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Section 1: 8-K (8-K)

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false0001028918PACIFIC PREMIER BANCORP INC 0001028918 2019-10-18 2019-10-18


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K


CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934


Date of Report (Date of earliest event reported)
October 18, 2019
PACIFIC PREMIER BANCORP, INC.
(Exact name of registrant as specified in its charter)
Delaware
0-22193
33-0743196
(State or other jurisdiction
of incorporation)
(Commission
File Number)
(I.R.S. Employer
Identification No.)

17901 Von Karman Avenue, Suite 1200, Irvine, CA 92614
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code (949) 864-8000

Not Applicable
(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth Company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class
 
Trading Symbol
 
Name of Each Exchange on Which Registered
Common Stock, par value $0.01 per share
 
PPBI
 
NASDAQ Stock Market







ITEM 2.02                      RESULTS OF OPERATIONS AND FINANCIAL CONDITION
 
On October 22, 2019, Pacific Premier Bancorp, Inc. ("PPBI") issued a press release setting forth its (unaudited) financial results for the third quarter of 2019.  A copy of PPBI’s press release is attached hereto as Exhibit 99.1 and hereby incorporated by reference.

The information furnished under Item 2.02 and Item 9.01 of this Current Report on Form 8-K, including Exhibit 99.1 to this Current Report on Form 8-K, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liabilities under that Section, nor shall it be deemed incorporated by reference in any registration statement or other filings of PPBI under the Securities Act of 1933, as amended, except as shall be set forth by specific reference in such filing.


ITEM 8.01         OTHER EVENTS

On October 18, 2019, PPBI’s Board of Directors declared a $0.22 per share dividend, payable on November 15, 2019 to stockholders of record on November 1, 2019.


ITEM 9.01                      FINANCIAL STATEMENTS AND EXHIBITS




SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


 
 
PACIFIC PREMIER BANCORP, INC.
 
 
 
 
Dated:
October 22, 2019
By:
/s/ STEVEN R. GARDNER
 
 
 
Steven R. Gardner
 
 
 
Chairman, President and Chief Executive Officer



(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit



Exhibit 99.1

Pacific Premier Bancorp, Inc. Announces Third Quarter 2019 Results (Unaudited) and a Quarterly Cash Dividend of $0.22 Per Share
 
Third Quarter 2019 Summary
 
Net income of $41.4 million, or $0.69 per diluted share
Return on average assets of 1.44%, return on average equity of 8.32% and return on average tangible common equity of 16.27%
Net interest margin increased to 4.36%, core net interest margin increased to 4.12%
12% annualized growth for non-maturity deposits, or $214.3 million, since June 30, 2019
Noninterest bearing deposits increased to 41% of total deposits, compared to 39% in the prior quarter
Nonperforming assets as a percentage of total assets of 0.07%
Completed $100 million share repurchase program authorized in October 2018

  
Irvine, Calif., October 22, 2019 -- Pacific Premier Bancorp, Inc. (NASDAQ: PPBI) (the “Company”), the holding company of Pacific Premier Bank (the “Bank”), reported net income of $41.4 million, or $0.69 per diluted share for the third quarter of 2019, compared with net income of $38.5 million, or $0.62 per diluted share, for the second quarter of 2019 and net income of $28.4 million, or $0.46 per diluted share, for the third quarter of 2018.
   
For the three months ended September 30, 2019, the Company’s return on average assets (“ROAA”) was 1.44%, return on average equity (“ROAE”) was 8.32% and return on average tangible common equity (“ROATCE”) was 16.27%, compared to 1.33%, 7.71% and 15.16%, respectively, for the second quarter of 2019 and 1.00%, 5.95% and 12.89%, respectively, for the third quarter of 2018. Total assets were $11.8 billion at September 30, 2019 compared with $11.8 billion at June 30, 2019 and $11.5 billion at September 30, 2018. A reconciliation of the non–U.S. GAAP measure of ROATCE to the U.S. GAAP measure of common stockholders' equity is set forth at the end of this press release.
  
Steven R. Gardner, Chairman, President and Chief Executive Officer of the Company, commented, “Our third quarter results reflect successful execution on the strategies we are employing to manage risk and enhance franchise value in the current environment of economic uncertainty and slowing growth. During the third quarter, we were able to effectively manage our cost of funds, protect our net interest margin, and realize a high level of efficiencies.

“Our performance continues to produce a superior level of risk-adjusted profitability, as we generated an ROAA of 1.44% and an ROATCE of 16.27% in the third quarter of 2019. Our strong profitability enabled us to return approximately $140 million of capital to our shareholders during the first nine months of the year through our quarterly dividend and stock repurchase program.

“Our focus on core deposit gathering continues to produce positive results. During the third quarter, our noninterest-bearing and money market deposits increased by $233.2 million, which enabled us to reduce higher cost funding, improved our overall deposit mix and helped drive a six basis point reduction in our cost of funds.

“While the markets in our geographic footprint remain healthy, we continue to be disciplined in our approach to loan production given the length of the economic expansion and our commitment to maintaining our conservative underwriting and pricing criteria. In the current environment, our focus will be on enhancing our franchise value through further improving our deposit mix, maintaining disciplined expense control and efficiently managing our capital,” said Mr. Gardner.
    

1



FINANCIAL HIGHLIGHTS
 
 
Three Months Ended
 
 
September 30,
 
June 30,
 
September 30,
 
 
2019
 
2019
 
2018
Financial Highlights
 
(dollars in thousands, except per share data)
Net income
 
$
41,375

 
$
38,527

 
$
28,392

Diluted earnings per share
 
0.69

 
0.62

 
0.46

Return on average assets
 
1.44
%
 
1.33
%
 
1.00
%
Return on average equity
 
8.32

 
7.71

 
5.95

Return on average tangible common equity (1)
 
16.27

 
15.16

 
12.89

Net interest margin
 
4.36

 
4.28

 
4.38

Core net interest margin (1)
 
4.12

 
4.08

 
4.19

Cost of deposits
 
0.71

 
0.73

 
0.54

Efficiency ratio (2)
 
50.9

 
51.1

 
53.5

Total assets
 
$
11,811,497

 
$
11,783,781

 
$
11,503,881

Total deposits
 
8,859,288

 
8,861,922

 
8,502,145

Non-maturity deposits as a percent of total deposits
 
85
%
 
82
%
 
85
%
Book value per share
 
$
33.50

 
$
32.80

 
$
30.68

Tangible book value per share (1)
 
18.41

 
17.92

 
16.06

Total risk-based capital ratio
 
13.40
%
 
13.54
%
 
12.05
%
 
 
 
 
 
 
 
(1) A reconciliation of the non-U.S. GAAP measures of average tangible common equity, core net interest margin and tangible book value per share to the U.S. 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, other-than-temporary impairment recovery/(loss) on investment securities, gain/(loss) from other real estate owned and gain/(loss) from debt extinguishment.

