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Section 1: 8-K (8-K 2019-Q1 EARNINGS RELEASE)

Document


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)
April 19, 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 (see General Instruction A.2. below):
[ ] 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. [ ]






ITEM 2.02                      RESULTS OF OPERATIONS AND FINANCIAL CONDITION
 
On April 23, 2019, Pacific Premier Bancorp, Inc. ("PPBI") issued a press release setting forth its (unaudited) financial results for the first 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 April 19, 2019, PPBI’s Board of Directors declared a $0.22 per share dividend, payable on May 15, 2019 to stockholders of record on May 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:
April 23, 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 First Quarter 2019 Results (Unaudited) and a Quarterly Cash Dividend of $0.22 Per Share
 
First Quarter 2019 Summary
 
Net income of $38.7 million, or $0.62 per diluted share
Return on average assets of 1.34%, return on average equity of 7.78%, and return on average tangible common equity of 15.45%
Efficiency ratio of 49.3%
Net interest margin of 4.37%, core net interest margin of 4.21%
Total assets increase to $11.6 billion
Noninterest bearing deposits as a percent of total deposits of 39%
Nonperforming assets as a percent of total assets of 0.11%

  
Irvine, Calif., April 23, 2019 -- Pacific Premier Bancorp, Inc. (NASDAQ: PPBI) (the “Company”), the holding company of Pacific Premier Bank (the “Bank”), reported net income for the first quarter of 2019 of $38.7 million, or $0.62 per diluted share, compared with net income of $39.6 million, or $0.63 per diluted share, for the fourth quarter of 2018 and net income of $28.0 million, or $0.60 per diluted share, for the first quarter of 2018. Financial results for the first quarter of 2019 include merger-related expense of $655,000.
   
For the three months ended March 31, 2019, the Company’s return on average assets (“ROAA”) was 1.34%, return on average equity (“ROAE”) was 7.78% and return on average tangible common equity (“ROATCE”) was 15.45%, compared to 1.37%, 8.15% and 16.65%, respectively, for the three months ended December 31, 2018 and 1.39%, 8.92% and 16.51%, respectively, for the three months ended March 31, 2018. Total assets as of March 31, 2019 were $11.6 billion compared with $11.5 billion at December 31, 2018 and $8.1 billion at March 31, 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, “We delivered another solid quarter of operating results that reflects the strength of the organization that we have built over the past few years. Our ability to generate high levels of profitability, including an ROAA of 1.34% and an ROATCE of 15.45% while also maintaining strong credit metrics is a testament to the talent and discipline of our employees. Given the strength of our performance, the Company's board of directors has authorized and declared a $0.22 per share dividend payable on May 15, 2019.

“We have been focused on continuous improvement throughout the organization and we are seeing the benefits created from the Grandpoint acquisition. Further, we have consolidated 5 branches in the past two quarters while maintaining our high level of service to clients. Our efficiency ratio was again below 50% during the first quarter of 2019 and we expect operating leverage to further improve in the coming quarters.

“Our disciplined balance sheet and risk management continue to result in a relatively stable core net interest margin and solid asset quality. Looking ahead, we will remain focused on closely matching our loan and deposit growth, while emphasizing loan production in the areas that produce attractive risk-adjusted yields. We expect balance sheet growth to accelerate as we move through the year owing to key investments in technology around API banking, Salesforce and cash management services,” said Mr. Gardner.
    

