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| EX-99.1 - EXHIBIT 99.1 - PACIFIC PREMIER BANCORP INC | ex_991-prxq4x2017xkbwconf.htm |
| 8-K - 8-K - PACIFIC PREMIER BANCORP INC | a8k_prxip-2017q4xkbwconf.htm |
Investor Presentation
Fourth Quarter 2017
Steve Gardner
Chairman, President & Chief Executive Officer
sgardner@ppbi.com - 949-864-8000
Exhibit 99.2
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” or “Pacific Premier”) 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, shareholder value creation and the impact of the Plaza Bancorp (“Plaza”) acquisition and
other acquisitions. 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 has made or 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 2016 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
33 Full-Service
Branch Locations
Company Profile
Exchange / Listing NASDAQ: PPBI
Focus
Small & Mid-Market
Businesses
Total Assets $8.02 Billion
Branch Network
• Market data as of 2/1/2018
(1) 3-month average as of 2/1/2018
Pacific Premier Branch Footprint
Headquarters Irvine, CA
# of Research Analysts 7 Analysts
Market Cap $1.93 Billion*
Avg. Daily Volume 524,779 Shares(1)
4
Strategic Transformation
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)
2018 and Beyond
Focus on producing EPS growth from scale, efficiency and balance sheet leverage
Target ROAA and ROATCE of 1.50% and 17%, respectively
Continue disciplined organic and acquisitive growth increasing scarcity value
2013 - 2017
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”) – $2 billion in assets, closed on 4/1/2017 (109 days)
Plaza Bancorp (“PLZZ”) - $1.3 billion in assets, closed on 11/1/2017 (84 days)
A balance of organic and acquisitive growth to create a California centric commercial
bank franchise with $8.02 billion in assets
5
Highlights – Q4 2017
Earnings Net income of $16.2 million, which included $5.4 million in merger-related expense and a $5.6
million deferred tax asset revaluation
Operating net income of $25.2* million or $0.56* per diluted per share
Adjusted ROAA of 1.35%*
Adjusted ROATCE of 15.9%*
Loans/
Asset Quality
New loan commitments of $648 million
Net interest margin of 4.56%, core net interest margin of 4.26% excluding accretion
Nonperforming assets as a percent of total assets of 0.04%
Delinquencies as a percent of total loans of 0.16%
Deposits
Deposits totaled $6.1 billion, an increase of $1.1 billion, or 21%, from prior quarter
Noninterest-bearing deposits represent 37% of total deposits
Non-maturity deposits equal 82% of total deposits
Cost of Deposits of 0.32%
Key Ratios
Increasing operating leverage, with an efficiency ratio of 48.2%
Tangible book value per share of $15.26*, 6% higher than the third quarter of 2017, including
DTA revaluation, and 22% higher than the fourth quarter of 2016
Acquisition
Completed acquisition of Plaza Bancorp on November 1, 2017 (84 days), adding approximately
$1.3 billion in assets
* Please refer to non-GAAP reconciliation
6
History of PPBI
• Total deposits compound annual growth rate of 39% since 2011
• Total loans compound annual growth rate of 43% since 2011
Total Assets – Acquired vs. Non-Acquired
February 2011
Acquired Canyon
National Bank
($192MM assets) in
FDIC-assisted deal
$8,025
$961
$1,174
$1,714
$2,039
$2,791
$4,040 $4,174
$6,440 $6,532
$8.00
$10.50
$13.00
$15.50
$-
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
2011 2012 2013 2014 2015 2016 1Q'17 2Q'17 3Q'17 4Q'17
Non-Acquired Acquired TBV/Share
November 2017
Acquired PLZZ
($1.3B assets)
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*
April 2017
Acquired HEOP
($2.0B assets)
Note: All dollars in millions
* Please refer to non-GAAP reconciliation
7
Small and middle market business banking focus
Full suite of business banking services, including: cash
management, payroll and merchant card services
Customized commercial and industrial (“C&I”) and
commercial real estate loans (“CRE”)