INCOME STATEMENT HIGHLIGHTS

Net Interest Income and Net Interest Margin
 
Net interest income totaled $112.3 million in the third quarter of 2019, an increase of $1.7 million, or 1.5%, from the second quarter of 2019. The increase in net interest income reflected one more day of interest, higher accretion and loan-related fees as well as lower cost of funds driven primarily by lower average balances of Federal Home Loan Bank of San Francisco (“FHLB”) advances and rates, partially offset by lower interest-earning asset yields and average balances.

The net interest margin for the third quarter of 2019 was 4.36%, compared with 4.28% in the prior quarter. The increase was primarily driven by higher accretion income of $6.0 million compared to $5.0 million in the prior quarter. Our core net interest margin, which excludes the impact of accretion, increased four basis points to 4.12%, compared to 4.08% in the prior quarter. The increase in our core net interest margin was primarily attributable to higher loan-related fees and lower cost of funds.

We anticipate our core net interest margin will be in the range of 4.00% to 4.10% in the fourth quarter of 2019.

Net interest income for the third quarter of 2019 decreased $378,000, or 0.3%, compared to the third quarter of 2018. The decrease was primarily related to an increase in our cost of funds since the end of the third quarter of 2018, partially offset by an increase in average interest-earning asset balances, which resulted primarily from investment securities purchases and organic loan growth since the end of the third quarter of 2018.

2



PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED AVERAGE BALANCES AND YIELD DATA
 
 
 
 
 
Three Months Ended
 
 
September 30, 2019
 
June 30, 2019
 
September 30, 2018
 
 
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
 
$
188,693

 
$
403

 
0.85
%
 
$
187,963

 
$
435

 
0.93
%
 
$
339,064

 
$
898

 
1.05
%
Investment securities
 
1,311,649

 
9,227

 
2.81

 
1,396,585

 
10,119

 
2.90

 
1,198,362

 
8,707

 
2.91

Loans receivable, net (1) (2)
 
8,728,536

 
122,974

 
5.59

 
8,779,440

 
121,860

 
5.57

 
8,664,796

 
119,271

 
5.46

Total interest-earning assets
 
$
10,228,878

 
$
132,604

 
5.14

 
$
10,363,988

 
$
132,414

 
5.12

 
$
10,202,222

 
$
128,876

 
5.01

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing deposits
 
$
5,343,043

 
$
15,878

 
1.18

 
$
5,345,388

 
$
15,991

 
1.20

 
$
5,316,195

 
$
11,942

 
0.89

Borrowings
 
436,979

 
4,391

 
3.99

 
675,345

 
5,782

 
3.43

 
583,400

 
4,221

 
2.87

Total interest-bearing liabilities
 
$
5,780,022

 
$
20,269

 
1.39

 
$
6,020,733

 
$
21,773

 
1.45

 
$
5,899,595

 
$
16,163

 
1.09

Noninterest-bearing deposits
 
$
3,533,797

 
 
 
 
 
$
3,426,508

 
 
 
 
 
$
3,473,056

 
 
 
 
Net interest income
 
 
 
$
112,335

 
 
 
 
 
$
110,641

 
 
 
 
 
$
112,713

 
 
Net interest margin (3)
 
 

 
 

 
4.36

 
 
 
 
 
4.28

 
 
 
 
 
4.38

Cost of deposits
 
 
 
 
 
0.71

 
 
 
 
 
0.73

 
 
 
 
 
0.54

Cost of funds (4)
 
 
 
 
 
0.86

 
 
 
 
 
0.92

 
 
 
 
 
0.68

 
(1) Average balance includes loans held for sale and nonperforming loans and is net of deferred loan origination fees/costs and discounts/premiums.
(2) Interest income includes net discount accretion of $6.0 million, $5.0 million and $4.1 million, respectively.
(3) Represents annualized net interest income divided by average interest-earning assets.
(4) Represents annualized total interest expense divided by the sum of average total interest-bearing liabilities and noninterest-bearing deposits.

Provision for Credit Losses

Provision for credit losses for the third quarter of 2019 was $1.6 million, an increase of $1.2 million from the second quarter of 2019. The increase was primarily due to the replenishment of $1.4 million of net charge-offs in the third quarter, compared to $360,000 replenishment in the second quarter. Additionally, the provision for unfunded commitments was $197,000 compared with a reduction of $408,000 in the prior quarter. Provision for credit losses for the third quarter of 2019 decreased $419,000 compared to the third quarter of 2018 primarily driven by lower loan balances and commitments, and continued strength in asset quality.
 
 
Three Months Ended
 
 
September 30,
 
June 30,
 
September 30,
 
 
2019
 
2019
 
2018
Provision for Credit Losses
 
(dollars in thousands)
Provision for loan losses
 
$
1,365

 
$
742

 
$
1,646

Provision for unfunded commitments
 
197

 
(408
)
 
335

Total provision for credit losses
 
$
1,562

 
$
334

 
$
1,981


3



Noninterest Income
 
Noninterest income for the third quarter of 2019 was $11.4 million, an increase of $5.1 million, or 80.7%, from the second quarter of 2019. The increase was primarily due to a $4.0 million increase in net gain from sales of investment securities and a $1.4 million increase in net gain from the sales of loans, partially offset by a $724,000 decrease in debit card interchange fee income. The decrease in debit card interchange fee income was the result of the Bank becoming a non-exempt institution, effective July 1, 2019, under the Durbin Amendment that regulates debit card interchange fee income.

