News Details

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

Company Release - 1/26/2023

Fourth Quarter 2022 Summary

  • Net income of $73.7 million, or $0.77 per diluted share
  • Return on average assets of 1.36%, return on average equity of 10.71%, and return on average tangible common equity(1) of 16.99%
  • Pre-provision net revenue (“PPNR”) to average assets(1) of 1.89%, annualized, increased from 1.85% in the prior quarter
  • Efficiency ratio(1) of 47.4%, compared with 48.3% in the prior quarter
  • Net interest margin of 3.61%, and core net interest margin(1) of 3.38%
  • Cost of deposits of 0.58%, and cost of core deposits(1) of 0.31%
  • Loan-to-deposit ratio of 84.6%, compared with 84.0% in the prior quarter
  • Nonperforming assets to total assets of 0.14%, and net charge-offs to average loans of 0.03%
  • Total risk-based capital ratio of 15.53% and common equity tier 1 capital ratio of 12.99%
  • Tangible book value per share(1) increased $0.70, or 3.7%, to $19.38 compared to the prior quarter

Pacific Premier Bancorp, Inc. (NASDAQ: PPBI) (the “Company” or “Pacific Premier”), the holding company of Pacific Premier Bank (the “Bank”), reported net income of $73.7 million, or $0.77 per diluted share, for the fourth quarter of 2022, compared with net income of $73.4 million, or $0.77 per diluted share, for the third quarter of 2022, and net income of $84.8 million, or $0.89 per diluted share, for the fourth quarter of 2021.

For the fourth quarter of 2022, the Company’s return on average assets (“ROAA”) was 1.36%, return on average equity (“ROAE”) was 10.71%, and return on average tangible common equity (“ROATCE”)(1) was 16.99%, compared to 1.35%, 10.57%, and 16.74%, respectively, for the third quarter of 2022 and 1.63%, 11.90%, and 18.66%, respectively, for the fourth quarter of 2021. Total assets as of December 31, 2022 were $21.69 billion, compared to $21.62 billion at September 30, 2022 and $21.09 billion at December 31, 2021.

Steven R. Gardner, Chairman, President, and Chief Executive Officer of the Company, commented, “Our fourth quarter results reflect the benefits of the actions we took over the past several quarters to proactively manage risk and position the balance sheet for higher interest rates. Despite a more challenging operating environment, we continued to deliver solid financial performance, including an increase in pre-provision net revenue(1) and higher returns compared to the prior quarter. Tangible book value per share(1) grew nearly 4% during the fourth quarter, and all of our capital ratios increased.

“We remain committed to our disciplined, consistent approach to new business development, which enabled us to add attractive full banking relationships with high quality commercial clients during the current quarter. With higher interest rates impacting demand for commercial real estate and multifamily loans, coupled with our conservative approach to new loan production, we saw a slight contraction in total loans during the fourth quarter. Our core commercial deposit base remained relatively stable, but the lower level of commercial real estate transactions continued to result in deposit outflows from our commercial escrow and exchange business. We replaced these outflows with additional time deposits of varying maturities, keeping our loan-to-deposit ratio in the mid-80% range.

“As we head into 2023, our strong liquidity and capital levels provide us with optionality as we navigate an uncertain economic environment. Starting in the fourth quarter of 2022, our teams began executing on new initiatives and marketing efforts to expand the products and services we are offering to existing clients and to enhance new client acquisitions, which we expect will drive growth in future periods. As always, we will be here when our clients need us most, and we will maintain our commitment to delivering value to our shareholders, clients, employees, and the communities we serve.”

____________________

(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

 

 

December 31,

 

September 30,

 

December 31,

(Dollars in thousands, except per share data)

 

2022

 

2022

 

2021

Financial Highlights

 

 

 

 

 

 

Net income

 

$

73,673

 

 

$

73,363

 

 

$

84,831

 

Net interest income

 

 

181,396

 

 

 

181,112

 

 

 

170,719

 

Diluted earnings per share

 

 

0.77

 

 

 

0.77

 

 

 

0.89

 

Common equity dividend per share

 

 

0.33

 

 

 

0.33

 

 

 

0.33

 

Return on average assets

 

 

1.36

%

 

 

1.35

%

 

 

1.63

%

Return on average equity

 

 

10.71

 

 

 

10.57

 

 

 

11.90

 

Return on average tangible common equity (1)

 

 

16.99

 

 

 

16.74

 

 

 

18.66

 

Pre-provision net revenue on average assets (1)

 

 

1.89

 

 

 

1.85

 

 

 

1.93

 

Net interest margin

 

 

3.61

 

 

 

3.61

 

 

 

3.53

 

Core net interest margin (1)

 

 

3.38

 

 

 

3.44

 

 

 

3.38

 

Cost of deposits

 

 

0.58

 

 

 

0.22

 

 

 

0.04

 

Cost of core deposits (1)

 

 

0.31

 

 

 

0.11

 

 

 

0.03

 

Efficiency ratio (1)

 

 

47.4

 

 

 

48.3

 

 

 

48.0

 

Noninterest expense as a percent of average assets

 

 

1.83

 

 

 

1.86

 

 

 

1.86

 

Total assets

 

$

21,688,017

 

 

$

21,619,201

 

 

$

21,094,429

 

Total deposits

 

 

17,352,401

 

 

 

17,746,374

 

 

 

17,115,589

 

Loans-to-deposit ratio

 

 

84.6

%

 

 

84.0

%

 

 

83.6

%

Non-maturity deposits as a percent of total deposits

 

 

85.6

 

 

 

89.5

 

 

 

93.8

 

Book value per share

 

$

29.45

 

 

$

28.79

 

 

$

30.58

 

Tangible book value per share (1)

 

 

19.38

 

 

 

18.68

 

 

 

20.29

 

Total capital ratio

 

 

15.53

%

 

 

14.83

%

 

 

14.62

%

____________________

(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 $181.4 million in the fourth quarter of 2022, an increase of $284,000, or 0.2%, from the third quarter of 2022. The slight increase in net interest income was driven by higher yields on interest-earning assets, as well as a favorable interest impact from fair value hedges on fixed-rate loans, mostly offset by a higher cost of funds.

The net interest margin for the fourth quarter of 2022 was 3.61% and unchanged from the third quarter of 2022. The core net interest margin(6) decreased 6 basis points to 3.38%, compared to 3.44% in the prior quarter, predominantly driven by lower loan-related fees as well as a higher cost of funds offsetting the impact of higher yields on interest-earning assets.

Net interest income for the fourth quarter of 2022 increased $10.7 million, or 6.3%, compared to the fourth quarter of 2021. The increase was primarily attributable to higher yields on average interest-earning assets, partially offset by a higher cost of funds.

 

PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED AVERAGE BALANCES AND YIELD DATA

(Unaudited)

 

 

 

Three Months Ended

 

 

December 31, 2022

 

September 30, 2022

 

December 31, 2021

(Dollars in thousands)

 

Average
Balance

 

Interest

 

Average
Yield/
Cost

 

Average
Balance

 

Interest

 

Average
Yield/
Cost

 

Average
Balance

 

Interest

 

Average
Yield/
Cost

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

1,015,197

 

$

8,636

 

3.37

%

 

$

665,510

 

$

2,754

 

1.64

%

 

$

334,371

 

$

66

 

0.08

%

Investment securities

 

 

4,130,042

 

 

24,688

 

2.39

 

 

 

4,277,444

 

 

22,067

 

2.06

 

 

 

4,833,251

 

 

19,522

 

1.62

 

Loans receivable, net (1) (2)

 

 

14,799,417

 

 

184,457

 

4.94

 

 

 

14,986,682

 

 

174,204

 

4.61

 

 

 

14,005,836

 

 

157,418

 

4.46

 

Total interest-earning assets

 

$

19,944,656

 

$

217,781

 

4.33

 

 

$

19,929,636

 

$

199,025

 

3.96

 

 

$

19,173,458

 

$

177,006

 

3.66

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits

 

$

11,021,383

 

$

25,865

 

0.93

%

 

$

10,839,359

 

$

9,873

 

0.36

%

 

$

10,471,426

 

$

1,694

 

0.06

%

Borrowings

 

 

1,157,258

 

 

10,520

 

3.62

 

 

 

966,981

 

 

8,040

 

3.31

 

 

 

400,014

 

 

4,593

 

4.59

 

Total interest-bearing liabilities

 

$

12,178,641

 

$

36,385

 

1.19

 

 

$

11,806,340

 

$

17,913

 

0.60

 

 

$

10,871,440

 

$

6,287

 

0.23

 

Noninterest-bearing deposits

 

$

6,587,400

 

 

 

 

 

$

6,893,463

 

 

 

 

 

$

6,911,702

 

 

 

 

Net interest income

 

 

 

$

181,396

 

 

 

 

 

$

181,112

 

 

 

 

 

$

170,719

 

 

Net interest margin (3)

 

 

 

 

 

3.61

%

 

 

 

 

 

3.61

%

 

 

 

 

 

3.53

%

Cost of deposits (4)

 

 

 

 

 

0.58

 

 

 

 

 

 

0.22

 

 

 

 

 

 

0.04

 

Cost of funds (5)

 

 

 

 

 

0.77

 

 

 

 

 

 

0.38

 

 

 

 

 

 

0.14

 

Cost of core deposits (6)

 

 

 

 

 

0.31

 

 

 

 

 

 

0.11

 

 

 

 

 

 

0.03

 

Ratio of interest-earning assets to interest-bearing liabilities

 

163.77

 

 

 

 

 

 

168.80

 

 

 

 

 

 

176.37

 

____________________

(1)

Average balance includes loans held for sale and nonperforming loans and is net of deferred loan origination fees/costs, discounts/premiums, and the basis adjustment of certain loans included in fair value hedging relationships.

(2)

Interest income includes net discount accretion of $3.5 million, $4.6 million, and $7.9 million, for the three months ended December 31, 2022, September 30, 2022, and December 31, 2021, respectively.

(3)

Represents annualized net interest income divided by average interest-earning assets.

(4)

Represents annualized interest expense on deposits divided by the sum of average interest-bearing deposits and noninterest-bearing deposits.

(5)

Represents annualized total interest expense divided by the sum of average total interest-bearing liabilities and noninterest-bearing deposits.

(6)

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

 

Provision for Credit Losses

For the fourth quarter of 2022, the Company recorded a $2.8 million provision expense, compared to a $1.1 million provision expense for the third quarter of 2022, and a $14.6 million provision recapture for the fourth quarter of 2021. The provision for credit losses for the fourth quarter of 2022 was impacted by changes to the overall size, composition, asset quality trends, and unfunded commitments of the loan portfolio.

The provision recapture for loans in the fourth quarter of 2021 was reflective of favorable changes in the macroeconomic forecasts related to the COVID-19 pandemic relative to prior periods.

 

 

Three Months Ended

 

 

December 31,

 

September 30,

 

December 31,

(Dollars in thousands)

 

2022

 

2022

 

2021

Provision for Credit Losses

 

 

 

 

 

 

Provision for loan losses

 

$

3,899

 

 

$

546

 

 

$

(14,710

)

Provision for unfunded commitments

 

 

(1,013

)

 

 

549

 

 

 

51

 

Provision for held-to-maturity securities

 

 

(48

)

 

 

(18

)

 

 

11

 

Total provision for credit losses

 

$

2,838

 

 

$

1,077

 

 

$

(14,648

)

 

Noninterest Income

Noninterest income for the fourth quarter of 2022 was $20.5 million, an increase of $333,000 from the third quarter of 2022. During the fourth quarter of 2022, the Bank sold $3.6 million of Small Business Administration ("SBA") loans for a net gain of $151,000 and $6.4 million of other loans for no gain, compared with $9.6 million of SBA loans sold for a net gain of $434,000 and $15.0 million of other loans for a net gain of $23,000 in the third quarter of 2022.

