Attached files
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| 8-K - 8-K - PACIFIC PREMIER BANCORP INC | ppbi_8-kxearningsx2018xq2.htm |
Exhibit 99.1
Pacific Premier Bancorp, Inc. Announces Second Quarter 2018 Results (Unaudited)
Second Quarter 2018 Summary
• | Net income of $27.3 million |
• | Diluted earnings per share of $0.58 |
• | ROAA and ROATCE of 1.35% and 15.42%, respectively |
• | Efficiency ratio of 53.0% |
• | Net interest margin of 4.41%, core net interest margin expands to 4.29% |
• | New loan commitments of $530 million |
• | Business loans increase 9.5% annualized |
• | Closed acquisition of Grandpoint Capital, Inc., effective July 1, 2018 |
Irvine, Calif., July 24, 2018 -- Pacific Premier Bancorp, Inc. (NASDAQ: PPBI) (the “Company”), the holding company of Pacific Premier Bank (the “Bank”), reported net income for the second quarter of 2018 of $27.3 million, or $0.58 per diluted share, compared with net income of $28.0 million, or $0.60 per diluted share, for the first quarter of 2018 and net income of $14.2 million, or $0.35 per diluted share, for the second quarter of 2017. Financial results for the second quarter of 2018 include $943,000 of merger-related expense.
For the three months ended June 30, 2018, the Company’s return on average assets ("ROAA") was 1.35% and return on average tangible common equity ("ROATCE") was 15.42%. For the three months ended March 31, 2018, the Company's ROAA was 1.39% and the ROATCE was 16.51%. For the three months ended June 30, 2017, the Company's ROAA was 0.89% and its ROATCE was 11.33%. Total assets as of June 30, 2018 were $8.2 billion compared with $8.1 billion at March 31, 2018 and $6.4 billion at June 30, 2017.
Steven R. Gardner, Chairman, President and Chief Executive Officer of the Company, commented, “We continue to execute well on our strategic priorities while delivering solid financial results. On July 1, we completed the acquisition of Grandpoint Capital in a little more than four months since the announcement. We have finalized the operational integration of both the Pacific Premier and Grandpoint teams, which further strengthens and expands the organization's depth, breadth and expertise. All of the remaining cost savings are expected to be realized by year-end as we complete the system conversion in mid-October of this year. Our franchise has a strong foundation in place to drive growth and increase market share.
“We have substantively completed the investments in our personnel and systems necessary to meet the heightened regulatory requirements associated with surpassing the $10 billion asset threshold. As we continue to add scale through organic and acquisitive growth, we expect to more fully absorb the investments we have made in our infrastructure and realize greater operating leverage going forward.
“While our earnings performance has generated attractive risk adjusted returns in the first half of the year, it does not live up to the high standards that we set for ourselves. We are capable of stronger performance metrics across the organization, and with the completion of a number of key projects, I expect our team to operate at a higher level. As always, we are refining our business strategies to drive an increased level of balance sheet growth in the second half of the year, and when combined with the projected synergies from the Grandpoint acquisition, we expect to be well positioned to realize an increase in our earnings power in 2019,” said Mr. Gardner.
FINANCIAL HIGHLIGHTS
Three Months Ended | ||||||||||||
June 30, | March 31, | June 30, | ||||||||||
2018 | 2018 | 2017 | ||||||||||
Financial Highlights | (dollars in thousands, except per share data) | |||||||||||
Net income | $ | 27,303 | $ | 28,002 | $ | 14,176 | ||||||
Diluted earnings per share | $ | 0.58 | $ | 0.60 | $ | 0.35 | ||||||
Return on average assets | 1.35 | % | 1.39 | % | 0.89 | % | ||||||
Return on average tangible common equity (1) | 15.42 | % | 16.51 | % | 11.33 | % | ||||||
Net interest margin | 4.41 | % | 4.50 | % | 4.40 | % | ||||||
Cost of deposits | 0.50 | % | 0.39 | % | 0.25 | % | ||||||
Efficiency ratio (2) | 53.0 | % | 52.4 | % | 52.3 | % | ||||||
Total assets | $ | 8,158,131 | $ | 8,086,816 | $ | 6,440,631 | ||||||
Total deposits | $ | 6,308,350 | $ | 6,192,273 | $ | 4,946,431 | ||||||
Core deposits to total deposits (3) | 89 | % | 88 | % | 91 | % | ||||||
Tangible book value per share (1) | $ | 16.21 | $ | 15.63 | $ | 13.83 | ||||||
Total capital ratio | 12.75 | % | 12.64 | % | 12.69 | % | ||||||
(1) A reconciliation of the non-GAAP measures of average tangible common equity and tangible book value per share to the GAAP measures of common stockholders' equity and book value are set forth at the end of this press release. | ||||||||||||
(2) 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 credit losses and total noninterest income, less gains/(loss) on sale of securities and other-than-temporary impairment recovery/(loss) on investment securities. | ||||||||||||
(3) Core deposits are all transaction accounts and non-brokered certificates of deposit less than $250,000. | ||||||||||||
INCOME STATEMENT HIGHLIGHTS
Net Interest Income and Net Interest Margin
Net interest income totaled $81.2 million in the second quarter of 2018, essentially unchanged from the first quarter of 2018. Compared to the prior quarter, net interest income was positively impacted by higher yields and average balances on our loans and investments, higher prepayments and other loan related fees, which were principally offset by lower accretion income, and higher deposit and borrowing costs.
Net interest margin for the second quarter was 4.41%, compared with 4.50% in the prior quarter. The decrease was principally driven by lower accretion income of $1.9 million, compared to $3.7 million in the first quarter of 2018. Excluding the impact of accretion, our core net interest margin expanded to 4.29%, compared to 4.26% in the prior quarter. Following the closing of Grandpoint, we expect the core net interest margin to be in the 4.05% to 4.15% range.
Net interest income for the second quarter of 2018 increased $17.8 million, or 28%, compared to the second quarter of 2017. The increase was primarily related to an increase in average interest-earning assets of $1.6 billion, which resulted primarily from our acquisition of Plaza Bancorp ("Plaza") in the fourth quarter of 2017 and our organic loan growth since the end of the second quarter of 2017.
PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES | |||||||||||||||||||||||||||||||||
CONSOLIDATED AVERAGE BALANCES AND YIELD DATA | |||||||||||||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||||||||||||
June 30, 2018 | March 31, 2018 | June 30, 2017 | |||||||||||||||||||||||||||||||
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 | (dollars in thousands) | ||||||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 146,279 | $ | 277 | 0.76 | % | $ | 167,236 | $ | 313 | 0.76 | % | $ | 133,127 | $ | 160 | 0.48 | % | |||||||||||||||
Investment securities | 980,334 | 6,797 | 2.77 | 924,687 | 6,341 | 2.74 | 829,380 | 5,019 | 2.42 | ||||||||||||||||||||||||
Loans receivable, net (1) (2) | 6,253,987 | 85,625 | 5.49 | 6,237,968 | 84,173 | 5.47 | 4,815,455 | 63,554 | 5.29 | ||||||||||||||||||||||||
Total interest-earning assets | $ | 7,380,600 | $ | 92,699 | 5.04 | % | $ | 7,329,891 | $ | 90,827 | 5.03 | % | $ | 5,777,962 | $ | 68,733 | 4.77 | % | |||||||||||||||
Liabilities | |||||||||||||||||||||||||||||||||
Interest-bearing deposits | $ | 3,888,553 | $ | 7,756 | 0.80 | % | $ | 3,852,853 | $ | 5,914 | 0.62 | % | $ | 3,107,842 | $ | 3,081 | 0.40 | % | |||||||||||||||
Borrowings | 560,706 | 3,772 | 2.70 | 613,295 | 3,632 | 2.40 | 464,845 | 2,314 | 2.00 | ||||||||||||||||||||||||
Total interest-bearing liabilities | $ | 4,449,259 | $ | 11,528 | 1.04 | % | $ | 4,466,148 | $ | 9,546 | 0.87 | % | $ | 3,572,687 | $ | 5,395 | 0.61 | % | |||||||||||||||
Noninterest-bearing deposits | $ | 2,310,714 | $ | 2,262,895 | $ | 1,802,752 | |||||||||||||||||||||||||||
Net interest income | $ | 81,171 | $ | 81,281 | $ | 63,338 | |||||||||||||||||||||||||||
Net interest margin (3) | 4.41 | % | 4.50 | % | 4.40 | % | |||||||||||||||||||||||||||
(1) Average balance includes loans held for sale and nonperforming loans and is net of deferred loan origination fees/costs and unamortized discounts/premiums. | |||||||||||||||||||||||||||||||||
(2) Includes net discount accretion interest of $1.9 million, $3.7 million and $4.2 million, respectively. | |||||||||||||||||||||||||||||||||
(3) Represents net interest income divided by average interest-earning assets. | |||||||||||||||||||||||||||||||||
Provision for Credit Losses
A provision for credit losses of $1.8 million was recorded for the second quarter of 2018, compared with a provision for credit losses of $2.3 million for the quarter ended March 31, 2018. The second quarter of 2018 provision for credit losses includes a $400,000 provision for unfunded commitments. The first quarter of 2018 included no additional allowance for unfunded commitments. The decrease in our provision for credit losses was primarily due to lower loan growth and lower net charge-offs compared to the prior quarter. We anticipate that our provision will approximate $2.5 million to $3.5 million per quarter in the second half of 2018.
Noninterest Income
Noninterest income for the second quarter of 2018 was $8.2 million, an increase of $485,000, or 6.3%, from the first quarter of 2018. The increase from the first quarter of 2018 was related to an $885,000 increase in net gain from the sales of loans and a $324,000 increase in net gain from sales of investment securities, partially offset by a $661,000 decrease in other income, driven primarily by a $290,000 net loss attributable to a CRA investment, and a $180,000 decrease in recoveries from pre-acquisition charged-off loans.
During the second quarter of 2018, the Bank sold $31.9 million of Small Business Administration ("SBA") loans for a gain of $2.9 million, compared with $35.7 million of SBA loans sold for a gain of $2.7 million in the first quarter of 2018. Additionally, the Bank sold $20.4 million of commercial real estate loans during the second quarter of 2018 for a gain of $927,000, compared with the sale of one commercial real estate loan for a gain of $230,000 in the first quarter of 2018.
Noninterest income for the second quarter of 2018 decreased $608,000, or 6.9%, compared to the second quarter of 2017. The decrease from the second quarter of 2017 was primarily related to a $1.8 million decrease in net gain from sales of investment securities, partially offset by a $956,000 increase in net gain from sales of loans, and a $411,000 increase in debit card interchange fees, as well as other service fee increases. With the closing of Grandpoint, our quarterly estimate of noninterest income for the second half of 2018 is $9.0 million to $10.0 million.
Three Months Ended | ||||||||||||
June 30, | March 31, | June 30, | ||||||||||
2018 | 2018 | 2017 | ||||||||||
NONINTEREST INCOME | (dollars in thousands) | |||||||||||
Loan servicing fees | $ | 292 | $ | 345 | $ | 143 | ||||||
Service charges on deposit accounts | 1,057 | 1,150 | 866 | |||||||||
Other service fee income | 169 | 146 | 495 | |||||||||
Debit card interchange fee income | 1,090 | 1,036 | 679 | |||||||||
Earnings on bank-owned life insurance | 617 | 611 | 689 | |||||||||
Net gain from sales of loans | 3,843 | 2,958 | 2,887 | |||||||||
Net gain from sales of investment securities | 330 | 6 | 2,093 | |||||||||
Other income | 753 | 1,414 | 907 | |||||||||
Total noninterest income | $ | 8,151 | $ | 7,666 | $ | 8,759 | ||||||
Noninterest Expense
Noninterest expense totaled $50.1 million for the second quarter of 2018, an increase of $268,000, or 0.5%, compared with the first quarter of 2018. The increase was primarily due to a $626,000 increase in deposit expense and a $401,000 increase in compensation and benefits. These increases were partially offset by decreases of $278,000 in CDI amortization, $605,000 in other expense and $178,000 in marketing expense. The second quarter of 2018 included $943,000 of merger-related expense compared with $936,000 in the first quarter of 2018.
In comparison to the second quarter of 2017, noninterest expense grew by $1.6 million, or 3.3%. The increase was primarily related to the additional costs from operations, personnel and branches retained from the acquisition of Plaza, combined with our continued investment in personnel to support our organic growth in loans and deposits. The second quarter of 2017 included merger-related expense of $10.1 million. With the closing of Grandpoint, we expect quarterly noninterest expense, excluding merger-related expense, should range between $63 million and $65 million for the second half of 2018.