1



FINANCIAL HIGHLIGHTS
 
 
Three Months Ended
 
 
March 31,
 
December 31,
 
March 31,
 
 
2019
 
2018
 
2018
Financial Highlights
 
(dollars in thousands, except per share data)
Net income
 
$
38,718

 
$
39,643

 
$
28,002

Diluted earnings per share
 
0.62

 
0.63

 
0.60

Return on average assets
 
1.34
%
 
1.37
%
 
1.39
%
Return on average equity
 
7.78

 
8.15

 
8.92

Return on average tangible common equity (1)
 
15.45

 
16.65

 
16.51

Net interest margin
 
4.37

 
4.49

 
4.50

Core net interest margin
 
4.21

 
4.24

 
4.26

Cost of deposits
 
0.63

 
0.55

 
0.39

Efficiency ratio (2)
 
49.3

 
48.3

 
52.4

Total assets
 
$
11,580,495

 
$
11,487,387

 
$
8,086,816

Total deposits
 
8,715,175

 
8,658,351

 
6,192,273

Core deposits to total deposits (3)
 
88
%
 
89
%
 
88
%
Book value per share
 
$
31.97

 
$
31.52

 
$
27.12

Tangible book value per share (1)
 
17.56

 
16.97

 
15.63

Total risk-based capital ratio
 
12.58
%
 
12.39
%
 
12.64
%
 
 
 
 
 
 
 
(1) A reconciliation of the non-U.S. GAAP measures of average tangible common equity 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 and gain/(loss) from other real estate owned.
(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 $111.4 million in the first quarter of 2019, a decrease of $6.1 million, or 5.2%, from the fourth quarter of 2018. The decrease in net interest income reflected the impact of two fewer days of interest in the first quarter of 2019 compared to fourth quarter of 2018, lower accretion income as well as higher funding costs.

Net interest margin for the first quarter was 4.37%, compared with 4.49% in the prior quarter. The decrease was primarily driven by lower accretion income of $3.8 million in the first quarter of 2019 compared to $6.3 million in the fourth quarter of 2018. Our core net interest margin, which excludes the impact of accretion, decreased 3 basis points to 4.21%, compared to 4.24% in the prior quarter. The decrease in the core net interest margin was attributable to higher cost of funds, partially offset by a higher core yields on interest-earning assets, which excludes the impact of accretion. Cost of deposits increased 8 basis point to 0.63% during the quarter.

We anticipate our core net interest margin will be in the range of 4.15% to 4.20% in the second quarter of 2019.

Net interest income for the first quarter of 2019 increased $30.1 million, or 37.1%, compared to the first quarter of 2018. The increase was primarily related to an increase in average interest-earning assets of $3.01 billion, which resulted primarily from our acquisition of Grandpoint in the third quarter of 2018, as well as organic loan growth since the end of the first quarter of 2018.

2



PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED AVERAGE BALANCES AND YIELD DATA
 
 
 
 
 
Three Months Ended
 
 
March 31, 2019
 
December 31, 2018
 
March 31, 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
 
$
173,613

 
$
378

 
0.88
%
 
$
230,377

 
$
634

 
1.09
%
 
$
167,236

 
$
313

 
0.76
%
Investment securities
 
1,298,476

 
9,389

 
2.89

 
1,243,240

 
9,046

 
2.91

 
919,526

 
6,341

 
2.76

Loans receivable, net (1) (2)
 
8,867,159

 
121,476

 
5.56

 
8,909,407

 
126,341

 
5.63

 
6,237,968

 
84,173

 
5.47

Total interest-earning assets
 
$
10,339,248

 
$
131,243

 
5.15

 
$
10,383,024

 
$
136,021

 
5.20

 
$
7,324,730

 
$
90,827

 
5.03

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing deposits
 
$
5,073,723

 
$
13,284

 
1.06

 
$
5,065,505

 
$
12,041

 
0.94

 
$
3,852,853

 
$
5,914

 
0.62

Borrowings
 
880,671

 
6,553

 
3.02

 
905,300

 
6,434

 
2.82

 
613,295

 
3,632

 
2.40

Total interest-bearing liabilities
 
$
5,954,394

 
$
19,837

 
1.35

 
$
5,970,805

 
$
18,475

 
1.23

 
$
4,466,148

 
$
9,546

 
0.87

Noninterest-bearing deposits
 
$
3,480,791

 
 
 
 
 
$
3,571,119

 
 
 
 
 
$
2,262,895

 
 
 
 
Net interest income
 
 
 
$
111,406

 
 
 
 
 
$
117,546

 
 
 
 
 
$
81,281

 
 
Net interest margin (3)
 
 

 
 

 
4.37

 
 
 
 
 
4.49

 
 
 
 
 
4.50

Cost of deposits
 
 
 
 
 
0.63

 
 
 
 
 
0.55

 
 
 
 
 
0.39

Cost of funds (4)
 
 
 
 
 
0.85

 
 
 
 
 
0.77

 
 
 
 
 
0.58

 
(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 $3.8 million, $6.3 million and $3.7 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.