During the third quarter of 2019, the Bank sold $26.3 million of Small Business Administration (“SBA”) loans for a net gain of $2.3 million, compared with the sale of $24.4 million of SBA loans for a net gain of $2.2 million during the prior quarter. The current quarter also included the sale of $684,000 of non-SBA loans for a net gain of $8,000 compared with sales of $82.5 million of non-SBA loans for a net loss of $1.3 million during the prior quarter.

We anticipate our noninterest income will range from $6.5 million to $7.0 million for the fourth quarter of 2019 based upon current SBA loan sale gain rates and normal, recurring business activities.

Noninterest income for the third quarter of 2019 increased $3.2 million, or 38.7%, compared to the third quarter of 2018. The increase was primarily related to a $3.2 million increase in net gain from sales of investment securities as well as an $698,000 increase in other income, partially offset by a $640,000 decrease in debit card interchange fee income and a $409,000 decrease in earnings on bank-owned life insurance (“BOLI”), primarily the result of a death benefit received in the third quarter of 2018.

The increase in net gain from sales of loans for the third quarter of 2019 compared to the same period last year was primarily due to a higher premium on SBA loans sales of 109%, compared with 107% in the third quarter of 2018. The Bank sold $29.9 million of SBA loans for a net gain of $2.0 million during the third quarter of 2018.

 
 
Three Months Ended
 
 
September 30,
 
June 30,
 
September 30,
 
 
2019
 
2019
 
2018
Noninterest Income
 
(dollars in thousands)
Loan servicing fees
 
$
546

 
$
409

 
$
400

Service charges on deposit accounts
 
1,440

 
1,441

 
1,570

Other service fee income
 
360

 
363

 
317

Debit card interchange fee income
 
421

 
1,145

 
1,061

Earnings on BOLI
 
861

 
851

 
1,270

Net gain from sales of loans
 
2,313

 
902

 
2,029

Net gain from sales of investment securities
 
4,261

 
212

 
1,063

Other income
 
1,228

 
1,001

 
530

Total noninterest income
 
$
11,430

 
$
6,324

 
$
8,240



4



 Noninterest Expense
 
Noninterest expense totaled $65.3 million for the third quarter of 2019, an increase of $1.4 million, or 2.2%, compared to the second quarter of 2019. The increase was driven by a $1.7 million increase in compensation primarily as a result of higher incentive and benefits expense and, to a lesser extent, a $641,000 increase in other expense. These increases were partially offset by a $750,000 decline in FDIC insurance premiums due to small institution assessment credits and a $487,000 decline in legal, audit and professional expense.

The Company anticipates that total operating expense will range from $65.0 million to $66.0 million for the fourth quarter of 2019.

Noninterest expense decreased by $17.4 million, or 21.1%, compared to the third quarter of 2018. The decrease was primarily related to a reduction in merger-related expense and additional cost savings from personnel and operations from the acquisition of Grandpoint Capital, Inc. (“Grandpoint”), partially offset by our continued investment to support our organic growth.

 
 
Three Months Ended
 
 
September 30,
 
June 30,
 
September 30,
 
 
2019
 
2019
 
2018
Noninterest Expense
 
(dollars in thousands)
Compensation and benefits
 
$
35,543

 
$
33,847

 
$
37,901

Premises and occupancy
 
7,593

 
7,517

 
7,214

Data processing
 
3,094

 
3,036

 
4,095

Other real estate owned operations, net
 
64

 
62

 

FDIC insurance premiums
 
(10
)
 
740

 
1,060

Legal, audit and professional expense
 
3,058

 
3,545

 
3,280

Marketing expense
 
1,767

 
1,425

 
1,569

Office, telecommunications and postage expense
 
1,200

 
1,311

 
1,538

Loan expense
 
1,137

 
1,005

 
1,139

Deposit expense
 
3,478

 
3,668

 
2,833

Merger-related expense
 
(4
)
 
5

 
13,978

CDI amortization
 
4,281

 
4,281

 
4,693

Other expense
 
4,135

 
3,494

 
3,482

Total noninterest expense
 
$
65,336

 
$
63,936

 
$
82,782


Income Tax

For the third quarter of 2019, our effective tax rate was 27.2%, compared with 26.9% for the second quarter of 2019 and 21.5% for the third quarter of 2018. The increase in the effective tax rate from the third quarter of 2018 was the result of a $2.3 million one-time benefit associated with the filing of the 2017 federal and state tax returns, and the remeasurement of deferred tax items realized in the third quarter of 2018.

The Company expects our 2019 annual effective tax rate to be in the range of 27% to 28%.


5



BALANCE SHEET HIGHLIGHTS

Loans

Loans held for investment totaled $8.76 billion at September 30, 2019, a decrease of $14.5 million, or 0.2%, from June 30, 2019, and a decrease of $1.7 million, or 0.02%, from September 30, 2018. The decreases were primarily driven by higher loan prepayments and payoffs, as well as lower line utilization and fundings when compared to the prior quarter, partially offset by lower loan sales and higher loan purchases. Loan sales during the third quarter of 2019 included $26.3 million of SBA loans and $684,000 of non-SBA loans, compared with $24.4 million of SBA loans and $82.5 million of non-SBA loans sold in the second quarter of 2019.

During the third quarter of 2019, the Bank generated $536.9 million of new loan commitments and $356.6 million of new loan fundings, compared with $568.2 million in new loan commitments and $394.8 million in new loan fundings for the second quarter of 2019, and $604.8 million in new loan commitments and $439.8 million in new loan fundings for the third quarter of 2018.
 
At September 30, 2019, the ratio of loans held for investment to total deposits was 98.9%, compared with 99.0% and 103.0% at June 30, 2019 and September 30, 2018, respectively.