Three Months Ended | ||||||||||||
June 30, | March 31, | June 30, | ||||||||||
2018 | 2018 | 2017 | ||||||||||
NONINTEREST EXPENSE | (dollars in thousands) | |||||||||||
Compensation and benefits | $ | 29,274 | $ | 28,873 | $ | 21,623 | ||||||
Premises and occupancy | 5,045 | 4,781 | 3,733 | |||||||||
Data processing | 2,747 | 2,702 | 2,439 | |||||||||
Other real estate owned operations, net | 2 | 1 | 44 | |||||||||
FDIC insurance premiums | 581 | 611 | 818 | |||||||||
Legal, audit and professional expense | 1,816 | 1,839 | 1,178 | |||||||||
Marketing expense | 1,352 | 1,530 | 1,006 | |||||||||
Office, telecommunications and postage expense | 1,115 | 1,080 | 922 | |||||||||
Loan expense | 594 | 591 | 1,068 | |||||||||
Deposit expense | 2,302 | 1,676 | 1,669 | |||||||||
Merger-related expense | 943 | 936 | 10,117 | |||||||||
CDI amortization | 1,996 | 2,274 | 1,761 | |||||||||
Other expense | 2,309 | 2,914 | 2,077 | |||||||||
Total noninterest expense | $ | 50,076 | $ | 49,808 | $ | 48,455 | ||||||
Income Tax
For the second quarter of 2018, our effective tax rate was 27.2%, compared with 24.1% for the first quarter of 2018 and 34.7% for the second quarter of 2017. The increase in the effective tax rate for the second quarter of 2018, compared to the first quarter of 2018, was primarily the result of the tax effect of exercised and vested share-based compensation awards, which are reported as discrete items in the period they occur, resulting in a $372,000 tax benefit to the Company for the second quarter of 2018, compared to a $1.4 million tax benefit in the first quarter of 2018. The Company expects the annual effective tax rate to be in the range of 26% to 27%.
The decrease in the effective tax rate for the second quarter of 2018, compared to the second quarter of 2017, was primarily the result of "H.R.1", formerly known as the "Tax Cuts and Jobs Act", which was signed into law on December 22, 2017, which among other items, reduced the federal corporate tax rate to 21%, effective January 2018, from the prior maximum rate of 35%.
BALANCE SHEET HIGHLIGHTS
Loans
Loans held for investment totaled $6.3 billion at June 30, 2018, an increase of $35.7 million, or 0.6%, from March 31, 2018, and an increase of $1.4 billion, or 29%, from June 30, 2017. The $35.7 million increase for the current quarter compared to the prior quarter was driven primarily by new organic loan commitments of $530 million compared with $488 million in the first quarter of 2018, partially offset by higher loan prepayments increasing to $266 million in the second quarter from $213 million in the prior quarter, and loans sales increasing to $52 million compared with $37 million in the prior quarter.
Business loans increased $79.9 million, or 9.5%, and real estate loans and consumer loans decreased $39.6 million and $4.2 million, respectively. Business loans represented 55% of the total gross loans held for investment for the quarter compared with 54% in the prior quarter and 46% in the second quarter of 2017. The total end-of-period weighted average interest rate on loans at June 30, 2018 was 5.12%, compared to 5.04% at March 31, 2018 and 4.79% at June 30, 2017, reflecting the impact of higher rates on new originations as well as the favorable repricing of variable rate portfolio loans as a result of recent Federal Reserve Bank fed funds rate increases.
The $530 million of new organic loan commitments during the second quarter of 2018 included $126 million of commercial and industrial loans, $89 million of franchise loans, $80 million of commercial real estate owner occupied loans, $79 million of construction loans, $60 million of commercial real estate non-owner occupied loans, $36 million of SBA loans, $31 million of multi-family loans and $17 million of agribusiness and farmland loans. The weighted average rate on our new loan production was 5.35% during the second quarter of 2018, an increase from 5.27% in the first quarter of 2018.
At June 30, 2018, our ratio of loans held for investment to total deposits was 99.5%, compared with 100.8% and 98.2% at March 31, 2018 and June 30, 2017, respectively.
June 30, | March 31, | June 30, | ||||||||||
2018 | 2018 | 2017 | ||||||||||
(dollars in thousands) | ||||||||||||
Business loans | ||||||||||||
Commercial and industrial | $ | 1,102,586 | $ | 1,062,385 | $ | 733,852 | ||||||
Franchise | 708,957 | 692,846 | 565,415 | |||||||||
Commercial owner occupied | 1,310,722 | 1,268,869 | 729,476 | |||||||||
SBA | 176,696 | 182,626 | 101,384 | |||||||||
Agribusiness | 136,962 | 149,256 | 98,842 | |||||||||
Total business loans | 3,435,923 | 3,355,982 | 2,228,969 | |||||||||
Real estate loans | ||||||||||||
Commercial non-owner occupied | 1,219,747 | 1,227,693 | 1,095,184 | |||||||||
Multi-family | 805,494 | 817,963 | 746,547 | |||||||||
One-to-four family | 249,495 | 266,324 | 322,048 | |||||||||
Construction | 321,423 | 319,610 | 289,600 | |||||||||
Farmland | 136,548 | 136,522 | 136,587 | |||||||||
Land | 30,246 | 34,452 | 31,799 | |||||||||
Total real estate loans | 2,762,953 | 2,802,564 | 2,621,765 | |||||||||
Consumer loans | ||||||||||||
Consumer loans | 81,973 | 86,206 | 7,309 | |||||||||
Gross loans held for investment | 6,280,849 | 6,244,752 | 4,858,043 | |||||||||
Deferred loan origination costs/(fees) and premiums/(discounts), net | (3,263 | ) | (2,911 | ) | 335 | |||||||
Loans held for investment | 6,277,586 | 6,241,841 | 4,858,378 | |||||||||
Allowance for loan losses | (31,747 | ) | (30,502 | ) | (25,055 | ) | ||||||
Loans held for investment, net | $ | 6,245,839 | $ | 6,211,339 | $ | 4,833,323 | ||||||
Loans held for sale, at lower of cost or fair value | $ | 13,879 | $ | 29,034 | $ | 6,840 | ||||||
Asset Quality and Allowance for Loan Losses
At June 30, 2018, our allowance for loan losses was $31.7 million, an increase of $1.2 million from March 31, 2018. The provision for loan losses for the second quarter of 2018 was $1.4 million, while net charge-offs were $108,000.
The ratio of allowance for loan losses to loans held for investment at June 30, 2018 amounted to 0.51%, compared to 0.49% and 0.52% at March 31, 2018 and June 30, 2017, respectively. Under the guidance of ASC 820: Fair Value Measurements and Disclosures, the fair value net discount on loans acquired through total bank acquisitions was $22.2 million, or 0.35% of total loans held for investment, as of June 30, 2018, compared to $24.5 million, or 0.39% of total loans held for investment, as of March 31, 2018.
Nonperforming assets totaled $6.4 million, or 0.08% of total assets, at June 30, 2018, a decrease from $8.6 million, or 0.11% of total assets, at March 31, 2018. During the second quarter of 2018, nonperforming loans decreased $2.1 million to $6.0 million and other real estate owned increased $14,000 to $220,000, while other assets owned decreased $50,000 to $183,000. Loan delinquencies were $7.4 million, or 0.12% of loans held for investment, at June 30, 2018, compared to $12.8 million, or 0.20% of loans held for investment, at March 31, 2018.
