Second Quarter 2024 Summary
- Net income of $41.9 million, or $0.43 per diluted
share
- Return on average assets of 0.90%
- Pre-provision net revenue (“PPNR”)(1) to average assets of
1.23%, annualized
- Net interest margin of 3.26%
- Cost of deposits of 1.73%, and cost of non-maturity
deposits(1) of 1.17%
- Non-maturity deposits(1) to total deposits of
83.66%
- Non-interest bearing deposits totaled 31.6% of total
deposits
- Total delinquency of 0.14% of loans held for
investment
- Nonperforming assets to total assets of 0.28%
- Tangible book value per share(1) increased $0.25 from the
prior quarter to $20.58
- Common equity tier 1 capital ratio of 15.89%, and total
risk-based capital ratio of 19.01%
- Tangible common equity ratio (“TCE”)(1) increased to
11.41%
Pacific Premier Bancorp, Inc. (NASDAQ: PPBI) (the “Company” or
“Pacific Premier”), the holding company of Pacific Premier Bank
(the “Bank”), reported net income of $41.9 million, or $0.43 per
diluted share, for the second quarter of 2024, compared with net
income of $47.0 million, or $0.49 per diluted share, for the first
quarter of 2024, and net income of $57.6 million, or $0.60 per
diluted share, for the second quarter of 2023.
For the second quarter of 2024, the Company’s return on average
assets (“ROAA”) was 0.90%, return on average equity (“ROAE”) was
5.76%, and return on average tangible common equity (“ROATCE”)(1)
was 8.92%, compared to 0.99%, 6.50%, and 10.05%, respectively, for
the first quarter of 2024, and 1.09%, 8.11%, and 12.66%,
respectively, for the second quarter of 2023. Total assets were
$18.33 billion at June 30, 2024, compared to $18.81 billion at
March 31, 2024, and $20.75 billion at June 30, 2023.
Steven R. Gardner, Chairman, Chief Executive Officer, and
President of the Company, commented, “We delivered solid financial
results for the second quarter, producing net income of $41.9
million, or $0.43 per share. Our results reflect our disciplined
approach to balance sheet and risk management, as well as our
ongoing focus on capital accumulation. Our quarter-end tangible
common equity(1) and tier 1 common equity ratios increased to
11.41% and 15.89%, respectively, placing us near the top of our
peers for both ratios.
“Second quarter asset quality trends remained solid. Our
nonperforming loans decreased to $52.1 million, reflecting our
proactive approach to credit risk management. Overall, credit
performance was consistent with our expectations as our borrowers
are on solid financial footing and borrower cash flows generally do
not appear to have deteriorated in any material way. Similar to our
capital ratios, our allowance for credit losses ranks among the top
of our peers.
“On the business development front, second quarter loan
production increased to $150.7 million, as our teams continue to
work collaboratively to expand our client base and reinforce
existing long-term relationships. Additionally, we saw clients use
excess deposits to pay down and pay off loans coupled with seasonal
factors associated with tax payments and distributions, as total
deposits declined from the prior quarter. Our deposit mix remained
favorable, as brokered deposits declined by $87.9 million and
noninterest-bearing deposits comprised 31.6% of total deposits.
“We enter the second half of the year from a position of
strength and expect stabilization in our loan and deposit balances
as we move through the rest of the year. Our strong capital and
liquidity levels provide us with significant optionality and
positions us well to take advantage of opportunities that may arise
to drive future earnings growth as we continue to serve our small-
and middle-market businesses and focus on building long-term
franchise value. I want to thank all of our employees for their
exceptional contributions this quarter and during the first half of
2024, as well as all of our stakeholders for their ongoing
support.”
FINANCIAL HIGHLIGHTS
Three Months Ended
June 30,
March 31,
June 30,
(Dollars in
thousands, except per share data)
2024
2024
2023
Financial highlights
(unaudited)
Net income
$
41,905
$
47,025
$
57,636
Net interest income
136,394
145,127
160,092
Diluted earnings per share
0.43
0.49
0.60
Common equity dividend per share paid
0.33
0.33
0.33
ROAA
0.90
%
0.99
%
1.09
%
ROAE
5.76
6.50
8.11
ROATCE (1)
8.92
10.05
12.66
Pre-provision net revenue to average
assets (1)
1.23
1.43
1.52
Net interest margin
3.26
3.39
3.33
Cost of deposits
1.73
1.59
1.27
Cost of non-maturity deposits (1)
1.17
1.06
0.71
Efficiency ratio (1)
61.3
60.2
54.1
Noninterest expense as a percent of
average assets
2.10
2.16
1.91
Total assets
$
18,332,325
$
18,813,181
$
20,747,883
Total deposits
14,627,654
15,187,828
16,539,875
Non-maturity deposits (1) as a percent of
total deposits
83.7
%
84.4
%
81.4
%
Noninterest-bearing deposits as a percent
of total deposits
31.6
32.9
35.6
Loan-to-deposit ratio
85.4
85.7
82.3
Nonperforming assets as a percent of total
assets
0.28
0.34
0.08
Delinquency as a percentage of loans held
for investment
0.14
0.09
0.23
Allowance for credit losses to loans held
for investment (2)
1.47
1.48
1.41
Book value per share
$
30.32
$
30.09
$
29.71
Tangible book value per share (1)
20.58
20.33
19.79
Tangible common equity ratio (1)
11.41
%
10.97
%
9.59
%
Common equity tier 1 capital ratio
15.89
15.02
14.34
Total capital ratio
19.01
18.23
17.24
______________________________
(1)
Reconciliations of the non-GAAP measures
are set forth at the end of this press release.
(2)
At June 30, 2024, 25% of loans held for
investment include a fair value net discount of $38.6 million, or
0.31% of loans held for investment. At March 31, 2024, 25% of loans
held for investment include a fair value net discount of $41.2
million, or 0.32% of loans held for investment. At June 30, 2023,
25% of loans held for investment include a fair value net discount
of $48.4 million, or 0.35% of loans held for investment.
INCOME STATEMENT HIGHLIGHTS
Net Interest Income and Net Interest Margin
Net interest income totaled $136.4 million in the second quarter
of 2024, a decrease of $8.7 million, or 6.0%, from the first
quarter of 2024. The decrease in net interest income was primarily
attributable to lower average loan balances and higher cost of
deposits.
The net interest margin for the second quarter of 2024 decreased
13 basis points to 3.26%, from 3.39% in the prior quarter. The
decrease was primarily due to a higher cost of deposits.
Net interest income for the second quarter of 2024 decreased
$23.7 million, or 14.8%, compared to the second quarter of 2023.
The decrease was attributable to a higher cost of funds and lower
average interest-earning asset balances, partially offset by lower
average interest-bearing liabilities and higher yields on average
interest-earning assets, all the result of the higher interest rate
environment and the Company's balance sheet management strategies
to prioritize capital accumulation.
PACIFIC PREMIER BANCORP, INC.
AND SUBSIDIARIES
CONSOLIDATED AVERAGE BALANCES
AND YIELD DATA
(Unaudited)
Three Months Ended
June 30, 2024
March 31, 2024
June 30, 2023
(Dollars in
thousands)
Average Balance
Interest Income/
Expense
Average Yield/
Cost
Average Balance
Interest Income/
Expense
Average Yield/
Cost
Average Balance
Interest Income/
Expense
Average Yield/ Cost
Assets
Cash and cash equivalents
$
1,134,736
$
13,666
4.84
%
$
1,140,909
$
13,638
4.81
%
$
1,433,137
$
16,600
4.65
%
Investment securities
2,964,909
26,841
3.62
2,948,170
26,818
3.64
3,926,568
25,936
2.64
Loans receivable, net (1) (2)
12,724,545
167,547
5.30
13,149,038
172,975
5.29
13,927,145
182,852
5.27
Total interest-earning assets
$
16,824,190
$
208,054
4.97
$
17,238,117
$
213,431
4.98
$
19,286,850
$
225,388
4.69
Liabilities
Interest-bearing deposits
$
10,117,571
$
64,229
2.55
%
$
10,058,808
$
59,506
2.38
%
$
10,797,708
$
53,580
1.99
%
Borrowings
532,251
7,431
5.59
850,811
8,798
4.15
1,131,465
11,716
4.15
Total interest-bearing liabilities
$
10,649,822
$
71,660
2.71
$
10,909,619
$
68,304
2.52
$
11,929,173
$
65,296
2.20
Noninterest-bearing deposits
$
4,824,002
$
4,996,939
$
6,078,543
Net interest income
$
136,394
$
145,127
$
160,092
Net interest margin (3)
3.26
%
3.39
%
3.33
%
Cost of deposits (4)
1.73
1.59
1.27
Cost of funds (5)
1.86
1.73
1.45
Cost of non-maturity deposits (6)
1.17
1.06
0.71
Ratio of interest-earning assets to
interest-bearing liabilities
157.98
158.01
161.68
_______________________________________
(1)
Average balance includes loans held for
sale and nonperforming loans and is net of deferred loan
origination fees/costs, discounts/premiums, and the basis
adjustment of certain loans included in fair value hedging
relationships.
