Attached files
| file | filename |
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| EX-99.1 - EXHIBIT 99.1 - PACIFIC PREMIER BANCORP INC | ex_991-prxrjxconfx2016xq4.htm |
| 8-K - 8-K - PACIFIC PREMIER BANCORP INC | a8k_ppbixip-2016xq4rjconf.htm |
Investor Presentation
Fourth Quarter 2016
Steve Gardner
Chairman & Chief Executive Officer
sgardner@ppbi.com - 949-864-8000
Ronald Nicolas
Sr. EVP & Chief Financial Officer
rnicolas@ppbi.com - 949-864-8000
And
Exhibit 99.2
Filed by Pacific Premier Bancorp, Inc.
Pursuant to Rule 425 under the
Securities Act of 1933
Subject Company: Heritage Oaks Bancorp
SEC Registration Statement No.: 333-215620
2
Forward-Looking Statements
The statements contained in this presentation 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 Pacific Premier Bancorp, Inc. (the
“Company”). 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 the Company conducts 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, interest rate, market and monetary fluctuations; the
timely development of competitive new products and services and the acceptance of these products and services by new and existing
customers; the willingness of users to substitute competitors’ products and services for the Company’s products and services; the impact
of changes in financial services policies, laws and regulations (including the Dodd-Frank Wall Street Reform and Consumer Protection Act)
and of governmental efforts to restructure the U.S. financial regulatory system; technological changes; the effect of acquisitions that the
Company may make, if any, including, without limitation, the failure to achieve the expected revenue growth and/or expense savings
from its acquisitions; changes in the level of the Company’s nonperforming assets and charge-offs; any oversupply of inventory and
deterioration in values of California real estate, both residential and commercial; the effect of changes in accounting policies and
practices, as may be adopted from time-to-time by bank regulatory agencies, the Securities and Exchange Commission (“SEC”), the Public
Company Accounting Oversight Board, the Financial Accounting Standards Board or other accounting standards setters; possible other-
than-temporary impairment of securities held by us; changes in consumer spending, borrowing and savings habits; the effects of the
Company’s lack of a diversified loan portfolio, including the risks of geographic and industry concentrations; ability to attract deposits and
other sources of liquidity; 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; unanticipated regulatory or judicial
proceedings; and the Company’s 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 2015 Annual Report on Form 10-K of Pacific
Premier Bancorp, Inc. filed with the SEC and available at the SEC’s Internet site (http://www.sec.gov).
The Company specifically disclaims any obligation to update any factors or to publicly announce the result of revisions to any of the
forward-looking statements included herein to reflect future events or developments.
3
15 Full-Service
Branch Locations
Company Profile
Exchange / Listing NASDAQ: PPBI
Focus
Small & Mid-Market
Businesses
Total Assets $4.0 Billion*
Branch Network
Note: Market data as of 2/22/2017
* As of 12/31/2016
Pacific Premier Branch Footprint
Headquarters Irvine, CA
# of Research Analysts 8 Analysts
Market Cap $1.11 Billion
Avg. Daily Volume 207,945 Shares
Note: Map does not include PPBI offices outside of California
4
Strategic Transformation
Pre 2008 Conversion from a thrift to a commercial bank
2008 - 2012
Organic growth driven by dynamic sales culture
Geographic expansion through highly accretive FDIC-assisted acquisitions
Canyon National Bank (CNB) - $192 million in assets, closed on 2/11/2011 (FDIC-Assisted)
Palm Desert National Bank (PDNB) - $103 million in assets, closed on 4/27/2012 (FDIC-Assisted)
2017 and Beyond
Focus on producing EPS growth from scale, efficiency, balance sheet leverage
Target ROAA and ROATCE of 1.25% and 15%, respectively
Continue disciplined organic and acquisitive growth increasing scarcity value
2013 - 2016
Build out of commercial banking platform through acquisitions
First Associations Bank (FAB) - $424 million in assets, closed on 3/15/2013 (151 days)
San Diego Trust Bank (SDTB) - $211 million in assets, closed on 6/25/2013 (111 days)
Infinity Franchise Holdings (IFH) - $80 million in assets, closed on 1/30/2014 (73 days)
Independence Bank (IDPK) - $422 million in assets, closed on 1/26/2015 (96 days)