Noninterest income for the fourth quarter of 2022 decreased $6.8 million, compared to the fourth quarter of 2021. The decrease was primarily due to a $3.6 million decrease in net gain from sales of investment securities, a $1.9 million decrease in trust custodial account fees resulting primarily from a decrease in the market value of assets under custody, a $1.2 million decrease in net gain from loan sales, and a $939,000 decrease in escrow and exchange fees attributable to lower transaction volumes, partially offset by an $851,000 increase in other income.

 

 

Three Months Ended

 

 

December 31,

 

September 30,

 

December 31,

(Dollars in thousands)

 

2022

 

2022

 

2021

Noninterest income

 

 

 

 

 

 

Loan servicing income

 

$

346

 

 

$

397

 

 

$

505

 

Service charges on deposit accounts

 

 

2,689

 

 

 

2,704

 

 

 

2,590

 

Other service fee income

 

 

295

 

 

 

323

 

 

 

391

 

Debit card interchange fee income

 

 

1,048

 

 

 

808

 

 

 

769

 

Earnings on bank owned life insurance

 

 

3,359

 

 

 

3,339

 

 

 

3,521

 

Net gain from sales of loans

 

 

151

 

 

 

457

 

 

 

1,334

 

Net (loss) gain from sales of investment securities

 

 

 

 

 

(393

)

 

 

3,585

 

Trust custodial account fees

 

 

9,722

 

 

 

9,951

 

 

 

11,611

 

Escrow and exchange fees

 

 

1,282

 

 

 

1,555

 

 

 

2,221

 

Other income

 

 

1,605

 

 

 

1,023

 

 

 

754

 

Total noninterest income

 

$

20,497

 

 

$

20,164

 

 

$

27,281

 

 

Noninterest Expense

Noninterest expense totaled $99.2 million for the fourth quarter of 2022, a decrease of $1.7 million compared to the third quarter of 2022, primarily due to a $2.0 million decrease in compensation and benefits.

Noninterest expense increased by $1.9 million compared to the fourth quarter of 2021 primarily due to a $2.9 million increase in deposit expense and a $1.1 million increase in data processing, partially offset by a $1.7 million decrease in compensation and benefits.

 

 

Three Months Ended

 

 

December 31,

 

September 30,

 

December 31,

(Dollars in thousands)

 

2022

 

2022

 

2021

Noninterest expense

 

 

 

 

 

 

Compensation and benefits

 

$

54,347

 

 

$

56,355

 

 

$

56,076

 

Premises and occupancy

 

 

11,641

 

 

 

12,011

 

 

 

11,403

 

Data processing

 

 

6,991

 

 

 

7,058

 

 

 

5,881

 

FDIC insurance premiums

 

 

1,463

 

 

 

1,461

 

 

 

1,389

 

Legal and professional services

 

 

5,175

 

 

 

4,075

 

 

 

5,870

 

Marketing expense

 

 

1,985

 

 

 

1,912

 

 

 

1,821

 

Office expense

 

 

1,310

 

 

 

1,338

 

 

 

1,463

 

Loan expense

 

 

743

 

 

 

789

 

 

 

857

 

Deposit expense

 

 

6,770

 

 

 

4,846

 

 

 

3,836

 

Amortization of intangible assets

 

 

3,440

 

 

 

3,472

 

 

 

3,880

 

Other expense

 

 

5,317

 

 

 

7,549

 

 

 

4,776

 

Total noninterest expense

 

$

99,182

 

 

$

100,866

 

 

$

97,252

 

 

Income Tax

For the fourth quarter of 2022, our income tax expense totaled $26.2 million, resulting in an effective tax rate of 26.2%, compared to income tax expense of $26.0 million and an effective tax rate of 26.1% for the third quarter of 2022, and income tax expense of $30.6 million and an effective tax rate of 26.5% for the fourth quarter of 2021.

For full year 2022, our income tax expense totaled $100.6 million, resulting in an effective tax rate of 26.2%.

BALANCE SHEET HIGHLIGHTS

Loans

Loans held for investment totaled $14.7 billion at December 31, 2022, a decrease of $232.5 million, or 1.6%, from September 30, 2022, and an increase of $380.4 million, or 2.7%, from December 31, 2021. The decrease from September 30, 2022 was driven primarily by lower loan fundings, partially offset by lower loan prepayments and maturities. The increase from December 31, 2021 was due to loan fundings, partially offset by loan amortization, prepayments, and maturities.

During the fourth quarter of 2022, loan commitments totaled $239.8 million, and new loan fundings totaled $149.1 million, compared with $789.2 million in loan commitments and $450.7 million in new loan fundings for the third quarter of 2022, and $1.48 billion in loan commitments and $1.07 billion in new loan fundings for the fourth quarter of 2021.

At December 31, 2022, the total loan-to-deposit ratio was 84.6%, compared with 84.0% and 83.6%, at September 30, 2022 and December 31, 2021, respectively.

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

 

Three Months Ended

 

December 31,

 

September 30,

 

December 31,

(Dollars in thousands)

2022

 

2022

 

2021

Beginning loan balance

$

14,979,098

 

 

$

15,101,652

 

 

$

13,990,961

 

New commitments

 

239,829

 

 

 

789,198

 

 

 

1,479,445

 

Unfunded new commitments

 

(90,758

)

 

 

(338,534

)

 

 

(408,963

)

Net new fundings

 

149,071

 

 

 

450,664

 

 

 

1,070,482

 

Amortization/maturities/payoffs

 

(481,120

)

 

 

(568,615

)

 

 

(935,064

)

Net draws on existing lines of credit

 

107,560

 

 

 

21,416

 

 

 

194,548

 

Loan sales

 

(9,471

)

 

 

(24,701

)

 

 

(13,427

)

Charge-offs

 

(4,271

)

 

 

(1,318

)

 

 

(734

)

Net (decrease) increase

 

(238,231

)

 

 

(122,554

)

 

 

315,805

 

Ending gross loan balance before basis adjustment

 

14,740,867

 

 

 

14,979,098

 

 

 

14,306,766

 

Basis adjustment associated with fair value hedge (1)

 

(61,926

)

 

 

(68,124

)

 

 

 

Ending gross loan balance

$

14,678,941

 

 

$

14,910,974

 

 

$

14,306,766

 

____________________

(1)

Represents the basis adjustment associated with the application of hedge accounting on certain loans.

 

The following table presents the composition of the loans held for investment as of the dates indicated:

 

 

December 31,

 

September 30,

 

December 31,

(Dollars in thousands)

 

2022

 

2022

 

2021

Investor loans secured by real estate

 

 

 

 

 

 

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

 

$

2,660,321

 

 

$

2,771,272

 

 

$

2,771,137

 

Multifamily

 

 

6,112,026

 

 

 

6,199,581

 

 

 

5,891,934

 

Construction and land

 

 

399,034

 

 

 

373,194

 

 

 

277,640

 

SBA secured by real estate (1)

 

 

42,135

 

 

 

42,998

 

 

 

46,917

 

Total investor loans secured by real estate

 

 

9,213,516

 

 

 

9,387,045

 

 

 

8,987,628

 

Business loans secured by real estate (2)

 

 

 

 

 

 

CRE owner-occupied

 

 

2,432,163

 

 

 

2,477,530

 

 

 

2,251,014

 

Franchise real estate secured

 

 

378,057

 

 

 

383,468

 

 

 

380,381

 

SBA secured by real estate (3)

 

 

61,368

 

 

 

64,002

 

 

 

69,184

 

Total business loans secured by real estate

 

 

2,871,588

 

 

 

2,925,000

 

 

 

2,700,579

 

Commercial loans (4)

 

 

 

 

 

 

Commercial and industrial

 

 

2,160,948

 

 

 

2,164,623

 

 

 

2,103,112

 

Franchise non-real estate secured

 

 

404,791

 

 

 

409,773

 

 

 

392,576

 

SBA non-real estate secured

 

 

11,100

 

 

 

11,557

 

 

 

11,045

 

Total commercial loans

 

 

2,576,839

 

 

 

2,585,953

 

 

 

2,506,733

 

Retail loans

 

 

 

 

 

 

Single family residential (5)

 

 

72,997

 

 

 

75,176

 

 

 

95,292

 

Consumer

 

 

3,284

 

 

 

3,761

 

 

 

5,665

 

Total retail loans

 

 

76,281

 

 

 

78,937

 

 

 

100,957

 

Loans held for investment before basis adjustment (6)

 

 

14,738,224

 

 

 

14,976,935

 

 

 

14,295,897

 

Basis adjustment associated with fair value hedge (7)

 

 

(61,926

)

 

 

(68,124

)

 

 

 

Loans held for investment

 

 

14,676,298

 

 

 

14,908,811

 

 

 

14,295,897

 

Allowance for credit losses for loans held for investment

 

 

(195,651

)

 

 

(195,549

)

 

 

(197,752

)

Loans held for investment, net

 

$

14,480,647

 

 

$

14,713,262

 

 

$

14,098,145

 

 

 

 

 

 

 

 

Total unfunded loan commitments

 

 

2,489,203

 

 

 

2,823,555

 

 

 

2,507,911

 

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

 

$

2,643

 

 

$

2,163

 

 

$

10,869

 

____________________

(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 $54.8 million, $59.0 million, and $77.1 million as of December 31, 2022, September 30, 2022, and December 31, 2021, respectively.

(7)

Represents the basis adjustment associated with the application of hedge accounting on certain loans.

 

The total end of period weighted average interest rate on loans, excluding fees and discounts, at December 31, 2022 was 4.61%, compared with 4.34% at September 30, 2022 and 3.95% at December 31, 2021. The quarter-over-quarter and year-over-year increases reflect higher rates on new loan originations and the repricing of floating rate loans as a result of the Federal Reserve Bank's interest rate increases since March 2022.

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

 

 

Three Months Ended

 

 

December 31,

 

September 30,

 

December 31,

(Dollars in thousands)

 

2022

 

2022

 

2021

Investor loans secured by real estate

 

 

 

 

 

 

CRE non-owner-occupied

 

$

34,258

 

 

$

88,708

 

 

$

94,740

 

Multifamily

 

 

28,285

 

 

 

151,269

 

 

 

552,600

 

Construction and land

 

 

31,175

 

 

 

123,557

 

 

 

94,343

 

Total investor loans secured by real estate

 

 

93,718

 

 

 

363,534

 

 

 

741,683

 

Business loans secured by real estate (2)

 

 

 

 

 

 

CRE owner-occupied

 

 

24,266

 

 

 

80,676

 

 

 

147,322

 

Franchise real estate secured

 

 

840

 

 

 

14,011

 

 

 

52,034

 

SBA secured by real estate (3)

 

 

4,198

 

 

 

6,468

 

 

 

15,631

 

Total business loans secured by real estate

 

 

29,304

 

 

 

101,155

 

 

 

214,987

 

Commercial loans (4)

 

 

 

 

 

 

Commercial and industrial

 

 

96,566

 

 

 

288,857

 

 

 

469,018

 

Franchise non-real estate secured

 

 

14,130

 

 

 

22,413

 

 

 

43,219

 

SBA non-real estate secured

 

 

1,058

 

 

 

4,673

 

 

 

3,500

 

Total commercial loans

 

 

111,754

 

 

 

315,943

 

 

 

515,737

 

Retail loans

 

 

 

 

 

 

Single family residential (5)

 

 

5,053

 

 

 

8,566

 

 

 

6,800

 

Consumer

 

 

 

 

 

 

 

 

238

 

Total retail loans

 

 

5,053

 

 

 

8,566

 

 

 

7,038

 

Total loan commitments

 

$

239,829

 

 

$

789,198

 

 

$

1,479,445

 

____________________

(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 increased to 6.34% in the fourth quarter of 2022, compared to 5.55% in the third quarter of 2022, and 3.55% in the fourth quarter of 2021.

