategy that enhances our new business development efforts, provides a superior banking experience for clients, and optimizes efficiencies and collaboration throughout the organization.

“We generated $1.46 billion in new loan commitments during the first quarter with well-balanced contributions coming from all of our major areas of lending. We also saw positive trends with commercial lines of credit utilization rates increasing in the first quarter. The combination of our strong loan production, increases in line utilization, and slower prepayments resulted in 12.3% annualized loan growth, which we funded with solid inflows of low-cost deposits, which grew 13.4% annualized.

“As always, we continue to prioritize risk management and maintain appropriate levels of capital, liquidity, and reserves in order to effectively manage through the challenges that may arise in connection with higher interest rates, inflationary pressures, and geopolitical uncertainty. During the quarter, we took a number of actions to position the balance sheet for higher interest rates, including reducing the size and duration of the available-for-sale securities portfolio, increasing our liquidity position, and enhancing our asset sensitivity. The strength of the organization we have built and our proactive approach to risk management has enabled us to capitalize on opportunities that arise in stressed environments. We are well positioned to continue to execute our proven business model by effectively managing risk, while growing the franchise both organically and through accretive acquisitions.”

____________________

(1)

Reconciliations of the non–U.S. generally accepted accounting principles (“GAAP”) measures are set forth at the end of this press release.

FINANCIAL HIGHLIGHTS

 

Three Months Ended

 

(Dollars in thousands, except per share data)

March 31,

2022

December 31,

2021

March 31,

2021

Financial highlights (unaudited)

 

 

 

Net income

$

66,904

 

$

84,831

 

$

68,668

 

Diluted earnings per share

 

0.70

 

 

0.89

 

 

0.72

 

Common equity dividend per share paid

 

0.33

 

 

0.33

 

 

0.30

 

Return on average assets

 

1.28

%

 

1.63

%

 

1.37

%

Return on average equity

 

9.34

 

 

11.90

 

 

9.99

 

Return on average tangible common equity (1)

 

14.66

 

 

18.66

 

 

16.21

 

Pre-provision net revenue on average assets (1)

 

1.72

 

 

1.93

 

 

1.86

 

Net interest margin

 

3.41

 

 

3.53

 

 

3.55

 

Core net interest margin (1)

 

3.33

 

 

3.38

 

 

3.30

 

Cost of deposits

 

0.04

 

 

0.04

 

 

0.11

 

Efficiency ratio (1)

 

50.7

 

 

48.0

 

 

48.6

 

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

 

1.86

%

 

1.86

%

 

1.85

%

Total assets

$

21,622,296

 

$

21,094,429

 

$

20,173,298

 

Total deposits

 

17,689,223

 

 

17,115,589

 

 

16,740,007

 

Loan-to-deposit ratio

 

83.4

%

 

83.6

%

 

78.4

%

Non-maturity deposits as a percent of total deposits

 

94.2

 

 

93.8

 

 

91.8

 

Book value per share

$

29.31

 

$

30.58

 

$

28.56

 

Tangible book value per share (1)

 

19.12

 

 

20.29

 

 

18.19

 

Total capital ratio

 

14.37

%

 

14.62

%

 

16.26

%

 

(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 $161.8 million in the first quarter of 2022, a decrease of $8.9 million, or 5.2%, from the fourth quarter of 2021. The decrease in net interest income was primarily attributable to lower loan related-fees and lower accretion income as a result of slowing prepayment activity, two fewer days of interest, and lower average investment and loan yields, partially offset by an increase in average earning assets and a favorable remix towards higher yielding loans.

The net interest margin for the first quarter of 2022 was 3.41%, compared with 3.53% in the prior quarter. The core net interest margin(1), which excludes the impact of loan accretion income and other adjustments, decreased 5 basis points to 3.33%, compared to 3.38% in the prior quarter, reflecting lower loan prepayment fees and lower average investment and loan yields, partially offset by the favorable shift in average earning-asset mix.

Net interest income for the first quarter of 2022 increased $187,000, or 0.1%, compared to the first quarter of 2021. The increase was attributable to higher average loan and investment balances, lower cost of funds, primarily due to an improved deposit mix from an $894.6 million increase in average noninterest-bearing checking, and redemptions of higher-cost subordinated debentures, partially offset by lower average interest-earning asset yields.

____________________

(1)

Reconciliations of the non–GAAP measures are set forth at the end of this press release.

PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED AVERAGE BALANCES AND YIELD DATA

(Unaudited)

Three Months Ended

March 31, 2022

December 31, 2021

March 31, 2021

 

(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

$

322,236

$

90

0.11

%

$

334,371

$

66

0.08

%

$

1,309,366

$

301

0.09

%

Investment securities

 

4,546,408

 

17,852

1.57

 

 

4,833,251

 

19,522

1.62

 

 

4,087,451

 

17,468

1.71

 

Loans receivable, net (1)(2)

 

14,371,588

 

150,604

4.25

 

 

14,005,836

 

157,418

4.46

 

 

13,093,609

 

155,225

4.81

 

Total interest-earning assets

 

$

 

19,240,232

 

$

 

168,546

 

3.55

 

 

 

$

 

19,173,458

 

$

 

177,006

 

3.66

 

 

 

$

 

18,490,426

 

$

 

172,994

 

3.79

 

 

Liabilities

 

Interest-bearing deposits

$

10,351,434

$

1,673

0.07

$

10,471,426

$

1,694

0.06

$

10,420,199

$

4,426

0.17

Borrowings

 

555,879

 

5,034

3.63

 

 

400,014

 

4,593

4.59

 

 

523,565

 

6,916

5.36

 

Total interest-bearing liabilities

 

$

 

10,907,313

 

$

 

6,707

 

0.25

 

 

 

$

 

10,871,440

 

$

 

6,287

 

0.23

 

 

 

$

 

10,943,764

 

$

 

11,342

 

0.42

 

 

Noninterest-bearing deposits

 

$

 

6,928,872

 

 

 

$

 

6,911,702

 

 

 

$

 

6,034,319

 

 

Net interest income

 

$

161,839

 

 

$

170,719

 

 

$

161,652

 

Net interest margin (3)

 

 

3.41

 

 

 

3.53

 

 

 

3.55

 

Cost of deposits (4)

 

 

0.04

 

 

 

0.04

 

 

 

0.11

 

Cost of funds (5)

 

 

0.15

 

 

 

0.14

 

 

 

0.27

 

Ratio of interest-earning assets to interest-bearing liabilities

176.40

 

 

176.37

 

 

168.96

 

 

(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 $5.9 million, $7.9 million, and $9.9 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 first quarter of 2022, the Company recorded a $448,000 provision expense, compared to a $14.6 million provision recapture for the fourth quarter of 2021, and a $2.0 million provision expense for the first quarter of 2021. The provision expense for the first quarter of 2022 was reflective of higher loans held for investment as well as the impact of growing uncertainties in the macroeconomic environment.

 

Three Months Ended

 

(Dollars in thousands)

March 31,

2022

December 31,

2021

March 31,

2021

Provision for credit losses

 

 

 

Provision for loan losses

$

211

$

(14,710

)

$

315

Provision for unfunded commitments

 

218

 

 

51

 

 

1,659

 

Provision for held-to-maturity securities

 

19

 

 

11

 

 

 

Total provision for credit losses

$

448

 

$

(14,648

)

$

1,974

 

 

Noninterest Income

Noninterest income for the first quarter of 2022 was $25.9 million, a decrease of $1.4 million from the fourth quarter of 2021. The decrease was primarily due to a $1.5 million decrease in net gain from sales of investment securities and a $560,000 decrease in escrow and exchange fees due to lower transaction volume, partially offset by an $814,000 increase in other income, which included $530,000 higher CRA investment income.