(2)
Interest income includes net discount
accretion of $2.3 million, $2.1 million, and $2.9 million for the
three months ended June 30, 2024, March 31, 2024, and June 30,
2023, 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 second quarter of 2024, the Company recorded a $1.3
million provision expense, compared to $3.9 million for the first
quarter of 2024, and $1.5 million for the second quarter of 2023.
The decrease in provision for credit losses compared to the first
quarter of 2024 was largely attributable to the decrease in loan
balances and changes in the loan composition, partially offset by
increases associated with economic and market forecasts.
Three Months Ended
June 30,
March 31,
June 30,
(Dollars in
thousands)
2024
2024
2023
Provision for credit losses
Provision for loan losses
$
1,756
$
6,288
$
610
Provision for unfunded commitments
(505
)
(2,425
)
1,003
Provision for held-to-maturity
securities
14
(11
)
(114
)
Total provision for credit losses
$
1,265
$
3,852
$
1,499
Noninterest Income
Noninterest income for the second quarter of 2024 was $18.2
million, a decrease of $7.6 million from the first quarter of 2024.
The decrease was primarily due to the prior quarter's $5.1 million
gain on debt extinguishment resulting from an early redemption of a
$200.0 million Federal Home Loan Bank of San Francisco (“FHLB”)
term advance, a $1.7 million decrease in trust custodial account
fees largely driven by annual tax fees earned during the prior
quarter, and a $1.3 million decrease in Community Reinvestment Act
("CRA") investment income.
Noninterest income for the second quarter of 2024 decreased $2.3
million compared to the second quarter of 2023. The decrease was
primarily due to a $2.2 million decrease in other income.
Three Months Ended
June 30,
March 31,
June 30,
(Dollars in
thousands)
2024
2024
2023
Noninterest income
Loan servicing income
$
510
$
529
$
493
Service charges on deposit accounts
2,710
2,688
2,670
Other service fee income
309
336
315
Debit card interchange fee income
925
765
914
Earnings on bank owned life insurance
4,218
4,159
3,487
Net gain from sales of loans
65
—
345
Trust custodial account fees
8,950
10,642
9,360
Escrow and exchange fees
702
696
924
Other (loss) income
(167
)
5,959
2,031
Total noninterest income
$
18,222
$
25,774
$
20,539
Noninterest Expense
Noninterest expense totaled $97.6 million for the second quarter
of 2024, a decrease of $5.1 million compared to the first quarter
of 2024. The decrease was primarily due to a $3.1 million decrease
in legal and professional services, driven by a $4.0 million
insurance claim receivable.
Noninterest expense for the second quarter of 2024 decreased by
$3.1 million compared to the second quarter of 2023. The decrease
was primarily due to a $3.6 million decrease in legal and
professional services, driven by a $4.0 million insurance claim
receivable, and a $1.1 million decrease in premises and occupancy
expense, partially offset by a $3.1 million increase in deposit
expense due to higher deposit earnings credit rates.
Three Months Ended
June 30,
March 31,
June 30,
(Dollars in
thousands)
2024
2024
2023
Noninterest expense
Compensation and benefits
$
53,140
$
54,130
$
53,424
Premises and occupancy
10,480
10,807
11,615
Data processing
7,754
7,511
7,488
Other real estate owned operations,
net
—
46
8
FDIC insurance premiums
1,873
2,629
2,357
Legal and professional services
1,078
4,143
4,716
Marketing expense
1,724
1,558
1,879
Office expense
1,077
1,093
1,280
Loan expense
840
770
567
Deposit expense
12,289
12,665
9,194
Amortization of intangible assets
2,763
2,836
3,055
Other expense
4,549
4,445
5,061
Total noninterest expense
$
97,567
$
102,633
$
100,644
Income Tax
For the second quarter of 2024, income tax expense totaled $13.9
million, resulting in an effective tax rate of 24.9%, compared with
income tax expense of $17.4 million and an effective tax rate of
27.0% for the first quarter of 2024, and income tax expense of
$20.9 million and an effective tax rate of 26.6% for the second
quarter of 2023.
BALANCE SHEET HIGHLIGHTS
Loans
Loans held for investment totaled $12.49 billion at June 30,
2024, a decrease of $522.1 million, or 4.0%, from March 31, 2024,
and a decrease of $1.12 billion, or 8.2%, from June 30, 2023. The
decrease from March 31, 2024 was primarily due to increased
prepayments and maturities, and a decrease in credit line draws,
partially offset by higher loan production and fundings.
During the second quarter of 2024, new origination activity
increased, yet borrower demand for commercial loans remained muted
given the uncertain economic and interest rate outlook. New loan
commitments totaled $150.7 million, and new loan fundings totaled
$58.6 million, compared with $45.6 million in loan commitments and
$14.0 million in new loan fundings for the first quarter of 2024,
and $148.5 million in loan commitments and $71.6 million in new
loan fundings for the second quarter of 2023.
At June 30, 2024, the total loan-to-deposit ratio was 85.4%,
compared to 85.7% and 82.3% at March 31, 2024 and June 30, 2023,
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
June 30,
March 31,
June 30,
(Dollars in
thousands)
2024
2024
2023
Beginning gross loan balance before basis
adjustment
$
13,044,395
$
13,318,571
$
14,223,036
New commitments
150,666
45,563
148,482
Unfunded new commitments
(92,017
)
(31,531
)
(76,928
)
Net new fundings
58,649
14,032
71,554
Amortization/maturities/payoffs
(447,170
)
(358,863
)
(582,948
)
Net draws on existing lines of credit
(100,302
)
109,860
36,393
Loan sales
(23,750
)
(32,676
)
(78,349
)
Charge-offs
(13,530
)
(6,529
)
(3,986
)
Transferred to other real estate owned
—
—
(104
)
Net decrease
(526,103
)
(274,176
)
(557,440
)
Ending gross loan balance before basis
adjustment
$
12,518,292
$
13,044,395
$
13,665,596
Basis adjustment associated with fair
value hedge (1)
(28,201
)
(32,324
)
(53,130
)
Ending gross loan balance
$
12,490,091
$
13,012,071
$
13,612,466
______________________________
(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:
June 30,
March 31,
June 30,
(Dollars in
thousands)
2024
2024
2023
Investor loans secured by real
estate
Commercial real estate (“CRE”)
non-owner-occupied
$
2,245,474
$
2,309,252
$
2,571,246
Multifamily
5,473,606
5,558,966
5,788,030
Construction and land
453,799
486,734
428,287
SBA secured by real estate (1)
33,245
35,206
38,876
Total investor loans secured by real
estate
8,206,124
8,390,158
8,826,439
Business loans secured by real estate
(2)
CRE owner-occupied
2,096,485
2,149,362
2,281,721
Franchise real estate secured
274,645
294,938
318,539
SBA secured by real estate (3)
46,543
48,426
57,084
Total business loans secured by real
estate
2,417,673
2,492,726
2,657,344
Commercial loans (4)
Commercial and industrial (“C&I”)
1,554,735
1,774,487
1,744,763
Franchise non-real estate secured
257,516
301,895
351,944
SBA non-real estate secured
10,346
10,946
9,688
Total commercial loans
1,822,597
2,087,328
2,106,395
Retail loans
Single family residential (5)
70,380
72,353
70,993
Consumer
1,378
1,830
2,241
Total retail loans
71,758
74,183
73,234
Loans held for investment before basis
adjustment (6)
12,518,152
13,044,395
13,663,412
Basis adjustment associated with fair
value hedge (7)
(28,201
)
(32,324
)
(53,130
)
Loans held for investment
12,489,951
13,012,071
13,610,282
Allowance for credit losses for loans held
for investment
(183,803
)
(192,340
)
(192,333
)
Loans held for investment, net
$
12,306,148
$
12,819,731
$
13,417,949
Total unfunded loan commitments
$
1,601,870
$
1,459,515
$
2,202,647
Loans held for sale, at lower of cost or
fair value
$
140
$
—
$
2,184
______________________________
(1)
SBA loans that are collateralized by
hotel/motel real property.
(2)
Loans to businesses that are
collateralized by real estate where the operating cash flow of the
business is the primary source of repayment.
(3)
SBA loans that are collateralized by real
property other than hotel/motel real property.