C&I and CRE business loans
Originated $201M Q4 2017 vs. $75M Q4 2016
38% of loan portfolio
Commercial Lines of Business
Business Banking SBA Lending
Franchise Lending
Income Property Lending
Small Business Administration (“SBA”) Loans
Nationwide origination capability
California Capital Access Program (“Cal CAP”) Loans
United State Department of Agriculture (“USDA”) Loans
Originated $58M Q4 2017 vs. $36M Q4 2016
Sell guaranteed portion – 75% of loan amount
Gross gain rates 8-12%
National lender for established and experienced owner
operators of Quick Serve Restaurants (“QSR”)
C&I and CRE based lending secured by equipment and
real estate
Originated $66M Q4 2017 vs. $57M Q4 2016
Average originated rate of 5.4% in Q4 2017
11% of loan portfolio
Credit facilities and banking services for CRE investors in
SoCal
Structured CRE and bridge loan flexibility
Originated $79M Q4 2017 and $81M Q4 2016
20% 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 $106M Q4 2017 vs. $90M Q4 2016
Attractive risk adjusted yields
5% of loan portfolio
HOA Banking
Nationwide leader of customized cash management,
electronic banking services and credit facilities for:
Home Owner Association (“HOA”) Companies
HOA Management Companies
Predominately money market and demand deposits
8
Increasing Loan Commitments & Attractive Yields
$251
$299
$322
$385
$455
$492
$558
$648
4.97% 4.93%
4.87%
4.80%
4.88%
4.99% 4.9… 5.00%
3.00%
3.50%
4.00%
4.50%
5.00%
$-
$100
$200
$300
$400
$500
$600
$700
1Q'16 2Q'16 3Q'16 4Q'16 1Q'17 2Q'17 3Q'17 4Q'17
Business Loans Real Estate Loans Other Loans Weighted Average Coupon
Note: All dollars in millions
Q
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ly
L
oa
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Co
mm
itm
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A
vg
. R
at
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ew
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omm
itm
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ts
9
Commercial Bank Transformation - Deposit Composition
Deposits – 12/31/2009 Deposits – 12/31/2017
Total Deposits: $618.7 Million
Cost of Deposits: 1.91%
Total Deposits: $6.1 Billion
Cost of Deposits: 0.32%
Non-interest-
Bearing Demand
5%
Interest-Bearing
Demand
4%
Money Market/
Savings
23%
Certificate of
Deposits
68%
• 37% of deposit balances are non-interest-bearing deposits
• 82% of deposits are non-maturity deposits
• 89% of deposits are core deposits*
* Core deposits are all transaction accounts and non-brokered CD accounts below $250,000
Non-interest
Bearing
Demand
37%
Interest-
Bearing
Demand
6%
Money
Market/Savings
39%
Certificate of
Deposits
18%
10
Commercial Bank Transformation – Loan Composition
Loans – 12/31/2009 Loans – 12/31/2017
• Loan portfolio is high quality and well-diversified
• Business-related loans represent 54% of total loans at 12/31/17*
• Business loan commitments originated for FY 2017 were $1.26 billion, 58% of total commitments
Total Loans: $576.3 Million Total Loans: $6.2 Billion
• Business loans are defined as commercial and industrial, franchise, commercial owner
occupied, agriculture and SBA
Commercial and
Industrial
5% CRE Owner
Occupied
18%
CRE Non-Owner
Occupied
26%
Multi-Family
48%
1-4 Family
2%
Other
1%
CRE Owner
Occupied
21%
CRE Non-
Owner
Occupied
20%
Commercial
and Industrial
18%
Multi-Family
13%
Franchise
11%
Construction &
Land
5%
One-to-Four
family
4%
Farm & Agric.
4%
SBA
3%
Consumer
1%
11
Conservative Credit Culture
Nonperforming Assets to Total Assets (%)
The Company has a history of effective credit risk management and outperforming peers
• Loan delinquencies to loans held for investment of 0.16% as of 12/31/2017
• Nonperforming assets to total assets of 0.04% at 12/31/2017
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
0.02 0.01 0.01 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 0.49 0.46 0.44
-
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.