During the first quarter of 2022, the Bank sold $17.8 million of Small Business Administration (“SBA”) loans for a net gain of $1.5 million, compared to the sales of $13.3 million of SBA loans for a net gain of $1.3 million in the fourth quarter of 2021.

Additionally, during the first quarter of 2022, the Bank sold $658.5 million of investment securities for a net gain of $2.1 million, compared to the sales of $267.1 million of investment securities for a net gain of $3.6 million in the fourth quarter of 2021.

Noninterest income for the first quarter of 2022 increased $2.2 million, or 9.1%, compared to the first quarter of 2021. The increase was primarily due to a $4.4 million increase in Trust custodial account fees.

 

Three Months Ended

 

(Dollars in thousands)

March 31,

2022

December 31,

2021

March 31,

2021

Noninterest income

 

 

 

Loan servicing income

$

419

$

505

$

458

Service charges on deposit accounts

 

2,615

 

 

2,590

 

 

2,032

 

Other service fee income

 

367

 

 

391

 

 

473

 

Debit card interchange fee income

 

836

 

 

769

 

 

787

 

Earnings on bank owned life insurance

 

3,221

 

 

3,521

 

 

2,233

 

Net gain from sales of loans

 

1,494

 

 

1,334

 

 

361

 

Net gain from sales of investment securities

 

2,134

 

 

3,585

 

 

4,046

 

Trust custodial account fees

 

11,579

 

 

11,611

 

 

7,222

 

Escrow and exchange fees

 

1,661

 

 

2,221

 

 

1,526

 

Other income

 

1,568

 

 

754

 

 

4,602

 

Total noninterest income

$

25,894

 

$

27,281

 

$

23,740

 

 

Noninterest Expense

Noninterest expense totaled $97.6 million for the first quarter of 2022, an increase of $396,000 compared to the fourth quarter of 2021, primarily driven by a $990,000 increase in other expense and a $905,000 increase in compensation and benefits.

Noninterest expense increased by $5.2 million compared to the first quarter of 2021. The increase was primarily due to a $4.4 million increase in compensation and benefits.

 

Three Months Ended

 

(Dollars in thousands)

March 31,

2022

December 31,

2021

March 31,

2021

Noninterest expense

 

 

 

Compensation and benefits

$

56,981

)

$

56,076

)

$

52,548

)

Premises and occupancy

 

11,952

 

 

11,403

 

 

11,980

 

Data processing

 

5,996

 

 

5,881

 

 

5,828

 

FDIC insurance premiums

 

1,396

 

 

1,389

 

 

1,181

 

Legal and professional services

 

4,068

 

 

5,870

 

 

3,935

 

Marketing expense

 

1,809

 

 

1,821

 

 

1,598

 

Office expense

 

1,203

 

 

1,463

 

 

1,829

 

Loan expense

 

1,134

 

 

857

 

 

1,115

 

Deposit expense

 

3,751

 

 

3,836

 

 

3,859

 

Merger-related expense

 

 

 

 

 

5

 

Amortization of intangible assets

 

3,592

 

 

3,880

 

 

4,143

 

Other expense

 

5,766

 

 

4,776

 

 

4,468

 

Total noninterest expense

$

97,648

 

$

97,252

 

$

92,489

 

 

Income Tax

For the first quarter of 2022, our income tax expense totaled $22.7 million, resulting in an effective tax rate of 25.4%, compared with income tax expense of $30.6 million and an effective tax rate of 26.5% for the fourth quarter of 2021, and income tax expense of $22.3 million and an effective tax rate of 24.5% for the first quarter of 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 $14.73 billion at March 31, 2022, an increase of $437.9 million, or 3.1%, from December 31, 2021, and an increase of $1.62 billion, or 12.3%, from March 31, 2021. The increase from December 31, 2021 was primarily driven by loan fundings, higher commercial line utilization rates, and lower levels of prepayments and maturities. Commercial line utilization rates increased to an average of 39.5% for the first quarter of 2022, compared to an average of 35.2% for the fourth quarter of 2021 and 34.1% for the first quarter of 2021.

During the first quarter of 2022, loan commitments totaled $1.46 billion and new loan fundings totaled $1.06 billion, compared with $1.48 billion in loan commitments and $1.07 billion in new loan fundings for the fourth quarter of 2021, and $1.15 billion in loan commitments and $746.3 million in new loan fundings for the first quarter of 2021. The year-over-year increase in new loan fundings was primarily due to expansion in our multifamily, commercial real estate owner-occupied, and commercial and industrial (“C&I”) loan segments.

At March 31, 2022, the total loan-to-deposit ratio was 83.4%, compared with 83.6% and 78.4% at December 31, 2021 and March 31, 2021, 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

 

(Dollars in thousands)

March 31,

2022

December 31,

2021

March 31,

2021

Beginning loan balance

$

14,306,766

 

$

13,990,961

 

$

13,237,034

 

New commitments

 

1,461,992

 

 

1,479,445

 

 

1,153,345

 

Unfunded new commitments

 

(399,235

)

 

(408,963

)

 

(407,047

)

Net new fundings

 

1,062,757

 

 

1,070,482

 

 

746,298

 

Amortization/maturities/payoffs

 

(786,700

)

 

(935,064

)

 

(773,170

)

Net draws on existing lines of credit

 

182,868

 

 

194,548

 

 

(82,472

)

Loan sales

 

(17,991

)

 

(13,427

)

 

(1,035

)

Charge-offs

 

(2,299

)

 

(734

)

 

(1,952

)

Net increase (decrease)

 

438,635

 

 

315,805

 

 

(112,331

)

Ending loan balance

$

14,745,401

 

$

14,306,766

 

$

13,124,703

 

 

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

 

(Dollars in thousands)

March 31,

2022

December 31,

2021

March 31,

2021

Investor loans secured by real estate

 

 

 

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

$

2,774,650

 

$

2,771,137

 

$

2,729,785

 

Multifamily

 

6,041,085

 

 

5,891,934

 

 

5,309,592

 

Construction and land

 

303,811

 

 

277,640

 

 

316,458

 

SBA secured by real estate (1)

 

42,642

 

 

46,917

 

 

56,381

 

Total investor loans secured by real estate

 

9,162,188

 

 

8,987,628

 

 

8,412,216

 

Business loans secured by real estate (2)

 

 

 

CRE owner-occupied

 

2,391,984

 

 

2,251,014

 

 

2,029,984

 

Franchise real estate secured

 

384,267

 

 

380,381

 

 

340,805

 

SBA secured by real estate (3)

 

68,466

 

 

69,184

 

 

73,967

 

Total business loans secured by real estate

 

2,844,717

 

 

2,700,579

 

 

2,444,756

 

Commercial loans (4)

 

 

 

Commercial and industrial

 

2,242,632

 

 

2,103,112

 

 

1,656,098

 

Franchise non-real estate secured

 

388,322

 

 

392,576

 

 

399,041

 

SBA non-real estate secured

 

10,761

 

 

11,045

 

 

14,908

 

Total commercial loans

 

2,641,715

 

 

2,506,733

 

 

2,070,047

 

Retail loans

 

 

 

Single family residential (5)

 

79,978

 

 

95,292

 

 

184,049

 

Consumer

 

5,157

 

 

5,665

 

 

6,324

 

Total retail loans

 

85,135

 

 

100,957

 

 

190,373

 

Gross loans held for investment (6)

 

14,733,755

 

 

14,295,897

 

 

13,117,392

 

Allowance for credit losses for loans held for investment

 

(197,517

)

 

(197,752

)

 

(266,999

)

Loans held for investment, net

$

14,536,238

 

$

14,098,145

 

$

12,850,393

 

 

Total unfunded loan commitments

$

2,940,370

 

$

2,507,911

 

$

2,243,650

 

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

$

11,646

 

$

10,869

 

$

7,311

 

 

(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 $71.2 million, $77.1 million, and $103.9 million as of March 31, 2022, December 31, 2021, and March 31, 2021, respectively.