(4)
Loans to businesses where the operating
cash flow of the business is the primary source of repayment.
(5)
Single family residential includes home
equity lines of credit, as well as second trust deeds.
(6)
Includes net deferred origination costs of
$1.4 million, $797,000, and $142,000, and unaccreted fair value net
purchase discounts of $38.6 million, $41.2 million, and $48.4
million as of June 30, 2024, March 31, 2024, and June 30, 2023,
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 June 30, 2024 was 4.88%, compared
to 4.91% at March 31, 2024, and 4.73% at June 30, 2023. The
decrease was a result of customers paying down and paying off
higher-rate loans compared to the prior quarter. The year-over-year
increase reflects higher rates on new originations and the
repricing of loans as a result of the increases in benchmark
interest rates.
The following table presents the composition of loan commitments
originated during the quarters indicated:
Three Months Ended
June 30,
March 31,
June 30,
(Dollars in
thousands)
2024
2024
2023
Investor loans secured by real
estate
CRE non-owner-occupied
$
3,818
$
850
$
1,470
Multifamily
6,026
480
53,522
Construction and land
16,820
—
24,525
Total investor loans secured by real
estate
26,664
1,330
79,517
Business loans secured by real estate
(1)
CRE owner-occupied
2,623
6,745
3,062
Total business loans secured by real
estate
2,623
6,745
3,062
Commercial loans (2)
Commercial and industrial
109,679
32,477
58,730
Franchise non-real estate secured
—
—
1,853
SBA non-real estate secured
1,281
—
1,612
Total commercial loans
110,960
32,477
62,195
Retail loans
Single family residential (3)
7,698
4,936
3,708
Consumer
2,721
75
—
Total retail loans
10,419
5,011
3,708
Total loan commitments
$
150,666
$
45,563
$
148,482
______________________________
(1)
Loans to businesses that are
collateralized by real estate where the operating cash flow of the
business is the primary source of repayment.
(2)
Loans to businesses where the operating
cash flow of the business is the primary source of repayment.
(3)
Single family residential includes home
equity lines of credit, as well as second trust deeds.
The weighted average interest rate on new loan commitments of
8.58% in the second quarter of 2024 was relatively consistent with
8.62% in the first quarter of 2024, and increased from 6.72% in the
second quarter of 2023.
Allowance for Credit Losses
At June 30, 2024, our allowance for credit losses (“ACL”) on
loans held for investment was $183.8 million, a decrease of $8.5
million from March 31, 2024 and June 30, 2023. The decrease in the
ACL from March 31, 2024 and June 30, 2023 reflects the relative
changes in size and composition in our loans held for investment,
partially offset by changes in economic and market forecasts.
During the second quarter of 2024, the Company incurred $10.3
million of net charge-offs, primarily related to the sale of
substandard non-owner-occupied CRE and multifamily loans during the
quarter.
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 June 30,
2024
(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
$
30,781
$
(4,196
)
$
1,500
$
1,653
$
29,738
Multifamily
58,411
(7,372
)
—
6,259
57,298
Construction and land
8,171
—
—
2,633
10,804
SBA secured by real estate (1)
2,184
(153
)
86
25
2,142
Business loans secured by real estate
(2)
CRE owner-occupied
28,760
—
121
(350
)
28,531
Franchise real estate secured
7,258
—
—
(464
)
6,794
SBA secured by real estate (3)
4,288
—
1
(155
)
4,134
Commercial loans (4)
Commercial and industrial
37,107
(968
)
148
(4,030
)
32,257
Franchise non-real estate secured
14,320
—
1,375
(4,565
)
11,130
SBA non-real estate secured
495
(6
)
3
(10
)
482
Retail loans
Single family residential (5)
442
—
3
(46
)
399
Consumer loans
123
(835
)
—
806
94
Totals
$
192,340
$
(13,530
)
$
3,237
$
1,756
$
183,803
______________________________
(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 June 30, 2024
was 1.47%, which was relatively consistent with 1.48% at March 31,
2024, and increased from 1.41% at June 30, 2023. The fair value net
discount on loans acquired through acquisitions was $38.6 million,
or 0.31% of total loans held for investment, as of June 30, 2024,
compared to $41.2 million, or 0.32% of total loans held for
investment, as of March 31, 2024, and $48.4 million, or 0.35% of
total loans held for investment, as of June 30, 2023.
Asset Quality
Nonperforming assets totaled $52.1 million, or 0.28% of total
assets, at June 30, 2024, compared with $64.1 million, or 0.34% of
total assets, at March 31, 2024, and $17.4 million, or 0.08% of
total assets, at June 30, 2023. Loan delinquencies were $17.9
million, or 0.14% of loans held for investment, at June 30, 2024,
compared to $12.2 million, or 0.09% of loans held for investment,
at March 31, 2024, and $31.0 million, or 0.23% of loans held for
investment, at June 30, 2023.
Classified loans totaled $183.8 million, or 1.47% of loans held
for investment, at June 30, 2024, compared with $204.7 million, or
1.57% of loans held for investment, at March 31, 2024, and $119.9
million, or 0.88% of loans held for investment, at June 30,
2023.
The following table presents the asset quality metrics of the
loan portfolio as of the dates indicated.
June 30,
March 31,
June 30,
(Dollars in
thousands)
2024
2024
2023
Asset quality
Nonperforming loans
$
52,119
$
63,806
$
17,151
Other real estate owned
—
248
270
Nonperforming assets
$
52,119
$
64,054
$
17,421
Total classified assets (1)
$
183,833
$
204,937
$
120,216
Allowance for credit losses
183,803
192,340
192,333
Allowance for credit losses as a percent
of total nonperforming loans
353
%
301
%
1,121
%
Nonperforming loans as a percent of loans
held for investment
0.42
0.49
0.13
Nonperforming assets as a percent of total
assets
0.28
0.34
0.08
Classified loans to total loans held for
investment
1.47
1.57
0.88
Classified assets to total assets
1.00
1.09
0.58
Net loan charge-offs for the quarter
ended
$
10,293
$
6,419
$
3,665
Net loan charge-offs for the quarter to
average total loans
0.08
%
0.05
%
0.03
%
Allowance for credit losses to loans held
for investment (2)
1.47
1.48
1.41
Delinquent loans (3)
30 - 59 days
$
4,985
$
1,983
$
649
60 - 89 days
3,289
974
31
90+ days
9,649
9,221
30,271
Total delinquency
$
17,923
$
12,178
$
30,951
Delinquency as a percentage of loans held
for investment
0.14
%
0.09
%
0.23
%
______________________________
(1)
Includes substandard and doubtful loans,
and other real estate owned.
(2)
At June 30, 2024, 25% of loans held for
investment include a fair value net discount of $38.6 million, or
0.31% of loans held for investment. At March 31, 2024, 25% of loans
held for investment include a fair value net discount of $41.2
million, or 0.32% of loans held for investment. At June 30, 2023,
25% of loans held for investment include a fair value net discount
of $48.4 million, or 0.35% of loans held for investment.
(3)
Nonaccrual loans are included in this
aging analysis based on the loan's past due status.
Investment Securities
At June 30, 2024, available-for-sale (“AFS”) and
held-to-maturity (“HTM”) investment securities were $1.32 billion
and $1.71 billion, respectively, compared to $1.15 billion and
$1.72 billion, respectively, at March 31, 2024, and $2.01 billion
and $1.74 billion, respectively, at June 30, 2023.
In total, investment securities were $3.03 billion at June 30,
2024, an increase of $155.7 million from March 31, 2024, and a
decrease of $719.2 million from June 30, 2023. The increase in the
second quarter of 2024 compared to the prior quarter was primarily
the result of $443.1 million in purchases of AFS U.S. Treasury
securities and a decrease of $4.2 million in AFS investment
securities mark-to-market unrealized loss, partially offset by
$291.5 million in principal payments, amortization and accretion,
and redemptions.
The decrease in investment securities from June 30, 2023 was the
result of $1.52 billion in sales of AFS investment securities,
primarily related to the investment securities portfolio
repositioning during the fourth quarter of 2023, and $611.5 million
in principal payments, amortization and accretion, and redemptions,
partially offset by $1.17 billion in purchases of AFS and HTM
investment securities and a decrease of $244.9 million in AFS
securities mark-to-market unrealized loss.