Security California Bancorp (SCAF) - $715 million in assets, closed 1/31/2016 (123 days)
Heritage Oaks Bancorp (HEOP) – Announced merger agreement on 12/13/16
A balance of organic and acquisitive growth to create a Southern California centric
commercial bank franchise with $4.0 billion in assets
5
History of PPBI
• Total deposits compound annual growth rate of 37% since 2012
• Total loans compound annual growth rate of 35% since 2012
Total Assets – Acquired vs. Non-Acquired
February 2011
Acquired Canyon
National Bank
($192MM assets) in
FDIC-assisted deal
$807 $827
$961 $1,174
$1,714 $1,745
$1,922
$2,034 $2,039
$2,753
$2,637 $2,715
$2,791
$3,563 $3,599
$3,755
$4,036
$6.00
$7.00
$8.00
$9.00
$10.00
$11.00
$12.00
$13.00
$14.00
$(250)
$250
$750
$1,250
$1,750
$2,250
$2,750
$3,250
$3,750
$4,250
2009 2010 2011 2012 2013 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 2Q'15 3Q'15 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16
Non-Acquired Acquired TBV/Share
April 2012
Acquired Palm Desert
National Bank
($103MM assets) in
FDIC-assisted deal
March 2013 and June 2013
Acquired First Associations
Bank ($424MM assets) and
San Diego Trust Bank
($211MM assets)
January 2014
Acquired Infinity
Franchise Holdings
($80MM assets), a
specialty finance company
January 2015
Acquired
Independence
Bank ($422MM
assets)
January 2016
Acquired SCAF
($715MM assets)
Timely and efficient acquisitions have accelerated PPBI’s growth and performance
Total Assets TBV/Share
6
Small and middle market business banking focus
Full suite of business banking services, including: cash
management, payroll and merchant card services
Customized C&I and commercial real estate loans
C&I and CRE business loans
Originated $314M FY 2016 vs. $146M FY 2015
32% of loan portfolio
Today’s Commercial Bank – Key Businesses
Business Banking SBA Lending
HOA Banking
Income Property Lending
Nationwide origination capability
Small Business Administration (“SBA”) Loans
California Capital Access Program (“Cal CAP”) Loans
United State Department of Agriculture (“USDA”) Loans
Originated $139M FY 2016 vs. $113M FY 2015
Sell guaranteed portion – 75%
Gross gain rates 8-12%
Nationwide leader of customized cash management,
electronic banking services and credit facilities for:
Home Owner Association (“HOA”) Companies
HOA Management Companies
HOA deposits now in excess of $791M as of 12/31
Predominately MMAs and demand deposits
Credit facilities and banking services for commercial real
estate (“CRE”) investors in SoCal
Structured CRE and bridge loan flexibility
Originated $167M FY 2016 and $62 FY 2015
17% of loan portfolio
Construction Lending
Construction loans for developers and owner users on
properties predominantly in coastal SoCal
New team assembled in first half of 2013
Originated $284M FY 2016 vs. $250M FY 2015
8% of loan portfolio
Attractive risk adjusted yields
Franchise Lending
National lender for established and experienced owner
operators of Quick Serve Restaurants
C&I and CRE based lending secured by equipment and
real estate
Originated $205M FY 2016 vs. $171M FY 2015
Average originated rate of 5.0% FY 2016
7
Technology Enabled Management Systems
PPBI’s sales management technology has accelerated the growth and sales culture by
effectively monitoring all facets of the deposit and loan process, including lead
generation, prospecting and closing
Customer Relationship Management (CRM) with SalesForce provides real-time updates of existing and
prospective client deposit and loan relationships. Deployed throughout the organization from RMs, PMs
and credit administration
Email communication software streamlines communication between our RMs and PMs for quicker
decision making
DataVault is PPBI’s proprietary software developed in-house for tracking HOA and Property Management
firm’s customer payment information, customized for internal reporting and 3rd party vendor
implementation
DataVault – Proprietary Mgmt. Software SalesForce Communication SalesForce Pipeline Management
8
Commercial Bank Transformation - Deposit Composition
Deposits – 12/31/2009 Deposits – 12/31/2016
• 38% of deposit balances are non-interest bearing deposits
• 82% of deposits are non-maturity deposits
Total Deposits: $618.7 Million
Cost of Deposits: 1.91%
Total Deposits: $3.1 Billion
Cost of Deposits: 0.27%
Non-Int. Bearing
Demand
5%
Interest Bearing
Demand
4%
MMDA and
Savings
23% CDs
68%
Non-Int. Bearing Demand
38%
Interest Bearing Demand
6%
MMDA and Savings
38%
CDs
18%
9
Commercial &
Industrial
5%
CRE - Own. Occ.