3



Provision for Credit Losses

A provision for credit losses of $1.5 million was recorded for the first quarter of 2019, compared with a provision for credit losses of $2.3 million for the fourth quarter of 2018. The first quarter of 2019 provision for credit losses includes a $486,000 reduction in reserve for unfunded commitments primarily due to lower attributable loan commitments and loss rates. The prior quarter, comparably, included a $580,000 reduction in reserve for unfunded commitments. Net charge-offs were $228,000 in the first quarter of 2019 compared to $138,000 in the fourth quarter of 2018.

Noninterest Income
 
Noninterest income for the first quarter of 2019 was $7.7 million, an increase of $711,000, or 10.2%, from the fourth quarter of 2018. The increase from the fourth quarter of 2018 was primarily due to a $427,000 increase in net gain from sales of investment securities, a $516,000 increase in other income and a $200,000 decrease in net gain from the sales of loans. The increase in other income included a favorable mark of $612,000 in Community Reinvestment Act (“CRA”) related equity investments, compared to a loss of $148,000 in the prior quarter, and $292,000 in recoveries of pre-acquisition charged-off loans, compared to recoveries of $176,000 in prior quarter.

During the first quarter of 2019, the Bank sold $25.5 million of Small Business Administration (“SBA”) loans for a net gain of $1.7 million, compared with the sale of $26.1 million of SBA loans for a net gain of $1.6 million during the prior quarter. The prior quarter also included the sale of $163.2 million of non-SBA loans for a net gain of $320,000.

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

Noninterest income for the first quarter of 2019 increased $15,000, or 0.2%, compared to the first quarter of 2018. The increase from the first quarter of 2018 was primarily related to a $421,000 increase in net gain from sale of investment securities, a $299,000 increase in earnings on bank-owned life insurance (“BOLI”), a $210,000 increase in other service fee income and a $180,000 increase in service charges on deposit accounts, partially offset by a $1.2 million decrease in net gain from sales of loans.

 
 
Three Months Ended
 
 
March 31,
 
December 31,
 
March 31,
 
 
2019
 
2018
 
2018
NONINTEREST INCOME
 
(dollars in thousands)
Loan servicing fees
 
$
398

 
$
408

 
$
345

Service charges on deposit accounts
 
1,330

 
1,351

 
1,150

Other service fee income
 
356

 
270

 
146

Debit card interchange fee income
 
1,071

 
1,139

 
1,036

Earnings on BOLI
 
910

 
929

 
611

Net gain from sales of loans
 
1,729

 
1,929

 
2,958

Net gain from sales of investment securities
 
427

 

 
6

Other income
 
1,460

 
944

 
1,414

Total noninterest income
 
$
7,681

 
$
6,970

 
$
7,666



4



 Noninterest Expense
 
Noninterest expense totaled $63.6 million for the first quarter of 2019, a decrease of $3.7 million, or 5.4%, compared with the fourth quarter of 2018. The decrease was driven primarily by merger-related expense of $655,000 in the first quarter of 2019 compared with $2.6 million in the fourth quarter of 2018. Excluding merger-related expense, noninterest expense decreased $1.7 million to $62.9 million, primarily due to a full quarter's realization of cost savings attributable to the acquisition of Grandpoint. Compensation and benefits were also favorably impacted overall by lower staffing and incentives.

The Company anticipates that total operating expense will range from $64.0 million to $65.0 million for the second quarter of 2019.