The following table presents the composition of the loan portfolio for the period indicated:

 
 
September 30,
 
June 30,
 
September 30,
 
 
2019
 
2019
 
2018
 
 
(dollars in thousands)
Business loans:
 
 
 
 
 
 
Commercial and industrial
 
$
1,233,938

 
$
1,300,083

 
$
1,359,841

Franchise
 
894,023

 
860,299

 
735,366

Commercial owner occupied
 
1,678,888

 
1,667,912

 
1,675,528

SBA
 
179,965

 
180,363

 
193,487

Agribusiness
 
119,633

 
126,857

 
133,241

    Total business loans
 
4,106,447

 
4,135,514

 
4,097,463

Real estate loans:
 
 
 
 
 
 
Commercial non-owner occupied
 
2,053,590

 
2,121,312

 
1,931,165

Multi-family
 
1,611,904

 
1,520,135

 
1,554,692

One-to-four family
 
273,182

 
248,392

 
376,617

Construction
 
478,961

 
505,401

 
504,708

Farmland
 
171,667

 
169,724

 
138,479

Land
 
30,717

 
40,748

 
49,992

    Total real estate loans
 
4,620,021

 
4,605,712

 
4,555,653

Consumer loans:
 
 
 
 
 
 
Consumer loans
 
40,548

 
40,680

 
114,736

Gross loans held for investment
 
8,767,016

 
8,781,906

 
8,767,852

Deferred loan origination costs/(fees) and premiums/(discounts), net
 
(9,540
)
 
(9,968
)
 
(8,648
)
  Loans held for investment
 
8,757,476

 
8,771,938

 
8,759,204

Allowance for loan losses
 
(35,000
)
 
(35,026
)
 
(33,306
)
Loans held for investment, net
 
$
8,722,476

 
$
8,736,912

 
$
8,725,898

Loans held for sale, at lower of cost or fair value
 
$
7,092

 
$
8,529

 
$
52,880



6



The total end-of-period weighted average interest rate on loans, excluding fees and discounts, at September 30, 2019 was 5.00%, compared to 5.11% at June 30, 2019 and 5.08% at September 30, 2018.

The following table presents the composition of the organic loan commitments originated during the period indicated:
 
September 30,
 
June 30,
 
September 30,
 
2019
 
2019
 
2018
 
(dollars in thousands)
Business loans:
 
 
 
 
 
Commercial and industrial
$
130,494

 
$
149,766

 
$
133,938

Franchise
91,018

 
92,966

 
60,179

Commercial owner occupied
64,080

 
67,191

 
123,785

SBA
35,516

 
28,023

 
38,103

Agribusiness
6,241

 
9,859

 
9,016

Total business loans
327,349

 
347,805

 
365,021

Real estate loans:
 
 
 
 
 
Commercial non-owner occupied
90,464

 
101,956

 
97,585

Multi-family
41,289

 
35,061

 
70,683

One-to-four family
6,110

 
3,140

 
18,056

Construction
59,639

 
64,059

 
50,182

Farmland
9,350

 
13,044

 

Land
1,285

 
1,625

 
1,175

Total real estate loans
208,137

 
218,885

 
237,681

Consumer loans:
 
 
 
 
 
Consumer loans
1,463

 
1,551

 
2,080

Total loan commitments
$
536,949

 
$
568,241

 
$
604,782


The weighted average interest rate on new loan production was 5.28% in the third quarter of 2019 compared with 5.42% in the second quarter of 2019 and 5.21% in the third quarter of 2018. During the third quarter of 2019, the Bank also purchased $94.9 million of multi-family loans at a weighted average interest rate of 4.27% and $35.5 million of commercial non-owner occupied loans at a weighted average interest rate of 4.52%.


7



Asset Quality and Allowance for Loan Losses
 
At September 30, 2019, our allowance for loan losses was $35.0 million, a decrease of $26,000, or 0.1%, from June 30, 2019 and an increase of $1.7 million, or 5.1%, from September 30, 2018. The provision for loan losses for the third quarter of 2019 was $1.4 million, compared to $742,000 and $1.6 million, for the second quarter of 2019 and the third quarter of 2018, respectively. During the third quarter of 2019, the Company incurred $1.4 million of net charge-offs, compared to $3.6 million and $87,000, at June 30, 2019 and September 30, 2018, respectively.

The ratio of allowance for loan losses to loans held for investment at September 30, 2019 amounted to 0.40%, compared to 0.40% and 0.38%, at June 30, 2019 and September 30, 2018, 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 $46.8 million, or 0.53% of total loans held for investment as of September 30, 2019, compared to $52.0 million, or 0.59% of total loans held for investment as of June 30, 2019, and $71.7 million, or 0.82% of total loans held for investment as of September 30, 2018.

Nonperforming assets totaled $8.2 million, or 0.07% of total assets, at September 30, 2019, an increase of $559,000 from June 30, 2019 and an increase of $478,000 from September 30, 2018. During the third quarter of 2019, nonperforming loans increased $468,000 to $8.1 million and other real estate owned increased $91,000 to $126,000. Total loan delinquencies were $11.2 million, or 0.13% of loans held for investment, at September 30, 2019, compared to $13.5 million, or 0.15% of loans held for investment, at June 30, 2019, and $7.7 million, or 0.09% of loans held for investment, at September 30, 2018.

 
 
September 30,
 
June 30,
 
September 30,
 
 
2019
 
2019
 
2018
Asset Quality
 
(dollars in thousands)
Nonperforming loans
 
$
8,105

 
$
7,637

 
$
7,268

Other real estate owned
 
126

 
35

 
356

Other assets owned
 

 

 
129

Nonperforming assets
 
$
8,231

 
$
7,672

 
$
7,753

 
 
 
 
 
 
 
Allowance for loan losses
 
$
35,000

 
$
35,026

 
$
33,306

Allowance for loan losses as a percent of total nonperforming loans
 
432
%
 
459
%
 
458
%
Nonperforming loans as a percent of loans held for investment
 
0.09

 
0.09

 
0.08

Nonperforming assets as a percent of total assets
 
0.07

 
0.07

 
0.07

Net loan charge-offs/(recoveries) for the quarter ended
 
$
1,391

 
$
3,572

 
$
87

Net loan charge-offs for quarter to average total loans (1)
 
0.02
%
 
0.04
%
 
%
Allowance for loan losses to loans held for investment (2)
 
0.40

 
0.40

 
0.38

Delinquent Loans
 
 

 
 
 
 

30 - 59 days
 
$
1,725

 
$
3,416

 
$
1,977

60 - 89 days
 
3,212

 
801

 
720

90+ days
 
6,293

 
9,261

 
5,048

Total delinquency
 
$
11,230

 
$
13,478

 
$
7,745

Delinquency as a percentage of loans held for investment
 
0.13
%
 
0.15
%
 
0.09
%
 
 
 
 
 
 
 
(1) The ratio is less than 0.01% as of September 30, 2018.
(2) At September 30, 2019, 41% of loans held for investment include a fair value net discount of $46.8 million or 0.53% of loans held for investment. At June 30, 2019, 44% of loans held for investment include a fair value net discount of $52.0 million, or 0.59% of loans held for investment. At September 30, 2018, 53% of loans held for investment include a fair value net discount of $71.7 million or 0.82% of loans held for investment.