Deposits
At June 30, 2024, total deposits were $14.63 billion, a decrease
of $560.2 million, or 3.7%, from March 31, 2024, and a decrease of
$1.91 billion, or 11.6%, from June 30, 2023. The decrease from the
prior quarter was largely driven by reductions of $381.5 million in
noninterest-bearing checking, $193.1 million in money market and
savings, $87.9 million in brokered certificates of deposit, and
$9.4 million in interest-bearing checking, partially offset by an
increase of $111.7 million in retail certificates of deposit. The
decrease from June 30, 2023 was attributable to decreases of $1.28
billion in noninterest-bearing checking and $1.23 billion in
brokered certificates of deposit, partially offset by an increase
of $540.5 million in retail certificates of deposit.
At June 30, 2024, non-maturity deposits(1) totaled $12.24
billion, or 83.7% of total deposits, a decrease of $584.0 million,
or 4.6%, from March 31, 2024, and a decrease of $1.22 billion, or
9.1%, from June 30, 2023. The decrease from the prior quarters was
attributable to clients utilizing their deposit balances to prepay
or pay down loans, seasonal tax payments and distributions, as well
as redeploying funds into higher yielding alternatives.
At June 30, 2024, maturity deposits totaled $2.39 billion, an
increase of $23.8 million, or 1.0%, from March 31, 2024, and a
decrease of $692.0 million, or 22.4%, from June 30, 2023. The
increase in the second quarter of 2024 compared to the prior
quarter was primarily driven by an increase of $111.7 million in
retail certificates of deposit, partially offset by the reduction
of $87.9 million in brokered certificates of deposit. The decrease
from June 30, 2023 was primarily driven by decreases in brokered
certificates of deposit.
The weighted average cost of total deposits for the second
quarter of 2024 was 1.73%, compared to 1.59% for the first quarter
of 2024, and 1.27% for the second quarter of 2023, both increases
principally driven by higher pricing across deposit categories. The
weighted average cost of non-maturity deposits(1) for the second
quarter of 2024 was 1.17%, compared to 1.06% for the first quarter
of 2024, and 0.71% for the second quarter of 2023.
At June 30, 2024, the end-of-period weighted average rate of
total deposits was 1.81%, compared to 1.66% at March 31, 2024, and
1.40% at June 30, 2023. At June 30, 2024, the end-of-period
weighted average rate of non-maturity deposits was 1.25%, compared
to 1.12% at March 31, 2024, and 0.78% at June 30, 2023.
At June 30, 2024, the Company’s FDIC-insured deposits as a
percentage of total deposits was 61%. Insured and collateralized
deposits comprised 67% of total deposits at June 30, 2024, which
was the same level at March 31, 2024 and June 30, 2023.
______________________________
(1)
Reconciliations of the non-GAAP measures
are set forth at the end of this press release.
The following table presents the composition of deposits as of
the dates indicated.
June 30,
March 31,
June 30,
(Dollars in
thousands)
2024
2024
2023
Deposit accounts
Noninterest-bearing checking
$
4,616,124
$
4,997,636
$
5,895,975
Interest-bearing:
Checking
2,776,212
2,785,626
2,759,855
Money market/savings
4,844,585
5,037,636
4,801,288
Total non-maturity deposits (1)
12,236,921
12,820,898
13,457,118
Retail certificates of deposit
1,906,552
1,794,813
1,366,071
Wholesale/brokered certificates of
deposit
484,181
572,117
1,716,686
Total maturity deposits
2,390,733
2,366,930
3,082,757
Total deposits
$
14,627,654
$
15,187,828
$
16,539,875
Cost of deposits
1.73
%
1.59
%
1.27
%
Cost of non-maturity deposits (1)
1.17
1.06
0.71
Noninterest-bearing deposits as a percent
of total deposits
31.6
32.9
35.6
Non-maturity deposits (1) as a percent of
total deposits
83.7
84.4
81.4
______________________________
(1)
Reconciliations of the non-GAAP measures
are set forth at the end of this press release.
Borrowings
At June 30, 2024, total borrowings amounted to $532.2 million,
remaining flat from March 31, 2024, and a decrease of $599.4
million from June 30, 2023. Total borrowings at June 30, 2024 were
comprised of $200.0 million of FHLB term advances and $332.2
million of subordinated debt. The decrease in borrowings at June
30, 2024 as compared to June 30, 2023 was due to a decrease of
$600.0 million in FHLB term advances.
As of June 30, 2024, our unused borrowing capacity was $8.65
billion, which consists of available lines of credit with FHLB and
other correspondent banks, as well as access through the Federal
Reserve Bank's discount window, which was not utilized during the
second quarter of 2024.
Capital Ratios
At June 30, 2024, our common stockholders' equity was $2.92
billion, or 15.95% of total assets, compared with $2.90 billion, or
15.43%, at March 31, 2024, and $2.85 billion, or 13.73%, at June
30, 2023, with a book value per share of $30.32, compared with
$30.09 at March 31, 2024, and $29.71 at June 30, 2023. At June 30,
2024, the ratio of tangible common equity to tangible assets(1)
increased 44 and 182 basis points to 11.41%, compared with 10.97%
at March 31, 2024, and 9.59% at June 30, 2023, respectively.
Tangible book value per share(1) increased $0.25 and $0.79 to
$20.58, compared with $20.33 at March 31, 2024, and $19.79 at June
30, 2023, respectively.
______________________________
(1)
Reconciliations of the non-GAAP measures
are set forth at the end of this press release.
The Company implemented the current expected credit losses
(“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 June
30, 2024, 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.
June 30,
March 31,
June 30,
Capital ratios
2024
2024
2023
Pacific Premier Bancorp, Inc.
Consolidated
Tangible common equity ratio (1)
11.41
%
10.97
%
9.59
%
Tier 1 leverage ratio
11.87
11.48
10.90
Common equity tier 1 capital ratio
15.89
15.02
14.34
Tier 1 capital ratio
15.89
15.02
14.34
Total capital ratio
19.01
18.23
17.24
Pacific Premier Bank
Tier 1 leverage ratio
13.42
%
12.97
%
12.15
%
Common equity tier 1 capital ratio
17.97
16.96
15.99
Tier 1 capital ratio
17.97
16.96
15.99
Total capital ratio
19.22
18.21
17.05
Share data
Book value per share
$
30.32
$
30.09
$
29.71
Tangible book value per share (1)
20.58
20.33
19.79
Common equity dividends declared per
share
0.33
0.33
0.33
Closing stock price (2)
22.97
24.00
20.68
Shares issued and outstanding
96,434,047
96,459,966
95,906,217
Market capitalization (2)(3)
$
2,215,090
$
2,315,039
$
1,983,341
______________________________
(1)
Reconciliations of the non-GAAP measures
are set forth at the end of this press release.
(2)
As of the last trading day prior to period
end.
(3)
Dollars in thousands.
Dividend and Stock Repurchase Program
On July 22, 2024, the Company's Board of Directors declared a
$0.33 per share dividend, payable on August 12, 2024 to
stockholders of record as of August 5, 2024. In January 2021, the
Company’s Board of Directors approved a stock repurchase program,
which authorized the repurchase of up to 4,725,000 shares of its
common stock. During the second quarter of 2024, 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 July 24, 2024 to discuss its financial results. Analysts
and investors may participate in the question-and-answer session. A
live webcast will be available on the Webcasts page of the
Company's investor relations website. An archived version of the
webcast will be available in the same location shortly after the
live call has ended. The conference call can be accessed by
telephone at (866) 290-5977. Participants should ask to be joined
to the Pacific Premier Bancorp, Inc. call. Additionally, a
telephone replay will be made available through July 31, 2024, at
(877) 344-7529, replay code 4208818.
About Pacific Premier Bancorp, Inc.
Pacific Premier Bancorp, Inc. (Nasdaq: PPBI) is the parent
company of Pacific Premier Bank, a California-based commercial bank
focused on serving small, middle-market, and corporate businesses
throughout the western United States in major metropolitan markets
in California, Washington, Oregon, Arizona, and Nevada. Founded in
1983, Pacific Premier Bank has grown to become one of the largest
banks headquartered in the western region of the United States,
with approximately $18 billion in total assets. Pacific Premier
Bank provides banking products and services, including deposit
accounts, digital banking, and treasury management services, to
businesses, professionals, entrepreneurs, real estate investors,
and nonprofit organizations. Pacific Premier Bank also offers a
wide array of loan products, such as commercial business loans,
lines of credit, SBA loans, commercial real estate loans,
agribusiness loans, franchise lending, home equity lines of credit,
and construction loans. Pacific Premier Bank offers commercial
escrow services and facilitates 1031 Exchange transactions through
its Commerce Escrow division. Pacific Premier Bank offers clients
IRA custodial services through its Pacific Premier Trust division,
which has approximately $17 billion of assets under custody and
over 32,000 client accounts comprised of self-directed investors,
financial institutions, capital syndicators, and financial
advisors. Additionally, Pacific Premier Bank provides nationwide
customized banking solutions to Homeowners’ Associations and
Property Management companies. Pacific Premier Bank is an Equal
Housing Lender and Member FDIC. For additional information about
Pacific Premier Bancorp, Inc. and Pacific Premier Bank, visit our
website: www.ppbi.com.