Noninterest expense grew by $13.8 million, or 27.6% compared to the first quarter of 2018. The increase was primarily related to the additional costs from operations, personnel and branches retained from the acquisition of Grandpoint, core deposit intangible (“CDI”) amortization expense, combined with our continued investment in personnel to support our organic growth in loans and deposits, partially offset by the reduction in merger-related expense.

 
 
Three Months Ended
 
 
March 31,
 
December 31,
 
March 31,
 
 
2019
 
2018
 
2018
NONINTEREST EXPENSE
 
(dollars in thousands)
Compensation and benefits
 
$
33,388

 
$
33,838

 
$
28,873

Premises and occupancy
 
7,535

 
7,504

 
4,781

Data processing
 
2,930

 
3,868

 
2,702

Other real estate owned operations, net
 
3

 
1

 
1

FDIC insurance premiums
 
800

 
750

 
611

Legal, audit and professional expense
 
2,998

 
3,105

 
1,839

Marketing expense
 
1,497

 
1,700

 
1,530

Office, telecommunications and postage expense
 
1,210

 
1,579

 
1,080

Loan expense
 
873

 
1,046

 
591

Deposit expense
 
3,583

 
3,105

 
1,676

Merger-related expense
 
655

 
2,597

 
936

CDI amortization
 
4,436

 
4,631

 
2,274

Other expense
 
3,669

 
3,515

 
2,914

Total noninterest expense
 
$
63,577

 
$
67,239

 
$
49,808


Income Tax

For the first quarter of 2019, our effective tax rate was 28.3%, compared with 27.9% for the fourth quarter of 2018 and 24.1% for the first quarter of 2018. The slight increase in the effective tax rate for the first quarter of 2019 was primarily the result of a reduced tax benefit from stock-based compensation.

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

The increase in the effective tax rate for the first quarter of 2019, compared to the first quarter of 2018, was primarily the result of $1.4 million reduced tax benefit from stock-based compensation.

5



BALANCE SHEET HIGHLIGHTS

Loans

Loans held for investment totaled $8.87 billion at March 31, 2019, an increase of $29.0 million, or 0.3%, from December 31, 2018, and an increase of $2.62 billion, or 42.0%, from March 31, 2018. The increase compared to the fourth quarter of 2018 was impacted by organic loan growth, partially offset by lower loan repayments and lower line utilization during the first quarter of 2019. The increase compared to the first quarter of 2018 was impacted by both organic loan growth and by the acquisition of Grandpoint, the latter of which added $2.4 billion of loans before fair value adjustments in the third quarter of 2018.

During the first quarter of 2019, the Bank generated $549.7 million of new loan commitments and $391.8 million of new loan fundings, compared with $730.0 million in new loan commitments and $531.5 million in new loan fundings for the fourth quarter of 2018 and $488.0 million in new loan commitments and $293.1 million in new loan fundings for the first quarter of 2018. The Bank experienced lower loan prepayments of $279.2 million in the first quarter of 2019 compared with $407.6 million in the prior quarter. The Bank also sold $25.5 million in loans in the first quarter compared with $189.3 million in the prior quarter, which included $26.1 million of SBA loans.
 
At March 31, 2019, the ratio of loans held for investment to total deposits was 101.7%, compared with 102.1% and 100.8% at December 31, 2018 and March 31, 2018, respectively.

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

 
 
March 31,
 
December 31,
 
March 31,
 
 
2019
 
2018
 
2018
 
 
(dollars in thousands)
Business loans:
 
 
 
 
 
 
Commercial and industrial
 
$
1,336,520

 
$
1,364,423

 
$
1,062,385

Franchise
 
813,057

 
765,416

 
692,846

Commercial owner occupied
 
1,648,762

 
1,679,122

 
1,268,869

SBA
 
188,757

 
193,882

 
182,626

Agribusiness
 
134,603

 
138,519

 
149,256

    Total business loans
 
4,121,699

 
4,141,362

 
3,355,982

Real estate loans:
 
 
 
 
 