8



Investment Securities

Investments securities totaled $1.30 billion at September 30, 2019, a decrease of $4.3 million, or 0.3%, from June 30, 2019, and an increase of $195.8 million, or 17.8%, from September 30, 2018. The small decrease in the third quarter of 2019 compared to the prior quarter was primarily the result of $187.1 million in sales and $33.3 million in principal payments, amortization and redemptions, offset by $205.1 million in purchases and an $11.0 million increase in mark-to-market fair value adjustment. The increase compared to the same period last year was primarily the result of $667.3 million in purchases and a $66.1 million increase in mark-to-market fair value adjustment, partially offset by $413.6 million in sales and $124.0 million in principal payments, amortization and redemptions.

Deposits

At September 30, 2019, deposits totaled $8.86 billion, a decrease of $2.6 million, or 0.03%, from June 30, 2019 and an increase of $357.1 million, or 4.2%, from September 30, 2018. At September 30, 2019, non-maturity deposits totaled $7.52 billion, or 85% of total deposits, an increase of $214.3 million, or 2.9%, from June 30, 2019 and an increase of $323.7 million, or 4.5%, from September 30, 2018. During the third quarter of 2019, deposit decreases included $171.1 million in brokered certificates of deposit, $45.8 million in retail certificates of deposits and $18.9 million in interest checking, offset by increases of $143.2 million in noninterest-bearing deposits and $89.9 million in money market/savings deposits, as compared to the second quarter of 2019.
 
The weighted average cost of deposits for the three-month period ending September 30, 2019 was 0.71%, compared to 0.73% for the three-month period ending June 30, 2019, and 0.54% for the three-month period ending September 30, 2018. The decrease in the weighted average cost of deposits in the third quarter of 2019 compared to the prior quarter was primarily driven by lower volume in brokered certificates of deposits as well as higher average noninterest-bearing and money market deposit balances.

 
 
September 30,
 
June 30,
 
September 30,
 
 
2019
 
2019
 
2018
Deposit Accounts
 
(dollars in thousands)
Noninterest-bearing checking
 
$
3,623,546

 
$
3,480,312

 
$
3,434,674

Interest-bearing:
 
 
 
 
 
 
Checking
 
529,401

 
548,314

 
495,483

Money market/savings
 
3,362,453

 
3,272,511

 
3,261,544

Retail certificates of deposit
 
1,019,433

 
1,065,207

 
1,045,334

Wholesale/brokered certificates of deposit
 
324,455

 
495,578

 
265,110

Total interest-bearing
 
5,235,742

 
5,381,610

 
5,067,471

Total deposits
 
$
8,859,288

 
$
8,861,922

 
$
8,502,145

 
 
 
 
 
 
 
Cost of deposits
 
0.71
%
 
0.73
%
 
0.54
%
Noninterest-bearing deposits as a percentage of total deposits
 
41
%
 
39
%
 
40
%
Non-maturity deposits as a percent of total deposits
 
85
%
 
82
%
 
85
%
Core deposits as a percent of total deposits (1)
 
91
%
 
89
%
 
91
%
 
 
 
 
 
 
 
(1) Core deposits are all transaction accounts and non-brokered certificates of deposit less than $250,000.


9



Borrowings

At September 30, 2019, total borrowings amounted to $822.4 million, an increase of $17.9 million, or 2.2%, from June 30, 2019 and a decrease of $149.8 million, or 15.4%, from September 30, 2018. Total borrowings at September 30, 2019 included $604.6 million of FHLB advances and $217.8 million of subordinated debt. In May 2019, the Company issued $125.0 million aggregate principal amount of its 4.875% Fixed-to-Floating Rate Subordinated Notes (the “Notes”) due May 15, 2029. At September 30, 2019, total borrowings represented 7.0% of total assets, compared to 6.8% and 8.5%, as of June 30, 2019 and September 30, 2018, respectively.

On July 8, 2019, the Company used partial proceeds from the issuance of the Notes in May 2019 to redeem all $10.3 million principal amount of Junior Subordinated Deferrable Interest Debentures (the “Subordinated Debentures”) due 2034 issued by PPBI Trust I, a statutory business trust created under the laws of the State of Delaware. Prior to redemption, the Subordinated Debentures carried an interest rate of three-month LIBOR plus 2.75% per annum, for an effective rate of 5.35% per annum, and were scheduled to mature on April 6, 2034. The Subordinated Debentures were called at par, plus accrued and unpaid interest, for an aggregate amount of $10.4 million.

On September 17, 2019, the Company used partial proceeds from the issuance of the Notes in May 2019 to redeem all $5.2 million outstanding principal amount of floating rate junior subordinated debt securities associated with First Commerce Bancorp Statutory Trust I, a statutory business trust created under the laws of the State of Connecticut, acquired as part of the Grandpoint acquisition. Prior to redemption, the junior subordinated debt securities carried an interest rate of three-month LIBOR plus 2.95% per annum, for an effective rate of 5.36% per annum, and were scheduled to mature on September 17, 2033. The junior subordinated debt securities were called at par, plus accrued and unpaid interest, for an aggregate amount of $5.2 million.

On October 7, 2019, the Company used partial proceeds from the issuance of the Notes in May 2019 to redeem all $3.1 million outstanding principal amount of floating rate junior subordinated debt securities associated with Mission Community Capital Trust I, a statutory business trust created under the laws of the State of Delaware, acquired as part of the Heritage Oaks Bancorp acquisition. The junior subordinated debt securities carried an interest rate of three-month LIBOR plus 2.95% per annum, for an effective rate of 5.25% per annum, as of September 30, 2019 and were scheduled to mature on October 7, 2033. The junior subordinated debt securities were called at par, plus accrued and unpaid interest, for an aggregate amount of $3.1 million.