Asset Quality and Allowance for Credit Losses

At December 31, 2022, our ACL on loans held for investment was $195.7 million, an increase of $102,000 from September 30, 2022, and a decrease of $2.1 million from December 31, 2021. During the fourth quarter of 2022, the Company incurred $3.8 million of net charge-offs, compared with $1.1 million of net charge-offs and $1.0 million of net recoveries during the third quarter of 2022 and the fourth quarter of 2021, respectively.

The following table provides the allocation of the ACL for loans held for investment, as well as the activity in the ACL attributed to various segments in the loan portfolio as of and for the period indicated:

 

Three Months Ended December 31, 2022

(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

$

37,104

 

$

(3,632

)

 

$

 

$

220

 

 

$

33,692

Multifamily

 

56,086

 

 

 

 

 

 

 

 

 

248

 

 

 

56,334

 

Construction and land

 

6,440

 

 

 

 

 

 

 

 

 

674

 

 

 

7,114

 

SBA secured by real estate (1)

 

2,955

 

 

 

 

 

 

 

 

 

(363

)

 

 

2,592

 

Business loans secured by real estate (2)

 

 

 

 

 

 

 

 

 

CRE owner-occupied

 

31,826

 

 

 

 

 

 

23

 

 

 

491

 

 

 

32,340

 

Franchise real estate secured

 

6,710

 

 

 

 

 

 

 

 

 

309

 

 

 

7,019

 

SBA secured by real estate (3)

 

4,785

 

 

 

 

 

 

 

 

 

(437

)

 

 

4,348

 

Commercial loans (4)

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

35,498

 

 

 

(637

)

 

 

387

 

 

 

(79

)

 

 

35,169

 

Franchise non-real estate secured

 

13,194

 

 

 

 

 

 

 

 

 

2,835

 

 

 

16,029

 

SBA non-real estate secured

 

440

 

 

 

 

 

 

7

 

 

 

(6

)

 

 

441

 

Retail loans

 

 

 

 

 

 

 

 

 

Single family residential (5)

 

296

 

 

 

 

 

 

57

 

 

 

(1

)

 

 

352

 

Consumer loans

 

215

 

 

 

(2

)

 

 

 

 

 

8

 

 

 

221

 

Totals

$

195,549

 

 

$

(4,271

)

 

$

474

 

 

$

3,899

 

 

$

195,651

 

____________________

(1)

SBA loans that are collateralized by hotel/motel real property.

(2)

Loans to businesses that are collateralized by real estate where the operating cash flow of the business is the primary source of repayment.

(3)

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

(4)

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

(5)

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

 

The ratio of ACL to loans held for investment at December 31, 2022 was 1.33%, compared to 1.31% at September 30, 2022 and 1.38% at December 31, 2021. The fair value net discount on loans acquired through bank acquisitions was $54.8 million, or 0.37% of total loans held for investment, as of December 31, 2022, compared to $59.0 million, or 0.39% of total loans held for investment, as of September 30, 2022, and $77.1 million, or 0.54% of total loans held for investment, as of December 31, 2021.

Nonperforming assets totaled $30.9 million, or 0.14% of total assets, at December 31, 2022, compared with $60.5 million, or 0.28% of total assets, at September 30, 2022 and $31.3 million, or 0.15% of total assets, at December 31, 2021. Loan delinquencies were $43.3 million, or 0.30% of loans held for investment, at December 31, 2022, compared to $41.3 million, or 0.28% of loans held for investment, at September 30, 2022, and $19.5 million, or 0.14% of loans held for investment, at December 31, 2021.

Classified loans totaled $149.3 million, or 1.02% of loans held for investment, at December 31, 2022, compared with $110.1 million, or 0.74% of loans held for investment, at September 30, 2022, and $121.8 million, or 0.85% of loans held for investment, at December 31, 2021.

The following table presents the asset quality metrics of the loan portfolio as of the dates indicated:

 

 

December 31,

 

September 30,

 

December 31,

(Dollars in thousands)

 

2022

 

2022

 

2021

Asset Quality

 

 

 

 

 

 

Nonperforming loans

 

$

30,905

 

 

$

60,464

 

 

$

31,273

 

Other real estate owned

 

 

 

 

 

 

 

 

 

Nonperforming assets

 

$

30,905

 

 

$

60,464

 

 

$

31,273

 

 

 

 

 

 

 

 

Total classified assets (1)

 

$

149,304

 

 

$

110,143

 

 

$

121,827

 

Allowance for credit losses

 

 

195,651

 

 

 

195,549

 

 

 

197,752

 

Allowance for credit losses as a percent of total nonperforming loans

 

 

633

%

 

 

323

%

 

 

632

%

Nonperforming loans as a percent of loans held for investment

 

 

0.21

 

 

 

0.41

 

 

 

0.22

 

Nonperforming assets as a percent of total assets

 

 

0.14

 

 

 

0.28

 

 

 

0.15

 

Classified loans to total loans held for investment

 

 

1.02

 

 

 

0.74

 

 

 

0.85

 

Classified assets to total assets

 

 

0.69

 

 

 

0.51

 

 

 

0.58

 

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

 

$

3,797

 

 

$

1,072

 

 

$

(981

)

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

 

 

0.03

%

 

 

0.01

%

 

 

(0.01

)%

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

 

 

1.33

 

 

 

1.31

 

 

 

1.38

 

Delinquent Loans:

 

 

 

 

 

 

30 - 59 days

 

$

20,538

 

 

$

1,484

 

 

$

1,395

 

60 - 89 days

 

 

185

 

 

 

6,535

 

 

 

 

90+ days

 

 

22,625

 

 

 

33,238

 

 

 

18,100

 

Total delinquency

 

$

43,348

 

 

$

41,257

 

 

$

19,495

 

Delinquency as a percent of loans held for investment

 

 

0.30

%

 

 

0.28

%

 

 

0.14

%

____________________

(1)

Includes substandard loans and other real estate owned.

(2)

At December 31, 2022, 26% of loans held for investment include a fair value net discount of $54.8 million, or 0.37% of loans held for investment. At September 30, 2022, 27% of loans held for investment include a fair value net discount of $59.0 million, or 0.39% 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.

 

Investment Securities

At December 31, 2022, available-for-sale ("AFS") and held-to-maturity ("HTM") investment securities were $2.60 billion and $1.39 billion, respectively, compared to $2.66 billion and $1.39 billion, respectively, at September 30, 2022, and $4.27 billion and $381.7 million, respectively, at December 31, 2021. In total, investment securities were $3.99 billion at December 31, 2022, a decrease of $57.5 million from $4.05 billion at September 30, 2022 and a decrease of $666.4 million from $4.66 billion at December 31, 2021. The decrease in the fourth quarter of 2022 compared to the prior quarter was primarily the result of principal payments, amortization, and redemptions of $85.1 million, partially offset by a mark-to-market fair value loss reduction of $20.6 million. The Company did not purchase or sell any securities during the fourth quarter of 2022.

The decrease in investment securities from December 31, 2021 was primarily the result of $934.7 million in sales, $426.2 million in principal payments, discounts from the AFS securities transferred from HTM, amortization, and redemptions, and a $299.0 million decrease in mark-to-market fair value adjustments as a result of higher interest rates, partially offset by $986.6 million in purchases.

Deposits

At December 31, 2022, deposits totaled $17.35 billion, a decrease of $394.0 million, or 2.2%, from September 30, 2022, and an increase of $236.8 million, or 1.38%, from December 31, 2021.

At December 31, 2022, core deposits(1) totaled $14.85 billion, or 85.6% of total deposits, a decrease of $1.03 billion, or 6.5%, from September 30, 2022, and a decrease of $1.20 billion, or 7.5%, from December 31, 2021. The linked-quarter decrease was partially driven by a $396.7 million decrease in the Bank's commercial escrow and exchange business, as well as declines in commercial and consumer deposit accounts.

At December 31, 2022, non-core deposits totaled $2.50 billion, an increase of $631.7 million, or 33.8%, from September 30, 2022, and an increase of $1.44 billion, or 135.3%, from December 31, 2021. The increase in the fourth quarter of 2022 compared to the prior quarter was primarily due to the addition of $417.7 million in brokered certificates of deposit and an increase of $214.0 million in retail certificates of deposit. The increase from December 31, 2021 was primarily driven by an increase in brokered certificates of deposit.

The weighted average cost of deposits for the fourth quarter of 2022 was 0.58%, compared with 0.22% for the third quarter of 2022 and 0.04% for the fourth quarter of 2021. The increase in the weighted average cost of deposits for the fourth quarter of 2022 compared to the third quarter of 2022 was principally driven by higher pricing across all deposit categories, and higher average retail and brokered certificates of deposit. The weighted average cost of core deposits(2) for the fourth quarter of 2022 was 0.31%, compared to 0.11% for the third quarter of 2022, and 0.03% for the fourth quarter of 2021.

At December 31, 2022, the end-of-period weighted average rate of total deposits was 0.79%, compared to 0.37% at September 30, 2022 and 0.04% at December 31, 2021. At December 31, 2022, the end-of-period weighted average rate of core deposits was 0.43%, compared to 0.20% at September 30, 2022 and 0.03% at December 31, 2021.

 

 

December 31,

 

September 30,

 

December 31,

(Dollars in thousands)

 

2022

 

2022

 

2021

Deposit Accounts

 

 

 

 

 

 

Noninterest-bearing checking

 

$

6,306,825

 

 

$

6,775,465

 

 

$

6,757,259

 

Interest-bearing:

 

 

 

 

 

 

Checking

 

 

3,119,850

 

 

 

3,605,498

 

 

 

3,493,331

 

Money market/savings

 

 

5,422,577

 

 

 

5,493,958

 

 

 

5,801,173

 

Total core deposits (1)

 

 

14,849,252

 

 

 

15,874,921

 

 

 

16,051,763

 

Brokered money market

 

 

30

 

 

 

30

 

 

 

5,553

 

Retail certificates of deposit

 

 

1,086,423

 

 

 

872,421

 

 

 

1,058,273

 

Wholesale/brokered certificates of deposit

 

 

1,416,696

 

 

 

999,002

 

 

 

 

Total non-core deposits

 

 

2,503,149

 

 

 

1,871,453

 

 

 

1,063,826

 

Total deposits

 

$

17,352,401

 

 

$

17,746,374

 

 

$

17,115,589

 

 

 

 

 

 

 

 

Cost of deposits

 

 

0.58

%

 

 

0.22

%

 

 

0.04

%

Cost of core deposits (2)

 

 

0.31

 

 

 

0.11

 

 

 

0.03

 

Noninterest-bearing deposits as a percent of total deposits

 

 

36.3

 

 

 

38.2

 

 

 

39.5

 

Non-maturity deposits as a percent of total deposits

 

 

85.6

 

 

 

89.5

 

 

 

93.8

 

Core deposits as a percent of total deposits

 

 

85.6

 

 

 

89.5

 

 

 

93.8

 

____________________

(1)

Core deposits are total deposits excluding all certificates of deposits and all brokered deposits.

(2)

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

 

Borrowings

At December 31, 2022, total borrowings amounted to $1.33 billion, an increase of $400.2 million from September 30, 2022 and an increase of $442.6 million from December 31, 2021. Total borrowings at December 31, 2022 included $1.00 billion of Federal Home Loan Bank of San Francisco (“FHLB”) term advances and $331.2 million of subordinated debt. The increase in borrowings at December 31, 2022 as compared to September 30, 2022 was primarily due to an increase of $400.0 million in FHLB term advances to manage interest rate risk and liquidity. The increase in borrowings at December 31, 2022 as compared to December 31, 2021 was primarily due to an increase of $450.0 million in FHLB term advances for the same purpose.