18%
CRE - Non-Own.
Occ.
26%
Multi-family
48%
1-4 Family
2%
Other
1%
Commercial Bank Transformation – Loan Composition
Loans – 12/31/2009 Loans – 12/31/2016
• Loan portfolio is high quality and well-diversified
• Business related loans represent 48% of total loans at 12/31/16*
Total Loans: $576.3 Million Total Loans: $3.2 Billion
* Business loans are defined as commercial and industrial, franchise, commercial owner occupied, and SBA
Multi-family
22%
CRE Non-Own.
Occ.
18%
Commercial &
Industrial
17%
CRE - Own. Occ.
14%
Franchise
14%
Constr., Land &
Development
9%
1-4 Family
3%
SBA
3%
10
Conservative Credit Culture
Nonperforming Assets to Total Assets (%)
The Company has a history of effective credit risk management and out performing peers
• No troubled debt restructurings (“TDRs”)
• Tactical loan sales utilized strategically to manage various risks
1.04
1.70
1.58 1.66
1.36
0.48 0.58
0.40
3.26
1.62
1.31
0.76
0.55
1.67
1.08
0.38 0.33
0.21 0.15 0.20 0.20 0.14 0.12 0.12 0.21 0.19 0.18 0.18 0.17
0.13 0.17
0.04
2.93
3.62
3.96
4.11
4.26 4.30 4.24
4.39
4.23 4.29
4.06 4.04
3.77
3.48 3.39
3.21
2.96
1.56
1.24
1.10 1.18 1.05
0.91
0.80 0.74 0.69 0.59 0.58
0.74
0.53 0.48
-
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
4.50
5.00
PPB Peers *
CNB
Acquisition
2/11/11
PDNB
Acquisition
4/27/12
* California peer group consists of all insured California institutions, from SNL Financial.
11
CRE to Capital Concentration
Our growth across our key businesses has diversified our loan portfolio allowing us to
decrease our CRE concentration
Held steady
CRE as a Percent of Total Capital
627%
499%
415%
372%
310%
349%
316%
336%
362% 352%
365% 376%
0%
100%
200%
300%
400%
500%
600%
700%
2008 2009 2010 2011 2012 2013 2014 2015 1Q'16 2Q'16 3Q'16 4Q'16
12
Strong Loan Yields - Declining Cost of Deposits
Core Loan Yields Cost of Deposits
$ in millions
0.33%
0.36%
0.32%
0.31%
0.28% 0.28%
0.27%
0.25%
0.30%
0.35%
0.40%
0.45%
0.50%
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
2013 2014 2015 1Q'16 2Q'16 3Q'16 4Q'16
Total Deposits Cost of Deposits
Our specialty businesses have optimized our NIM through diversification and
disciplined pricing as well as accelerating organic loan and deposit growth
5.26%
5.15%
5.10%
5.21%
5.01%
4.96% 4.97%
4.50%
4.75%
5.00%
5.25%
5.50%
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
2013 2014 2015 1Q'16 2Q'16 3Q'16 4Q'16
Loans Core Loan Yield
Note: Core loan yields exclude accretion, prepayments and other one-time items.
13
Revenue & Net Interest Margin
Annual Operating Revenue
Note: Operating revenue = net interest income + noninterest income.
*Annualized
$67
$87
$121
$156
$168
$180
$186
$0.0
$50.0
$100.0
$150.0
$200.0
2013 2014 2015 1Q'16* 2Q'16* 3Q'16* 4Q'16*
Core Net Interest Margin
$ in millions
And delivered revenue growth of 41% as well as consistent net interest margin of over 4%
3.93%
4.09%
4.06%
4.11%
4.14%
4.22%
4.32%
3.70%
3.80%
3.90%
4.00%
4.10%
4.20%
4.30%
4.40%
2013 2014 2015 1Q'16 2Q'16 3Q'16 4Q'16
14
Noninterest Expense & Efficiency
Adjusted Noninterest Expense / Avg. Assets Efficiency Ratio
In addition to leveraging technology to drive growth, the Company has continually
improved its operational processes to achieve greater operating leverage and
economies of scale
Note: Efficiency Ratio represents the ratio of noninterest expense less other real estate owned operations, core deposit intangible amortization and merger related expense to the sum of net
interest income before provision for loan losses and total noninterest income less gains/(loss) on sale of securities, and other-than-temporary impairment recovery (loss) on investment securities.