12
CRE to Capital Concentration
• CRE concentrations are well managed across the organization
• Our growth across our key businesses has diversified our loan portfolio
Managed Growth
CRE as a Percent of Total Capital
627%
499%
415%
372%
310%
349%
316%
336%
362% 352%
365% 376%
378%
340% 336%
287%
0%
100%
200%
300%
400%
500%
600%
700%
2008 2009 2010 2011 2012 2013 2014 2015 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17 2Q'17 3Q'17 4Q'17
13
Strong Loan Yields - Low Cost of Deposits
Portfolio Core Loan Yields Cost of Total Deposits
0.33%
0.36%
0.32%
0.28% 0.27%
0.25%
0.28%
0.32%
0.00%
0.10%
0.20%
0.30%
0.40%
0.50%
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
2013 2014 2015 2016 1Q'17 2Q'17 3Q'17 4Q'17
Total Deposits Cost of Deposits
Our specialty lines of business have optimized our net interest margin through diversification
and disciplined pricing as well as accelerating organic loan and deposit growth…
Note: All dollars in millions
Note: Core loan yields exclude accretion.
5.28% 5.18% 5.17% 5.13% 5.05%
4.94% 4.98%
5.16%
0.00%
0.75%
1.50%
2.25%
3.00%
3.75%
4.50%
5.25%
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
2013 2014 2015 2016 1Q'17 2Q'17 3Q'17 4Q'17
Loans Portfolio Core Loan Yield
14
Revenue & Net Interest Margin
Annual Operating Revenue(1)
Note: All dollars in millions
(1) Operating revenue = net interest income + noninterest income.
(2) Core net interest margin excludes accretion.
*Annualized
$67
$87
$121
$173
$279
$350
$0
$50
$100
$150
$200
$250
$300
$350
$400
2013 2014 2015 2016 2017 4Q'17*
Core Net Interest Margin(2)
And delivered compounded annual revenue growth rate of 51% as well as strong net
interest margin of over 4%
3.93%
4.09%
4.06%
4.20%
4.27%
4.09%
4.14%
4.26%
3.70%
3.80%
3.90%
4.00%
4.10%
4.20%
4.30%
2013 2014 2015 2016 1Q'17 2Q'17 3Q'17 4Q'17
Acquired
HEOP
4/1/17
15
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.
2.95%
2.87%
2.58% 2.55%
2.40%
2.30% 2.32% 2.27%
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
2013 2014 2015 2016 1Q'17 2Q'17 3Q'17 4Q'17
64.7%
61.4%
55.9%
53.6% 52.3% 52.3% 52.1%
48.2%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
2013 2014 2015 2016 1Q'17 2Q'17 3Q'17 4Q'17
16
Pre-Tax, Pre-Provision Income(1) Tangible Book Value per Share
$23
$34
$52
$79
$132
$156
$0
$20
$40
$60
$80
$100
$120
$140
$160
$180
2013 2014 2015 2016 2017 Q4'17*
$9.08
$10.12
$11.17
$12.51
$12.88
$13.83
$14.35
$15.26
$7.00
$8.00
$9.00
$10.00
$11.00
$12.00
$13.00
$14.00
$15.00
$16.00
2013 2014 2015 2016 1Q'17 2Q'17 3Q'17 4Q'17
Strong operating income has consistently resulted in shareholder value creation
Operating Income and Tangible Book Value
Note: All dollars in millions, except per share data
Note: Tangible book values are based on basic shares outstanding.