Capital Ratios

At December 31, 2022, our common stockholder's equity was $2.80 billion, or 12.90% of total assets, compared with $2.74 billion, or 12.65% of total assets, at September 30, 2022, and $2.89 billion, or 13.68% of total assets, at December 31, 2021, with a book value per share of $29.45, compared with $28.79 at September 30, 2022 and $30.58 at December 31, 2021. At December 31, 2022, the ratio of tangible common equity to total assets(1) was 8.88%, compared with 8.59% at September 30, 2022 and 9.52% at December 31, 2021, and tangible book value per share(1) was $19.38, compared with $18.68 at September 30, 2022 and $20.29 at December 31, 2021. The increase in tangible book value per share at December 31, 2022 from the prior quarter was primarily driven by net income and other comprehensive income on our AFS securities portfolio during the quarter, partially offset by the dividends paid. The decrease in tangible book value per share at December 31, 2022 from December 31, 2021 was primarily driven by the other comprehensive loss from the impact of higher interest rates on our AFS securities portfolio and dividends paid, partially offset by net income in 2022.

The Company implemented the CECL model on January 1, 2020 and elected to phase in the full effect of CECL on regulatory capital over the five-year transition period. In the first quarter of 2022, the Company began phasing into regulatory capital the cumulative adjustments at the end of the second year of the transition period at 25% per year. At December 31, 2022, the Company and Bank were in compliance with the capital conservation buffer requirement and exceeded the minimum Common Equity Tier 1, Tier 1, and total capital ratios, inclusive of the fully phased-in capital conservation buffer of 7.0%, 8.5% and 10.5%, respectively, and the Bank qualified as “well-capitalized” for purposes of the federal bank regulatory prompt corrective action regulations.

____________________

(1)

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

 

The following table presents capital ratios and share data as of the dates indicated:

 

 

December 31,

 

September 30,

 

December 31,

Capital Ratios

 

2022

 

2022

 

2021

Pacific Premier Bancorp, Inc. Consolidated

 

 

Tier 1 leverage ratio

 

 

10.29

%

 

 

10.12

%

 

 

10.08

%

Common equity tier 1 risk-based capital ratio

 

 

12.99

 

 

 

12.36

 

 

 

12.11

 

Tier 1 risk-based capital ratio

 

 

12.99

 

 

 

12.36

 

 

 

12.11

 

Total risk-based capital ratio

 

 

15.53

 

 

 

14.83

 

 

 

14.62

 

Tangible common equity ratio (1)

 

 

8.88

 

 

 

8.59

 

 

 

9.52

 

 

 

 

 

 

 

 

Pacific Premier Bank

 

 

 

 

 

 

Tier 1 leverage ratio

 

 

11.80

%

 

 

11.64

%

 

 

11.62

%

Common equity tier 1 risk-based capital ratio

 

 

14.89

 

 

 

14.23

 

 

 

13.96

 

Tier 1 risk-based capital ratio

 

 

14.89

 

 

 

14.23

 

 

 

13.96

 

Total risk-based capital ratio

 

 

15.74

 

 

 

15.05

 

 

 

14.70

 

 

 

 

 

 

 

 

Share Data

 

 

 

 

 

 

Book value per share

 

$

29.45

 

 

$

28.79

 

 

$

30.58

 

Tangible book value per share (1)

 

 

19.38

 

 

 

18.68

 

 

 

20.29

 

Common equity dividends declared per share

 

 

0.33

 

 

 

0.33

 

 

 

0.33

 

Closing stock price (2)

 

 

31.56

 

 

 

30.96

 

 

 

40.03

 

Shares issued and outstanding

 

 

95,021,760

 

 

 

95,016,767

 

 

 

94,389,543

 

Market Capitalization (2)(3)

 

$

2,998,887

 

 

$

2,941,719

 

 

$

3,778,413

 

____________________

(1)

A reconciliation of the non-GAAP measures of tangible common equity and tangible book value per share to the GAAP measures of common stockholders' equity and book value per share is set forth below.

(2)

As of the last trading day prior to period end.

(3)

Dollars in thousands.

 

Dividend and Stock Repurchase Program

On January 24, 2023, the Company's Board of Directors declared a $0.33 per share dividend, payable on February 10, 2023 to stockholders of record on February 3, 2023. In January 2021, the Company’s Board of Directors approved a stock repurchase program, which authorized the repurchase up to 4,725,000 shares of its common stock. During the fourth quarter of 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 January 26, 2023 to discuss its financial results. Analysts and investors may participate in the question-and-answer session. A live webcast will be available on the Webcasts page of the Company's investor relations website. An archived version of the webcast will be available in the same location shortly after the live call has ended. The conference call can be accessed by telephone at (866) 290-5977. Participants should ask to be joined into the Pacific Premier Bancorp, Inc. call. Additionally, a telephone replay will be made available through February 2, 2023 at (877) 344-7529, access code 4933909.

About Pacific Premier Bancorp, Inc.

Pacific Premier Bancorp, Inc. (Nasdaq: PPBI) is the parent company of Pacific Premier Bank, a California-based commercial bank focused on serving small, middle-market, and corporate businesses throughout the western United States in major metropolitan markets in California, Washington, Arizona, and Nevada. Founded in 1983, Pacific Premier Bank has grown to become one of the largest banks headquartered in the western region of the United States, with approximately $22 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 39,000 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. These risks and uncertainties include, but are not limited to, the following: the strength of the United States economy in general and the strength of the local economies in which we conduct operations; the effects of, and changes in, trade, monetary, and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System; inflation/deflation, interest rate, market, and monetary fluctuations; our ability to attract and retain deposits and access to other sources of liquidity; the effect of acquisitions we have made or may make, including, without limitation, the failure to achieve the expected revenue growth and/or expense savings from such acquisitions, and/or the failure to effectively integrate an acquisition target into our operations; the timely development of competitive new products and services and the acceptance of these products and services by new and existing customers; possible impairment charges to goodwill, including any impairment that may result from increased volatility in our stock price; the impact of changes in financial services policies, laws, and regulations, including those concerning taxes, banking, securities, and insurance, and the application thereof by regulatory bodies; 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; the impact of governmental efforts to restructure the U.S. financial regulatory system; the impact of recent or future changes in the FDIC insurance assessment rate or the rules and regulations related to the calculation of the FDIC insurance assessment amount; changes in consumer spending, borrowing, and savings habits; the effects of our lack of a diversified loan portfolio, including the risks of geographic and industry concentrations; the possibility that we may reduce or discontinue the payments of dividends on our common stock; the possibility that we may discontinue, reduce or otherwise limit the level of repurchases of our common stock we may make from time to time pursuant to our stock repurchase program; changes in the financial performance and/or condition of our borrowers; changes in the competitive environment among financial and bank holding companies and other financial service providers; geopolitical conditions, including acts or threats of terrorism, actions taken by the United States or other governments in response to acts or threats of terrorism, and/or military conflicts, including the war between Russia and Ukraine, which could impact business and economic conditions in the United States and abroad; public health crises 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)

 

 

 

December 31,

 

September 30,

 

June 30,

 

March 31,

 

December 31,

(Dollars in thousands)

 

2022

 

2022

 

2022

 

2022

 

2021

ASSETS

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

1,101,249

 

 

$

739,211

 

 

$

972,798

 

 

$

809,259

 

 

$

304,703

 

Interest-bearing time deposits with financial institutions

 

 

1,734

 

 

 

1,733

 

 

 

2,216

 

 

 

2,216

 

 

 

2,216

 

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

 

 

1,388,103

 

 

 

1,385,502

 

 

 

1,390,682

 

 

 

996,382

 

 

 

381,674

 

Investment securities available for sale, at fair value

 

 

2,601,013

 

 

 

2,661,079

 

 

 

2,679,070

 

 

 

3,222,095

 

 

 

4,273,864

 

FHLB, FRB, and other stock

 

 

119,918

 

 

 

118,778

 

 

 

118,636

 

 

 

116,973

 

 

 

117,538

 

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

 

 

2,643

 

 

 

2,163

 

 

 

2,957

 

 

 

11,646

 

 

 

10,869

 

Loans held for investment

 

 

14,676,298

 

 

 

14,908,811

 

 

 

15,047,608

 

 

 

14,733,755

 

 

 

14,295,897

 

Allowance for credit losses

 

 

(195,651

)

 

 

(195,549

)

 

 

(196,075

)

 

 

(197,517

)

 

 

(197,752

)

Loans held for investment, net

 

 

14,480,647

 

 

 

14,713,262

 

 

 

14,851,533

 

 

 

14,536,238

 

 

 

14,098,145

 

Accrued interest receivable

 

 

73,784

 

 

 

66,192

 

 

 

66,898

 

 

 

60,922

 

 

 

65,728

 

Premises and equipment

 

 

64,543

 

 

 

65,651

 

 

 

68,435

 

 

 

70,453

 

 

 

71,908

 

Deferred income taxes, net

 

 

183,602

 

 

 

190,948

 

 

 

163,767

 

 

 

133,938

 

 

 

87,344

 

Bank owned life insurance

 

 

460,010

 

 

 

457,301

 

 

 

454,593

 

 

 

451,968

 

 

 

449,353

 

Intangible assets

 

 

55,588

 

 

 

59,028

 

 

 

62,500

 

 

 

65,978

 

 

 

69,571

 

Goodwill

 

 

901,312

 

 

 

901,312

 

 

 

901,312

 

 

 

901,312

 

 

 

901,312

 

Other assets

 

 

253,871

 

 

 

257,041

 

 

 

258,522

 

 

 

242,916

 

 

 

260,204

 

Total assets

 

$

21,688,017

 

 

$

21,619,201

 

 

$

21,993,919

 

 

$

21,622,296

 

 

$

21,094,429

 

LIABILITIES

 

 

 

 

 

 

 

 

 

 

Deposit accounts:

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing checking

 

$

6,306,825

 

 

$

6,775,465

 

 

$

6,934,318

 

 

$

7,106,548

 

 

$

6,757,259

 

Interest-bearing:

 

 

 

 

 

 

 

 

 

 

Checking

 

 

3,119,850

 

 

 

3,605,498

 

 

 

4,149,432

 

 

 

3,679,067

 

 

 

3,493,331

 

Money market/savings

 

 

5,422,607

 

 

 

5,493,988

 

 

 

5,545,230

 

 

 

5,872,597

 

 

 

5,806,726

 

Retail certificates of deposit

 

 

1,086,423

 

 

 

872,421

 

 

 

855,966

 

 

 

1,031,011

 

 

 

1,058,273

 

Wholesale/brokered certificates of deposit

 

 

1,416,696

 

 

 

999,002

 

 

 

599,667

 

 

 

 

 

 

 

Total interest-bearing

 

 

11,045,576

 

 

 

10,970,909

 

 

 

11,150,295

 

 

 

10,582,675

 

 

 

10,358,330

 

Total deposits

 

 

17,352,401

 

 

 

17,746,374

 

 

 

18,084,613

 

 

 

17,689,223

 

 

 

17,115,589

 

FHLB advances and other borrowings

 

 

1,000,000

 

 

 

600,000

 

 

 

600,000

 

 

 

600,000

 

 

 

558,000

 

Subordinated debentures

 

 

331,204

 

 

 

331,045

 

 

 

330,886

 

 

 

330,726

 

 

 

330,567

 

Accrued expenses and other liabilities

 

 

206,023

 

 

 