FORWARD-LOOKING STATEMENTS
The statements contained herein that are not historical facts
are forward-looking statements based on management’s current
expectations and beliefs concerning future developments and their
potential effects on the Company including, without limitation,
plans, strategies and goals, and statements about the Company’s
expectations regarding revenue and asset growth, financial
performance and profitability, loan and deposit growth, yields and
returns, loan diversification and credit management, stockholder
value creation, tax rates, liquidity, and the impact of
acquisitions we have made or may make.
Such statements involve inherent risks and uncertainties, many
of which are difficult to predict and are generally beyond the
control of the Company. There can be no assurance that future
developments affecting the Company will be the same as those
anticipated by management. The Company cautions readers that a
number of important factors could cause actual results to differ
materially from those expressed in, or implied or projected by,
such forward-looking statements. These risks and uncertainties
include, but are not limited to, the following: the strength of the
United States ("U.S.") economy in general and the strength of the
local economies in which we conduct operations; adverse
developments in the banking industry and the potential impact of
such developments on customer confidence, liquidity, and regulatory
responses to these developments; the effects of, and changes in,
trade, monetary, and fiscal policies and laws, including interest
rate policies of the Board of Governors of the Federal Reserve
System; interest rate, liquidity, economic, market, credit,
operational, and inflation risks associated with our business,
including the speed and predictability of changes in these risks;
our ability to attract and retain deposits and access to other
sources of liquidity, particularly in a rising or high interest
rate environment, and the quality and composition of our deposits;
business and economic conditions generally and in the financial
services industry, nationally and within our current and future
geographic markets, including the tight labor market, ineffective
management of the U.S. Federal budget or debt, or turbulence or
uncertainty in domestic or foreign financial markets; the effect of
acquisitions we have made or may make, including, without
limitation, the failure to achieve the expected revenue growth
and/or expense savings from such acquisitions, and/or the failure
to effectively integrate an acquisition target into our operations;
the timely development of competitive new products and services and
the acceptance of these products and services by new and existing
customers; possible impairment charges to goodwill, including any
impairment that may result from increased volatility in our stock
price; the impact of changes in financial services policies, laws,
and regulations, including those concerning taxes, banking,
securities, and insurance, and the application thereof by
regulatory bodies; compliance risks, including any increased costs
of monitoring, testing, and maintaining compliance with complex
laws and regulations; the effectiveness of our risk management
framework and quantitative models; the effect of changes in
accounting policies and practices or accounting standards, as may
be adopted from time-to-time by bank regulatory agencies, the U.S.
Securities and Exchange Commission (“SEC”), the Public Company
Accounting Oversight Board, the Financial Accounting Standards
Board or other accounting standards setters; possible
credit-related impairments of securities held by us; changes in the
level of our nonperforming assets and charge-offs; the impact of
governmental efforts to restructure the U.S. financial regulatory
system; the impact of recent or future changes in the FDIC
insurance assessment rate or the rules and regulations related to
the calculation of the FDIC insurance assessment amount, including
any special assessments; changes in consumer spending, borrowing,
and savings habits; the effects of concentrations in our loan
portfolio, including commercial real estate and 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, Israel and Hamas, and
overall tension in the Middle East, and trade tensions, all of
which could impact business and economic conditions in the United
States and abroad; public health crises and pandemics 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 2023
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)
June 30,
March 31,
December 31,
September 30,
June 30,
(Dollars in
thousands)
2024
2024
2023
2023
2023
ASSETS
Cash and cash equivalents
$
899,817
$
1,028,818
$
936,473
$
1,400,276
$
1,463,677
Interest-bearing time deposits with
financial institutions
996
995
995
1,242
1,487
Investment securities held-to-maturity, at
amortized cost, net of allowance for credit losses
1,710,141
1,720,481
1,729,541
1,737,866
1,737,604
Investment securities available-for-sale,
at fair value
1,320,050
1,154,021
1,140,071
1,914,599
2,011,791
FHLB, FRB, and other stock
97,037
97,063
99,225
105,505
105,369
Loans held for sale, at lower of amortized
cost or fair value
140
—
—
641
2,184
Loans held for investment
12,489,951
13,012,071
13,289,020
13,270,120
13,610,282
Allowance for credit losses
(183,803
)
(192,340
)
(192,471
)
(188,098
)
(192,333
)
Loans held for investment, net
12,306,148
12,819,731
13,096,549
13,082,022
13,417,949
Accrued interest receivable
69,629
67,642
68,516
68,131
70,093
Other real estate owned
—
248
248
450
270
Premises and equipment, net
52,137
54,789
56,676
59,396
61,527
Deferred income taxes, net
108,607
111,390
113,580
192,208
184,857
Bank owned life insurance
477,694
474,404
471,178
468,191
465,288
Intangible assets
37,686
40,449
43,285
46,307
49,362
Goodwill
901,312
901,312
901,312
901,312
901,312
Other assets
350,931
341,838
368,996
297,574
275,113
Total assets
$
18,332,325
$
18,813,181
$
19,026,645
$
20,275,720
$
20,747,883
LIABILITIES
Deposit accounts:
Noninterest-bearing checking
$
4,616,124
$
4,997,636
$
4,932,817
$
5,782,305
$
5,895,975
Interest-bearing:
Checking
2,776,212
2,785,626
2,899,621
2,598,449
2,759,855
Money market/savings
4,844,585
5,037,636
4,868,442
4,873,582
4,801,288
Retail certificates of deposit
1,906,552
1,794,813
1,684,560
1,525,919
1,366,071
Wholesale/brokered certificates of
deposit
484,181
572,117
610,186
1,227,192
1,716,686
Total interest-bearing
10,011,530
10,190,192
10,062,809
10,225,142
10,643,900
Total deposits
14,627,654
15,187,828
14,995,626
16,007,447
16,539,875
FHLB advances and other borrowings
200,000
200,000
600,000
800,000
800,000
Subordinated debentures
332,160
332,001
331,842
331,682
331,523
Accrued expenses and other liabilities
248,747
190,551
216,596
281,057
227,351
Total liabilities
15,408,561
15,910,380
16,144,064
17,420,186
17,898,749
STOCKHOLDERS’ EQUITY
Common stock
941
941
938
937
937
Additional paid-in capital
2,383,615
2,378,171
2,377,131
2,371,941
2,366,639
Retained earnings
629,341
619,405
604,137
771,285
757,025
Accumulated other comprehensive loss
(90,133
)
(95,716
)
(99,625
)
(288,629
)
(275,467
)
Total stockholders' equity
2,923,764
2,902,801
2,882,581
2,855,534
2,849,134
Total liabilities and stockholders'
equity
$
18,332,325
$
18,813,181
$
19,026,645
$
20,275,720
$
20,747,883
PACIFIC PREMIER BANCORP, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
OPERATIONS
(Unaudited)
Three Months Ended
Six Months Ended
June 30,
March 31,
June 30,
June 30,
June 30,
(Dollars in
thousands, except per share data)
2024
2024
2023
2024
2023
INTEREST INCOME
Loans
$
167,547
$
172,975
$
182,852
$
340,522
$
363,810
Investment securities and other
interest-earning assets
40,507
40,456
42,536
80,963
82,921
Total interest income
208,054
213,431
225,388
421,485
446,731
INTEREST EXPENSE
Deposits
64,229
59,506
53,580
123,735
93,814
FHLB advances and other borrowings
2,330
4,237
7,155
6,567
15,093
Subordinated debentures
5,101
4,561
4,561
9,662
9,122
Total interest expense
71,660
68,304
65,296
139,964
118,029
Net interest income before provision for
credit losses
136,394
145,127
160,092
281,521
328,702
Provision for credit losses
1,265
3,852
1,499
5,117
4,515
Net interest income after provision for
credit losses
135,129
141,275
158,593
276,404
324,187
NONINTEREST INCOME
Loan servicing income
510
529
493
1,039
1,066
Service charges on deposit accounts
2,710
2,688
2,670
5,398
5,299
Other service fee income
309
336
315
645
611
Debit card interchange fee income
925
765
914
1,690
1,717
Earnings on bank owned life insurance
4,218
4,159
3,487
8,377
6,861
Net gain from sales of loans
65
—
345
65
374
Net gain from sales of investment
securities
—
—
—
—
138
Trust custodial account fees
8,950
10,642
9,360
19,592
20,385
Escrow and exchange fees
702
696
924
1,398
1,982
Other (loss) income
(167
)
5,959
2,031
5,792
3,292
Total noninterest income
18,222
25,774
20,539
43,996
41,725
NONINTEREST EXPENSE
Compensation and benefits
53,140
54,130
53,424
107,270
107,717
Premises and occupancy
10,480
10,807
11,615
21,287
23,357
Data processing
7,754
7,511
7,488
15,265
14,753
Other real estate owned operations,
net
—
46
8
46
116
FDIC insurance premiums
1,873
2,629
2,357
4,502
4,782
Legal and professional services
1,078
4,143
4,716
5,221
10,217
Marketing expense
1,724
1,558
1,879
3,282
3,717
Office expense
1,077
1,093
1,280
2,170
2,512
Loan expense
840
770
567
1,610
1,213
Deposit expense
12,289
12,665
9,194
24,954
17,630
Amortization of intangible assets
2,763
2,836
3,055
5,599
6,226
Other expense
4,549
4,445
5,061
8,994
9,756
Total noninterest expense
97,567
102,633
100,644
200,200
201,996
Net income before income taxes
55,784
64,416
78,488
120,200
163,916
Income tax expense
13,879
17,391
20,852
31,270
43,718
Net income
$
41,905
$
47,025
$
57,636
$
88,930
$
120,198
EARNINGS (LOSS) PER SHARE
Basic
$
0.43
$
0.49
$
0.60
$
0.92
$
1.26
Diluted
$
0.43
$
0.49
$
0.60
$
0.92
$
1.26
WEIGHTED AVERAGE SHARES
OUTSTANDING
Basic
94,628,201
94,350,259
94,166,083
94,489,230
94,012,799
Diluted
94,716,205
94,477,355
94,215,967
94,597,559
94,192,341
SELECTED FINANCIAL DATA
PACIFIC PREMIER BANCORP, INC.