June 30, | March 31, | June 30, | ||||||||||
2018 | 2018 | 2017 | ||||||||||
Asset Quality | (dollars in thousands) | |||||||||||
Nonperforming loans | $ | 6,039 | $ | 8,149 | $ | 395 | ||||||
Other real estate owned | 220 | 206 | 372 | |||||||||
Other assets owned | 183 | 233 | — | |||||||||
Nonperforming assets | $ | 6,442 | $ | 8,588 | $ | 767 | ||||||
Allowance for loan losses | $ | 31,747 | $ | 30,502 | $ | 25,055 | ||||||
Allowance for loan losses as a percent of total nonperforming loans | 526 | % | 374 | % | 6,343 | % | ||||||
Nonperforming loans as a percent of loans held for investment | 0.10 | % | 0.13 | % | 0.01 | % | ||||||
Nonperforming assets as a percent of total assets | 0.08 | % | 0.11 | % | 0.01 | % | ||||||
Net loan charge-offs/(recoveries) for the quarter ended | $ | 108 | $ | 687 | $ | (76 | ) | |||||
Net loan charge-offs for quarter to average total loans | — | % | 0.01 | % | — | % | ||||||
Allowance for loan losses to loans held for investment (1) | 0.51 | % | 0.49 | % | 0.52 | % | ||||||
Delinquent Loans | ||||||||||||
30 - 59 days | $ | 3,583 | $ | 6,605 | $ | 600 | ||||||
60 - 89 days | 1,290 | 1,084 | 1,965 | |||||||||
90+ days | 2,574 | 5,065 | 454 | |||||||||
Total delinquency | $ | 7,447 | $ | 12,754 | $ | 3,019 | ||||||
Delinquency as a percentage of loans held for investment | 0.12 | % | 0.20 | % | 0.06 | % | ||||||
(1) 40% of loans held for investment include a fair value net discount of $22.2 million. | ||||||||||||
Investment Securities
Investments totaled $907 million at June 30, 2018, an increase of $18.9 million from March 31, 2018, and $196 million from June 30, 2017. The increase in the second quarter of 2018 was primarily the result of $71.8 million in purchases, partially offset by $15.9 million in sales and $32.3 million in principal payments/amortization/redemptions.
Deposits
At June 30, 2018, deposits totaled $6.3 billion, an increase of $116 million, or 1.9%, from March 31, 2018 and $1.4 billion, or 28%, from June 30, 2017. At June 30, 2018, non-maturity deposits totaled $5.1 billion, or 81% of total deposits, an increase of $64.9 million, or 1.3%, from March 31, 2018 and an increase of $1.0 billion, or 24%, from June 30, 2017. During the second quarter of 2018, deposit increases included $79.2 million in retail certificates deposit, $41.0 million in money market/savings deposits and $36.9 million in noninterest-bearing deposits, partially offset by a $28.1 million decrease in wholesale/brokered certificates of deposit and a $12.9 million decrease in interest checking.
The weighted average cost of deposits for the three-month period ending June 30, 2018 was 0.50%, compared to 0.39% for the three-month period ending March 31, 2018 and 0.25% for the three-month period ending June 30, 2017. The increase in the weighted average cost of deposits was primarily driven by higher rates in money market and retail certificates of deposit accounts.
June 30, | March 31, | June 30, | ||||||||||
2018 | 2018 | 2017 | ||||||||||
Deposit Accounts | (dollars in thousands) | |||||||||||
Noninterest-bearing checking | $ | 2,349,464 | $ | 2,312,586 | $ | 1,810,047 | ||||||
Interest-bearing: | ||||||||||||
Checking | 342,986 | 355,895 | 323,818 | |||||||||
Money market/savings | 2,446,849 | 2,405,869 | 2,006,131 | |||||||||
Retail certificates of deposit | 823,425 | 744,214 | 572,523 | |||||||||
Wholesale/brokered certificates of deposit | 345,626 | 373,709 | 233,912 | |||||||||
Total interest-bearing | 3,958,886 | 3,879,687 | 3,136,384 | |||||||||
Total deposits | $ | 6,308,350 | $ | 6,192,273 | $ | 4,946,431 | ||||||
Cost of deposits | 0.50 | % | 0.39 | % | 0.25 | % | ||||||
Noninterest-bearing deposits as a percent of total deposits | 37 | % | 37 | % | 37 | % | ||||||
Non-maturity deposits as a percent of total deposits | 81 | % | 82 | % | 84 | % | ||||||
Borrowings
At June 30, 2018, total borrowings amounted to $484 million, a decrease of $104 million, or 18%, from March 31, 2018 and an increase of $7.3 million, or 1.5%, from June 30, 2017. Total borrowings for the quarter included $338 million of advances from the Federal Home Loan Bank of San Francisco and $105 million of subordinated debt. At June 30, 2018, total borrowings represented 5.9% of total assets, compared to 7.3% and 7.4%, as of March 31, 2018 and June 30, 2017, respectively.
Capital Ratios
At June 30, 2018, our ratio of tangible common equity to total assets was 9.91%, compared with 9.63% in the prior quarter, with a book value per share of $27.63 and a tangible book value per share of $16.21 per share, compared with a tangible book value per share of $15.63 at March 31, 2018 and a tangible book value per share of $13.83 at June 30, 2017.
At June 30, 2018, the Company had a tier 1 leverage ratio of 10.41%, common equity tier 1 capital ratio of 10.80%, tier 1 capital ratio of 11.09% and total capital ratio of 12.75%.
At June 30, 2018, the Bank exceeded all regulatory capital requirements with a tier 1 leverage ratio of 11.31%, common equity tier 1 capital ratio of 12.05%, tier 1 capital ratio of 12.05% and total capital ratio of 12.53%. These capital ratios each exceeded the “well capitalized” standards defined by the federal banking regulators of 5.00% for tier 1 leverage ratio, 6.5% for common equity tier 1 capital ratio, 8.00% for tier 1 capital ratio and 10.00% for total capital ratio.