206,386

 

 

 

223,201

 

 

 

219,329

 

 

 

203,962

 

Total liabilities

 

 

18,889,628

 

 

 

18,883,805

 

 

 

19,238,700

 

 

 

18,839,278

 

 

 

18,208,118

 

STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

Common stock

 

 

933

 

 

 

933

 

 

 

933

 

 

 

933

 

 

 

929

 

Additional paid-in capital

 

 

2,362,663

 

 

 

2,357,731

 

 

 

2,353,361

 

 

 

2,348,727

 

 

 

2,351,294

 

Retained earnings

 

 

700,040

 

 

 

657,845

 

 

 

615,943

 

 

 

577,591

 

 

 

541,950

 

Accumulated other comprehensive loss

 

 

(265,247

)

 

 

(281,113

)

 

 

(215,018

)

 

 

(144,233

)

 

 

(7,862

)

Total stockholders' equity

 

 

2,798,389

 

 

 

2,735,396

 

 

 

2,755,219

 

 

 

2,783,018

 

 

 

2,886,311

 

Total liabilities and stockholders' equity

 

$

21,688,017

 

 

$

21,619,201

 

 

$

21,993,919

 

 

$

21,622,296

 

 

$

21,094,429

 

 

PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

 

 

 

 

 

 

Three Months Ended

 

Year Ended

 

 

December 31,

 

September 30,

 

December 31,

 

December 31,

 

December 31,

(Dollars in thousands, except per share data)

 

2022

 

2022

 

2021

 

2022

 

2021

INTEREST INCOME

 

 

 

 

 

 

 

 

 

 

Loans

 

$

184,457

 

 

$

174,204

 

 

$

157,418

 

 

$

673,720

 

 

$

622,033

 

Investment securities and other interest-earning assets

 

 

33,324

 

 

 

24,821

 

 

 

19,588

 

 

 

94,858

 

 

 

74,706

 

Total interest income

 

 

217,781

 

 

 

199,025

 

 

 

177,006

 

 

 

768,578

 

 

 

696,739

 

INTEREST EXPENSE

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

25,865

 

 

 

9,873

 

 

 

1,694

 

 

 

40,093

 

 

 

11,817

 

FHLB advances and other borrowings

 

 

5,960

 

 

 

3,480

 

 

 

33

 

 

 

13,131

 

 

 

99

 

Subordinated debentures

 

 

4,560

 

 

 

4,560

 

 

 

4,560

 

 

 

18,242

 

 

 

22,449

 

Total interest expense

 

 

36,385

 

 

 

17,913

 

 

 

6,287

 

 

 

71,466

 

 

 

34,365

 

Net interest income before provision for credit losses

 

 

181,396

 

 

 

181,112

 

 

 

170,719

 

 

 

697,112

 

 

 

662,374

 

Provision for credit losses

 

 

2,838

 

 

 

1,077

 

 

 

(14,648

)

 

 

4,832

 

 

 

(70,876

)

Net interest income after provision for credit losses

 

 

178,558

 

 

 

180,035

 

 

 

185,367

 

 

 

692,280

 

 

 

733,250

 

NONINTEREST INCOME

 

 

 

 

 

 

 

 

 

 

Loan servicing income

 

 

346

 

 

 

397

 

 

 

505

 

 

 

1,664

 

 

 

2,121

 

Service charges on deposit accounts

 

 

2,689

 

 

 

2,704

 

 

 

2,590

 

 

 

10,698

 

 

 

9,219

 

Other service fee income

 

 

295

 

 

 

323

 

 

 

391

 

 

 

1,351

 

 

 

1,566

 

Debit card interchange fee income

 

 

1,048

 

 

 

808

 

 

 

769

 

 

 

3,628

 

 

 

3,489

 

Earnings on bank owned life insurance

 

 

3,359

 

 

 

3,339

 

 

 

3,521

 

 

 

13,159

 

 

 

11,299

 

Net gain from sales of loans

 

 

151

 

 

 

457

 

 

 

1,334

 

 

 

3,238

 

 

 

4,428

 

Net (loss) gain from sales of investment securities

 

 

 

 

 

(393

)

 

 

3,585

 

 

 

1,710

 

 

 

16,906

 

Trust custodial account fees

 

 

9,722

 

 

 

9,951

 

 

 

11,611

 

 

 

41,606

 

 

 

38,176

 

Escrow and exchange fees

 

 

1,282

 

 

 

1,555

 

 

 

2,221

 

 

 

6,325

 

 

 

7,286

 

Other income

 

 

1,605

 

 

 

1,023

 

 

 

754

 

 

 

5,369

 

 

 

13,360

 

Total noninterest income

 

 

20,497

 

 

 

20,164

 

 

 

27,281

 

 

 

88,748

 

 

 

107,850

 

NONINTEREST EXPENSE

 

 

 

 

 

 

 

 

 

 

Compensation and benefits

 

 

54,347

 

 

 

56,355

 

 

 

56,076

 

 

 

225,245

 

 

 

215,690

 

Premises and occupancy

 

 

11,641

 

 

 

12,011

 

 

 

11,403

 

 

 

47,433

 

 

 

48,234

 

Data processing

 

 

6,991

 

 

 

7,058

 

 

 

5,881

 

 

 

26,649

 

 

 

23,770

 

FDIC insurance premiums

 

 

1,463

 

 

 

1,461

 

 

 

1,389

 

 

 

5,772

 

 

 

5,274

 

Legal and professional services

 

 

5,175

 

 

 

4,075

 

 

 

5,870

 

 

 

17,947

 

 

 

18,554

 

Marketing expense

 

 

1,985

 

 

 

1,912

 

 

 

1,821

 

 

 

7,632

 

 

 

6,917

 

Office expense

 

 

1,310

 

 

 

1,338

 

 

 

1,463

 

 

 

5,103

 

 

 

5,957

 

Loan expense

 

 

743

 

 

 

789

 

 

 

857

 

 

 

3,810

 

 

 

4,469

 

Deposit expense

 

 

6,770

 

 

 

4,846

 

 

 

3,836

 

 

 

19,448

 

 

 

15,654

 

Merger-related expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5

 

Amortization of intangible assets

 

 

3,440

 

 

 

3,472

 

 

 

3,880

 

 

 

13,983

 

 

 

15,936

 

Other expense

 

 

5,317

 

 

 

7,549

 

 

 

4,776

 

 

 

23,648

 

 

 

19,817

 

Total noninterest expense

 

 

99,182

 

 

 

100,866

 

 

 

97,252

 

 

 

396,670

 

 

 

380,277

 

Net income before income taxes

 

 

99,873

 

 

 

99,333

 

 

 

115,396

 

 

 

384,358

 

 

 

460,823

 

Income tax

 

 

26,200

 

 

 

25,970

 

 

 

30,565

 

 

 

100,615

 

 

 

120,934

 

Net income

 

$

73,673

 

 

$

73,363

 

 

$

84,831

 

 

$

283,743

 

 

$

339,889

 

EARNINGS PER SHARE

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.78

 

 

$

0.77

 

 

$

0.90

 

 

$

2.99

 

 

$

3.60

 

Diluted

 

 

0.77

 

 

 

0.77

 

 

 

0.89

 

 

 

2.98

 

 

 

3.58

 

WEIGHTED AVERAGE SHARES OUTSTANDING

 

 

 

 

 

 

 

 

 

 

Basic

 

 

93,810,468

 

 

 

93,793,502

 

 

 

93,415,304

 

 

 

93,718,293

 

 

 

93,532,109

 

Diluted

 

 

94,176,633

 

 

 

94,120,637

 

 

 

93,906,491

 

 

 

94,091,461

 

 

 

94,012,137

 

 

SELECTED FINANCIAL DATA

PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED AVERAGE BALANCES AND YIELD DATA

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

December 31, 2022

 

September 30, 2022

 

December 31, 2021

(Dollars in thousands)

 

Average
Balance

 

Interest

 

Average
Yield/
Cost

 

Average
Balance

 

Interest

 

Average
Yield/
Cost

 

Average
Balance

 

Interest

 

Average
Yield/
Cost

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

1,015,197

 

$

8,636

 

3.37

%

 

$

665,510

 

$

2,754

 

1.64

%

 

$

334,371

 

$

66

 

0.08

%

Investment securities

 

 

4,130,042

 

 

24,688

 

2.39

 

 

 

4,277,444

 

 

22,067

 

2.06

 

 

 

4,833,251

 

 

19,522

 

1.62

 

Loans receivable, net (1) (2)

 

 

14,799,417

 

 

184,457

 

4.94

 

 

 

14,986,682

 

 

174,204

 

4.61

 

 

 

14,005,836

 

 

157,418

 

4.46

 

Total interest-earning assets

 

 

19,944,656

 

 

217,781

 

4.33

 

 

 

19,929,636

 

 

199,025

 

3.96

 

 

 

19,173,458

 

 

177,006

 

3.66

 

Noninterest-earning assets

 

 

1,784,277

 

 

 

 

 

 

1,757,800

 

 

 

 

 

 

1,693,547

 

 

 

 

Total assets

 

$

21,728,933

 

 

 

 

 

$

21,687,436

 

 

 

 

 

$

20,867,005

 

 

 

 

Liabilities and Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest checking

 

$

3,320,146

 

$

3,752

 

0.45

%

 

$

3,812,448

 

$

1,658

 

0.17

%

 

$

3,501,323

 

$

225

 

0.03

%

Money market

 

 

4,998,726

 

 

7,897

 

0.63

 

 

 

5,053,890

 

 

2,940

 

0.23

 

 

 

5,467,559

 

 

925

 

0.07

 

Savings

 

 

443,016

 

 

310

 

0.28

 

 

 

434,591

 

 

28

 

0.03

 

 

 

418,218

 

 

27

 

0.03

 

Retail certificates of deposit

 

 

975,958

 

 

3,941

 

1.60

 

 

 

835,645

 

 

1,420

 

0.67

 

 

 

1,084,326

 

 

517

 

0.19

 

Wholesale/brokered certificates of deposit

 

 

1,283,537

 

 

9,965

 

3.08

 

 

 

702,785

 

 

3,827

 

2.16

 

 

 

 

 

 

 

Total interest-bearing deposits

 

 

11,021,383

 

 

25,865

 

0.93

 

 

 

10,839,359

 

 

9,873

 

0.36

 

 

 

10,471,426

 

 

1,694

 

0.06

 

FHLB advances and other borrowings

 

 

826,125

 

 

5,960

 

2.86

 

 

 

636,006

 

 

3,480

 

2.17

 

 

 

69,538

 

 

33

 

0.19

 

Subordinated debentures

 

 

331,133

 

 

4,560

 

5.51

 

 

 

330,975

 

 

4,560

 

5.51

 

 

 

330,476

 

 

4,560

 

5.52

 

Total borrowings

 

 

1,157,258

 

 

10,520

 

3.62

 

 

 

966,981

 

 

8,040

 

3.31

 

 

 

400,014

 

 

4,593

 

4.59

 

Total interest-bearing liabilities

 

 

12,178,641

 

 

36,385

 

1.19

 

 

 

11,806,340

 

 

17,913

 

0.60

 

 

 

10,871,440

 

 

6,287

 

0.23

 

Noninterest-bearing deposits

 

 

6,587,400

 

 

 

 

 

 

6,893,463

 

 

 

 

 

 

6,911,702

 

 

 

 

Other liabilities

 

 

211,731

 

 

 

 

 

 

212,509

 

 

 

 

 

 

232,863

 

 

 

 

Total liabilities

 

 

18,977,772

 

 

 

 

 

 

18,912,312

 

 

 

 

 

 

18,016,005

 

 

 

 

Stockholders' equity

 

 

2,751,161

 