The total end-of-period weighted average interest rate on loans, excluding fees and discounts, at March 31, 2022 was 3.92%, compared to 3.95% at December 31, 2021, and 4.21% at March 31, 2021. The quarter-over- quarter and year-over-year decreases reflect the continued impact from lower levels of 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:

 

Three Months Ended

 

(Dollars in thousands)

March 31,

2022

December 31,

2021

March 31,

2021

Investor loans secured by real estate

 

 

 

CRE non-owner-occupied

$

153,845

$

94,740

$

128,408

Multifamily

 

454,652

 

 

552,600

 

 

407,156

 

Construction and land

 

213,206

 

 

94,343

 

 

94,124

 

SBA secured by real estate (1)

 

7,775

 

 

 

 

 

Total investor loans secured by real estate

 

829,478

 

 

741,683

 

 

629,688

 

Business loans secured by real estate (2)

 

 

 

CRE owner-occupied

 

246,405

 

 

147,322

 

 

110,353

 

Franchise real estate secured

 

21,060

 

 

52,034

 

 

24,429

 

SBA secured by real estate (3)

 

9,378

 

 

15,631

 

 

4,101

 

Total business loans secured by real estate

 

276,843

 

 

214,987

 

 

138,883

 

Commercial loans (4)

 

 

 

Commercial and industrial

 

317,728

 

 

469,018

 

 

352,530

 

Franchise non-real estate secured

 

28,090

 

 

43,219

 

 

17,647

 

SBA non-real estate secured

 

3,543

 

 

3,500

 

 

686

 

Total commercial loans

 

349,361

 

 

515,737

 

 

370,863

 

Retail loans

 

 

 

Single family residential (5)

 

6,310

 

 

6,800

 

 

13,353

 

Consumer

 

 

 

238

 

 

558

 

Total retail loans

 

6,310

 

 

7,038

 

 

13,911

 

Total loan commitments

$

1,461,992

 

$

1,479,445

 

$

1,153,345

 

 

(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 3.55% in the first quarter of 2022, compared to 3.55% in the fourth quarter of 2021, and 3.63% in the first quarter of 2021.

Asset Quality and Allowance for Credit Losses

At March 31, 2022, our allowance for credit losses (“ACL”) on loans held for investment was $197.5 million, a decrease of $235,000 from December 31, 2021, and a decrease of $69.5 million from March 31, 2021. The ACL as of March 31, 2022 was reflective of higher loans held for investment as well as the impact of growing uncertainties in the macroeconomic environment. The decrease in ACL from March 31, 2021 was primarily due to favorable changes in the macroeconomic forecasts employed in the Company's current expected credit losses (“CECL”) model related to the COVID-19 pandemic.

During the first quarter of 2022, the Company incurred $446,000 of net charge-offs, compared to $1.0 million of net recoveries during the fourth quarter of 2021 and $1.3 million of net charge-offs during the first quarter of 2021.

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 March 31, 2022

 

Beginning

 

 

Provision for

Ending

ACL

 

 

Credit

ACL

(Dollars in thousands)

Balance

Charge-offs

Recoveries

Losses

Balance

Investor loans secured by real estate

 

 

 

 

 

CRE non-owner-occupied

$

37,380

$

 

$

$

(1,406

)

$

35,974

Multifamily

 

55,209

 

 

 

 

 

 

(884

)

 

54,325

 

Construction and land

 

5,211

 

 

 

 

 

 

8

 

 

5,219

 

SBA secured by real estate (1)

 

3,201

 

 

(70

)

 

 

 

(81

)

 

3,050

 

Business loans secured by real estate (2)

 

 

 

 

 

CRE owner-occupied

 

29,575

 

 

 

 

10

 

 

2,306

 

 

31,891

 

Franchise real estate secured

 

7,985

 

 

 

 

 

 

(8

)

 

7,977

 

SBA secured by real estate (3)

 

4,866

 

 

 

 

 

 

329

 

 

5,195

 

Commercial loans (4)

 

 

 

 

 

Commercial and industrial

 

38,136

 

 

(2,179

)

 

1,841

 

 

800

 

 

38,598

 

Franchise non-real estate secured

 

15,084

 

 

 

 

 

 

(780

)

 

14,304

 

SBA non-real estate secured

 

565

 

 

(50

)

 

2

 

 

(27

)

 

490

 

Retail loans

 

 

 

 

 

Single family residential (5)

 

255

 

 

 

 

 

 

(22

)

 

233

 

Consumer loans

 

285

 

 

 

 

 

 

(24

)

 

261

 

Totals

$

197,752

 

$

(2,299

)

$

1,853

 

$

211

 

$

197,517

 

 

(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 March 31, 2022 was 1.34%, compared to 1.38% at December 31, 2021 and 2.04% at March 31, 2021. The fair value net discount on loans acquired through total bank acquisitions was $71.2 million, or 0.48% of total loans held for investment, as of March 31, 2022, compared to $77.1 million, or 0.54% of total loans held for investment, as of December 31, 2021, and $103.9 million, or 0.79% of total loans held for investment, as of March 31, 2021.

Nonperforming assets totaled $55.3 million, or 0.26% of total assets, at March 31, 2022, compared with $31.3 million, or 0.15% of total assets, at December 31, 2021, and $38.9 million, or 0.19% of total assets, at March 31, 2021. Total loan delinquencies were $43.7 million, or 0.30% of loans held for investment, at March 31, 2022, compared to $19.5 million, or 0.14% of loans held for investment, at December 31, 2021, and $22.6 million, or 0.17% of loans held for investment, at March 31, 2021. The quarter-over-quarter and year-over-year increase in

nonperforming assets and loan delinquencies was primarily due to the addition of a single C&I relationship totaling $25.3 million at March 31, 2022.

Classified loans totaled $122.5 million, or 0.83% of loans held for investment, at March 31, 2022, compared with $121.8 million, or 0.85% of loans held for investment, at December 31, 2021, and $134.7 million, or 1.03% of loans held for investment, at March 31, 2021.

Interest typically is not 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. At March 31, 2022, there was a CRE owner-occupied loan of $1.8 million in default for more than 90 days and still accruing interest, pending a legal proceeding with repayment reasonably expected. There were $16.9 million of troubled debt restructured loans at March 31, 2022, compared with $17.3 million at December 31, 2021, and no troubled debt restructured loans at March 31, 2021.

 

(Dollars in thousands)

March 31,

2022

December 31,

2021

March 31,

2021

Asset quality

 

 

 

Nonperforming loans

$

55,309

 

$

31,273

 

$

38,909

 

Other real estate owned

 

 

 

 

 

 

Nonperforming assets

$

55,309

 

$

31,273

 

$

38,909

 

 

 

 

 

Total classified assets (1)

$

122,528

 

$

121,827

 

$

134,667

 

Allowance for credit losses

 

197,517

 

 

197,752

 

 

266,999

 

Allowance for credit losses as a percent of total nonperforming loans

 

357

%

 

632

%

 

686

%

Nonperforming loans as a percent of loans held for investment

 

0.38

 

 

0.22

 

 

0.30

 

Nonperforming assets as a percent of total assets

 

0.26

 

 

0.15

 

 

0.19

 

Classified loans to total loans held for investment

 

0.83

 

 

0.85

 

 

1.03

 

Classified assets to total assets

 

0.57

 

 

0.58

 

 

0.67

 

Net loan charge-offs (recoveries) for the quarter ended

$

446

 

$

(981

)

$

1,334

 

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

 

 

 

 

%

 

 

 

(0.01

 

)%

 

 

 

0.01

 

%

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

 

1.34

 

 

1.38

 

 

2.04

 

Delinquent loans

 

 

 

30 - 59 days

$

25,332

 

$

1,395

 

$

13,116

 

60 - 89 days

 

74

 

 

 

 

61

 

90+ days

 

18,245

 

 

18,100

 

 

9,410

 

Total delinquency

$

43,651

 

$

19,495

 

$

22,587

 

Delinquency as a percentage of loans held for investment

 

0.30

%

 

0.14

%

 

0.17

%

 

(1)

 

Includes substandard loans and other real estate owned.