June 30, | March 31, | June 30, | ||||||||||
Capital Ratios | 2018 | 2018 | 2017 | |||||||||
Pacific Premier Bancorp, Inc. Consolidated | ||||||||||||
Tier 1 leverage ratio | 10.41 | % | 10.10 | % | 9.85 | % | ||||||
Common equity tier 1 capital ratio | 10.80 | % | 10.67 | % | 10.71 | % | ||||||
Tier 1 capital ratio | 11.09 | % | 10.96 | % | 11.08 | % | ||||||
Total capital ratio | 12.75 | % | 12.64 | % | 12.69 | % | ||||||
Tangible common equity ratio (1) | 9.91 | % | 9.63 | % | 9.18 | % | ||||||
Pacific Premier Bank | ||||||||||||
Tier 1 leverage ratio | 11.31 | % | 11.00 | % | 10.54 | % | ||||||
Common equity tier 1 capital ratio | 12.05 | % | 11.93 | % | 11.85 | % | ||||||
Tier 1 capital ratio | 12.05 | % | 11.93 | % | 11.85 | % | ||||||
Total capital ratio | 12.53 | % | 12.39 | % | 12.35 | % | ||||||
Share Data | ||||||||||||
Book value per share | $ | 27.63 | $ | 27.12 | $ | 23.96 | ||||||
Shares issued and outstanding | 46,629,118 | 46,527,566 | 40,048,758 | |||||||||
Tangible book value per share (1) | $ | 16.21 | $ | 15.63 | $ | 13.83 | ||||||
Closing stock price (2) | $ | 38.15 | $ | 40.20 | $ | 36.90 | ||||||
Market Capitalization (3) | $ | 1,778,901 | $ | 1,870,408 | $ | 1,477,799 | ||||||
(1) A reconciliation of the non-GAAP measures of tangible common equity and tangible book value per share to the GAAP measures of common stockholders' equity and book value per share is set forth below. | ||||||||||||
(2) As of the last trading day prior to period end. | ||||||||||||
(3) Dollars in thousands. | ||||||||||||
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, 2018 to discuss its financial results. Analysts and investors may participate in the question-and-answer session. A live webcast will be available on the Webcasts page of the Company's investor relations website. An archived version of the webcast will be available in the same location shortly after the live call has ended. The conference call can be accessed by telephone at (866) 290-5977 and asking to be joined to the Pacific Premier Bancorp conference call. Additionally, a telephone replay will be made available through July 31, 2018 at (877) 344-7529, conference ID 10121631.
About Pacific Premier Bancorp, Inc.
Pacific Premier Bancorp is the holding company for Pacific Premier Bank, one of the largest banks headquartered in Southern California with approximately $11.6 billion in assets. Pacific Premier Bank is a business bank primarily focused on serving small and middle market businesses in the counties of Orange, Los Angeles, Riverside, San Bernardino, San Diego, San Luis Obispo and Santa Barbara, California, as well as markets in the states of Arizona, Nevada and Washington. Through its more than 40 depository branches, Pacific Premier Bank offers a diverse range of lending products including commercial, commercial real estate, construction, and SBA loans, as well as specialty banking products for homeowners associations and franchise lending nationwide.
FORWARD-LOOKING COMMENTS
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, shareholder value creation and the impact of the acquisition of Grandpoint Capital, Inc. (“Grandpoint”) and its wholly owned subsidiary, Grandpoint Bank, 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 expected cost savings, synergies and other financial benefits from the Grandpoint acquisition or any other acquisition the Company has made or may make might not be realized within the expected time frames or at all; 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; 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 2017 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).
Pacific Premier 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.
Contact:
Pacific Premier Bancorp, Inc.
Steven R. Gardner
Chairman, President and Chief Executive Officer
949.864.8000
Ronald J. Nicolas, Jr.
Senior Executive Vice President & CFO
949.864.8000
PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES | ||||||||||||||||||||
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION | ||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||||||||
ASSETS | 2018 | 2018 | 2017 | 2017 | 2017 | |||||||||||||||
Cash and due from banks | $ | 30,025 | $ | 42,575 | $ | 39,606 | $ | 35,713 | $ | 35,686 | ||||||||||
Interest-bearing deposits with financial institutions | 101,443 | 83,481 | 157,558 | 85,649 | 193,595 | |||||||||||||||
Cash and cash equivalents | 131,468 | 126,056 | 197,164 | 121,362 | 229,281 | |||||||||||||||
Interest-bearing time deposits with financial institutions | 6,633 | 6,633 | 6,633 | 4,437 | 3,944 | |||||||||||||||
Investments held-to-maturity, at amortized cost | 31,965 | 24,559 | 18,291 | 18,627 | 7,750 | |||||||||||||||
Investment securities available-for-sale, at fair value | 874,700 | 863,243 | 787,429 | 703,944 | 703,083 | |||||||||||||||
FHLB, FRB and other stock, at cost | 82,666 | 82,115 | 65,881 | 58,344 | 56,612 | |||||||||||||||
Loans held for sale, at lower of cost or fair value | 13,879 | 29,034 | 23,426 | 44,343 | 6,840 | |||||||||||||||
Loans held for investment | 6,277,586 | 6,241,841 | 6,196,224 | 5,009,114 | 4,858,378 | |||||||||||||||
Allowance for loan losses | (31,747 | ) | (30,502 | ) | (28,936 | ) | (27,143 | ) | (25,055 | ) | ||||||||||
Loans held for investment, net | 6,245,839 | 6,211,339 | 6,167,288 | 4,981,971 | 4,833,323 | |||||||||||||||
Accrued interest receivable | 27,420 | 27,073 | 27,060 | 20,527 | 20,607 | |||||||||||||||
Other real estate owned | 220 | 206 | 326 | 372 | 372 | |||||||||||||||
Premises and equipment | 54,049 | 53,146 | 53,155 | 45,725 | 45,342 | |||||||||||||||
Deferred income taxes, net | 17,183 | 13,941 | 13,265 | 22,023 | 22,201 | |||||||||||||||
Bank owned life insurance | 76,937 | 76,454 | 75,976 | 75,482 | 74,982 | |||||||||||||||