 

 

 

 

 

2,775,124

 

 

 

 

 

 

2,851,000

 

 

 

 

Total liabilities and equity

 

$

21,728,933

 

 

 

 

 

$

21,687,436

 

 

 

 

 

$

20,867,005

 

 

 

 

Net interest income

 

 

 

$

181,396

 

 

 

 

 

$

181,112

 

 

 

 

 

$

170,719

 

 

Net interest margin (3)

 

 

 

 

 

3.61

%

 

 

 

 

 

3.61

%

 

 

 

 

 

3.53

%

Cost of deposits (4)

 

 

 

 

 

0.58

 

 

 

 

 

 

0.22

 

 

 

 

 

 

0.04

 

Cost of funds (5)

 

 

 

 

 

0.77

 

 

 

 

 

 

0.38

 

 

 

 

 

 

0.14

 

Cost of core deposits (6)

 

 

 

 

 

0.31

 

 

 

 

 

 

0.11

 

 

 

 

 

 

0.03

 

Ratio of interest-earning assets to interest-bearing liabilities

 

163.77

 

 

 

 

 

 

168.80

 

 

 

 

 

 

176.37

 

 

 

For the Year Ended December 31,

 

2022

 

2021

(Dollars in thousands)

Average
Balance

 

Interest

 

Average
Yield/
Cost

 

Average
Balance

 

Interest

 

Average
Yield/
Cost

Assets

 

 

 

 

 

 

 

 

 

 

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

$

678,270

 

$

12,691

 

1.87

%

 

$

904,159

 

$

877

 

0.10

%

Investment securities

 

4,301,005

 

 

82,167

 

1.91

 

 

 

4,495,956

 

 

73,829

 

1.64

 

Loans receivable, net (1)(2)

 

14,767,554

 

 

673,720

 

4.56

 

 

 

13,497,119

 

 

622,033

 

4.61

 

Total interest-earning assets

 

19,746,829

 

 

768,578

 

3.89

 

 

 

18,897,234

 

 

696,739

 

3.69

 

Noninterest-earning assets

 

1,766,599

 

 

 

 

 

 

1,595,168

 

 

 

 

Total assets

$

21,513,428

 

 

 

 

 

$

20,492,402

 

 

 

 

Liabilities and Equity

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits:

 

 

 

 

 

 

 

 

 

 

 

Interest checking

$

3,681,244

 

$

6,351

 

0.17

%

 

$

3,276,638

 

$

1,270

 

0.04

%

Money market

 

5,155,785

 

 

12,735

 

0.25

 

 

 

5,507,469

 

 

6,824

 

0.12

 

Savings

 

433,156

 

 

391

 

0.09

 

 

 

393,332

 

 

251

 

0.06

 

Retail certificates of deposit

 

944,963

 

 

6,498

 

0.69

 

 

 

1,248,956

 

 

3,332

 

0.27

 

Wholesale/brokered certificates of deposit

 

520,652

 

 

14,118

 

2.71

 

 

 

29,645

 

 

140

 

0.47

 

Total interest-bearing deposits

 

10,735,800

 

 

40,093

 

0.37

 

 

 

10,456,040

 

 

11,817

 

0.11

 

FHLB advances and other borrowings

 

574,320

 

 

13,131

 

2.29

 

 

 

24,947

 

 

99

 

0.40

 

Subordinated debentures

 

330,885

 

 

18,242

 

5.51

 

 

 

410,067

 

 

22,449

 

5.47

 

Total borrowings

 

905,205

 

 

31,373

 

3.47

 

 

 

435,014

 

 

22,548

 

5.18

 

Total interest-bearing liabilities

 

11,641,005

 

 

71,466

 

0.61

 

 

 

10,891,054

 

 

34,365

 

0.32

 

Noninterest-bearing deposits

 

6,859,141

 

 

 

 

 

 

6,527,259

 

 

 

 

Other liabilities

 

224,739

 

 

 

 

 

 

275,496

 

 

 

 

Total liabilities

 

18,724,885

 

 

 

 

 

 

17,693,809

 

 

 

 

Stockholders’ equity

 

2,788,543

 

 

 

 

 

 

2,798,593

 

 

 

 

Total liabilities and equity

$

21,513,428

 

 

 

 

 

$

20,492,402

 

 

 

 

Net interest income

 

 

$

697,112

 

 

 

 

 

$

662,374

 

 

Net interest rate spread

 

 

 

 

3.28

%

 

 

 

 

 

3.37

%

Net interest margin (3)

 

 

 

 

3.53

 

 

 

 

 

 

3.51

 

Cost of deposits (4)

 

 

 

 

0.23

 

 

 

 

 

 

0.07

 

Cost of funds (5)

 

 

 

 

0.39

 

 

 

 

 

 

0.20

 

Cost of core deposits (6)

 

 

 

 

0.12

 

 

 

 

 

 

0.05

 

Ratio of interest-earning assets to interest-bearing liabilities

 

 

 

169.63

 

 

 

 

 

 

173.51

 

____________________

(1)

Average balance includes loans held for sale and nonperforming loans and is net of deferred loan origination fees/costs and discounts/premiums, and the basis adjustments of certain loans included in fair value hedging relationships.

(2)

Interest income includes net discount accretion of $3.5 million, $4.6 million, and $7.9 million, for the three months ended December 31, 2022, September 30, 2022, and December 31, 2021, respectively, and $21.7 million and $36.7 million, respectively, for the years ended December 31, 2022 and December 31, 2021, respectively.

(3)

Represents net interest income divided by average interest-earning assets.

(4)

Represents annualized interest expense on deposits divided by the sum of average interest-bearing deposits and noninterest-bearing deposits.

(5)

Represents annualized total interest expense divided by the sum of average total interest-bearing liabilities and noninterest-bearing deposits.

(6)

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

 

PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES

LOAN PORTFOLIO COMPOSITION

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

September 30,

 

June 30,

 

March 31,

 

December 31,

(Dollars in thousands)

 

2022

 

2022

 

2022

 

2022

 

2021

Investor loans secured by real estate

 

 

 

 

 

 

 

 

 

 

CRE non-owner-occupied

 

$

2,660,321

 

 

$

2,771,272

 

 

$

2,788,715

 

 

$

2,774,650

 

 

$

2,771,137

 

Multifamily

 

 

6,112,026

 

 

 

6,199,581

 

 

 

6,188,086

 

 

 

6,041,085

 

 

 

5,891,934

 

Construction and land

 

 

399,034

 

 

 

373,194

 

 

 

331,734

 

 

 

303,811

 

 

 

277,640

 

SBA secured by real estate (1)

 

 

42,135

 

 

 

42,998

 

 

 

44,199

 

 

 

42,642

 

 

 

46,917

 

Total investor loans secured by real estate

 

 

9,213,516

 

 

 

9,387,045

 

 

 

9,352,734

 

 

 

9,162,188

 

 

 

8,987,628

 

Business loans secured by real estate (2)

 

 

 

 

 

 

 

 

 

 

CRE owner-occupied

 

 

2,432,163

 

 

 

2,477,530

 

 

 

2,486,747

 

 

 

2,391,984

 

 

 

2,251,014

 

Franchise real estate secured

 

 

378,057

 

 

 

383,468

 

 

 

387,683

 

 

 

384,267

 

 

 

380,381

 

SBA secured by real estate (3)

 

 

61,368

 

 

 

64,002

 

 

 

67,191

 

 

 

68,466

 

 

 

69,184

 

Total business loans secured by real estate

 

 

2,871,588

 

 

 

2,925,000

 

 

 

2,941,621

 

 

 

2,844,717

 

 

 

2,700,579

 

Commercial loans (4)

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

 

2,160,948

 

 

 

2,164,623

 

 

 

2,295,421

 

 

 

2,242,632

 

 

 

2,103,112

 

Franchise non-real estate secured

 

 

404,791

 

 

 

409,773

 

 

 

415,830

 

 

 

388,322

 

 

 

392,576

 

SBA non-real estate secured

 

 

11,100

 

 

 

11,557

 

 

 

11,008

 

 

 

10,761

 

 

 

11,045

 

Total commercial loans

 

 

2,576,839

 

 

 

2,585,953

 

 

 

2,722,259

 

 

 

2,641,715

 

 

 

2,506,733

 

Retail loans

 

 

 

 

 

 

 

 

 

 

Single family residential (5)

 

 

72,997

 

 

 

75,176

 

 

 

77,951

 

 

 

79,978

 

 

 

95,292

 

Consumer

 

 

3,284

 

 

 

3,761

 

 

 

4,130

 

 

 

5,157

 

 

 

5,665

 

Total retail loans

 

 

76,281

 

 

 

78,937

 

 

 

82,081

 

 

 

85,135

 

 

 

100,957

 

Loans held for investment before basis adjustment (6)

 

 

14,738,224

 

 

 

14,976,935

 

 

 

15,098,695

 

 

 

14,733,755

 

 

 

14,295,897

 

Basis adjustment associated with fair value hedge (7)

 

 

(61,926

)

 

 

(68,124

)

 

 

(51,087

)

 

 

 

 

 

 

Loans held for investment

 

 

14,676,298

 

 

 

14,908,811

 

 

 

15,047,608

 

 

 

14,733,755

 

 

 

14,295,897

 

Allowance for credit losses for loans held for investment

 

 

(195,651

)

 

 

(195,549

)

 

 

(196,075

)

 

 

(197,517

)

 

 

(197,752

)

Loans held for investment, net

 

$

14,480,647

 

 

$

14,713,262

 

 

$

14,851,533

 

 

$

14,536,238

 

 

$

14,098,145

 

 

 

 

 

 

 

 

 

 

 

 

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

 

$

2,643

 

 

$

2,163

 

 

$

2,957

 

 

$

11,646

 

 

$

10,869

 

____________________

(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 $54.8 million, $59.0 million, $63.6 million, $71.2 million, and $77.1 million as of December 31, 2022, September 30, 2022, June 30, 2022, March 31, 2022, and December 31, 2021 respectively.

(7)

Represents the basis adjustment associated with the application of hedge accounting on certain loans.

 

PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES

ASSET QUALITY INFORMATION

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

September 30,

 

June 30,

 

March 31,

 

December 31,

(Dollars in thousands)

 

2022

 

2022

 

2022

 

2022

 

2021

Asset Quality

 

 

 

 

 

 

 

 

 

 

Nonperforming loans

 

$

30,905

 

 

$

60,464

 

 

$

44,445

 

 

$

55,309

 

 

$

31,273

 

Other real estate owned

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonperforming assets

 

$

30,905

 

 

$

60,464

 

 

$

44,445

 

 

$

55,309

 

 

$

31,273

 

 

 

 

 

 

 

 

 

 

 

 

Total classified assets (1)

 

$

149,304

 

 

$

110,143

 

 

$

106,153

 

 

$

122,528

 

 

$

121,827

 

Allowance for credit losses

 

 

195,651

 

 

 

195,549

 

 

 

196,075

 

 

 

197,517

 

 

 

197,752

 

Allowance for credit losses as a percent of total nonperforming loans

 

 

633

%

 

 

323

%

 

 

441

%

 

 

357

%

 

 

632

%

Nonperforming loans as a percent of loans held for investment

 

 

0.21

 

 

 

0.41

 

 

 

0.30

 

 

 

0.38

 

 

 

0.22

 

Nonperforming assets as a percent of total assets

 

 

0.14

 

 

 

0.28

 

 

 

0.20

 

 

 

0.26

 

 

 

0.15

 

Classified loans to total loans held for investment

 

 

1.02

 

 

 

0.74

 

 

 

0.71

 

 

 

0.83

 

 

 

0.85

 

Classified assets to total assets

 

 

0.69

 

 

 

0.51

 

 

 

0.48

 

 

 

0.57

 

 

 

0.58

 

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

 

$

3,797

 

 

$

1,072

 

 

$

5,245

 

 

$

446

 

 

$

(981

)

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

 

 

0.03

%

 

 

0.01

%

 

 

0.04

%

 

 

%

 

 

(0.01

)%

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

 

 

1.33

 

 

 

1.31

 

 

 

1.30

 

 

 

1.34

 

 

 

1.38

 

Delinquent Loans:

 

 

 

 

 

 

 

 

 

 

30 - 59 days

 

$

20,538

 

 

$

1,484

 

 

$

6,915

 

 

$

25,332

 

 

$

1,395

 

60 - 89 days

 

 

185

 

 

 

6,535

 

 

 

 

 

 

74

 

 

 

 

90+ days

 

 

22,625

 

 

 

33,238

 

 

 

29,360

 

 

 

18,245

 

 

 

18,100

 

Total delinquency

 

$

43,348

 

 

$

41,257

 

 

$

36,275

 

 

$

43,651

 

 

$

19,495

 

Delinquency as a percent of loans held for investment

 

 

0.30

%

 

 

0.28

%

 

 

0.24

%

 

 

0.30

%

 

 

0.14

%

____________________

(1)

Includes substandard loans and other real estate owned.