 
Commercial non-owner occupied
 
2,124,250

 
2,003,174

 
1,227,693

Multi-family
 
1,511,942

 
1,535,289

 
817,963

One-to-four family
 
279,467

 
356,264

 
266,324

Construction
 
538,197

 
523,643

 
319,610

Farmland
 
167,345

 
150,502

 
136,522

Land
 
46,848

 
46,628

 
34,452

    Total real estate loans
 
4,668,049

 
4,615,500

 
2,802,564

Consumer loans:
 
 
 
 
 
 
Consumer loans
 
85,302

 
89,424

 
86,206

Gross loans held for investment
 
8,875,050

 
8,846,286

 
6,244,752

Deferred loan origination costs/(fees) and premiums/(discounts), net
 
(9,195
)
 
(9,468
)
 
(2,911
)
  Loans held for investment
 
8,865,855

 
8,836,818

 
6,241,841

Allowance for loan losses
 
(37,856
)
 
(36,072
)
 
(30,502
)
Loans held for investment, net
 
$
8,827,999

 
$
8,800,746

 
$
6,211,339

 
 
 
 
 
 
 
Loans held for sale, at lower of cost or fair value
 
$
11,671

 
$
5,719

 
$
29,034



6



The total end-of-period weighted average interest rate on loans, excluding fees and discounts, at March 31, 2019 was 5.13%, compared to 5.13% at December 31, 2018 and 5.04% at March 31, 2018. The quarter-over- quarter comparison is unchanged, while the year-over-year increase reflects the impact of higher rates on new loan originations as well as the favorable repricing of loans as a result of the 2018 Federal Reserve Bank fed funds rate increases, partially offset by the lower yields associated with the Grandpoint acquisition.

The following table presents the composition of the organic loan commitments originated during the period indicated:
 
March 31,
 
December 31,
 
March 31,
 
2019
 
2018
 
2018
 
(dollars in thousands)
Business loans:
 
 
 
 
 
Commercial and industrial
$
112,074

 
$
141,837

 
$
126,513

Franchise
86,356

 
82,013

 
52,260

Commercial owner occupied
39,049

 
64,349

 
46,956

SBA
41,963

 
26,884

 
38,972

Agribusiness
13,388

 
6,525

 
32,234

Total business loans
292,830

 
321,608

 
296,935

Real estate loans:
 
 
 
 
 
Commercial non-owner occupied
114,809

 
196,779

 
18,217

Multi-family
30,991

 
73,454

 
45,225

One-to-four family
14,689

 
13,029

 
9,271

Construction
74,203

 
85,327

 
111,673

Farmland
17,250

 
14,588

 
590

Land
4,050

 
4,229

 
5,825

Total real estate loans
255,992

 
387,406

 
190,801

Consumer loans:
 
 
 
 
 
Consumer loans
840

 
20,938

 
271

Total loan commitments
$
549,662

 
$
729,952

 
$
488,007


The weighted average rate on new loan production was 5.67% in the first quarter of 2019 compared with 5.35% in the fourth quarter of 2018 and 5.27% in the first quarter of 2018.


7



Asset Quality and Allowance for Loan and Lease Losses
 
At March 31, 2019, our allowance for loan and lease losses was $37.9 million, an increase of $1.8 million from December 31, 2018. The provision for loan losses for the first quarter of 2019 was $2.0 million, while net charge-offs were $228,000.

The ratio of allowance for loan losses to loans held for investment at March 31, 2019 amounted to 0.43%, compared to 0.41% and 0.49% at December 31, 2018 and March 31, 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 $57.2 million, or 0.65% of total loans held for investment as of March 31, 2019, compared to $61.0 million, or 0.69% of total loans held for investment as of December 31, 2018.

Nonperforming assets totaled $13.1 million, or 0.11% of total assets, at March 31, 2019, an increase of $8.0 million from December 31, 2018. During the first quarter of 2019, nonperforming loans increased $8.0 million to $12.9 million and other real estate owned increased $33,000 to $180,000, while other assets owned remained unchanged at $13,000. Loan delinquencies were $15.8 million, or 0.18% of loans held for investment, at March 31, 2019, compared to $12.9 million, or 0.15% of loans held for investment, at December 31, 2018.