Intangible assets | 37,938 | 40,740 | 43,014 | 33,545 | 35,305 | |||||||||||||||
Goodwill | 494,672 | 493,785 | 493,329 | 371,677 | 370,564 | |||||||||||||||
Other assets | 62,562 | 38,492 | 52,264 | 29,955 | 30,425 | |||||||||||||||
Total assets | $ | 8,158,131 | $ | 8,086,816 | $ | 8,024,501 | $ | 6,532,334 | $ | 6,440,631 | ||||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||||||||
LIABILITIES | ||||||||||||||||||||
Deposit accounts: | ||||||||||||||||||||
Noninterest-bearing checking | $ | 2,349,464 | $ | 2,312,586 | $ | 2,226,876 | $ | 1,890,241 | $ | 1,810,047 | ||||||||||
Interest-bearing: | ||||||||||||||||||||
Checking | 342,986 | 355,895 | 365,193 | 304,295 | 323,818 | |||||||||||||||
Money market/savings | 2,446,849 | 2,405,869 | 2,409,007 | 2,009,781 | 2,006,131 | |||||||||||||||
Retail certificates of deposit | 823,425 | 744,214 | 714,751 | 573,656 | 572,531 | |||||||||||||||
Wholesale/brokered certificates of deposit | 345,626 | 373,709 | 370,059 | 240,180 | 233,904 | |||||||||||||||
Total interest-bearing | 3,958,886 | 3,879,687 | 3,859,010 | 3,127,912 | 3,136,384 | |||||||||||||||
Total deposits | 6,308,350 | 6,192,273 | 6,085,886 | 5,018,153 | 4,946,431 | |||||||||||||||
FHLB advances and other borrowings | 379,100 | 483,525 | 536,287 | 382,173 | 397,267 | |||||||||||||||
Subordinated debentures | 105,253 | 105,188 | 105,123 | 79,871 | 79,800 | |||||||||||||||
Accrued expenses and other liabilities | 76,903 | 43,922 | 55,209 | 70,477 | 57,402 | |||||||||||||||
Total liabilities | 6,869,606 | 6,824,908 | 6,782,505 | 5,550,674 | 5,480,900 | |||||||||||||||
STOCKHOLDERS’ EQUITY | ||||||||||||||||||||
Common stock | 459 | 472 | 458 | 397 | 396 | |||||||||||||||
Additional paid-in capital | 1,067,907 | 1,065,218 | 1,063,974 | 817,809 | 815,329 | |||||||||||||||
Retained earnings | 232,372 | 205,069 | 177,149 | 160,978 | 140,746 | |||||||||||||||
Accumulated other comprehensive (loss) income | (12,213 | ) | (8,851 | ) | 415 | 2,476 | 3,260 | |||||||||||||
Total stockholders' equity | 1,288,525 | 1,261,908 | 1,241,996 | 981,660 | 959,731 | |||||||||||||||
Total liabilities and stockholders' equity | $ | 8,158,131 | $ | 8,086,816 | $ | 8,024,501 | $ | 6,532,334 | $ | 6,440,631 | ||||||||||
PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES | ||||||||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||||||
(dollars in thousands, except per share data) | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||||
June 30, | March 31, | June 30, | June 30, | June 30, | ||||||||||||||||
2018 | 2018 | 2017 | 2018 | 2017 | ||||||||||||||||
INTEREST INCOME | ||||||||||||||||||||
Loans | $ | 85,625 | $ | 84,173 | $ | 63,554 | $ | 169,798 | $ | 105,990 | ||||||||||
Investment securities and other interest-earning assets | 7,074 | 6,654 | 5,179 | 13,728 | 8,170 | |||||||||||||||
Total interest income | 92,699 | 90,827 | 68,733 | 183,526 | 114,160 | |||||||||||||||
INTEREST EXPENSE | ||||||||||||||||||||
Deposits | 7,756 | 5,914 | 3,081 | 13,670 | 5,216 | |||||||||||||||
FHLB advances and other borrowings | 2,125 | 2,023 | 1,175 | 4,148 | 1,779 | |||||||||||||||
Subordinated debentures | 1,647 | 1,609 | 1,139 | 3,256 | 2,124 | |||||||||||||||
Total interest expense | 11,528 | 9,546 | 5,395 | 21,074 | 9,119 | |||||||||||||||
Net interest income before provision for credit losses | 81,171 | 81,281 | 63,338 | 162,452 | 105,041 | |||||||||||||||
Provision for credit losses | 1,761 | 2,253 | 1,945 | 4,014 | 4,190 | |||||||||||||||
Net interest income after provision for credit losses | 79,410 | 79,028 | 61,393 | 158,438 | 100,851 | |||||||||||||||
NONINTEREST INCOME | ||||||||||||||||||||
Loan servicing fees | 292 | 345 | 143 | 637 | 365 | |||||||||||||||
Service charges on deposit accounts | 1,057 | 1,150 | 866 | 2,207 | 1,207 | |||||||||||||||
Other service fee income | 169 | 146 | 495 | 315 | 874 | |||||||||||||||
Debit card interchange fee income | 1,090 | 1,036 | 679 | 2,126 | 746 | |||||||||||||||
Earnings on bank-owned life insurance | 617 | 611 | 689 | 1,228 | 1,025 | |||||||||||||||
Net gain from sales of loans | 3,843 | 2,958 | 2,887 | 6,801 | 5,698 | |||||||||||||||
Net gain from sales of investment securities | 330 | 6 | 2,093 | 336 | 2,093 | |||||||||||||||
Other income | 753 | 1,414 | 907 | 2,167 | 1,434 | |||||||||||||||
Total noninterest income | 8,151 | 7,666 | 8,759 | 15,817 | 13,442 | |||||||||||||||
NONINTEREST EXPENSE | ||||||||||||||||||||
Compensation and benefits | 29,274 | 28,873 | 21,623 | 58,147 | 36,510 | |||||||||||||||
Premises and occupancy | 5,045 | 4,781 | 3,733 | 9,826 | 6,186 | |||||||||||||||
Data processing | 2,747 | 2,702 | 2,439 | 5,449 | 3,626 | |||||||||||||||
Other real estate owned operations, net | 2 | 1 | 44 | 3 | 56 | |||||||||||||||
FDIC insurance premiums | 581 | 611 | 818 | 1,192 | 1,273 | |||||||||||||||
Legal, audit and professional expense | 1,816 | 1,839 | 1,178 | 3,655 | 2,035 | |||||||||||||||
Marketing expense | 1,352 | 1,530 | 1,006 | 2,882 | 1,824 | |||||||||||||||
Office, telecommunications and postage expense | 1,115 | 1,080 | 922 | 2,195 | 1,355 | |||||||||||||||
Loan expense | 594 | 591 | 1,068 | 1,185 | 1,536 | |||||||||||||||
Deposit expense | 2,302 | 1,676 | 1,669 | 3,978 | 3,113 | |||||||||||||||
Merger-related expense | 943 | 936 | 10,117 | 1,879 | 15,063 | |||||||||||||||
CDI amortization | 1,996 | 2,274 | 1,761 | 4,270 | 2,272 | |||||||||||||||
Other expense | 2,309 | 2,914 | 2,077 | 5,223 | 3,610 | |||||||||||||||
Total noninterest expense | 50,076 | 49,808 | 48,455 | 99,884 | 78,459 | |||||||||||||||
Net income before income taxes | 37,485 | 36,886 | 21,697 | 74,371 | 35,834 | |||||||||||||||
Income tax | 10,182 | 8,884 | 7,521 | 19,066 | 12,137 | |||||||||||||||