Capital Ratios

At September 30, 2019, our ratio of tangible common equity to total assets was 10.01%, compared with 9.96% at June 30, 2019 and 9.47% at September 30, 2018, with a tangible book value per share of $18.41, compared with $17.92 at June 30, 2019 and $16.06 at September 30, 2018.

At September 30, 2019, the Company had a tier 1 leverage ratio of 10.34%, common equity tier 1 capital ratio of 10.93%, tier 1 capital ratio of 11.04% and total capital ratio of 13.40%.

At September 30, 2019, the Bank exceeded all regulatory capital requirements with a tier 1 leverage ratio of 12.20%, common equity tier 1 capital ratio of 13.01%, tier 1 capital ratio of 13.01% and total capital ratio of 13.41%. 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 and exceeded the the minimum common equity Tier 1, Tier 1 and total capital ratio inclusive of the fully phased-in capital conservation buffer for 7.0%, 8.5% and 10.5%, respectively


10



 
 
September 30,
 
June 30,
 
September 30,
Capital Ratios
 
2019
 
2019
 
2018
Pacific Premier Bancorp, Inc. Consolidated
 
 

 
 

 
 

Tier 1 leverage ratio
 
10.34
%
 
10.32
%
 
10.15
%
Common equity tier 1 capital ratio
 
10.93

 
10.82

 
10.55

Tier 1 capital ratio
 
11.04

 
11.07

 
10.81

Total capital ratio
 
13.40

 
13.54

 
12.05

Tangible common equity ratio (1)
 
10.01

 
9.96

 
9.47

 
 
 
 
 
 
 
Pacific Premier Bank
 
 
Tier 1 leverage ratio
 
12.20
%
 
11.66
%
 
10.83
%
Common equity tier 1 capital ratio
 
13.01

 
12.51

 
11.53

Tier 1 capital ratio
 
13.01

 
12.51

 
11.53

Total capital ratio
 
13.41

 
12.90

 
11.92

 
 
 
 
 
 
 
Share Data
 
 

 
 

 
 

Book value per share
 
$
33.50

 
$
32.80

 
$
30.68

Tangible book value per share (1)
 
18.41

 
17.92

 
16.06

Dividend per share
 
0.22

 
0.22

 

Closing stock price (2)
 
31.19

 
30.88

 
37.20

Shares issued and outstanding
 
59,364,340

 
60,509,994

 
62,472,721

Market capitalization (2)(3)
 
$
1,851,574

 
$
1,868,549

 
$
2,323,985

 
(1) A reconciliation of the non-U.S. GAAP measures of tangible common equity and tangible book value per share to the U.S. GAAP measures of common stockholders' equity and book value per share is set forth below.
(2) As of the last trading day prior to period end.
(3) Dollars in thousands.

Dividend and Stock Repurchase Program

On October 18, 2019, the Company's Board of Directors declared a $0.22 per share dividend, payable on November 15, 2019 to stockholders of record as of November 1, 2019. During the third quarter of 2019, the Company repurchased 1,145,515 shares of common stock at an average price of $29.68 per share with a total market value of $34.0 million under its stock repurchase program. The total number of common stock shares repurchased during the second and third quarter of 2019 under the program was 3,364,761 shares for a total of $100 million, or $29.69 per share, the maximum dollar value of shares approved by the Board of Directors. The Company's third stock repurchase program has been completed.


11



Conference Call and Webcast
 
The Company will host a conference call at 9:00 a.m. PT / 12:00 p.m. ET on October 22, 2019 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 October 29, 2019 at (877) 344-7529, conference ID 10135275.

About Pacific Premier Bancorp, Inc.

Pacific Premier Bancorp, Inc. is the holding company for Pacific Premier Bank, one of the largest banks headquartered in Southern California with approximately $11.8 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, stockholder value creation, tax rates and the impact of the acquisition of Grandpoint 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 we conduct operations; the effects of, and changes in, trade, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System; inflation/deflation, interest rate, market and monetary fluctuations; the effect of acquisitions we may make, including, without limitation, the failure to achieve the expected revenue growth and/or expense savings from such acquisitions, and/or the failure to effectively integrate an acquisition target into our operations; the timely development of competitive new products and services and the acceptance of these products and services by new and existing customers; the impact of changes in financial services policies, laws and regulations, including those concerning taxes, banking, securities and insurance, and the application thereof by regulatory bodies; the effectiveness of our risk management framework and quantitative models; changes in the level of our nonperforming assets and charge-offs; uncertainty regarding the future of LIBOR; the effect of changes in accounting policies and practices or accounting standards, as may be adopted from time-to-time by bank regulatory agencies, the U.S. Securities and Exchange Commission (“SEC”), the Public Company Accounting Oversight Board, the Financial Accounting Standards Board or other accounting standards setters, including ASU 2016-13 (Topic 326), “Measurement of Credit Losses on Financial Instruments,” commonly referenced as the Current Expected Credit Loss (“CECL”) model, which will change how we estimate credit losses and may increase the required level of our allowance for credit losses after adoption on January 1, 2020; possible other-than-temporary impairments of securities held by us; the impact of current governmental efforts to restructure the U.S. financial regulatory system, including any amendments to the Dodd-Frank Wall Street Reform and Consumer Protection Act; changes in consumer spending, borrowing and savings habits; the effects of our lack of a diversified loan portfolio, including the risks of geographic and industry concentrations; our ability to attract

12



deposits and other sources of liquidity; the possibility that we may reduce or discontinue the payments of dividends on common stock; changes in the financial performance and/or condition of our borrowers; changes in the competitive environment among financial and bank holding companies and other financial service providers; geopolitical conditions, including acts or threats of terrorism, actions taken by the United States or other governments in response to acts or threats of terrorism and/or military conflicts, which could impact business and economic conditions in the United States and abroad; cybersecurity threats and the cost of defending against them, including the costs of compliance with potential legislation to combat cybersecurity at a state, national or global level; unanticipated regulatory or legal proceedings; and our ability to manage the risks involved in the foregoing. Additional factors that could cause actual results to differ materially from those expressed in the forward-looking statements are discussed in the 2018 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 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 and Chief Financial Officer
(949) 864-8000