(2)

At December 31, 2022, 26% of loans held for investment include a fair value net discount of $54.8 million, or 0.37% of loans held for investment. At September 30, 2022, 27% of loans held for investment include a fair value net discount of $59.0 million, or 0.39% of loans held for investment. At June 30, 2022, 29% of loans held for investment include a fair value net discount of $63.6 million, or 0.42% of loans held for investment. At March 31, 2022, 32% of loans held for investment include a fair value net discount $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.

 

PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES

NONACCRUAL LOANS (1)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

(Dollars in thousands)

 

Collateral
Dependent
Loans

 

ACL

 

Non-
Collateral
Dependent
Loans

 

ACL

 

Total
Nonaccrual
Loans

 

Nonaccrual
Loans With
No ACL

December 31, 2022

 

 

 

 

 

 

 

 

 

 

 

 

Investor loans secured by real estate

 

 

 

 

 

 

 

 

 

 

 

 

CRE non-owner-occupied

 

$

4,429

 

$

 

$

 

$

 

$

4,429

 

$

4,429

Multifamily

 

 

8,780

 

 

 

 

 

 

 

 

8,780

 

 

8,780

SBA secured by real estate (2)

 

 

533

 

 

 

 

 

 

 

 

533

 

 

533

Total investor loans secured by real estate

 

 

13,742

 

 

 

 

 

 

 

 

13,742

 

 

13,742

Business loans secured by real estate (3)

 

 

 

 

 

 

 

 

 

 

 

 

CRE owner-occupied

 

 

11,475

 

 

1,742

 

 

 

 

 

 

11,475

 

 

9,733

SBA secured by real estate (4)

 

 

1,191

 

 

 

 

 

 

 

 

1,191

 

 

1,191

Total business loans secured by real estate

 

 

12,666

 

 

1,742

 

 

 

 

 

 

12,666

 

 

10,924

Commercial loans (5)

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

 

3,908

 

 

 

 

 

 

 

 

3,908

 

 

3,908

SBA not secured by real estate

 

 

589

 

 

 

 

 

 

 

 

589

 

 

589

Total commercial loans

 

 

4,497

 

 

 

 

 

 

 

 

4,497

 

 

4,497

Totals nonaccrual loans

 

$

30,905

 

$

1,742

 

$

 

$

 

$

30,905

 

$

29,163

____________________

(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.

 

PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES

PAST DUE STATUS

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Days Past Due

 

 

(Dollars in thousands)

 

Current

 

30-59

 

60-89

 

90+

 

Total

December 31, 2022

 

 

 

 

 

 

 

 

 

 

Investor loans secured by real estate

 

 

 

 

 

 

 

 

 

 

CRE non-owner-occupied

 

$

2,655,892

 

$

 

$

 

$

4,429

 

$

2,660,321

Multifamily

 

 

6,103,246

 

 

2,723

 

 

 

 

6,057

 

 

6,112,026

Construction and land

 

 

399,034

 

 

 

 

 

 

 

 

399,034

SBA secured by real estate (1)

 

 

42,135

 

 

 

 

 

 

 

 

42,135

Total investor loans secured by real estate

 

 

9,200,307

 

 

2,723

 

 

 

 

10,486

 

 

9,213,516

Business loans secured by real estate (2)

 

 

 

 

 

 

 

 

 

 

CRE owner-occupied

 

 

2,424,174

 

 

1,434

 

 

 

 

6,555

 

 

2,432,163

Franchise real estate secured

 

 

370,984

 

 

7,073

 

 

 

 

 

 

378,057

SBA secured by real estate (3)

 

 

60,177

 

 

 

 

104

 

 

1,087

 

 

61,368

Total business loans secured by real estate

 

 

2,855,335

 

 

8,507

 

 

104

 

 

7,642

 

 

2,871,588

Commercial loans (4)

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

 

2,152,302

 

 

4,657

 

 

81

 

 

3,908

 

 

2,160,948

Franchise non-real estate secured

 

 

401,199

 

 

3,592

 

 

 

 

 

 

404,791

SBA not secured by real estate

 

 

10,511

 

 

 

 

 

 

589

 

 

11,100

Total commercial loans

 

 

2,564,012

 

 

8,249

 

 

81

 

 

4,497

 

 

2,576,839

Retail loans

 

 

 

 

 

 

 

 

 

 

Single family residential (5)

 

 

71,940

 

 

1,057

 

 

 

 

 

 

72,997

Consumer loans

 

 

3,282

 

 

2

 

 

 

 

 

 

3,284

Total retail loans

 

 

75,222

 

 

1,059

 

 

 

 

 

 

76,281

Loans held for investment before basis adjustment (6)

 

$

14,694,876

 

$

20,538

 

$

185

 

$

22,625

 

$

14,738,224

____________________

(1)

SBA loans that are collateralized by hotel/motel real property.

(2)

Loans to businesses that are collateralized by real estate where the operating cash flow of the business is the primary source of repayment.

(3)

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

(4)

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

(5)

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

(6)

Excludes the basis adjustment of $61.9 million to the carrying amount of certain loans included in fair value hedging relationships.

 

PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES

CREDIT RISK GRADES

(Unaudited)

 

 

 

 

 

 

 

 

 

(Dollars in thousands)

 

Pass

 

Special
Mention

 

Substandard

 

Total Gross
Loans

December 31, 2022

 

 

 

 

 

 

 

 

Investor loans secured by real estate

 

 

 

 

 

 

 

 

CRE non-owner-occupied

 

$

2,647,607

 

$

7,487

 

$

5,227

 

$

2,660,321

Multifamily

 

 

6,089,836

 

 

12,667

 

 

9,523

 

 

6,112,026

Construction and land

 

 

399,034

 

 

 

 

 

 

399,034

SBA secured by real estate (1)

 

 

33,161

 

 

 

 

8,974

 

 

42,135

Total investor loans secured by real estate

 

 

9,169,638

 

 

20,154

 

 

23,724

 

 

9,213,516

Business loans secured by real estate (2)

 

 

 

 

 

 

 

 

CRE owner-occupied

 

 

2,363,719

 

 

2,351

 

 

66,093

 

 

2,432,163

Franchise real estate secured

 

 

352,645

 

 

18,036

 

 

7,376

 

 

378,057

SBA secured by real estate (3)

 

 

55,865

 

 

118

 

 

5,385

 

 

61,368

Total business loans secured by real estate

 

 

2,772,229

 

 

20,505

 

 

78,854

 

 

2,871,588

Commercial loans (4)

 

 

 

 

 

 

 

 

Commercial and industrial

 

 

2,093,726

 

 

31,273

 

 

35,949

 

 

2,160,948

Franchise non-real estate secured

 

 

368,013

 

 

27,583

 

 

9,195

 

 

404,791

SBA not secured by real estate

 

 

9,550

 

 

 

 

1,550

 

 

11,100

Total commercial loans

 

 

2,471,289

 

 

58,856

 

 

46,694

 

 

2,576,839

Retail loans

 

 

 

 

 

 

 

 

Single family residential (5)

 

 

72,992

 

 

 

 

5

 

 

72,997

Consumer loans

 

 

3,257

 

 

 

 

27

 

 

3,284

Total retail loans

 

 

76,249

 

 

 

 

32

 

 

76,281

Loans held for investment before basis adjustment (6)

 

$

14,489,405

 

$

99,515

 

$

149,304

 

$

14,738,224

____________________

(1)

SBA loans that are collateralized by hotel/motel real property.

(2)

Loans to businesses that are collateralized by real estate where the operating cash flow of the business is the primary source of repayment.

(3)

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

(4)

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

(5)

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

(6)

Excludes the basis adjustment of $61.9 million to the carrying amount of certain loans included in fair value hedging relationships.

 

PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES
GAAP to NON-GAAP RECONCILIATIONS
(Unaudited)

The Company uses certain non-GAAP financial measures to provide meaningful supplemental information regarding the Company’s operational performance and to enhance investors’ overall understanding of such financial performance. However, these non-GAAP financial measures are supplemental and are not a substitute for an analysis based on GAAP measures. As other companies may use different calculations for these adjusted measures, this presentation may not be comparable to other similarly titled adjusted measures reported by other companies.

For periods presented below, return on average 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 and merger-related expense, where applicable, 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

 

Year Ended

 

 

December 31,

 

September 30,

 

December 31,

 

December 31,

 

December 31,

(Dollars in thousands)

 

2022

 

2022

 

2021

 

2022

 

2021

Net income

 

$

73,673

 

 

$

73,363

 

 

$

84,831

 

 

$

283,743

 

 

$

339,889

 

Plus: amortization of intangible assets expense

 

 

3,440

 

 

 

3,472

 

 

 

3,880

 

 

 

13,983

 

 

 

15,936

 

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

 

 

978

 

 

 

991

 

 

 

1,107

 

 

 

3,987

 

 

 

4,556

 

Net income for average tangible common equity

 

 

76,135

 

 

 

75,844

 

 

 

87,604

 

 

 

293,739

 

 

 

351,269

 

Plus: merger-related expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5

 

Less: merger-related expense tax adjustment (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1

 

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

 

$

76,135

 

 

$

75,844

 

 

$

87,604

 

 

$

293,739

 

 

$

351,273

 

 

 

 

 

 

 

 

 

 

 

 

Average stockholders' equity

 

$

2,751,161

 

 

$

2,775,124

 

 

$

2,851,000

 

 

$

2,788,543

 

 

$

2,798,593

 

Less: average intangible assets

 

 

57,624

 

 

 

61,101

 

 

 

71,897

 

 

 

62,833

 

 

 

77,817

 

Less: average goodwill

 

 

901,312

 

 

 

901,312

 

 

 

901,312

 

 

 

901,312

 

 

 

900,458

 

Average tangible common equity

 

$

1,792,225

 

 

$

1,812,711

 

 

$

1,877,791

 

 

$

1,824,398

 

 

$

1,820,318

 

 

 

 

 

 

 

 

 

 

 

 

Return on average equity (annualized)

 

 

10.71

%

 

 

10.57

%

 

 

11.90

%

 

 

10.18

%

 

 

12.14

%

Return on average tangible common equity (annualized)

 

 

16.99

%

 

 

16.74

%

 

 

18.66

%

 

 

16.10

%

 

 

19.30

%

Return on average tangible common equity excluding merger-related expense

 

 

16.99

%

 

 

16.74

%

 

 

18.66

%

 

 

16.10

%

 