AND SUBSIDIARIES
CONSOLIDATED AVERAGE BALANCES
AND YIELD DATA
(Unaudited)
Three Months Ended
June 30, 2024
March 31, 2024
June 30, 2023
(Dollars in
thousands)
Average Balance
Interest Income/
Expense
Average Yield/ Cost
Average Balance
Interest Income/
Expense
Average Yield/ Cost
Average Balance
Interest Income/
Expense
Average Yield/ Cost
Assets
Interest-earning assets:
Cash and cash equivalents
$
1,134,736
$
13,666
4.84
%
$
1,140,909
$
13,638
4.81
%
$
1,433,137
$
16,600
4.65
%
Investment securities
2,964,909
26,841
3.62
2,948,170
26,818
3.64
3,926,568
25,936
2.64
Loans receivable, net (1)(2)
12,724,545
167,547
5.30
13,149,038
172,975
5.29
13,927,145
182,852
5.27
Total interest-earning assets
16,824,190
208,054
4.97
17,238,117
213,431
4.98
19,286,850
225,388
4.69
Noninterest-earning assets
1,771,493
1,796,279
1,771,156
Total assets
$
18,595,683
$
19,034,396
$
21,058,006
Liabilities and equity
Interest-bearing deposits:
Interest checking
$
2,747,972
$
10,177
1.49
%
$
2,838,332
$
9,903
1.40
%
$
2,746,578
$
8,659
1.26
%
Money market
4,724,572
26,207
2.23
4,636,141
23,632
2.05
4,644,623
15,644
1.35
Savings
271,812
224
0.33
287,735
227
0.32
352,377
102
0.12
Retail certificates of deposit
1,830,516
21,115
4.64
1,727,728
19,075
4.44
1,286,160
10,306
3.21
Wholesale/brokered certificates of
deposit
542,699
6,506
4.82
568,872
6,669
4.72
1,767,970
18,869
4.28
Total interest-bearing deposits
10,117,571
64,229
2.55
10,058,808
59,506
2.38
10,797,708
53,580
1.99
FHLB advances and other borrowings
200,154
2,330
4.68
518,879
4,237
3.28
800,016
7,155
3.59
Subordinated debentures
332,097
5,101
6.14
331,932
4,561
5.50
331,449
4,561
5.50
Total borrowings
532,251
7,431
5.59
850,811
8,798
4.15
1,131,465
11,716
4.15
Total interest-bearing liabilities
10,649,822
71,660
2.71
10,909,619
68,304
2.52
11,929,173
65,296
2.20
Noninterest-bearing deposits
4,824,002
4,996,939
6,078,543
Other liabilities
213,844
231,889
206,929
Total liabilities
15,687,668
16,138,447
18,214,645
Stockholders' equity
2,908,015
2,895,949
2,843,361
Total liabilities and equity
$
18,595,683
$
19,034,396
$
21,058,006
Net interest income
$
136,394
$
145,127
$
160,092
Net interest margin (3)
3.26
%
3.39
%
3.33
%
Cost of deposits (4)
1.73
1.59
1.27
Cost of funds (5)
1.86
1.73
1.45
Cost of non-maturity deposits (6)
1.17
1.06
0.71
Ratio of interest-earning assets to
interest-bearing liabilities
157.98
158.01
161.68
______________________________
(1)
Average balance includes loans held for
sale and nonperforming loans and is net of deferred loan
origination fees/costs, discounts/premiums, and the basis
adjustment of certain loans included in fair value hedging
relationships.
(2)
Interest income includes net discount
accretion of $2.3 million, $2.1 million, and $2.9 million for the
three months ended June 30, 2024, March 31, 2024, and June 30,
2023, 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.
PACIFIC PREMIER BANCORP, INC.
AND SUBSIDIARIES
LOAN PORTFOLIO
COMPOSITION
(Unaudited)
June 30,
March 31,
December 31,
September 30,
June 30,
(Dollars in
thousands)
2024
2024
2023
2023
2023
Investor loans secured by real
estate
CRE non-owner-occupied
$
2,245,474
$
2,309,252
$
2,421,772
$
2,514,056
$
2,571,246
Multifamily
5,473,606
5,558,966
5,645,310
5,719,210
5,788,030
Construction and land
453,799
486,734
472,544
444,576
428,287
SBA secured by real estate (1)
33,245
35,206
36,400
37,754
38,876
Total investor loans secured by real
estate
8,206,124
8,390,158
8,576,026
8,715,596
8,826,439
Business loans secured by real estate
(2)
CRE owner-occupied
2,096,485
2,149,362
2,191,334
2,228,802
2,281,721
Franchise real estate secured
274,645
294,938
304,514
313,451
318,539
SBA secured by real estate (3)
46,543
48,426
50,741
53,668
57,084
Total business loans secured by real
estate
2,417,673
2,492,726
2,546,589
2,595,921
2,657,344
Commercial loans (4)
Commercial and industrial
1,554,735
1,774,487
1,790,608
1,588,771
1,744,763
Franchise non-real estate secured
257,516
301,895
319,721
335,053
351,944
SBA non-real estate secured
10,346
10,946
10,926
10,667
9,688
Total commercial loans
1,822,597
2,087,328
2,121,255
1,934,491
2,106,395
Retail loans
Single family residential (5)
70,380
72,353
72,752
70,984
70,993
Consumer
1,378
1,830
1,949
1,958
2,241
Total retail loans
71,758
74,183
74,701
72,942
73,234
Loans held for investment before basis
adjustment (6)
12,518,152
13,044,395
13,318,571
13,318,950
13,663,412
Basis adjustment associated with fair
value hedge (7)
(28,201
)
(32,324
)
(29,551
)
(48,830
)
(53,130
)
Loans held for investment
12,489,951
13,012,071
13,289,020
13,270,120
13,610,282
Allowance for credit losses for loans held
for investment
(183,803
)
(192,340
)
(192,471
)
(188,098
)
(192,333
)
Loans held for investment, net
$
12,306,148
$
12,819,731
$
13,096,549
$
13,082,022
$
13,417,949
Loans held for sale, at lower of cost or
fair value
$
140
$
—
$
—
$
641
$
2,184
______________________________
(1)
SBA loans that are collateralized by
hotel/motel real property.
(2)
Loans to businesses that are
collateralized by real estate where the operating cash flow of the
business is the primary source of repayment.
(3)
SBA loans that are collateralized by real
property other than hotel/motel real property.
(4)
Loans to businesses where the operating
cash flow of the business is the primary source of repayment.
(5)
Single family residential includes home
equity lines of credit, as well as second trust deeds.