Adjusted noninterest expense excludes other real estate owned operations, core deposit intangible amortization and merger related costs.
*Annualized
2.95%
2.87%
2.58%
2.46%
2.54%
2.74%
2.46%
2.20%
2.30%
2.40%
2.50%
2.60%
2.70%
2.80%
2.90%
3.00%
2013 2014 2015 1Q'16* 2Q'16* 3Q'16* 4Q'16*
64.7%
61.4%
55.9%
52.4%
54.4%
57.0%
50.9%
40.0%
45.0%
50.0%
55.0%
60.0%
65.0%
70.0%
2013 2014 2015 1Q'16 2Q'16 3Q'16 4Q'16
15
Pre-Tax Pre-Provision Income Tangible Book Value
$ in thousands
$16,440
$32,019
$47,149
$61,664
$73,264
$76,468
$84,980
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
$80,000
$90,000
$100,000
2013 2014 2015 1Q'16 2Q'16* 3Q'16* 4Q'16*
$9.08
$10.12
$11.17
$11.46
$11.87
$12.22
$12.51
$7.00
$8.00
$9.00
$10.00
$11.00
$12.00
$13.00
$14.00
2013 2014 2015 1Q'16 2Q'16 3Q'16 4Q'16
Strong operating income has consistently resulted in shareholder value creation
Net Income and Tangible Book Value
Note: All dollars in thousands, except per share data
Note: Tangible book values are based on basic shares outstanding
*Annualized
16
Capital Resources
(1) Please refer to non-GAAP reconciliation
As of December 31, 2016
Well-Capitalized
Requirement
Pacific Premier
Bancorp, Inc. Pacific Premier Bank
Regulatory Capital Ratios:
Tier 1 Leverage Capital Ratio 5.00% 9.78% 10.94%
Common Equity Tier 1 Risk-based Capital Ratio 6.50% 10.17% 11.70%
Tier 1 Risk-Based Capital Ratio 8.00% 10.45% 11.70%
Total Risk Based Capital Ratio 10.00% 12.77% 12.34%
Tangible Common Equity Ratio (1) 8.86% 10.24%
The consolidated Company and the Bank both remain well capitalized with strong
earnings capacity to sustain growth strategy and well-capitalized levels
17
Superior Market Performance (PPBI)
Source: SNL Financial, market information as of 12/31/2016
Since December 2014, PPBI’s stock price has significantly outperformed its publicly traded
bank peers (SNL Bank Index / NASDAQ Bank Index)
PPBI +126%
NASDAQ
Bank
SNL Bank +28%
+51%
-40.0%
-20.0%
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
120.0%
140.0%
Dec-14 Feb-15 Apr-15 Jun-15 Aug-15 Oct-15 Dec-15 Feb-16 Apr-16 Jun-16 Aug-16 Oct-16 Dec-16
PPBI SNL Bank NASDAQ Bank
18
Strategically Focused – Financially Motivated
PPBI’s management team operates the bank with the understanding we are growing toward $10.0 billion
• Our business model is always evolving, transforming and improving
• Continue to build a quality banking franchise and leverage core competencies
• Investments in and the strengthening of the entire team is an on-going process
Continue to Evolve and Strive for Superior Performance
Operational Integrity Leads to Strong Internal Controls and Risk Management
PPBI’s operating environment and culture have been built over the years to be scalable
• Sales culture maturation combined with traditional Relationship Managers and the leveraging of technology
• Disciplined credit underwriting culture remains a fundamental underpinning
• BSA/AML – automated Rule Based Risk Rating and statistical analytics covering entire client base
• CRA – enhanced program to exceed community group requirements and large bank exam standards
Keen Focus on Creating Maximum Shareholder Value
Management consistently communicates and executes on its strategic plan
• Our Board regularly evaluates capital management, strategic direction and the alternatives to maximize shareholder value
• Focused on increasing earnings and building TBV through growth strategies and improving efficiencies
• Our goal is to create a fundamentally sound franchise with strong earnings and risk management
19
Transaction Highlights