(2)

 

At March 31, 2022, 32% of loans held for investment include a fair value net discount of $71.2 million, or 0.48% of loans held for investment. At December 31, 2021, 36% of loans held for investment include a fair value net discount of $77.1 million, or 0.54% of loans held for investment. At March 31, 2021, 51% of loans held for investment include a fair value net discount of $103.9 million, or 0.79% of loans held for investment.

Investment Securities

At March 31, 2022, available-for-sale (“AFS”) and held-to-maturity (“HTM”) investment securities were $3.22 billion and $996.4 million, respectively, compared to $4.27 billion and $381.7 million, respectively, at December 31, 2021. During the first quarter of 2022, the Company reassessed classification of certain investments with longer duration and transferred a total of $386.8 million of municipal bonds and $255.0 million of mortgage-backed securities, both of which the Company intends and has the ability to hold to maturity, from AFS to HTM at fair value.

In total, investment securities were $4.22 billion at March 31, 2022, a decrease of $437.1 million from December 31, 2021, and an increase of $339.2 million from March 31, 2021. The decrease in the first quarter of 2022 compared to the prior quarter was primarily the result of $658.5 million in investment securities sales, $109.3 million in principal payments, discounts from the AFS securities transferred to HTM, amortizations, and redemptions, as well as a $168.1 million decrease in mark-to-market fair value adjustment, partially offset by $498.9 million in investment securities purchases.

The increase in investment securities from March 31, 2021 was primarily the result of $2.40 billion in purchases, partially offset by $1.37 billion in sales, $542.9 million in principal payments, amortization, and redemptions, and a $151.5 million decrease in mark-to-market fair value adjustment.

Deposits

At March 31, 2022, deposits totaled $17.69 billion, an increase of $573.6 million, or 3.4%, from December 31, 2021, and an increase of $949.2 million, or 5.7%, from March 31, 2021. At March 31, 2022, non-maturity deposits totaled $16.66 billion, or 94.2% of total deposits, an increase of $600.9 million, or 3.7%, from December 31, 2021, and an increase of $1.29 billion, or 8.4%, from March 31, 2021. During the first quarter of 2022, deposit increases included $349.3 million in noninterest-bearing checking deposits, $185.7 million in interest- bearing checking deposits, and $65.9 million in money market and savings deposits, partially offset by a planned decrease of $27.3 million in retail certificates of deposits, as compared to the fourth quarter of 2021. The increase in deposits from March 31, 2021 was primarily driven by an increase in business checking deposits, partially offset by decreases in certificates of deposit and money market/savings deposits.

The weighted average cost of deposits for the first quarter of 2022 remained unchanged at 0.04%, compared to the fourth quarter of 2021, and decreased from 0.11% for the first quarter of 2021.

The end of period weighted average rate of deposits at March 31, 2022 was 0.04%.

 

(Dollars in thousands)

March 31,

2022

December 31,

2021

March 31,

2021

Deposit accounts

 

 

 

Noninterest-bearing checking

$

7,106,548

$

6,757,259

$

6,302,703

Interest-bearing:

 

 

 

Checking

 

3,679,067

 

 

3,493,331

 

 

3,155,071

 

Money market/savings

 

5,872,597

 

 

5,806,726

 

 

5,911,417

 

Retail certificates of deposit

 

1,031,011

 

 

1,058,273

 

 

1,353,431

 

Wholesale/brokered certificates of deposit

 

 

 

 

 

17,385

 

Total interest-bearing

 

10,582,675

 

 

10,358,330

 

 

10,437,304

 

Total deposits

$

17,689,223

 

$

17,115,589

 

$

16,740,007

 

 
Cost of deposits

0.04

%

0.04

%

0.11

%

Noninterest-bearing deposits as a percent of total deposits

40.2

39.5

37.7

Non-maturity deposits as a percent of total deposits

94.2

93.8

91.8

Core deposits as a percent of total deposits (1)

97.3

97.1

96.2

 

(1)

 

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

Borrowings

At March 31, 2022, total borrowings amounted to $930.7 million, an increase of $42.2 million from December 31, 2021, and an increase of $419.1 million from March 31, 2021. Total borrowings at March 31, 2022 were comprised of $600.0 million of Federal Home Loan Bank of San Francisco (“FHLB”) advances and $330.7 million of subordinated debt. The increase in borrowings at March 31, 2022 as compared to December 31, 2021 was primarily due to an increase of $600.0 million in FHLB term advances, offset by repayment of $550.0 million in FHLB overnight advances and $8.0 million in other short-term borrowings. The increase in borrowings at

March 31, 2022 as compared to March 31, 2021 was primarily due to an increase of $590.0 million in FHLB advances, partially offset by redemptions of $160.0 million in subordinated notes and $10.4 million junior subordinated debt securities. At March 31, 2022, total borrowings represented 4.3% of total assets, compared to 4.2% and 2.5% as of December 31, 2021 and March 31, 2021, respectively.

Capital Ratios

At March 31, 2022, our common stockholder's equity was $2.78 billion, or 12.87% of total assets, compared with $2.89 billion, or 13.68%, at December 31, 2021, and $2.70 billion, or 13.40%, at March 31, 2021, with a book value per share of $29.31, compared with $30.58 at December 31, 2021, and $28.56 at March 31, 2021. At March 31, 2022, our ratio of tangible common equity to tangible assets(1) was 8.79%, compared with 9.52% at December 31, 2021, and 8.97% at March 31, 2021, and our tangible book value per share(1) was $19.12, compared with $20.29 at December 31, 2021, and $18.19 at March 31, 2021. The decreases in the ratio of tangible common equity to tangible assets and tangible book value per share at March 31, 2022 from the prior quarter were primarily driven by the other comprehensive loss from the impact of higher interest rates on our AFS securities portfolio.

____________________

(1)

Reconciliations of the non–GAAP measures 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. Beginning the first quarter of March 31, 2022, the Company phases into regulatory capital the cumulative adjustments at the end of the second year of the transition period at 25% per year. At March 31, 2022, the Company and Bank are 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.