The increase in nonperforming assets during the first quarter of 2019 was primarily attributable to the downgrade of one franchise loan, for which the Company has established a $1.6 million specific reserve.

 
 
March 31,
 
December 31,
 
March 31,
 
 
2019
 
2018
 
2018
Asset Quality
 
(dollars in thousands)
Nonperforming loans
 
$
12,858

 
$
4,857

 
$
8,149

Other real estate owned
 
180

 
147

 
206

Other assets owned
 
13

 
13

 
233

Nonperforming assets
 
$
13,051

 
$
5,017

 
$
8,588

 
 
 
 
 
 
 
Allowance for loan losses
 
$
37,856

 
$
36,072

 
$
30,502

Allowance for loan losses as a percent of total nonperforming loans
 
294
%
 
743
%
 
374
%
Nonperforming loans as a percent of loans held for investment
 
0.15

 
0.05

 
0.13

Nonperforming assets as a percent of total assets
 
0.11

 
0.04

 
0.11

Net loan charge-offs/(recoveries) for the quarter ended
 
$
228

 
$
138

 
$
687

Net loan charge-offs for quarter to average total loans (1)
 
%
 
%
 
0.01
%
Allowance for loan losses to loans held for investment (2)
 
0.43

 
0.41

 
0.49

Delinquent Loans
 
 

 
 
 
 

30 - 59 days
 
$
2,299

 
$
7,047

 
$
6,605

60 - 89 days
 
1,982

 
1,242

 
1,084

90+ days
 
11,481

 
4,564

 
5,065

Total delinquency
 
$
15,762

 
$
12,853

 
$
12,754

Delinquency as a percentage of loans held for investment
 
0.18
%
 
0.15
%
 
0.20
%
 
 
 
 
 
 
 
(1) The ratios are less than 0.01% as of March 31, 2019 and December 31, 2018.
(2) 47% of loans held for investment include a fair value net discount of $57.2 million.


8



Investment Securities

Investments securities available-for-sale totaled $1.22 billion at March 31, 2019, an increase of $66.9 million, or 5.8%, from December 31, 2018, and $327.5 million, or 36.9%, from March 31, 2018. The increase in the first quarter of 2019 compared to prior quarter was primarily the result of $252.5 million in purchases and mark-to-market fair value adjustment increases of $15.0 million, partially offset by $169.5 million in sales and $31.2 million in principal payments, amortization and redemptions. The increase compared to the same period last year was primarily the result of $392.9 million of investment securities from the acquisition of Grandpoint.

Deposits

At March 31, 2019, deposits totaled $8.72 billion, an increase of $56.8 million, or 0.7%, from December 31, 2018 and $2.52 billion, or 40.7%, from March 31, 2018. At March 31, 2019, non-maturity deposits totaled $7.12 billion, or 81.7% of total deposits, a decrease of $124.6 million, or 1.7%, from December 31, 2018 and an increase of $2.05 billion, or 40.4%, from March 31, 2018. During the first quarter of 2019, deposit increases included $34.2 million in interest checking and $183.0 million in brokered certificates of deposit, partially offset by decreases of $87.0 million in money market/savings deposits and $71.8 million in noninterest-bearing deposits. During the first quarter of 2019, the Bank added brokered certificates of deposits as rates moved favorably to these funding sources compared with higher cost, overnight borrowing rates.
 
The weighted average cost of deposits for the three-month period ending March 31, 2019 was 0.63%, compared to 0.55% for the three-month period ending December 31, 2018, and 0.39% for the three-month period ending March 31, 2018. The increase in the weighted average cost of deposits in the first quarter of 2019 compared to the prior quarter was primarily driven by higher rates in retail and brokered certificates of deposits and, to a lesser extent, money market accounts.