Net income | $ | 27,303 | $ | 28,002 | $ | 14,176 | $ | 55,305 | $ | 23,697 | ||||||||||
EARNINGS PER SHARE | ||||||||||||||||||||
Basic | $ | 0.59 | $ | 0.61 | $ | 0.36 | $ | 1.20 | $ | 0.71 | ||||||||||
Diluted | 0.58 | 0.60 | 0.35 | 1.18 | 0.69 | |||||||||||||||
WEIGHTED AVERAGE SHARES OUTSTANDING | ||||||||||||||||||||
Basic | 46,053,077 | 45,893,496 | 39,586,524 | 45,973,727 | 33,591,040 | |||||||||||||||
Diluted | 46,702,968 | 46,652,059 | 40,267,220 | 46,678,123 | 34,267,215 | |||||||||||||||
SELECTED FINANCIAL DATA
PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES | |||||||||||||||||||||||||||||||||
CONSOLIDATED AVERAGE BALANCES AND YIELD DATA | |||||||||||||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||||||||||||
June 30, 2018 | March 31, 2018 | June 30, 2017 | |||||||||||||||||||||||||||||||
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 | (dollars in thousands) | ||||||||||||||||||||||||||||||||
Interest-earning assets: | |||||||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 146,279 | $ | 277 | 0.76 | % | $ | 167,236 | $ | 313 | 0.76 | % | $ | 133,127 | $ | 160 | 0.48 | % | |||||||||||||||
Investment securities | 980,334 | 6,797 | 2.77 | 924,687 | 6,341 | 2.74 | 829,380 | 5,019 | 2.42 | ||||||||||||||||||||||||
Loans receivable, net (1) (2) | 6,253,987 | 85,625 | 5.49 | 6,237,968 | 84,173 | 5.47 | 4,815,455 | 63,554 | 5.29 | ||||||||||||||||||||||||
Total interest-earning assets | 7,380,600 | 92,699 | 5.04 | 7,329,891 | 90,827 | 5.03 | 5,777,962 | 68,733 | 4.77 | ||||||||||||||||||||||||
Noninterest-earning assets | 726,922 | 715,408 | 592,343 | ||||||||||||||||||||||||||||||
Total assets | $ | 8,107,522 | $ | 8,045,299 | $ | 6,370,305 | |||||||||||||||||||||||||||
Liabilities and Equity | |||||||||||||||||||||||||||||||||
Interest-bearing deposits: | |||||||||||||||||||||||||||||||||
Interest checking | $ | 349,721 | $ | 117 | 0.13 | % | $ | 348,110 | $ | 114 | 0.13 | % | $ | 329,450 | $ | 90 | 0.11 | % | |||||||||||||||
Money market | 2,185,310 | 3,943 | 0.72 | 2,189,912 | 3,159 | 0.59 | 1,779,013 | 1,582 | 0.36 | ||||||||||||||||||||||||
Savings | 219,035 | 83 | 0.15 | 223,992 | 79 | 0.14 | 218,888 | 68 | 0.12 | ||||||||||||||||||||||||
Retail certificates of deposit | 784,911 | 2,290 | 1.17 | 713,225 | 1,388 | 0.79 | 568,380 | 911 | 0.64 | ||||||||||||||||||||||||
Wholesale/brokered certificates of deposit | 349,576 | 1,323 | 1.52 | 377,614 | 1,174 | 1.26 | 212,111 | 430 | 0.81 | ||||||||||||||||||||||||
Total interest-bearing deposits | 3,888,553 | 7,756 | 0.80 | 3,852,853 | 5,914 | 0.62 | 3,107,842 | 3,081 | 0.40 | ||||||||||||||||||||||||
FHLB advances and other borrowings | 455,488 | 2,125 | 1.87 | 508,142 | 2,023 | 1.61 | 385,088 | 1,175 | 1.22 | ||||||||||||||||||||||||
Subordinated debentures | 105,218 | 1,647 | 6.26 | 105,153 | 1,609 | 6.12 | 79,757 | 1,139 | 5.71 | ||||||||||||||||||||||||
Total borrowings | 560,706 | 3,772 | 2.70 | 613,295 | 3,632 | 2.40 | 464,845 | 2,314 | 2.00 | ||||||||||||||||||||||||
Total interest-bearing liabilities | 4,449,259 | 11,528 | 1.04 | 4,466,148 | 9,546 | 0.87 | 3,572,687 | 5,395 | 0.61 | ||||||||||||||||||||||||
Noninterest-bearing deposits | 2,310,714 | 2,262,895 | 1,802,752 | ||||||||||||||||||||||||||||||
Other liabilities | 67,617 | 60,627 | 46,666 | ||||||||||||||||||||||||||||||
Total liabilities | 6,827,590 | 6,789,670 | 5,422,105 | ||||||||||||||||||||||||||||||
Stockholders' equity | 1,279,932 | 1,255,629 | 948,200 | ||||||||||||||||||||||||||||||
Total liabilities and equity | $ | 8,107,522 | $ | 8,045,299 | $ | 6,370,305 | |||||||||||||||||||||||||||
Net interest income | $ | 81,171 | $ | 81,281 | $ | 63,338 | |||||||||||||||||||||||||||
Net interest margin (3) | 4.41 | % | 4.50 | % | 4.40 | % | |||||||||||||||||||||||||||
Ratio of interest-earning assets to interest-bearing liabilities | 165.88 | % | 164.12 | % | 161.73 | % | |||||||||||||||||||||||||||
(1) Average balance includes loans held for sale and nonperforming loans and is net of deferred loan origination fees/costs and unamortized discounts/premiums. | |||||||||||||||||||||||||||||||||
(2) Includes net discount accretion interest of $1.9 million, $3.7 million and $4.2 million, respectively. | |||||||||||||||||||||||||||||||||
(3) Represents net interest income divided by average interest-earning assets. | |||||||||||||||||||||||||||||||||
PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES | ||||||||||||||||||||
LOAN PORTFOLIO COMPOSITION | ||||||||||||||||||||
June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||||||||
2018 | 2018 | 2017 | 2017 | 2017 | ||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||
Business loans | ||||||||||||||||||||
Commercial and industrial | $ | 1,102,586 | $ | 1,062,385 | $ | 1,086,659 | $ | 763,091 | $ | 733,852 | ||||||||||
Franchise | 708,957 | 692,846 | 660,414 | 626,508 | 565,415 | |||||||||||||||
Commercial owner occupied | 1,310,722 | 1,268,869 | 1,289,213 | 805,137 | 729,476 | |||||||||||||||
SBA | 176,696 | 182,626 | 185,514 | 107,211 | 101,384 | |||||||||||||||
Agribusiness | 136,962 | 149,256 | 116,066 | 86,466 | 98,842 | |||||||||||||||
Total business loans | 3,435,923 | 3,355,982 | 3,337,866 | 2,388,413 | 2,228,969 | |||||||||||||||
Real estate loans | ||||||||||||||||||||
Commercial non-owner occupied | 1,219,747 | 1,227,693 | 1,243,115 | 1,098,995 | 1,095,184 | |||||||||||||||
Multi-family | 805,494 | 817,963 | 794,384 | 797,370 | 746,547 | |||||||||||||||
One-to-four family | 249,495 | 266,324 | 270,894 | 246,248 | 322,048 | |||||||||||||||
Construction | 321,423 | 319,610 | 282,811 | 301,334 | 289,600 | |||||||||||||||
Farmland | 136,548 | 136,522 | 145,393 | 140,581 | 136,587 | |||||||||||||||
Land | 30,246 | 34,452 | 31,233 | 30,719 | 31,799 | |||||||||||||||