Refer to non-GAAP reconciliation
(1) Excludes merger-related expenses
*Annualized
17
(1) Pro forma capital ratios as of 12/31/2017
(2) Refer to non-GAAP reconciliation
The consolidated Company and the Bank will remain well capitalized with strong
earnings capacity to sustain growth strategy and well-capitalized levels
Capital Ratios – As of 12/31/2017
Pacific
Premier
Well-Capitalized
Requirement
Consolidated
Leverage Ratio 10.7% N/A
Common Equity Tier-1 Ratio 10.6% N/A
Tier-1 Ratio 10.9% N/A
Risk Based Capital Ratio 12.6% N/A
Tangible Common Equity ("TCE") Ratio (2) 9.4% N/A
Bank
Leverage Ratio 11.7% 5.0%
Common Equity Tier-1 Ratio 11.9% 6.5%
Tier-1 Ratio 11.9% 8.0%
Risk Based Capital Ratio 12.3% 10.0%
18
Superior Market Performance (PPBI)
Source: SNL Financial, market information as of 12/31/2017
Since December 2015, PPBI’s stock price has significantly outperformed its publicly traded
bank peers (SNL Bank Index / NASDAQ Bank Index)
PPBI +88%
NASDAQ
Bank
SNL Bank +40%
+43%
-40.0%
-20.0%
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
120.0%
Dec-15 Feb-16 Apr-16 Jun-16 Aug-16 Oct-16 Dec-16 Feb-17 Apr-17 Jun-17 Aug-17 Oct-17 Dec-17
PPBI SNL Bank NASDAQ Bank
19
Strategically Focused – Financially Motivated
The Company’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 our 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
The Company’s operating environment and culture have been built over the years to be scalable
• 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 tangible book value through growth strategies and improving efficiencies
• Our goal is to create a fundamentally sound franchise with strong earnings and risk management
20
Scarcity Value in Southern California
• Significant scarcity value for quality and
sizeable banking franchises in Southern
California
• PPBI is 5th 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
Source: SNL Financial for period-ending 12/31/2017
*Total assets includes impact from First Foundation’s acquisition of PPB Bancorp
Note: All dollars in thousands
Rank Company Name Exchange City
Total Assets
($000s)
1 PacWest Bancorp NASDAQ Beverly Hills 24,994,876$
2 Banc of California, Inc. NYSE Santa Ana 10,327,852$
3 BofI Holding, Inc. NASDAQ San Diego 8,581,628$
4 CVB Financial Corp. NASDAQ Ontario 8,270,586$
5 Pacific Premier Bancorp, Inc. NASDAQ Irvine 8,024,501$
6 Opus Bank NASDAQ Irvine 7,486,809$
7 Farmers & Merchants Bank of Long Beach OTCQB Long Beach 6,991,578$
8 First Foundation Inc.* NASDAQ Irvine 4,637,822$
9 Community Bank OTC Pink Pasadena 3,747,398$
10 Grandpoint Capital, Inc. OTC Pink Los Angeles 3,203,002$
11 Manufacturers Bank Los Angeles 2,477,688$
12 American Business Bank OTC Pink Los Angeles 1,758,336$
13 Pacific Mercantile Bancorp NASDAQ Costa Mesa 1,322,604$
14 Silvergate Bank La Jolla 1,216,674$
15 Provident Financial Holdings, Inc. NASDAQ Riverside 1,162,131$
16 Sunwest Bank Irvine 1,082,839$
17 Malaga Bank F.S.B. OTC Pink Palos Verdes Estates 1,041,000$
18 Seacoast Commerce Bank OTC Pink San Diego 938,927$
19 Commercial Bank of California Irvine 800,518$
20 Bank of Hemet Riverside 698,703$
21 San Diego Private Bank OTCQX Coronado 671,245$
22 California First National Bank OTCQX Irvine 629,516$
23 CommerceWest Bank OTC Pink Irvine 573,071$
24 Pacific Commerce Bank OTC Pink Los Angeles 536,111$
25 Pacific Enterprise Bank - Irvine 514,069$
21
• Proven track record of executing on acquisitions and organic growth
• Well positioned to evaluate attractive acquisition opportunities
• 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
• Create scarcity value among banks in Southern California
Pacific Premier Outlook
Building Long-term Franchise Value
22
Appendix material
23
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.