 

Capital ratios

March 31,

2022

December 31,

2021

March 31,

2021

Pacific Premier Bancorp, Inc. Consolidated

 

 

 

Tier 1 leverage ratio

 

10.10

%

 

10.08

%

 

9.66

%

Common equity tier 1 capital ratio

 

11.80

 

 

12.11

 

 

12.05

 

Tier 1 capital ratio

 

11.80

 

 

12.11

 

 

12.05

 

Total capital ratio

 

14.37

 

 

14.62

 

 

16.26

 

Tangible common equity ratio (1)

 

8.79

 

 

9.52

 

 

8.97

 

 

 

 

 

Pacific Premier Bank

 

 

 

Tier 1 leverage ratio

 

11.66

%

 

11.62

%

 

11.13

%

Common equity tier 1 capital ratio

 

13.61

 

 

13.96

 

 

13.90

 

Tier 1 capital ratio

 

13.61

 

 

13.96

 

 

13.90

 

Total capital ratio

 

14.47

 

 

14.70

 

 

15.92

 

 

 

 

 

Share data

 

 

 

Book value per share

$

29.31

 

$

30.58

 

$

28.56

 

Tangible book value per share (1)

 

19.12

 

 

20.29

 

 

18.19

 

Common equity dividends declared per share

 

0.33

 

 

0.33

 

 

0.30

 

Closing stock price (2)

 

35.35

 

 

40.03

 

 

43.44

 

Shares issued and outstanding

 

94,945,849

 

 

94,389,543

 

 

94,644,415

 

Market capitalization (2)(3)

$

3,356,336

 

$

3,778,413

 

$

4,111,353

 

 

(1)

 

Reconciliations of the non-GAAP measures are 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 April 22, 2022, the Company's Board of Directors declared a $0.33 per share dividend, payable on May 13, 2022 to stockholders of record as of May 6, 2022. In January 2021, the Company’s Board of Directors approved a stock repurchase program, which authorized the repurchase of up to 4,725,000 shares of its common stock. During the first quarter of 2022, 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 April 26, 2022 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 May 3, 2022, at (877) 344-7529, conference ID 5702244.

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 over $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 approximately $18 billion of assets under custody and over 42,000 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 related uncertainty as well as the risk and costs related to our adoption of 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, including the war between Russia and Ukraine, 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; 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 2021 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)

 

 

(Dollars in thousands)

March 31,

2022

December 31,

2021

September 30,

2021

June 30,

2021

March 31,

2021

ASSETS

 

 

 

 

 

Cash and cash equivalents

$

809,259

 

$

304,703

 

$

322,320

$

631,888

$

1,554,668

 

Interest-bearing time deposits with financial institutions

 

2,216

 

 

2,216

 

 

2,708

 

 

2,708

 

 

2,708

 

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

 

 

 

996,382

 

 

 

 

 

381,674

 

 

 

 

 

170,576

 

 

 

 

 

18,933

 

 

 

 

 

21,931

 

 

Investment securities available-for-sale, at fair value

 

3,222,095

 

 

4,273,864

 

 

4,709,815

 

 

4,487,447

 

 

3,857,337

 

FHLB, FRB, and other stock, at cost

 

116,973

 

 

117,538

 

 

118,399

 

 

117,738

 

 

117,843

 

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

 

11,646

 

 

10,869

 

 

8,100

 

 

4,714

 

 

7,311

 

Loans held for investment

 

14,733,755

 

 

14,295,897

 

 

13,982,861

 

 

13,594,598

 

 

13,117,392

 

Allowance for credit losses

 

(197,517

)

 

(197,752

)

 

(211,481

)

 

(232,774

)

 

(266,999

)

Loans held for investment, net

 

14,536,238

 

 

14,098,145

 

 

13,771,380

 

 

13,361,824

 

 

12,850,393

 

Accrued interest receivable

 

60,922

 

 

65,728

 

 

63,228

 

 

67,529

 

 

65,098

 

Premises and equipment

 

70,453

 

 

71,908

 

 

72,850

 

 

73,821

 

 

76,329

 

Deferred income taxes, net

 

133,938

 

 

87,344

 

 

83,432

 

 

81,741

 

 

104,450

 

Bank owned life insurance

 

451,968

 

 

449,353

 

 

447,135

 

 

444,645

 

 

292,932

 

Intangible assets

 

65,978

 

 

69,571

 

 

73,451

 

 

77,363

 

 

81,364

 

Goodwill

 

901,312

 

 

901,312

 

 

901,312

 

 

901,312

 

 

900,204

 

Other assets

 

242,916

 

 

260,204

 

 

260,505

 

 

257,823

 

 

240,730

 

Total assets

$

21,622,296

 

$

21,094,429

 

$

21,005,211

 

$

20,529,486

 

$

20,173,298

 

LIABILITIES

 

 

 

 

 

Deposit accounts:

 

 

 

 

 

Noninterest-bearing checking

$

7,106,548

 

$

6,757,259

 

$

6,841,495

 

$

6,768,384

 

$

6,302,703

 

Interest-bearing:

 

 

 

 

 

Checking

 

3,679,067

 

 

3,493,331

 

 

3,477,902

 

 

3,103,343

 

 

3,155,071

 

Money market/savings

 

5,872,597

 

 

5,806,726

 

 

6,037,532

 

 

5,883,672

 

 

5,911,417

 

Retail certificates of deposit

 

1,031,011

 

 

1,058,273

 

 

1,113,070

 

 

1,259,698

 

 

1,353,431

 

Wholesale/brokered certificates of deposit

 

 

 

 

 

 

 

 

 

17,385

 

Total interest-bearing

 

10,582,675

 

 

10,358,330

 

 

10,628,504

 

 

10,246,713

 

 

10,437,304

 

Total deposits

 

17,689,223

 

 

17,115,589

 

 

17,469,999

 

 

17,015,097

 

 

16,740,007

 

FHLB advances and other borrowings

 

600,000

 

 

558,000

 

 

150,000

 

 

 

 

10,000

 

Subordinated debentures

 

330,726

 

 

330,567

 

 

330,408

 

 

476,622

 

 

501,611

 

Accrued expenses and other liabilities

 

219,329

 

 

203,962

 

 

216,688

 

 

224,348

 

 

218,582

 

Total liabilities

 

18,839,278

 

 

18,208,118

 

 

18,167,095

 

 

17,716,067

 

 

17,470,200

 

STOCKHOLDERS’ EQUITY

 

 

 

 

 

Common stock

 

933

 

 

929

 

 

929

 

 

931

 

 

931

 

Additional paid-in capital

 

2,348,727

 

 

2,351,294

 

 

2,347,626

 

 

2,352,112

 

 

2,348,445

 

Retained earnings

 

577,591

 

 

541,950

 

 

488,385

 

 

433,852

 

 

368,911

 

Accumulated other comprehensive (loss) income

 

(144,233

)

 

(7,862

)

 

1,176

 

 

26,524

 

 

(15,189

)

Total stockholders' equity

 

2,783,018

 

 

2,886,311

 

 

2,838,116

 

 

2,813,419

 

 

2,703,098

 

Total liabilities and stockholders' equity

$

21,622,296

 

$

21,094,429

 

$

21,005,211

 

$

20,529,486

$

20,173,298

 

PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

Three Months Ended

March 31,

December 31,

March 31,

(Dollars in thousands, except per share data)

2022

2021

2021

INTEREST INCOME

 

 

 

Loans

$

150,604

$

157,418

$

155,225

Investment securities and other interest-earning assets

 

17,942

 

 

19,588

 

 

17,769

 

Total interest income

 

168,546

 

 

177,006

 

 

172,994

 

INTEREST EXPENSE

 

 

 

Deposits

 

1,673

 

 

1,694

 

 

4,426

 

FHLB advances and other borrowings

 

474

 

 

33

 

 

65

 

Subordinated debentures

 

4,560

 

 

4,560

 

 

6,851

 

Total interest expense

 

6,707

 

 

6,287

 

 

11,342

 

Net interest income before provision for credit losses

 

161,839

 

 

170,719

 

 

161,652

 

Provision for credit losses

 

448

 

 

(14,648

)

 

1,974

 

Net interest income after provision for credit losses

 

161,391

 

 

185,367

 

 

159,678

 

NONINTEREST INCOME

 

 

 

Loan servicing income

 

419

 

 

505

 

 

458

 

Service charges on deposit accounts

 

2,615

 

 

2,590

 

 

2,032

 

Other service fee income

 

367

 

 

391

 

 

473

 

Debit card interchange fee income

 

836

 

 

769

 

 

787

 

Earnings on bank owned life insurance

 