Total real estate loans | 2,762,953 | 2,802,564 | 2,767,830 | 2,615,247 | 2,621,765 | |||||||||||||||
Consumer loans | ||||||||||||||||||||
Consumer loans | 81,973 | 86,206 | 92,931 | 6,228 | 7,309 | |||||||||||||||
Gross loans held for investment | 6,280,849 | 6,244,752 | 6,198,627 | 5,009,888 | 4,858,043 | |||||||||||||||
Deferred loan origination costs/(fees) and premiums/(discounts), net | (3,263 | ) | (2,911 | ) | (2,403 | ) | (774 | ) | 335 | |||||||||||
Loans held for investment | 6,277,586 | 6,241,841 | 6,196,224 | 5,009,114 | 4,858,378 | |||||||||||||||
Allowance for loan losses | (31,747 | ) | (30,502 | ) | (28,936 | ) | (27,143 | ) | (25,055 | ) | ||||||||||
Loans held for investment, net | $ | 6,245,839 | $ | 6,211,339 | $ | 6,167,288 | $ | 4,981,971 | $ | 4,833,323 | ||||||||||
Loans held for sale, at lower of cost or fair value | $ | 13,879 | $ | 29,034 | $ | 23,426 | $ | 44,343 | $ | 6,840 | ||||||||||
PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES | ||||||||||||||||||||
ASSET QUALITY INFORMATION | ||||||||||||||||||||
June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||||||||
2018 | 2018 | 2017 | 2017 | 2017 | ||||||||||||||||
Asset Quality | (dollars in thousands) | |||||||||||||||||||
Nonperforming loans | $ | 6,039 | $ | 8,149 | $ | 3,284 | $ | 515 | $ | 395 | ||||||||||
Other real estate owned | 220 | 206 | 326 | 372 | 372 | |||||||||||||||
Other assets owned | 183 | 233 | — | — | — | |||||||||||||||
Nonperforming assets | $ | 6,442 | $ | 8,588 | $ | 3,610 | $ | 887 | $ | 767 | ||||||||||
Allowance for loan losses | $ | 31,747 | $ | 30,502 | $ | 28,936 | $ | 27,143 | $ | 25,055 | ||||||||||
Allowance for loan losses as a percent of total nonperforming loans | 526 | % | 374 | % | 881 | % | 5,270 | % | 6,343 | % | ||||||||||
Nonperforming loans as a percent of loans held for investment | 0.10 | % | 0.13 | % | 0.05 | % | 0.01 | % | 0.01 | % | ||||||||||
Nonperforming assets as a percent of total assets | 0.08 | % | 0.11 | % | 0.04 | % | 0.01 | % | 0.01 | % | ||||||||||
Net loan charge-offs/(recoveries) for the quarter ended | $ | 108 | $ | 687 | $ | 392 | $ | (39 | ) | $ | (76 | ) | ||||||||
Net loan charge-offs for quarter to average total loans | — | % | 0.01 | % | 0.01 | % | — | % | — | % | ||||||||||
Allowance for loan losses to loans held for investment (1) | 0.51 | % | 0.49 | % | 0.47 | % | 0.54 | % | 0.52 | % | ||||||||||
Delinquent Loans | ||||||||||||||||||||
30 - 59 days | $ | 3,583 | $ | 6,605 | $ | 5,964 | $ | 556 | $ | 600 | ||||||||||
60 - 89 days | 1,290 | 1,084 | 1,056 | 1,423 | 1,965 | |||||||||||||||
90+ days | 2,574 | 5,065 | 3,039 | 1,629 | 454 | |||||||||||||||
Total delinquency | $ | 7,447 | $ | 12,754 | $ | 10,059 | $ | 3,608 | $ | 3,019 | ||||||||||
Delinquency as a percent of loans held for investment | 0.12 | % | 0.20 | % | 0.16 | % | 0.07 | % | 0.06 | % | ||||||||||
(1) 40% of loans held for investment include a fair value net discount of $22.2 million. | ||||||||||||||||||||
PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES | ||||||||||||
GAAP RECONCILIATIONS | ||||||||||||
(dollars in thousands, except per share data) | ||||||||||||
For periods presented below, return on average tangible common equity is a non-GAAP financial measure derived from GAAP-based amounts. We calculate these figures by excluding CDI amortization expense and exclude the average CDI and average goodwill from the average stockholders' equity during the period. 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. | ||||||||||||
Three Months Ended | ||||||||||||
June 30, | March 31, | June 30, | ||||||||||
2018 | 2018 | 2017 | ||||||||||
Net income | $ | 27,303 | $ | 28,002 | $ | 14,176 | ||||||
Plus CDI amortization expense | 1,996 | 2,274 | 1,761 | |||||||||
Less CDI amortization expense tax adjustment | 542 | 548 | 610 | |||||||||
Net income for average tangible common equity | $ | 28,757 | $ | 29,728 | $ | 15,327 | ||||||
Average stockholders' equity | $ | 1,279,932 | $ | 1,255,629 | $ | 948,200 | ||||||
Less average CDI | 39,766 | 42,220 | 36,445 | |||||||||
Less average goodwill | 494,070 | 493,357 | 370,564 | |||||||||
Average tangible common equity | $ | 746,096 | $ | 720,052 | $ | 541,191 | ||||||
Return on average equity | 8.53 | % | 8.92 | % | 5.98 | % | ||||||
Return on average tangible common equity | 15.42 | % | 16.51 | % | 11.33 | % | ||||||
Tangible common equity to tangible assets (the "tangible common equity ratio") and tangible book value per share are 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 share, which we calculate by dividing common stockholders' equity by 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. | ||||||||||||||||||||
June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||||||||
2018 | 2018 | 2017 | 2017 | 2017 | ||||||||||||||||
Total stockholders' equity | $ | 1,288,525 | $ | 1,261,908 | $ | 1,241,996 | $ | 981,660 | $ | 959,731 | ||||||||||
Less intangible assets | 532,610 | 534,525 | 536,343 | 405,222 | 405,869 | |||||||||||||||
Tangible common equity | $ | 755,915 | $ | 727,383 | $ | 705,653 | $ | 576,438 | $ | 553,862 | ||||||||||
Book value per share | $ | 27.63 | $ | 27.12 | $ | 26.86 | $ | 24.44 | $ | 23.96 | ||||||||||
Less intangible book value per share | 11.42 | 11.49 | 11.60 | 10.09 | 10.13 | |||||||||||||||
Tangible book value per share | $ | 16.21 | $ | 15.63 | $ | 15.26 | $ | 14.35 | $ | 13.83 | ||||||||||
Total assets | $ | 8,158,131 | $ | 8,086,816 | $ | 8,024,501 | $ | 6,532,334 | $ | 6,440,631 | ||||||||||
Less intangible assets | 532,610 | 534,525 | 536,343 | 405,222 | 405,869 | |||||||||||||||
Tangible assets | $ | 7,625,521 | $ | 7,552,291 | $ | 7,488,158 | $ | 6,127,112 | $ | 6,034,762 | ||||||||||
Tangible common equity ratio | 9.91 | % | 9.63 | % | 9.42 | % | 9.41 | % | 9.18 | % | ||||||||||