(4) Annualized
* 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,
2016 2017 2017 2017 2017
Summary Balance Sheet
Total Assets $4,036,311 $4,174,428 $6,440,631 $6,532,334 $8,024,501
Loans Held for Investment 3,241,613 3,385,697 4,858,611 5,009,317 6,196,468
Total Deposits 3,145,581 3,297,073 4,946,431 5,018,153 6,085,868
Loans Held for Investment / Total Deposits 103.1% 102.7% 98.2% 99.8% 101.8%
Summary Income Statement
Total Revenue $46,622 $46,386 $72,097 $72,512 $87,621
Total Noninterest Expense 25,377 29,747 48,496 39,612 49,895
Provision for Loan Losses 2,054 2,502 1,904 2,049 2,185
Net Income 11,953 9,521 14,176 20,232 16,171
Diluted EPS $0.43 $0.34 $0.35 $0.50 $0.36
Performance Ratios
Return on Average Assets* (4) 1.24% 0.94% 0.89% 1.26% 0.87%
Return on Average Tangible Common Equity* (4) 14.2% 11.0% 11.3% 15.0% 10.5%
Efficiency Ratio (1) 50.9% 52.3% 52.3% 52.1% 48.2%
Net Interest Margin 4.59% 4.39% 4.40% 4.34% 4.56%
Asset Quality
Delinquent Loans to Loans Held for Investment 0.03% 0.01% 0.06% 0.07% 0.16%
Allowance for Loan Losses to Loans Held for Investment 0.66% 0.68% 0.52% 0.54% 0.47%
Nonperforming Loans to Loans Held for Investment 0.04% 0.02% 0.01% 0.01% 0.05%
Nonperforming Assets to Total Assets (2) 0.04% 0.02% 0.01% 0.01% 0.04%
Classified Assets to Total Risk-Based Capital (3) 3.00% 2.54% 5.00% 6.15% 5.68%
Classified Assets to Total Assets (3) 0.33% 0.28% 0.52% 0.66% 0.61%
Capital Ratios
Tangible Common Equity/ Tangible Assets * 8.86% 8.85% 9.18% 9.41% 9.42%
Tangible Book Value Per Share * $12.51 $12.88 $13.83 $14.35 $15.26
Common Equity Tier 1 Risk-based Capital Ratio 10.12% 9.84% 10.71% 10.59% 10.59%
Tier 1 Risk-based Ratio 10.41% 10.11% 11.08% 10.94% 10.88%
Risk-based Capital Ratio 12.72% 12.34% 12.69% 12.51% 12.57%
`
24
Non-GAAP Financial Measures
Tangible common equity to tangible assets (the "tangible common equity ratio") and tangible book value per share are a non-GAAP financial measures derived from GAAP-based
amounts. We calculate the tangible common equity ratio by excluding the balance of intangible assets from common stockholders' equity and dividing by tangible assets. We
calculate tangible book value per share by dividing tangible common equity by common shares outstanding, as compared to book value per common share, which we calculate by
dividing common stockholders’ equity by common shares outstanding. We believe that this information is consistent with the treatment by bank regulatory agencies, which exclude
intangible assets from the calculation of risk-based capital ratios. Accordingly, we believe that these non-GAAP financial measures provide information that is important to investors
and that is useful in understanding our capital position and ratios. However, these non-GAAP financial measures are supplemental and are not a substitute for an analysis based on
GAAP measures. As other companies may use different calculations for these measures, this presentation may not be comparable to other similarly titled measures reported by
other companies. A reconciliation of the non-GAAP measure of tangible common equity ratio to the GAAP measure of common equity ratio and tangible book value per share to the
GAAP measure of book value per share are set forth below.
Note: All dollars in thousands, except per share data
December 31, December 31, December 31, December 31, December 31, December 31, March 31, June 30, September 30, December 31,
2011 2012 2013 2014 2015 2016 2017 2017 2017 2017
Total stockholders' equity 86,777$ 134,517$ 175,226$ 199,592$ 298,980$ 459,740$ 471,025$ 959,731$ 981,660$ 1,241,996$
Less: Intangible assets (2,069) (2,626) (24,056) (28,564) (58,002) (111,941) (111,432) (405,869) (405,222) (536,343)
Tangible common equity 84,708$ 131,891$ 151,170$ 171,028$ 240,978$ 347,799$ 359,593$ 553,862$ 576,438$ 705,653$
Total assets 961,128$ 1,173,792$ 1,714,187$ 2,037,731$ 2,789,599$ 4,036,311$ 4,174,428$ 6,440,631$ 6,532,334$ 8,024,501$
Less: Intangible assets (2,069) (2,626) (24,056) (28,564) (58,002) (111,670) (111,432) (405,869) (405,222) (536,343)
Tangible assets 959,059$ 1,171,166$ 1,690,131$ 2,009,167$ 2,731,597$ 3,924,641$ 4,062,996$ 6,034,762$ 6,127,112$ 7,488,158$
Common Equity ratio 9.03% 11.46% 10.22% 9.79% 10.72% 11.39% 11.28% 14.90% 15.03% 15.48%
Less: Intangible equity ratio (0.20%) (0.20%) (1.28%) (1.28%) (1.90%) (2.53%) (2.43%) (5.72%) (5.62%) (6.06%)