 

19.30

%

____________________

(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 expense, where applicable, from the 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

 

Year Ended

 

 

December 31,

 

September 30,

 

December 31,

 

December 31,

 

December 31,

(Dollars in thousands)

 

2022

 

2022

 

2021

 

2022

 

2021

Interest income

 

$

217,781

 

 

$

199,025

 

 

$

177,006

 

 

$

768,578

 

 

$

696,739

 

Interest expense

 

 

36,385

 

 

 

17,913

 

 

 

6,287

 

 

 

71,466

 

 

 

34,365

 

Net interest income

 

 

181,396

 

 

 

181,112

 

 

 

170,719

 

 

 

697,112

 

 

 

662,374

 

Noninterest income

 

 

20,497

 

 

 

20,164

 

 

 

27,281

 

 

 

88,748

 

 

 

107,850

 

Revenue

 

 

201,893

 

 

 

201,276

 

 

 

198,000

 

 

 

785,860

 

 

 

770,224

 

Noninterest expense

 

 

99,182

 

 

 

100,866

 

 

 

97,252

 

 

 

396,670

 

 

 

380,277

 

Plus: merger-related expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5

 

Pre-provision net revenue

 

 

102,711

 

 

 

100,410

 

 

 

100,748

 

 

 

389,190

 

 

 

389,952

 

Pre-provision net revenue (annualized)

 

$

410,844

 

 

$

401,640

 

 

$

402,992

 

 

$

389,190

 

 

$

389,952

 

 

 

 

 

 

 

 

 

 

 

 

Average assets

 

$

21,728,933

 

 

$

21,687,436

 

 

$

20,867,005

 

 

$

21,513,428

 

 

$

20,492,402

 

 

 

 

 

 

 

 

 

 

 

 

Pre-provision net revenue on average assets

 

 

0.47

%

 

 

0.46

%

 

 

0.48

%

 

 

1.81

%

 

 

1.90

%

Pre-provision net revenue on average assets (annualized)

 

 

1.89

%

 

 

1.85

%

 

 

1.93

%

 

 

1.81

%

 

 

1.90

%

Tangible book value per share and tangible common equity to tangible assets (the “tangible common equity ratio”) are non-GAAP financial measures derived from GAAP-based amounts. We calculate tangible book value per share by dividing tangible common equity by common shares outstanding, as compared to book value per share, which we calculate by dividing common stockholders' equity by shares outstanding. We calculate the tangible common equity ratio by excluding the balance of intangible assets from common stockholders' equity and dividing by tangible assets. We believe that this information is consistent with the treatment by bank regulatory agencies, which excludes intangible assets from the calculation of risk-based capital ratios. Accordingly, we believe that these non-GAAP financial measures provide information that is important to investors and that is useful in understanding our capital position and ratios.

 

 

December 31,

 

September 30,

 

June 30,

 

March 31,

 

December 31,

(Dollars in thousands, except per share data)

 

2022

 

2022

 

2022

 

2022

 

2021

Total stockholders' equity

 

$

2,798,389

 

 

$

2,735,396

 

 

$

2,755,219

 

 

$

2,783,018

 

 

$

2,886,311

 

Less: intangible assets

 

 

956,900

 

 

 

960,340

 

 

 

963,812

 

 

 

967,290

 

 

 

970,883

 

Tangible common equity

 

$

1,841,489

 

 

$

1,775,056

 

 

$

1,791,407

 

 

$

1,815,728

 

 

$

1,915,428

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

$

21,688,017

 

 

$

21,619,201

 

 

$

21,993,919

 

 

$

21,622,296

 

 

$

21,094,429

 

Less: intangible assets

 

 

956,900

 

 

 

960,340

 

 

 

963,812

 

 

 

967,290

 

 

 

970,883

 

Tangible assets

 

$

20,731,117

 

 

$

20,658,861

 

 

$

21,030,107

 

 

$

20,655,006

 

 

$

20,123,546

 

 

 

 

 

 

 

 

 

 

 

 

Tangible common equity ratio

 

 

8.88

%

 

 

8.59

%

 

 

8.52

%

 

 

8.79

%

 

 

9.52

%

 

 

 

 

 

 

 

 

 

 

 

Common shares issued and outstanding

 

 

95,021,760

 

 

 

95,016,767

 

 

 

94,976,605

 

 

 

94,945,849

 

 

 

94,389,543

 

 

 

 

 

 

 

 

 

 

 

 

Book value per share

 

$

29.45

 

 

$

28.79

 

 

$

29.01

 

 

$

29.31

 

 

$

30.58

 

Less: intangible book value per share

 

 

10.07

 

 

 

10.11

 

 

 

10.15

 

 

 

10.19

 

 

 

10.29

 

Tangible book value per share

 

$

19.38

 

 

$

18.68

 

 

$

18.86

 

 

$

19.12

 

 

$

20.29

 

Core net interest income and core net interest margin are non-GAAP financial measures derived from GAAP-based amounts. We calculate core net interest income by excluding scheduled accretion income, accelerated accretion income, premium amortization on CDs, nonrecurring nonaccrual interest adjustments, and gain (loss) on interest rate contract in fair value hedging relationships from net interest income. The core net interest margin is calculated as the ratio of core net interest income to average interest-earning 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.

 

 

Three Months Ended

 

Year Ended

 

 

December 31,

 

September 30,

 

December 31,

 

December 31,

 

December 31,

(Dollars in thousands)

 

2022

 

2022

 

2021

 

2022

 

2021

Net interest income

 

$

181,396

 

 

$

181,112

 

 

$

170,719

 

 

$

697,112

 

 

$

662,374

 

Less: scheduled accretion income

 

 

2,179

 

 

 

2,377

 

 

 

3,097

 

 

 

10,039

 

 

 

13,874

 

Less: accelerated accretion income

 

 

1,358

 

 

 

2,269

 

 

 

4,770

 

 

 

11,628

 

 

 

22,792

 

Less: premium amortization on CD

 

 

30

 

 

 

39

 

 

 

183

 

 

 

225

 

 

 

3,266

 

Less: nonrecurring nonaccrual interest adjustments

 

 

(111

)

 

 

(848

)

 

 

349

 

 

 

(1,267

)

 

 

(544

)

Less: gain (loss) on fair value hedging relationships

 

 

8,004

 

 

 

4,240

 

 

 

(819

)

 

 

10,705

 

 

 

(914

)

Core net interest income

 

 

169,936

 

 

 

173,035

 

 

 

163,139

 

 

 

665,782

 

 

 

623,900

 

 

 

 

 

 

 

 

 

 

 

 

Average interest-earning assets

 

$

19,944,656

 

 

$

19,929,636

 

 

$

19,173,458

 

 

$

19,746,829

 

 

$

18,897,234

 

 

 

 

 

 

 

 

 

 

 

 

Net interest margin

 

 

3.61

%

 

 

3.61

%

 

 

3.53

%

 

 

3.53

%

 

 

3.51

%

Core net interest margin

 

 

3.38

%

 

 

3.44

%

 

 

3.38

%

 

 

3.37

%

 

 

3.30

%

Efficiency ratio is a non-GAAP financial measure derived from GAAP-based amounts. This figure represents the ratio of noninterest expense, less amortization of intangible assets and merger-related expense, where applicable, to the sum of net interest income before provision for credit losses and total noninterest income, less gain (loss) from investment securities and other income - security recoveries, and net loss from debt extinguishment. Management believes that the exclusion of such items from this financial measure provides useful information to gain an understanding of the operating results of our core business.

 

Three Months Ended

 

Year Ended

 

 

December 31,

 

September 30,

 

December 31,

 

December 31,

 

December 31,

(Dollars in thousands)

 

2022

 

2022

 

2021

 

2022

 

2021

Total noninterest expense

 

$

99,182

 

 

$

100,866

 

 

$

97,252

 

 

$

396,670

 

 

$

380,277

 

Less: amortization of intangible assets

 

 

3,440

 

 

 

3,472

 

 

 

3,880

 

 

 

13,983

 

 

 

15,936

 

Less: merger-related expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5

 

Noninterest expense, adjusted

 

$

95,742

 

 

$

97,394

 

 

$

93,372

 

 

$

382,687

 

 

$

364,336

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income before provision for credit losses

 

$

181,396

 

 

$

181,112

 

 

$

170,719

 

 

$

697,112

 

 

$

662,374

 

Add: total noninterest income

 

 

20,497

 

 

 

20,164

 

 

 

27,281

 

 

 

88,748

 

 

 

107,850

 

Less: net (loss) gain from investment securities

 

 

 

 

 

(393

)

 

 

3,585

 

 

 

1,710

 

 

 

16,906

 

Less: other income - security recoveries

 

 

 

 

 

 

 

 

1

 

 

 

 

 

 

10

 

Less: net loss from debt extinguishment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(180

)

Revenue, adjusted

 

$

201,893

 

 

$

201,669

 

 

$

194,414

 

 

$

784,150

 

 

$

753,488

 

 

 

 

 

 

 

 

 

 

 

 

Efficiency ratio

 

 

47.4

%

 

 

48.3

%

 

 

48.0

%

 

 

48.8

%

 

 

48.4

%

Cost of core deposits is a non-GAAP financial measure derived from GAAP-based amounts. Cost of core deposits is calculated as the ratio of core deposit interest expense to average core deposits. We calculate core deposit interest expense by excluding interest expense for certificates of deposit and brokered deposits from total deposit expense, and we calculate average core deposits by excluding certificates of deposit and brokered deposits from total deposits. Management believes cost of core deposits is a useful measure to assess the Company's deposit base, including its potential volatility.

 

 

Three Months Ended

 

Year Ended

 

 

December 31,

 

September 30,

 

December 31,

 

December 31,

 

December 31,

(Dollars in thousands)

 

2022

 

2022

 

2021

 

2022

 

2021

Total deposits interest expense

 

$

25,865

 

 

$

9,873

 

 

$

1,694

 

 

$

40,093

 

 

$

11,817

 

Less: certificates of deposit interest expense

 

 

3,941

 

 

 

1,420

 

 

 

517

 

 

 

6,498

 

 

 

3,332

 

Less: brokered deposits interest expense

 

 

9,965

 

 

 

3,827

 

 

 

1

 

 

 

14,120

 

 

 

149

 

Core deposits expense

 

$

11,959

 

 

$

4,626

 

 

$

1,176

 

 

$

19,475

 

 

$

8,336

 

 

 

 

 

 

 

 

 

 

 

 

Total average deposits

 

$

17,608,783

 

 

$

17,732,822

 

 

$

17,383,128

 

 

$

17,594,941

 

 

$

16,983,299

 

Less: average certificates of deposit

 

 

975,958

 

 

 

835,645

 

 

 

1,084,326

 

 

 

944,963

 

 

 

1,248,956

 

Less: average brokered deposits

 

 

1,283,567

 

 

 

703,848

 

 

 

5,552

 

 

 

523,530

 

 

 

35,194

 

Average core deposits

 

$

15,349,258

 

 

$

16,193,329

 

 

$

16,293,250

 

 

$

16,126,448

 

 

$

15,699,149

 

 

 

 

 

 

 

 

 

 

 

 

Cost of core deposits

 

 

0.31

%

 

 

0.11

%

 

 

0.03

%

 

 

0.12

%

 

 

0.05

%

 

Pacific Premier Bancorp, Inc.

Steven R. Gardner
Chairman, Chief Executive Officer, and President
(949) 864-8000

Ronald J. Nicolas, Jr.
Senior Executive Vice President and Chief Financial Officer
(949) 864-8000

Matthew J. Lazzaro
Senior Vice President, Director of Investor Relations
(949) 243-1082

Source: Pacific Premier Bancorp, Inc.