3,221

 

 

3,521

 

 

2,233

 

Net gain from sales of loans

 

1,494

 

 

1,334

 

 

361

 

Net gain from sales of investment securities

 

2,134

 

 

3,585

 

 

4,046

 

Trust custodial account fees

 

11,579

 

 

11,611

 

 

7,222

 

Escrow and exchange fees

 

1,661

 

 

2,221

 

 

1,526

 

Other income

 

1,568

 

 

754

 

 

4,602

 

Total noninterest income

 

25,894

 

 

27,281

 

 

23,740

 

NONINTEREST EXPENSE

 

 

 

Compensation and benefits

 

56,981

 

 

56,076

 

 

52,548

 

Premises and occupancy

 

11,952

 

 

11,403

 

 

11,980

 

Data processing

 

5,996

 

 

5,881

 

 

5,828

 

FDIC insurance premiums

 

1,396

 

 

1,389

 

 

1,181

 

Legal and professional services

 

4,068

 

 

5,870

 

 

3,935

 

Marketing expense

 

1,809

 

 

1,821

 

 

1,598

 

Office expense

 

1,203

 

 

1,463

 

 

1,829

 

Loan expense

 

1,134

 

 

857

 

 

1,115

 

Deposit expense

 

3,751

 

 

3,836

 

 

3,859

 

Merger-related expense

 

 

 

 

 

5

 

Amortization of intangible assets

 

3,592

 

 

3,880

 

 

4,143

 

Other expense

 

5,766

 

 

4,776

 

 

4,468

 

Total noninterest expense

 

97,648

 

 

97,252

 

 

92,489

 

Net income before income taxes

 

89,637

 

 

115,396

 

 

90,929

 

Income tax

 

22,733

 

 

30,565

 

 

22,261

 

Net income

$

66,904

 

$

84,831

 

$

68,668

 

EARNINGS PER SHARE

 

 

 

Basic

$

0.71

 

$

0.90

 

$

0.73

 

Diluted

$

0.70

 

$

0.89

 

$

0.72

 

WEIGHTED AVERAGE SHARES OUTSTANDING

 

 

 

Basic

 

93,499,695

 

 

93,415,304

 

 

93,529,147

 

Diluted

 

93,946,074

 

 

93,906,491

 

 

94,093,644

 

 

SELECTED FINANCIAL DATA

PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED AVERAGE BALANCES AND YIELD DATA

(Unaudited)

 

Three Months Ended

March 31, 2022

December 31, 2021

March 31, 2021

 

(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

$

322,236

)

$

90

)

0.11

%

$

334,371

)

$

66

)

0.08

%

$

1,309,366

)

$

301

)

0.09

%

Investment securities

 

4,546,408

 

 

17,852

 

1.57

 

 

4,833,251

 

 

19,522

 

1.62

 

 

4,087,451

 

 

17,468

 

1.71

 

Loans receivable, net (1)(2)

 

14,371,588

 

 

150,604

 

4.25

 

 

14,005,836

 

 

157,418

 

4.46

 

 

13,093,609

 

 

155,225

 

4.81

 

Total interest-earning assets

 

19,240,232

 

 

168,546

 

3.55

 

 

19,173,458

 

 

177,006

 

3.66

 

 

18,490,426

 

 

172,994

 

3.79

 

Noninterest-earning assets

 

1,716,559

 

 

 

 

1,693,547

 

 

 

 

1,503,834

 

 

 

Total assets

$

20,956,791

 

 

 

$

20,867,005

 

 

 

$

19,994,260

 

 

 

Liabilities and equity

Interest-bearing deposits:

 

 

 

 

 

 

 

 

 

Interest checking

$

3,537,824

 

$

229

 

0.03

%

$

3,501,323

 

$

225

 

0.03

%

$

3,060,055

 

$

419

 

0.06

%

Money market

 

5,343,973

 

 

888

 

0.07

 

 

5,467,559

 

 

925

 

0.07

 

 

5,447,909

 

 

2,588

 

0.19

 

Savings

 

422,186

 

 

26

 

0.02

 

 

418,218

 

 

27

 

0.03

 

 

368,288

 

 

82

 

0.09

 

Retail certificates of deposit

 

1,047,451

 

 

530

 

0.21

 

 

1,084,326

 

 

517

 

0.19

 

 

1,425,093

 

 

1,201

 

0.34

 

Wholesale/brokered certificates of deposit

118,854

136

0.46

Total interest-bearing deposits

 

10,351,434

 

 

1,673

 

0.07

 

 

10,471,426

 

 

1,694

 

0.06

 

 

10,420,199

 

 

4,426

 

0.17

 

FHLB advances and other borrowings

225,250

474

0.85

69,538

33

0.19

22,012

65

1.20

Subordinated debentures

 

330,629

 

 

4,560

 

5.52

 

 

330,476

 

 

4,560

 

5.52

 

 

501,553

 

 

6,851

 

5.46

 

Total borrowings

 

555,879

 

 

5,034

 

3.63

 

 

400,014

 

 

4,593

 

4.59

 

 

523,565

 

 

6,916

 

5.36

 

Total interest-bearing liabilities

10,907,313

6,707

0.25

10,871,440

6,287

0.23

10,943,764

11,342

0.42

Noninterest-bearing deposits

 

6,928,872

 

 

 

 

6,911,702

 

 

 

 

6,034,319

 

 

 

Other liabilities

 

256,219

 

 

 

 

232,863

 

 

 

 

266,536

 

 

 

Total liabilities

 

18,092,404

 

 

 

 

18,016,005

 

 

 

 

17,244,619

 

 

 

Stockholders' equity

 

2,864,387

 

 

 

 

2,851,000

 

 

 

 

2,749,641

 

 

 

Total liabilities and equity

$

20,956,791

 

 

 

$

20,867,005

 

 

 

$

19,994,260

 

 

 

Net interest income

 

$

161,839

 

 

 

$

170,719

 

 

 

$

161,652

 

 

Net interest margin (3)

 

 

3.41

%

 

 

3.53

%

 

 

3.55

%

Cost of deposits (4)

 

 

0.04

 

 

 

0.04

 

 

 

0.11

 

Cost of funds (5)

 

 

0.15

 

 

 

0.14

 

 

 

0.27

 

Ratio of interest-earning assets to interest-bearing liabilities

176.40

 

 

176.37

 

 

168.96

 

 

(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 $5.9 million, $7.9 million, and $9.9 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)

 

 

March 31,

December 31,

September

June 30,

March 31,

(Dollars in thousands)

2022

2021

2021

2021

2021

Investor loans secured by real estate

 

 

 

 

 

CRE non-owner-occupied

$

2,774,650

 

$

2,771,137

 

$

2,823,065

 

$

2,810,233

 

$

2,729,785

 

Multifamily

 

6,041,085

 

 

5,891,934

 

 

5,705,666

 

 

5,539,464

 

 

5,309,592

 

Construction and land

 

303,811

 

 

277,640

 

 

292,815

 

 

297,728

 

 

316,458

 

SBA secured by real estate (1)

 

42,642

 

 

46,917

 

 

49,446

 

 

53,003

 

 

56,381

 

Total investor loans secured by real estate

 

9,162,188

 

 

8,987,628

 

 

8,870,992

 

 

8,700,428

 

 

8,412,216

 

Business loans secured by real estate (2)

 

 

 

 

 

CRE owner-occupied

 

2,391,984

 

 

2,251,014

 

 

2,242,164

 

 

2,089,300

 

 

2,029,984

 

Franchise real estate secured

 

384,267

 

 

380,381

 

 

354,481

 

 

358,120

 

 

340,805

 

SBA secured by real estate (3)

 

68,466

 

 

69,184

 

 

69,937

 