(6)
Includes net deferred origination costs
(fees) of $1.4 million, $797,000, $(74,000), $451,000, and
$142,000, and unaccreted fair value net purchase discounts of $38.6
million, $41.2 million, $43.3 million, $46.2 million, and $48.4
million as of June 30, 2024, March 31, 2024, December 31, 2023,
September 30, 2023, and June 30, 2023, 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)
June 30,
March 31,
December 31,
September 30,
June 30,
(Dollars in
thousands)
2024
2024
2023
2023
2023
Asset quality
Nonperforming loans
$
52,119
$
63,806
$
24,817
$
25,458
$
17,151
Other real estate owned
—
248
248
450
270
Nonperforming assets
$
52,119
$
64,054
$
25,065
$
25,908
$
17,421
Total classified assets (1)
$
183,833
$
204,937
$
142,210
$
149,708
$
120,216
Allowance for credit losses
183,803
192,340
192,471
188,098
192,333
Allowance for credit losses as a percent
of total nonperforming loans
353
%
301
%
776
%
739
%
1,121
%
Nonperforming loans as a percent of loans
held for investment
0.42
0.49
0.19
0.19
0.13
Nonperforming assets as a percent of total
assets
0.28
0.34
0.13
0.13
0.08
Classified loans to total loans held for
investment
1.47
1.57
1.07
1.12
0.88
Classified assets to total assets
1.00
1.09
0.75
0.74
0.58
Net loan charge-offs for the quarter
ended
$
10,293
$
6,419
$
3,902
$
6,752
$
3,665
Net loan charge-offs for the quarter to
average total loans
0.08
%
0.05
%
0.03
%
0.05
%
0.03
%
Allowance for credit losses to loans held
for investment (2)
1.47
1.48
1.45
1.42
1.41
Delinquent loans (3)
30 - 59 days
$
4,985
$
1,983
$
2,484
$
2,967
$
649
60 - 89 days
3,289
974
1,294
475
31
90+ days
9,649
9,221
6,276
7,484
30,271
Total delinquency
$
17,923
$
12,178
$
10,054
$
10,926
$
30,951
Delinquency as a percent of loans held for
investment
0.14
%
0.09
%
0.08
%
0.08
%
0.23
%
______________________________
(1)
Includes substandard and doubtful loans,
and other real estate owned.
(2)
At June 30, 2024, 25% of loans held for
investment include a fair value net discount of $38.6 million, or
0.31% of loans held for investment. At March 31, 2024, 25% of loans
held for investment include a fair value net discount of $41.2
million, or 0.32% of loans held for investment. At December 31,
2023, 24% of loans held for investment include a fair value net
discount of $43.3 million, or 0.33% of loans held for investment.
At September 30, 2023, 24% of loans held for investment include a
fair value net discount of $46.2 million, or 0.35% of loans held
for investment. At June 30, 2023, 25% of loans held for investment
include a fair value net discount of $48.4 million, or 0.35% of
loans held for investment.
(3)
Nonaccrual loans are included in this
aging analysis based on the loan's past due status.
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
June 30, 2024
Investor loans secured by real
estate
CRE non-owner-occupied
$
19,381
$
—
$
—
$
—
$
19,381
$
19,381
SBA secured by real estate (2)
934
—
—
—
934
934
Total investor loans secured by real
estate
20,315
—
—
—
20,315
20,315
Business loans secured by real estate
(3)
CRE owner-occupied
8,439
—
—
—
8,439
8,439
Franchise real estate secured
—
—
292
37
292
—
Total business loans secured by real
estate
8,439
—
292
37
8,731
8,439
Commercial loans (4)
Commercial and industrial
9,252
—
11,727
—
20,979
20,979
Franchise non-real estate secured
—
—
1,559
200
1,559
—
SBA not secured by real estate
535
—
—
—
535
535
Total commercial loans
9,787
—
13,286
200
23,073
21,514
Totals nonaccrual loans
$
38,541
$
—
$
13,578
$
237
$
52,119
$
50,268
______________________________
(1)
The ACL for nonaccrual loans is determined
based on a discounted cash flow methodology unless the loan is
considered collateral dependent. The ACL for collateral dependent
loans is determined based on the estimated fair value of the
underlying collateral.
(2)
SBA loans that are collateralized by
hotel/motel real property.
(3)
Loans to businesses that are
collateralized by real estate where the operating cash flow of the
business is the primary source of repayment.
(4)
Loans to businesses where the operating
cash flow of the business is the primary source of repayment.
PACIFIC PREMIER BANCORP, INC.
AND SUBSIDIARIES
PAST DUE STATUS
(Unaudited)
Days Past Due (7)
(Dollars in
thousands)
Current
30-59
60-89
90+
Total
June 30, 2024
Investor loans secured by real
estate
CRE non-owner-occupied
$
2,244,424
$
—
$
—
$
1,050
$
2,245,474
Multifamily
5,473,606
—
—
—
5,473,606
Construction and land
453,799
—
—
—
453,799
SBA secured by real estate (1)
32,748
—
—
497
33,245
Total investor loans secured by real
estate
8,204,577
—
—
1,547
8,206,124
Business loans secured by real
estate (2)
CRE owner-occupied
2,088,046
3,852
—
4,587
2,096,485
Franchise real estate secured
274,353
—
—
292
274,645
SBA secured by real estate (3)
46,543
—
—
—
46,543
Total business loans secured by real
estate
2,408,942
3,852
—
4,879
2,417,673
Commercial loans (4)
Commercial and industrial
1,552,024
1,133
449
1,129
1,554,735
Franchise non-real estate secured
253,117
—
2,840
1,559
257,516
SBA not secured by real estate
9,811
—
—
535
10,346
Total commercial loans
1,814,952
1,133
3,289
3,223
1,822,597
Retail loans
Single family residential (5)
70,380
—
—
—
70,380
Consumer loans
1,378
—
—
—
1,378
Total retail loans
71,758
—
—
—
71,758
Loans held for investment before basis
adjustment (6)
$
12,500,229
$
4,985
$
3,289
$
9,649
$
12,518,152
______________________________
(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 $28.2
million to the carrying amount of certain loans included in fair
value hedging relationships.
(7)
Nonaccrual loans are included in this
aging analysis based on the loan's past due status.
PACIFIC PREMIER BANCORP, INC.
AND SUBSIDIARIES
CREDIT RISK GRADES
(Unaudited)
(Dollars in
thousands)
Pass
Special Mention
Substandard
Doubtful
Total Gross
Loans
June 30, 2024
Investor loans secured by real
estate
CRE non-owner-occupied
$
2,204,871
$
3,585
$
37,018
$
—
$
2,245,474
Multifamily
5,455,303
18,303
—
—
5,473,606
Construction and land
453,375
424
—
—
453,799
SBA secured by real estate (1)
25,026
1,130
7,089
—
33,245
Total investor loans secured by real
estate
8,138,575
23,442
44,107
—
8,206,124
Business loans secured by real
estate (2)
CRE owner-occupied
2,014,813
32,938
48,734
—
2,096,485
Franchise real estate secured
271,264
1,579
1,802
—
274,645
SBA secured by real estate (3)
42,673
82
3,788
—
46,543
Total business loans secured by real
estate
2,328,750
34,599
54,324
—
2,417,673
Commercial loans (4)
Commercial and industrial
1,456,169
29,183
65,708
3,675
1,554,735
Franchise non-real estate secured
241,664
602
15,250
—
257,516
SBA not secured by real estate
9,577
—
769
—
10,346
Total commercial loans
1,707,410
29,785
81,727
3,675
1,822,597
Retail loans
Single family residential (5)
70,380
—
—
—
70,380
Consumer loans
1,378
—
—
—
1,378
Total retail loans
71,758
—
—
—
71,758
Loans held for investment before basis
adjustment (6)
$
12,246,493
$
87,826
$
180,158
$
3,675
$
12,518,152
______________________________
(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 $28.2
million to the carrying amount of certain loans included in fair
value hedging relationships.
GAAP TO NON-GAAP RECONCILIATIONS
PACIFIC PREMIER BANCORP, INC.
AND SUBSIDIARIES
(Unaudited)
The Company uses certain non-GAAP
financial measures to provide meaningful supplemental information
regarding the Company’s operational performance and to enhance
investors’ overall understanding of such financial performance.
However, these non-GAAP financial measures are supplemental and are
not a substitute for an analysis based on GAAP measures. As other
companies may use different calculations for these adjusted
measures, this presentation may not be comparable to other
similarly titled adjusted measures reported by other companies.
For periods presented below, return on
average assets excluding the FDIC special assessment is a non-GAAP
financial measure derived from GAAP based amounts. We calculate
this figure by excluding the FDIC special assessment and the
related tax impact from net income. Management believes that the
exclusion of such nonrecurring items from this financial measure
provides useful information to gain an understanding of the
operating results of our core business and a better comparison of
financial performance.