Market extension into California’s Central Coast
HEOP assets of $2.0 billion which increases PPBI’s pro forma assets to
approximately $6.0 billion
HEOP’s relationship banking model complements PPBI’s strong growth
strategy
Loan/deposit ratio of 82.3% for HEOP and 103.1% for PPBI as of
12/31/16
High quality core deposit franchise – additive to PPBI’s funding base
Non-interest bearing deposits of 34.1%
Cost of deposits of 0.22% in Q3 2016
Financially compelling economics for PPBI shareholders
Immediately accretive to EPS(1)
Immediately accretive to tangible book value per share
Tangible book value payback period of 0 years
Source: SNL Financial, PPBI and HEOP information as of 9/30/2016
(1) Based on mean EPS estimates for 2017 and 2018 per SNL FactSet research for HEOP and PPBI. EPS
accretion excludes merger related expenses
PPBI Branch
HEOP Branch
HEOP Loan Production Office
Pro Forma Branch Footprint Rationale and Highlights
Company Snapshot - Heritage Oaks Bancorp
Exchange / Ticker NASDAQ: HEOP
Company Headquarters Paso Robles, CA
Year Established 1983
Balance Sheet
Total Assets ($MM) 1,988$
Gross Loans, Excluding HFS ($MM) 1,342$
Total Deposits ($MM) 1,631$
Loan / Deposit Ratio 82.2%
Performance
Return on Average Assets (Q3 2016) 0.85%
Net Interest Margin (Q3 2016) 3.50%
Non-Performing Assets / Total Assets 0.25%
Delinquent Loans / Gross Loans 0.00%
Loan Loss Reserves / Gross Loans 1.31%
20
Transaction Assumptions and Pro Forma Impact
Consideration Fixed exchange ratio of 0.3471 for HEOP shareholders – 100% stock consideration, no caps or collars
PPBI issues 11,890,720 shares of common stock
Pro forma ownership of 69.9% for PPBI and 30.1% for HEOP
Transaction value of $405.6 million, or $11.68 per share(1)
Valuation
Multiples
Price / tangible book value per share of 214.2%
Price / earnings of 20.1x for 2017E EPS(2)
Premium to HEOP’s closing price of 7.5%
Pro Forma Impact
to PPBI
Immediately accretive to EPS in 2017 and 5.2% accretive in 2018(2), first full year with 100% cost savings phased-in
Immediately accretive to tangible book value per share and tangible book value payback period of 0 years
Mid-teen internal rate of return
Board of Directors
3 HEOP directors will join the PPBI Board of Directors at closing which will consist of 10 individuals
HEOP directors joining PPBI will include Simone Lagomarsino, President & CEO of HEOP and 2 other in-market directors
Other
Assumptions
Closing expected in early Q2 2017
Estimated cost savings of approximately 26.5% of HEOP’s non-interest expense (phased-in 60% in 2017, 100% in 2018)
No revenue synergies assumed for modeling purposes
Fair value mark of –1.60% of gross loans, or $21.5 million
Pre-tax one-time merger related expenses of approximately $21.9 million
Capital Ratios Pro forma TCE ratio of 8.8%, leverage ratio 9.3% and total risk based capital ratio 12.5%
(1) Based on PPBI price of $33.65 as of 12/12/2016
(2) Based on mean EPS estimates for 2017 and 2018 per SNL FactSet research for HEOP and PPBI. EPS accretion
excludes merger related expenses
21
Constr., Land &
Development
8.1%
1-4 Family
3.3%
Multi-Family
22.3%
Owner Occupied
CRE
14.9%
Non-Owner
Occupied CRE
17.0%
Commercial &
Industrial
17.4%
Franchise
13.9%
SBA
3.0%
Consumer and
Other
0.2%
Pro Forma Loans & Deposits
Pro Forma(1) PPBI
PPBI Pro Forma(1)
Diversified
Loan
Portfolio
$3.1B Deposits
0.28% Cost of Deposits
$4.7B Deposits
0.26% Cost of Deposits
$3.1B Loans
5.37% Yield on Loans
$4.4B Loans
5.12% Yield on Loans
Source: SNL Financial, PPBI and HEOP information for the quarter ended 9/30/2016