 

72,923

 

 

73,967

 

Total business loans secured by real estate

 

2,844,717

 

 

2,700,579

 

 

2,666,582

 

 

2,520,343

 

 

2,444,756

 

Commercial loans (4)

 

 

 

 

 

Commercial and industrial

 

2,242,632

 

 

2,103,112

 

 

1,888,870

 

 

1,795,144

 

 

1,656,098

 

Franchise non-real estate secured

 

388,322

 

 

392,576

 

 

392,950

 

 

401,315

 

 

399,041

 

SBA non-real estate secured

 

10,761

 

 

11,045

 

 

12,732

 

 

13,900

 

 

14,908

 

Total commercial loans

 

2,641,715

 

 

2,506,733

 

 

2,294,552

 

 

2,210,359

 

 

2,070,047

 

Retail loans

 

 

 

 

 

Single family residential (5)

 

79,978

 

 

95,292

 

 

144,309

 

 

157,228

 

 

184,049

 

Consumer

 

5,157

 

 

5,665

 

 

6,426

 

 

6,240

 

 

6,324

 

Total retail loans

 

85,135

 

 

100,957

 

 

150,735

 

 

163,468

 

 

190,373

 

Gross loans held for investment (6)

 

14,733,755

 

 

14,295,897

 

 

13,982,861

 

 

13,594,598

 

 

13,117,392

 

Allowance for credit losses for loans held for investment

 

 

 

(197,517

 

)

 

 

 

(197,752

 

)

 

 

 

(211,481

 

)

 

 

 

(232,774

 

)

 

 

 

(266,999

 

)

Loans held for investment, net

$

14,536,238

 

$

14,098,145

 

$

13,771,380

 

$

13,361,824

 

$

12,850,393

 

 

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

$

11,646

$

10,869

$

8,100

$

4,714

$

7,311

 

(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 $71.2 million, $77.1 million, $85.0 million, $94.4 million, and $103.9 million as of March 31, 2022, December 31, 2021, September 30, 2021, June 30, 2021, and March 31, 2021, respectively.

 

PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES

ASSET QUALITY INFORMATION

(Unaudited)

 

 

(Dollars in thousands)

March 31,

2022

December 31,

2021

September 30,

2021

June 30,

2021

March 31,

2021

Asset quality

 

 

 

 

 

Nonperforming loans

$

55,309

 

$

31,273

 

$

35,090

 

$

34,387

 

$

38,909

 

Other real estate owned

 

 

 

 

 

 

 

 

 

 

Nonperforming assets

$

55,309

 

$

31,273

 

$

35,090

 

$

34,387

 

$

38,909

 

 

 

 

 

 

 

Total classified assets (1)

$

122,528

 

$

121,827

 

$

124,506

 

$

131,350

 

$

134,667

 

Allowance for credit losses

 

197,517

 

 

197,752

 

 

211,481

 

 

232,774

 

 

266,999

 

Allowance for credit losses as a percent of total nonperforming loans

357

%

632

%

603

%

677

%

686

%

Nonperforming loans as a percent of loans held for investment

0.38

0.22

0.25

0.25

0.30

Nonperforming assets as a percent of total assets

 

0.26

 

 

0.15

 

 

0.17

 

 

0.17

 

 

0.19

 

Classified loans to total loans held for investment

 

0.83

 

 

0.85

 

 

0.89

 

 

0.97

 

 

1.03

 

Classified assets to total assets

 

0.57

 

 

0.58

 

 

0.59

 

 

0.64

 

 

0.67

 

Net loan charge-offs (recoveries) for the quarter ended

$

446

$

(981

)

$

1,750

$

1,094

$

1,334

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

 

%

 

(0.01

)%

 

0.01

%

 

0.01

%

 

0.01

%

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

 

1.34

 

 

1.38

 

 

1.51

 

 

1.71

 

 

2.04

 

Loans modified under the CARES Act

$

 

$

 

$

 

$

819

 

$

 

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

 

%

 

%

 

%

 

0.01

%

 

%

Delinquent loans

 

 

 

 

 

30 - 59 days

$

25,332

 

$

1,395

 

$

728

 

$

207

 

$

13,116

 

60 - 89 days

 

74

 

 

 

 

936

 

 

83

 

 

61

 

90+ days

 

18,245

 

 

18,100

 

 

18,514

 

 

19,045

 

 

9,410

 

Total delinquency

$

43,651

 

$

19,495

 

$

20,178

 

$

19,335

 

$

22,587

 

Delinquency as a percent of loans held for investment

 

0.30

%

 

0.14

%

 

0.14

%

 

0.14

%

 

0.17

%

 

(1)

 

Includes substandard loans and other real estate owned.

(2)

 

At March 31, 2022, 32% of loans held for investment include a fair value net discount of $71.2 million, or 0.48% of loans held for investment. At December 31, 2021, 36% of loans held for investment include a fair value net discount of $77.1 million, or 0.54% of loans held for investment. 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 March 31, 2021, 51% of loans held for investment include a fair value net discount of $103.9 million, or 0.79% 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

March 31, 2022

 

     

 

 

Investor loans secured by real estate

 

     

 

 

CRE non-owner-occupied

$

10,243

$

1,152

$

$

$

10,243

$

2,627

SBA secured by real estate (2)

 

573

 

 

 

 

 

 

 

 

573

 

 

573

 

Total investor loans secured by real estate

 

10,816

 

 

1,152

 

 

 

 

 

 

10,816

 

 

3,200

 

Business loans secured by real estate (3)

 

 

 

 

 

 

CRE owner-occupied

 

4,901

 

 

 

 

 

 

 

 

4,901

 

 

4,901

 

SBA secured by real estate (4)

 

575

 

 

 

 

 

 

 

 

575

 

 

575

 

Total business loans secured by real estate

 

5,476

 

 

 

 

 

 

 

 

5,476

 

 

5,476

 

Commercial loans (5)

 

 

 

 

 

 

Commercial and industrial

 

26,588

 

 

 

 

 

 

 

 

26,588

 

 

26,588

 

Franchise non-real estate secured

 

 

 

 

 

11,779

 

 

 

 

11,779

 

 

11,779

 

SBA not secured by real estate

 

642

 

 

 

 

 

 

 

 

642

 

 

642

 

Total commercial loans

 

27,230

 

 

 

 

11,779

 

 

 

 

39,009

 

 

39,009

 

Retail loans

 

 

 

 

 

 

Single family residential (6)

 

8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8

 

 

8

 

Total retail loans

 

8

 

 

 

 

 

 

 

 

8

 

 

8

 

Totals nonaccrual loans

$

43,530

 

$

1,152

 

$

11,779

 

$

 

$

55,309

 

$

47,693

 

       

(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

March 31, 2022

 

 

 

 

 

Investor loans secured by real estate

 

 

 

 

 

CRE non-owner-occupied

$

2,762,632

$

$

$

12,018

$

2,774,650

Multifamily

 

6,041,085

 

 

 

 

 

 

 

 

6,041,085

 

Construction and land

 

303,811

 

 

 

 

 

 

 

 

303,811

 

SBA secured by real estate (1)

 

42,642

 

 

 

 

 

 

 

 

42,642

 

Total investor loans secured by real estate

 

9,150,170

 

 

 

 

 

 

12,018

 

 

9,162,188

 

Business loans secured by real estate (2)

 

 

 

 

 

CRE owner-occupied

 

2,387,083

 

 

 

 

 

 

4,901

 

 

2,391,984

 

Franchise real estate secured

 

384,267

 

 

 

 

 

 

 

 

384,267

 

SBA secured by real estate (3)

 

68,025

 

 

 

 

 

 

441

 

 

68,466

 

Total business loans secured by real estate

 