13



PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(dollars in thousands)
(Unaudited)
 
 
September 30,
 
June 30,
 
March 31,
 
December 31,
 
September 30,
ASSETS
 
2019
 
2019
 
2019
 
2018
 
2018
Cash and due from banks
 
$
166,238

 
$
139,879

 
$
122,947

 
$
125,036

 
$
151,983

Interest-bearing deposits with financial institutions
 
261,477

 
235,505

 
55,435

 
78,370

 
111,229

Cash and cash equivalents
 
427,715

 
375,384

 
178,382

 
203,406

 
263,212

Interest-bearing time deposits with financial institutions
 
2,711

 
2,956

 
5,896

 
6,143

 
6,386

Investments held-to-maturity, at amortized cost
 
40,433

 
42,997

 
43,894

 
45,210

 
46,385

Investment securities available-for-sale, at fair value
 
1,256,655

 
1,258,379

 
1,171,410

 
1,103,222

 
1,054,877

FHLB, FRB and other stock, at cost
 
92,986

 
92,841

 
94,751

 
94,918

 
98,779

Loans held for sale, at lower of cost or fair value
 
7,092

 
8,529

 
11,671

 
5,719

 
52,880

Loans held for investment
 
8,757,476

 
8,771,938

 
8,865,855

 
8,836,818

 
8,759,204

Allowance for loan losses
 
(35,000
)
 
(35,026
)
 
(37,856
)
 
(36,072
)
 
(33,306
)
Loans held for investment, net
 
8,722,476

 
8,736,912

 
8,827,999

 
8,800,746

 
8,725,898

Accrued interest receivable
 
38,603

 
40,420

 
40,302

 
37,837

 
37,683

Other real estate owned
 
126

 
35

 
180

 
147

 
356

Premises and equipment
 
62,851

 
54,218

 
61,523

 
64,691

 
66,103

Deferred income taxes, net
 

 
2,266

 
9,275

 
15,627

 
26,848

Bank owned life insurance
 
112,716

 
112,054

 
111,400

 
110,871

 
110,354

Intangible assets
 
87,560

 
91,840

 
96,120

 
100,556

 
105,187

Goodwill
 
808,322

 
808,322

 
808,726

 
808,726

 
807,892

Other assets
 
151,251

 
156,628

 
118,966

 
89,568

 
101,041

Total assets
 
$
11,811,497

 
$
11,783,781

 
$
11,580,495

 
$
11,487,387

 
$
11,503,881

LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 

 
 
 
 

 
 
 
 
LIABILITIES:
 
 

 
 
 
 

 
 
 
 
Deposit accounts:
 
 

 
 
 
 

 
 
 
 
Noninterest-bearing checking
 
$
3,623,546

 
$
3,480,312

 
$
3,423,893

 
$
3,495,737

 
$
3,434,674

Interest-bearing:
 
 
 
 
 
 
 
 
 
 
Checking
 
529,401

 
548,314

 
560,274

 
526,088

 
495,483

Money market/savings
 
3,362,453

 
3,272,511

 
3,138,875

 
3,225,849

 
3,261,544

Retail certificates of deposit
 
1,019,433

 
1,065,207

 
1,007,559

 
1,009,066

 
1,045,334

Wholesale/brokered certificates of deposit
 
324,455

 
495,578

 
584,574

 
401,611

 
265,110

Total interest-bearing
 
5,235,742

 
5,381,610

 
5,291,282

 
5,162,614

 
5,067,471

Total deposits
 
8,859,288

 
8,861,922

 
8,715,175

 
8,658,351

 
8,502,145

FHLB advances and other borrowings
 
604,558

 
571,575

 
609,591

 
667,681

 
861,972

Subordinated debentures
 
217,825

 
232,944

 
110,381

 
110,313

 
110,244

Deferred income taxes, net
 
301

 

 

 

 

Accrued expenses and other liabilities
 
140,527

 
132,884

 
138,284

 
81,345

 
113,143

Total liabilities
 
9,822,499

 
9,799,325

 
9,573,431

 
9,517,690

 
9,587,504

STOCKHOLDERS’ EQUITY:
 
 

 
 

 
 

 
 

 
 

Common stock
 
584

 
595

 
617

 
617

 
617

Additional paid-in capital
 
1,590,168

 
1,618,137

 
1,676,024

 
1,674,274

 
1,671,673

Retained earnings
 
368,051

 
343,366

 
325,363

 
300,407

 
260,764

Accumulated other comprehensive (loss) income
 
30,195

 
22,358

 
5,060

 
(5,601
)
 
(16,677
)
Total stockholders' equity
 
1,988,998

 
1,984,456

 
2,007,064

 
1,969,697

 
1,916,377

Total liabilities and stockholders' equity
 
$
11,811,497

 
$
11,783,781

 
$
11,580,495

 
$
11,487,387

 
$
11,503,881


14



PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in thousands, except per share data)
(Unaudited)
 
 
Three Months Ended
 
Nine Months Ended
 
 
September 30,
 
June 30,
 
September 30,
 
September 30,
 
September 30,
 
 
2019
 
2019
 
2018
 
2019
 
2018
INTEREST INCOME
 
 

 
 

 
 

 
 
 
 
Loans
 
$
122,974

 
$
121,860

 
$
119,271

 
$
366,310

 
$
289,069

Investment securities and other interest-earning assets
 
9,630

 
10,554

 
9,605

 
29,951

 
23,333

Total interest income
 
132,604

 
132,414

 
128,876

 
396,261

 
312,402

INTEREST EXPENSE
 
 
 
 
 
 
 
 

 
 

Deposits
 
15,878

 
15,991

 
11,942

 
45,153

 
25,612

FHLB advances and other borrowings
 
1,214

 
3,083

 
2,494

 
9,099

 
6,642

Subordinated debentures
 
3,177

 
2,699

 
1,727

 
7,627

 
4,983

Total interest expense
 
20,269

 
21,773

 
16,163

 
61,879

 
37,237

Net interest income before provision for credit losses
 
112,335

 
110,641

 
112,713

 
334,382

 
275,165

Provision for credit losses
 
1,562

 
334

 
1,981

 
3,422

 
5,995

Net interest income after provision for credit losses
 
110,773

 
110,307

 
110,732

 
330,960

 
269,170

NONINTEREST INCOME
 
 
 