(1) Pro forma does not include purchase accounting or merger related adjustments
Noninterest-
Bearing Demand
37.9%
Interest-Bearing
Demand
5.6%
MMDA and
Savings
37.8%Time Deposits
18.7%
Noninterest-
Bearing Demand
36.9%
Interest-Bearing
Demand
6.5%
MMDA and
Savings
39.3%
Time Deposits
17.3%
Constr., Land &
Development
6.2%
1-4 Family
7.2%
Multi-Family
17.4%
Owner Occupied
CRE
15.3%
Non-Owner
Occupied CRE
21.3%
Commercial &
Industrial
16.3% Farm &
Agricultural
4.2%
Franchise
9.7%
SBA
2.1%
Consumer and
Other
0.2%
Strong Core
Deposit
Base
HEOP’s low-cost core deposit base is an excellent fit with PPBI’s asset origination strength
22
Scarcity Value in Southern California
• Significant scarcity value for quality and
sizeable banking franchises in Southern
California
• PPBI is 7th largest bank headquartered in
Southern California
• Includes all banks and thrifts headquartered
in Southern California (Orange, Los Angeles,
San Bernardino, Riverside, and San Diego
counties). Sorted by total assets, excludes
pending merger targets and ethnic-focused
banks
Largest 25 Banks Headquartered in Southern California
Rank Company name Exchange City
Total Assets
($000s)
1 PacWest Bancorp NASDAQ Beverly Hi l l s 21,869,767$
2 Banc of Ca l i fornia , Inc. NYSE Irvine 11,029,853$
4 BofI Holding, Inc. NASDAQ San Diego 8,167,876$
3 CVB Financia l Corp. NASDAQ Ontario 8,073,707$
5 Opus Bank NASDAQ Irvine 7,882,563$
6 F & M Bank of Long Beach OTCQB Long Beach 6,729,058$
7 Pacific Premier Bancorp, Inc.* NASDAQ Irvine 6,065,273$
9 Firs t Foundation Inc. NASDAQ Irvine 3,593,668$
8 Community Bank OTC Pink Pasadena 3,587,055$
10 Grandpoint Capi ta l , Inc. OTC Pink Los Angeles 3,297,392$
11 CU Bancorp NASDAQ Los Angeles 2,994,760$
12 Manufacturers Bank - Los Angeles 2,613,381$
13 American Bus iness Bank OTC Pink Los Angeles 1,853,711$
14 Monteci to Bancorp - Santa Barbara 1,337,836$
16 Plaza Bank - Irvine 1,221,171$
15 Provident Financia l Holdings , Inc. NASDAQ Rivers ide 1,192,155$
17 Paci fic Mercanti le Bancorp NASDAQ Costa Mesa 1,140,688$
18 Sunwest Bank - Irvine 999,823$
19 Malaga Financia l Corporation OTC Pink Palos Verdes Estates 981,000$
20 Si lvergate Bank - La Jol la 978,086$
21 Cal i fornia Fi rs t National Bancorp NASDAQ Irvine 880,344$
22 Commercia l Bank of Ca l i fornia - Irvine 810,695$
24 Community West Bancshares NASDAQ Goleta 710,572$
23 Bank of Hemet - Rivers ide 637,238$
25 Commerce West Bank OTC Pink Irvine 616,672$
Source: SNL Financial for most recent period-end
*Total assets includes impact from PPBI’s pending acquisition of HEOP
Note: All dollars in thousands
23
• Continue to drive economies of scale and operating leverage
• Positioned to deliver continued growth and strong profitability
• Ability to integrate business lines that generate higher risk adjusted returns
• Proven track record of executing on acquisitions and organic growth
• Well positioned to evaluate attractive acquisition opportunities
• Create scarcity value among banks in Southern California
PPBI Outlook
Building Long-term Franchise Value
24
Appendix material
PPBI Supplemental Information
25
Consolidated Financial Highlights
(1) Represents the ratio of noninterest expense less OREO operations, core deposit intangible amortization and merger related expense to the sum of net interest
income before provision for loan losses and total noninterest income less gains/(loss) on sale of securities.
(2) Nonperforming assets excludes nonperforming investment securities.
(3) Classified assets includes substandard loans, doubtful, substandard investment securities, and OREO.