2,839,375

 

 

 

 

 

 

5,342

 

 

2,844,717

 

Commercial loans (4)

 

 

 

 

 

Commercial and industrial

 

2,216,983

 

 

25,332

 

 

74

 

 

243

 

 

2,242,632

 

Franchise non-real estate secured

 

388,322

 

 

 

 

 

 

 

 

388,322

 

SBA not secured by real estate

 

10,119

 

 

 

 

 

 

642

 

 

10,761

 

Total commercial loans

 

2,615,424

 

 

25,332

 

 

74

 

 

885

 

 

2,641,715

 

Retail loans

 

 

 

 

 

Single family residential (5)

 

79,978

 

 

 

 

 

 

 

 

79,978

 

Consumer loans

 

5,157

 

 

 

 

 

 

 

 

5,157

 

Total retail loans

 

85,135

 

 

 

 

 

 

 

 

85,135

 

Total loans

$

14,690,104

 

$

25,332

 

$

74

 

$

18,245

 

$

14,733,755

 

 

(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

March 31, 2022

 

 

 

 

Investor loans secured by real estate

 

 

 

 

CRE non-owner-occupied

$

2,735,537

$

9,878

$

29,235

$

2,774,650

Multifamily

 

6,040,325

 

 

 

 

760

 

 

6,041,085

 

Construction and land

 

303,811

 

 

 

 

 

 

303,811

 

SBA secured by real estate (1)

 

33,789

 

 

 

 

8,853

 

 

42,642

 

Total investor loans secured by real estate

 

9,113,462

 

 

9,878

 

 

38,848

 

 

9,162,188

 

Business loans secured by real estate (2)

 

 

 

 

CRE owner-occupied

 

2,368,845

 

 

764

 

 

22,375

 

 

2,391,984

 

Franchise real estate secured

 

384,267

 

 

 

 

 

 

384,267

 

SBA secured by real estate (3)

 

59,998

 

 

 

 

8,468

 

 

68,466

 

Total business loans secured by real estate

 

2,813,110

 

 

764

 

 

30,843

 

 

2,844,717

 

Commercial loans (4)

 

 

 

 

Commercial and industrial

 

2,209,517

 

 

1,011

 

 

32,104

 

 

2,242,632

 

Franchise non-real estate secured

 

369,292

 

 

 

 

19,030

 

 

388,322

 

SBA not secured by real estate

 

9,042

 

 

66

 

 

1,653

 

 

10,761

 

Total commercial loans

 

2,587,851

 

 

1,077

 

 

52,787

 

 

2,641,715

 

Retail loans

 

 

 

 

Single family residential (5)

 

79,932

 

 

 

 

46

 

 

79,978

 

Consumer loans

 

5,153

 

 

 

 

4

 

 

5,157

 

Total retail loans

 

85,085

 

 

 

 

50

 

 

85,135

 

Total loans

$

14,599,508

 

$

11,719

 

$

122,528

 

$

14,733,755

 

 

(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
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 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.

Three Months Ended

March 31,

December 31,

March 31,

(Dollars in thousands)

2022

2021

2021

Net income

$

66,904

 

$

84,831

 

$

68,668

 

Plus: amortization of intangible assets expense

 

3,592

 

 

3,880

 

 

4,143

 

Less: amortization of intangible assets expense tax adjustment (1)

 

1,025

 

 

1,107

 

 

1,185

 

Net income for average tangible common equity

 

69,471

 

 

87,604

 

 

71,626

 

Plus: merger-related expense

 

 

 

 

 

5

 

Less: merger-related expense tax adjustment (1)

 

 

 

 

 

1

 

Net income for average tangible common equity excluding merger-related expense

$

69,471

 

$

87,604

 

$

71,630

 

 

 

 

 

Average stockholders' equity

$

2,864,387

 

$

2,851,000

 

$

2,749,641

 

Less: average intangible assets

 

68,157

 

 

71,897

 

 

83,946

 

Less: average goodwill

 

901,312

 

 

901,312

 

 

898,587

 

Average tangible common equity

$

1,894,918

 

$

1,877,791

 

$

1,767,108

 

 

 

 

 

Return on average equity (annualized)

 

9.34

%

 

11.90

%

 

9.99

%

Return on average tangible common equity (annualized)

 

14.66

%

 

18.66

%

 

16.21

%

Return on average tangible common equity excluding merger- related expense (annualized)

 

14.66

%

 

18.66

%

 

16.21

%

 

(1)

Adjusted by statutory tax rate

For periods presented below, return on average assets excluding merger-related expense is a non-GAAP financial measure derived from GAAP based amounts. We calculate this figure by excluding merger-related expense and the related tax impact from net income. 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

 

(Dollars in thousands)

March 31,

2022

December 31,

2021

March 31,

2021

Net income

$

66,904

 

$

84,831

 

$

68,668

 

Plus: merger-related expense

 

 

 

 

 

5

 

Less: merger-related expense tax adjustment (1)

 

 

 

 

 

1

 

Net income for average assets excluding merger-related expense

$

66,904

 

$

84,831

 

$

68,672

 

 

 

 

 

Average assets

$

20,956,791

 

$

20,867,005

 

$

19,994,260

 

 

 

 

 

Return on average assets (annualized)

 

1.28

%

 

1.63

%

 

1.37

%

Return on average assets excluding merger-related expense (annualized)

 

1.28

%

 

1.63

%

 

1.37

%

 

 

 

 

(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, provision for credit losses, and merger-related expenses from net income. 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

 

(Dollars in thousands)

March 31,

2022

December 31,

2021

March 31,

2021

Interest income

$

168,546

$

177,006

$

172,994

Interest expense

 

6,707

 

 

6,287

 

 

11,342

 

Net interest income

 

161,839

 

 

170,719

 

 

161,652

 

Noninterest income

 

25,894

 

 

27,281

 

 

23,740

 

Revenue

 

187,733

 

 

198,000

 

 

185,392

 

Noninterest expense

 

97,648

 

 

97,252

 

 

92,489

 

Add: merger-related expense

 

 

 

 

 

5

 

Pre-provision net revenue

 

90,085

 

 

100,748

 

 

92,908

 

Pre-provision net revenue (annualized)

$

360,340

 

$

402,992

 

$

371,632

 

 
Average assets

$

20,956,791

$

20,867,005

$

19,994,260

 

Pre-provision net revenue on average assets

0.43

%

0.48

%

0.46

%

Pre-provision net revenue on average assets (annualized)

1.72

%

1.93

%

1.86

%

Noninterest expense (excluding merger-related expense) as a percent of average assets is a non-GAAP financial measure derived from GAAP-based amounts. We calculate the noninterest expense (excluding merger-related expense) as a percent of average assets by excluding merger-related expenses from the noninterest expense and dividing by average assets. 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

 

(Dollars in thousands)

March 31,

2022

December 31,

2021

March 31,

2021

Noninterest expense

$

97,648

 

$

97,252

 

$

92,489

 

Less: merger-related expense

 

 

 

 

 

5

 

Noninterest expense excluding merger-related expense

$

97,648

 

$

97,252

 

$

92,484

 

 
Average assets

$

20,956,791

 

$

20,867,005

 

$

19,994,260

 

 
Noninterest expense as a percent of average assets (annualized)

 

1,86

%

 

1.86

%

 

1.85

%

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

 

1.86

%

 

1.86

%

 

1.85

%

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.

 

(Dollars in thousands, except per share data)

March 31,

2022

December 31,

2021

September 30,

2021

June 30,

2021

March 31,

2021

Total stockholders' equity

$

2,783,018

 

$

2,886,311

 

$

2,838,116

 

$

2,813,419

 

$

2,703,098

 

Less: intangible assets