Three Months Ended
June 30,
March 31,
June 30,
(Dollars in
thousands)
2024
2024
2023
Net income
$
41,905
$
47,025
$
57,636
Add: FDIC special assessment
(161
)
523
—
Less: tax adjustment (1)
(45
)
148
—
Adjusted net income for average assets
$
41,789
$
47,400
$
57,636
Average assets
$
18,595,683
$
19,034,396
$
21,058,006
ROAA (annualized)
0.90
%
0.99
%
1.09
%
Adjusted ROAA (annualized)
0.90
%
1.00
%
1.09
%
______________________________
(1)
Adjusted by statutory tax rate
For periods presented below, return on
average tangible common equity is a non-GAAP financial measure
derived from GAAP-based amounts. We calculate this figure by
excluding amortization of intangible assets expense from net income
and excluding the average intangible assets and average goodwill
from the average stockholders' equity during the periods indicated.
Management believes that the exclusion of such items from this
financial measure provides useful information to gain an
understanding of the operating results of our core business. The
adjusted net income, adjusted return on average equity, and
adjusted return on average tangible common equity further exclude
the nonrecurring items to provide a better comparison to the
financial results of prior periods.
Three Months Ended
June 30,
March 31,
June 30,
(Dollars in
thousands)
2024
2024
2023
Net income
$
41,905
$
47,025
$
57,636
Plus: amortization of intangible assets
expense
2,763
2,836
3,055
Less: tax adjustment (1)
781
801
868
Net income for average tangible common
equity
$
43,887
$
49,060
$
59,823
Add: FDIC special assessment
(161
)
523
—
Less: tax adjustment (1)
(45
)
148
—
Adjusted net income for average tangible
common equity
$
43,771
$
49,435
$
59,823
Average stockholders' equity
$
2,908,015
$
2,895,949
$
2,843,361
Less: average intangible assets
39,338
42,134
51,180
Less: average goodwill
901,312
901,312
901,312
Adjusted average tangible common
equity
$
1,967,365
$
1,952,503
$
1,890,869
ROAE (annualized)
5.76
%
6.50
%
8.11
%
Adjusted ROAE (annualized)
5.75
%
6.55
%
8.11
%
ROATCE (annualized)
8.92
%
10.05
%
12.66
%
Adjusted ROATCE (annualized)
8.90
%
10.13
%
12.66
%
_____________________________________
(1)
Adjusted by statutory tax rate.
Pre-provision net revenue is a non-GAAP
financial measure derived from GAAP-based amounts. We calculate the
pre-provision net revenue by excluding income tax and provision for
credit losses from net income. The adjusted pre-provision net
income further excludes the FDIC special assessment to provide a
better comparison of financial performance. Management believes
that the exclusion of such items from this financial measure
provides useful information to gain an understanding of the
operating results of our core business and a better comparison to
the financial results of prior periods.
Three Months Ended
June 30,
March 31,
June 30,
(Dollars in
thousands)
2024
2024
2023
Interest income
$
208,054
$
213,431
$
225,388
Interest expense
71,660
68,304
65,296
Net interest income
136,394
145,127
160,092
Noninterest income
18,222
25,774
20,539
Revenue
154,616
170,901
180,631
Noninterest expense
97,567
102,633
100,644
Pre-provision net revenue
57,049
68,268
79,987
Add: FDIC special assessment
(161
)
523
—
Adjusted pre-provision net revenue
$
56,888
$
68,791
$
79,987
Pre-provision net revenue (annualized)
$
228,196
$
273,072
$
319,948
Adjusted pre-provision net revenue
(annualized)
$
227,552
$
275,164
$
319,948
Average assets
$
18,595,683
$
19,034,396
$
21,058,006
Pre-provision net revenue to average
assets
0.31
%
0.36
%
0.38
%
Pre-provision net revenue to average
assets (annualized)
1.23
%
1.43
%
1.52
%
Adjusted pre-provision net revenue on
average assets
0.31
%
0.36
%
0.38
%
Adjusted pre-provision net revenue on
average assets (annualized)
1.22
%
1.45
%
1.52
%
Efficiency ratio is a non-GAAP financial
measure derived from GAAP-based amounts. This figure represents the
ratio of noninterest expense, less amortization of intangible
assets and other real estate owned operations, where applicable, to
the sum of net interest income before provision for credit losses
and total noninterest income less (loss) gain from other real
estate owned and gain from debt extinguishment. The adjusted
efficiency ratio further excludes the FDIC special assessment to
provide a better comparison to the financial results of prior
periods. Management believes that the exclusion of such items from
this financial measure provides useful information to gain an
understanding of the operating results of our core business.
Three Months Ended
June 30,
March 31,
June 30,
(Dollars in
thousands)
2024
2024
2023
Total noninterest expense
$
97,567
$
102,633
$
100,644
Less: amortization of intangible
assets
2,763
2,836
3,055
Less: other real estate owned operations,
net
—
46
8
Adjusted noninterest expense
94,804
99,751
97,581
Less: FDIC special assessment
(161
)
523
—
Adjusted noninterest expense excluding
FDIC special assessment
$
94,965
$
99,228
$
97,581
Net interest income before provision for
credit losses
$
136,394
$
145,127
$
160,092
Add: total noninterest income
18,222
25,774
20,539
Less: net (loss) gain from other real
estate owned
(28
)
—
106
Less: net gain from debt
extinguishment
—
5,067
—
Adjusted revenue
$
154,644
$
165,834
$
180,525
Efficiency ratio
61.3
%
60.2
%
54.1
%
Adjusted efficiency ratio excluding FDIC
special assessment
61.4
%
59.8
%
54.1
%
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.
June 30,
March 31,
December 31,
September 30,
June 30,
(Dollars in
thousands, except per share data)
2024
2024
2023
2023
2023
Total stockholders' equity
$
2,923,764
$
2,902,801
$
2,882,581
$
2,855,534
$
2,849,134
Less: intangible assets
938,998
941,761
944,597
947,619
950,674
Tangible common equity
$
1,984,766
$
1,961,040
$
1,937,984
$
1,907,915
$
1,898,460
Total assets
$
18,332,325
$
18,813,181
$
19,026,645
$
20,275,720
$
20,747,883
Less: intangible assets
938,998
941,761
944,597
947,619
950,674
Tangible assets
$
17,393,327
$
17,871,420
$
18,082,048
$
19,328,101
$
19,797,209
Tangible common equity ratio
11.41
%
10.97
%
10.72
%
9.87
%
9.59
%
Common shares issued and outstanding
96,434,047
96,459,966
95,860,092
95,900,847
95,906,217
Book value per share
$
30.32
$
30.09
$
30.07
$
29.78
$
29.71
Less: intangible book value per share
9.74
9.76
9.85
9.88
9.91
Tangible book value per share
$
20.58
$
20.33
$
20.22
$
19.89
$
19.79
Cost of non-maturity deposits is a
non-GAAP financial measure derived from GAAP-based amounts. Cost of
non-maturity deposits is calculated as the ratio of non-maturity
deposit interest expense to average non-maturity deposits. We
calculate non-maturity deposit interest expense by excluding
interest expense for all certificates of deposit from total deposit
expense, and we calculate average non-maturity deposits by
excluding all certificates of deposit from total deposits.
Management believes cost of non-maturity deposits is a useful
measure to assess the Company's deposit base, including its
potential volatility.
Three Months Ended
June 30,
March 31,
June 30,
(Dollars in
thousands)
2024
2024
2023
Total deposits interest expense
$
64,229
$
59,506
$
53,580
Less: certificates of deposit interest
expense
21,115
19,075
10,306
Less: brokered certificates of deposit
interest expense
6,506
6,669
18,869
Non-maturity deposit expense
$
36,608
$
33,762
$
24,405
Total average deposits
$
14,941,573
$
15,055,747
$
16,876,251
Less: average certificates of deposit
1,830,516
1,727,728
1,286,160
Less: average brokered certificates of
deposit
542,699
568,872
1,767,970
Average non-maturity deposits
$
12,568,358
$
12,759,147
$
13,822,121
Cost of non-maturity deposits
1.17
%
1.06
%
0.71
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240724355821/en/
Pacific Premier Bancorp, Inc.
Steven R. Gardner Chairman, Chief Executive Officer, and
President (949) 864-8000
Ronald J. Nicolas, Jr. Senior Executive Vice President and Chief
Financial Officer (949) 864-8000
Matthew J. Lazzaro Senior Vice President and Director of
Investor Relations (949) 243-1082
Pacific Premier Bancorp (NASDAQ:PPBI)
過去 株価チャート
から 6 2024 まで 7 2024
Pacific Premier Bancorp (NASDAQ:PPBI)
過去 株価チャート
から 7 2023 まで 7 2024