* Please refer to non-GAAP reconciliation
Note: All dollars in thousands, except per share data
December 31, March 31, June 30, September 30, December 31,
2015 2016 2016 2016 2016
Summary Balance Sheet
Total Assets $2,789,599 $3,562,068 $3,597,666 $3,754,831 $4,036,311
Loans Held for Investment 2,254,315 2,851,432 2,920,619 3,090,839 3,241,613
Total Deposits 2,195,123 2,906,264 2,931,001 3,059,752 3,145,485
Gross Loans / Deposits 103% 98% 100% 101% 103%
Summary Income Statement
Total Revenue $33,054 $39,049 $42,011 $44,977 $46,622
Total Non-Interest Expense 18,539 23,633 23,695 25,860 25,377
Provision for Loan Losses 1,700 1,120 1,589 4,013 2,054
Net Income 8,065 8,554 10,369 9,227 11,953
Diluted EPS $0.37 $0.33 $0.37 $0.33 $0.43
Performance Ratios
Return on Average Assets 1.18% 1.04% 1.17% 1.00% 1.24%
Return on Average Tangible Common Equity 14.09% 12.02% 13.48% 11.52% 14.42%
Return on Adjusted Average Tangible Common Equity 14.92% 14.91% 13.86% 11.52% 14.42%
Efficiency Ratio 53.8% 52.4% 54.4% 57.0% 50.9%
Net Interest Margin 4.40% 4.43% 4.48% 4.41% 4.59%
Asset Quality
Delinquent Loans to Loans Held for Investment 0.12% 0.12% 0.19% 0.18% 0.03%
Allowance for Loan Losses to Loans Held for Investment 0.77% 0.65% 0.65% 0.71% 0.66%
Nonperforming Assets to Total Assets 0.18% 0.17% 0.13% 0.17% 0.04%
Net Loan Charge-offs to Average Total Loans 0.02% 0.00% 0.04% 0.04% 0.08%
Allowance for Loan Losses as a % of Nonperforming loans 436% 383% 467% 381% 1868%
Classified Assets to Total Risk-Based Capital 6.29% 6.17% 6.07% 5.05% 3.00%
Capital Ratios
Tangible Common Equity/ Tangible Assets * 8.82% 9.16% 9.42% 9.28% 8.86%
Tangible Book Value Per Share * $11.17 $11.46 $11.87 $12.22 $12.51
Common Equity Tier 1 Risk-based Capital Ratio 9.91% 10.43% 10.58% 10.42% 10.17%
Tier 1 Risk-based Ratio 10.28% 10.75% 10.90% 10.72% 10.45%
Risk-based Capital Ratio 13.43% 13.32% 13.45% 13.21% 12.77%
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Non-GAAP Financial Measures
Tangible common equity to tangible assets (the "tangible common equity ratio") and tangible book value per share are a non-GAAP financial measures derived from GAAP-based
amounts. We calculate the tangible common equity ratio by excluding the balance of intangible assets from common stockholders' equity and dividing by tangible assets. We calculate
tangible book value per share by dividing tangible common equity by common shares outstanding, as compared to book value per common share, which we calculate by dividing
common stockholders’ equity by common shares outstanding. We believe that this information is consistent with the treatment by bank regulatory agencies, which exclude 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. 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 measures, this presentation may not be comparable to other similarly titled measures reported by other
companies. A reconciliation of the non-GAAP measure of tangible common equity ratio to the GAAP measure of common equity ratio and tangible book value per share to the GAAP
measure of book value per share are set forth below.
Note: All dollars in thousands, except per share data
December 31, March 31, June 30, September 30, December 31,
2015 2016 2016 2016 2016
Total stockholders' equity $ 298,980 $ 428,894 $ 440,630 $ 449,965 $ 459,740
Less: Intangible assets (58,002) (113,084) (112,439) (111,915) (111,941)
Tangible common equity $ 240,978 $ 315,810 $ 328,191 $ 338,050 $ 347,799
Total assets $ 2,789,599 $ 3,562,068 $ 3,597,666 $ 3,754,831 $ 4,036,311
Less: Intangible assets (58,002) (113,084) (112,439) (111,915) (111,941)
Tangible assets $ 2,731,597 $ 3,448,984 $ 3,485,227 $ 3,642,916 $ 3,924,370
Common Equity ratio 10.72% 12.04% 12.25% 11.98% 11.39%
Less: Intangibility equity ratio (1.90%) (2.88%) (2.83%) (2.70%) (2.53%)
Tangible common equity ratio 8.82% 9.16% 9.42% 9.28% 8.86%
Basic shares outstanding 21,570,746 27,537,233 27,650,533 27,656,533 27,798,283
Book value per share $ 13.86 $ 15.58 $ 15.94 $ 16.27 $ 16.54
Less: Intangible book value per share (2.69) (4.11) (4.07) (4.05) (4.03)
Tangible book value per share $ 11.17 $ 11.47 $ 11.87 $ 12.22 $ 12.51