 
 
 
 
 

 
 

Loan servicing fees
 
546

 
409

 
400

 
1,353

 
1,037

Service charges on deposit accounts
 
1,440

 
1,441

 
1,570

 
4,211

 
3,777

Other service fee income
 
360

 
363

 
317

 
1,079

 
632

Debit card interchange fee income
 
421

 
1,145

 
1,061

 
2,637

 
3,187

Earnings on BOLI
 
861

 
851

 
1,270

 
2,622

 
2,498

Net gain from sales of loans
 
2,313

 
902

 
2,029

 
4,944

 
8,830

Net gain from sales of investment securities
 
4,261

 
212

 
1,063

 
4,900

 
1,399

Other income
 
1,228

 
1,001

 
530

 
3,689

 
2,697

Total noninterest income
 
11,430

 
6,324

 
8,240

 
25,435

 
24,057

NONINTEREST EXPENSE
 
 
 
 
 
 
 
 

 
 

Compensation and benefits
 
35,543

 
33,847

 
37,901

 
102,778

 
96,048

Premises and occupancy
 
7,593

 
7,517

 
7,214

 
22,645

 
17,040

Data processing
 
3,094

 
3,036

 
4,095

 
9,060

 
9,544

Other real estate owned operations, net
 
64

 
62

 

 
129

 
3

FDIC insurance premiums
 
(10
)
 
740

 
1,060

 
1,530

 
2,252

Legal, audit and professional expense
 
3,058

 
3,545

 
3,280

 
9,601

 
6,935

Marketing expense
 
1,767

 
1,425

 
1,569

 
4,689

 
4,451

Office, telecommunications and postage expense
 
1,200

 
1,311

 
1,538

 
3,721

 
3,733

Loan expense
 
1,137

 
1,005

 
1,139

 
3,015

 
2,324

Deposit expense
 
3,478

 
3,668

 
2,833

 
10,729

 
6,811

Merger-related expense
 
(4
)
 
5

 
13,978

 
656

 
15,857

CDI amortization
 
4,281

 
4,281

 
4,693

 
12,998

 
8,963

Other expense
 
4,135

 
3,494

 
3,482

 
11,298

 
8,705

Total noninterest expense
 
65,336

 
63,936

 
82,782

 
192,849

 
182,666

Net income before income taxes
 
56,867

 
52,695

 
36,190

 
163,546

 
110,561

Income tax
 
15,492

 
14,168

 
7,798

 
44,926

 
26,864

Net income
 
$
41,375

 
$
38,527

 
$
28,392

 
$
118,620

 
$
83,697

EARNINGS PER SHARE
 
 
 
 
 
 
 
 

 
 

Basic
 
$
0.69

 
$
0.62

 
$
0.46

 
$
1.93

 
$
1.63

Diluted
 
$
0.69

 
$
0.62

 
$
0.46

 
$
1.92

 
$
1.61

WEIGHTED AVERAGE SHARES OUTSTANDING
 
 
 
 
 
 
 
 

 
 

Basic
 
59,293,218

 
61,308,046

 
61,727,030

 
60,853,081

 
51,282,533

Diluted
 
59,670,855

 
61,661,773

 
62,361,804

 
61,201,858

 
51,965,647


15



SELECTED FINANCIAL DATA

PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED AVERAGE BALANCES AND YIELD DATA
 
 
 
 
 
Three Months Ended
 
 
September 30, 2019
 
June 30, 2019
 
September 30, 2018
 
 
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
 
$
188,693

 
$
403

 
0.85
%
 
$
187,963

 
$
435

 
0.93
%
 
$
339,064

 
$
898

 
1.05
%
Investment securities
 
1,311,649

 
9,227

 
2.81

 
1,396,585

 
10,119

 
2.90

 
1,198,362

 
8,707

 
2.91

Loans receivable, net (1)(2)
 
8,728,536

 
122,974

 
5.59

 
8,779,440

 
121,860

 
5.57

 
8,664,796

 
119,271

 
5.46

Total interest-earning assets
 
10,228,878

 
132,604

 
5.14

 
10,363,988

 
132,414

 
5.12

 
10,202,222

 
128,876

 
5.01

Noninterest-earning assets
 
1,232,963

 
 
 
 
 
1,221,985

 
 
 
 
 
1,185,882

 
 
 
 
Total assets
 
$
11,461,841

 
 
 
 
 
$
11,585,973

 
 
 
 
 
$
11,388,104

 
 
 
 
Liabilities and Equity
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing deposits:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest checking
 
$
553,588

 
$
688

 
0.49
%
 
$
543,473

 
$
535

 
0.39
%
 
$
532,246

 
$
480

 
0.36
%
Money market
 
3,107,570

 
7,736

 
0.99

 
2,978,065

 
7,305

 
0.98

 
3,143,556

 
6,391

 
0.81

Savings
 
239,601

 
103

 
0.17

 
242,483

 
92

 
0.15

 
264,453

 
97

 
0.15

Retail certificates of deposit
 
1,044,174

 
4,867

 
1.85

 
1,025,404

 
4,610

 
1.80

 
1,059,416

 
3,417

 
1.28

Wholesale/brokered certificates of deposit
 
398,110

 
2,484

 
2.48

 
555,963

 
3,449

 
2.49

 
316,524

 
1,557

 
1.95

Total interest-bearing deposits
 
5,343,043

 
15,878

 
1.18

 
5,345,388

 
15,991

 
1.20

 
5,316,195

 
11,942

 
0.89

FHLB advances and other borrowings
 
214,264

 
1,214

 
2.25

 
491,706

 
3,083

 
2.51

 
473,197

 
2,494

 
2.09

Subordinated debentures
 
222,715

 
3,177

 
5.71

 
183,639

 
2,699

 
5.88

 
110,203

 
1,727

 
6.27

Total borrowings