Tangible common equity ratio 8.83% 11.26% 8.94% 8.51% 8.82% 8.86% 8.85% 9.18% 9.41% 9.42%
Basic shares outstanding 10,337,626 13,661,648 16,656,279 16,903,884 21,570,746 27,798,283 27,908,816 40,047,682 40,162,026 46,245,050
Book value per share 8.39$ 9.85$ 10.52$ 11.81$ 13.86$ 16.54$ 16.88$ 23.96$ 24.44$ 26.86$
Less: Intangible book value per share (0.20) (0.20) (1.44) (1.69) (2.69) (4.03) (4.00) (10.13) (10.09) (11.60)
Tangible book value per share 8.19$ 9.65$ 9.08$ 10.12$ 11.17$ 12.51$ 12.88$ 13.83$ 14.35$ 15.26$
25
Non-GAAP Financial Measures
Pre-tax, pre-provision income, excluding merger-related expense, is a non-GAAP financial measure derived from GAAP-based amounts. We calculate it by excluding income taxes,
the provision for loan losses and merger-related expenses. We believe that this non-GAAP financial measure provides information that is important to investors. However, this non-
GAAP financial measure is a supplement and is not a substitute for an analysis based on GAAP measures. As other companies may use different calculations for this measure, this
presentation may not be comparable to other similarly titled measures reported by other companies. A reconciliation of pre-tax, pre-provision income, excluding merger-related
expenses is set forth below.
Note: All dollars in thousands
Annualized
Three Months Ended
December 31, December 31, December 31, December 31, December 31, December 31,
2013 2014 2015 2016 2017 2017
Net income 8,993$ 16,616$ 25,515$ 40,103$ 60,100$ 64,684$
Add: Income tax 5,587 10,719 15,209 25,215 42,126 77,480
Add: Provision for loan losses 1,860 4,684 6,425 8,776 8,640 8,740
Add: Merger-related expense 6,926 1,490 4,799 4,388 21,002 5,436
Pre-tax, pre-provision income
(excluding merger-related expense) 23,366$ 33,509$ 51,948$ 78,482$ 131,868$ 156,340$
For the Years Ended
26
Non-GAAP Financial Measures
For quarter period presented below, adjusted net income and adjusted diluted earnings per share are non-GAAP financial measures derived from GAAP-based amounts. We
calculate these figures by excluding merger related expenses and DTA revaluations in the period results. Management believes that the exclusion of such items from these financial
measures provides useful information to an understanding of the operating results of our core business. 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.
(1) Annualized
Note: All dollars in thousands
December 31,
2017
Net income 16,171$
Add: Merger-related expense 5,436
Add: DTA revaluation 3,545
Adjusted net income 25,152$
Diluted earnings per share 0.36$
Add: Merger-related and litigation expense, net of tax 0.20
Adjusted diluted earnings per share 0.56$
Return on average assets 0.87%
Add: Merger-related and litigation expense, net of tax 0.48%
Adjusted return on average assets(1) 1.35%
27
Non-GAAP Financial Measures
For the quarter period presented below, adjusted net income for return on average tangible common equity and average tangible common equity are non-GAAP financial measures
derived from GAAP-based amounts. We calculate return on average tangible common equity by adjusting net income for the effect of CDI amortization and exclude the average CDI
and average goodwill from the average stockholders' equity during the period. We calculate adjusted return on average tangible common equity by adjusting net income for the
effect of CDI amortization and merger related expense and exclude the average CDI and average goodwill from the average stockholders' equity during the period. We believe that
this 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 adjusted
measures, this presentation may not be comparable to other similarly titled adjusted measures reported by other companies. A reconciliation of the non-GAAP measures of return
on average tangible common equity and adjusted return on average tangible common equity to the GAAP measure of return on common stockholders’ equity is set forth below.
• Please refer to non-GAAP reconciliation
(1) Annualized
Note: All dollars in thousands
December 31,
2017
Adjusted net income* 25,152$
Plus: Tax effected CDI amortization 2,111
Less: CDI amortization expense tax adjustment 815
Adjusted net income for return on average tangible
common equity 26,448$
Average stockholders' equity 1,161,174$
Less: Average core deposit intangible 40,274
Less: Average goodwill 454,362
Average tangible common equity 666,538$
Adjusted return on average tangible common equity(1) 15.9%