 
 
March 31,
 
December 31,
 
March 31,
 
 
2019
 
2018
 
2018
Deposit Accounts
 
(dollars in thousands)
Noninterest-bearing checking
 
$
3,423,893

 
$
3,495,737

 
$
2,312,586

Interest-bearing:
 
 
 
 
 
 
Checking
 
560,274

 
526,088

 
355,895

Money market/savings
 
3,138,875

 
3,225,849

 
2,405,869

Retail certificates of deposit
 
1,007,559

 
1,009,066

 
744,214

Wholesale/brokered certificates of deposit
 
584,574

 
401,611

 
373,709

Total interest-bearing
 
5,291,282

 
5,162,614

 
3,879,687

Total deposits
 
$
8,715,175

 
$
8,658,351

 
$
6,192,273

 
 
 
 
 
 
 
Cost of deposits
 
0.63
%
 
0.55
%
 
0.39
%
Noninterest-bearing deposits as a percent of total deposits
 
39

 
40

 
37

Non-maturity deposits as a percent of total deposits
 
82

 
84

 
82


Borrowings

At March 31, 2019, total borrowings amounted to $720.0 million, a decrease of $58.0 million, or 7.5%, from December 31, 2018 and an increase of $131.3 million, or 22.3%, from March 31, 2018. Total borrowings for the quarter included $609.6 million of advances from the Federal Home Loan Bank of San Francisco ("FHLB") and $110.4 million of subordinated debt. At March 31, 2019, total borrowings represented 6.2% of total assets, compared to 6.8% and 7.3%, as of December 31, 2018 and March 31, 2018, respectively.


9



Capital Ratios
 
At March 31, 2019, our ratio of tangible common equity to total assets was 10.32%, compared with 10.02% at December 31, 2018, and 9.63% at March 31, 2018, with a tangible book value per share of $17.56, compared with $16.97 at December 31, 2018 and $15.63 at March 31, 2018.

At March 31, 2019, the Company had a tier 1 leverage ratio of 10.69%, common equity tier 1 capital ratio of 11.08%, tier 1 capital ratio of 11.32% and total capital ratio of 12.58%.

At March 31, 2019, the Bank exceeded all regulatory capital requirements with a tier 1 leverage ratio of 11.39%, common equity tier 1 capital ratio of 12.07%, tier 1 capital ratio of 12.07% and total capital ratio of 12.49%. 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.

 
 
March 31,
 
December 31,
 
March 31,
Capital Ratios
 
2019
 
2018
 
2018
Pacific Premier Bancorp, Inc. Consolidated
 
 

 
 

 
 

Tier 1 leverage ratio
 
10.69
%
 
10.38
%
 
10.10
%
Common equity tier 1 capital ratio
 
11.08

 
10.88

 
10.67

Tier 1 capital ratio
 
11.32

 
11.13

 
10.96

Total capital ratio
 
12.58

 
12.39

 
12.64

Tangible common equity ratio (1)
 
10.32

 
10.02

 
9.63

 
 
 
 
 
 
 
Pacific Premier Bank
 
 
Tier 1 leverage ratio
 
11.39
%
 
11.06
%
 
11.00
%
Common equity tier 1 capital ratio
 
12.07

 
11.87

 
11.93

Tier 1 capital ratio
 
12.07

 
11.87

 
11.93

Total capital ratio
 
12.49

 
12.28

 
12.39

 
 
 
 
 
 
 
Share Data
 
 

 
 

 
 

Book value per share
 
$
31.97

 
$
31.52

 
$
27.12

Tangible book value per share (1)
 
17.56

 
16.97

 
15.63

Closing stock price (2)
 
26.53

 
25.52

 
40.20

Shares issued and outstanding
 
62,773,299

 
62,480,755

 
46,527,566

Market Capitalization (3)
 
$
1,665,376

 
$
1,594,509

 
$
1,870,408

 
(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 April 19, 2019, the Company's Board of Directors declared a $0.22 per share dividend, payable on May 15, 2019 to stockholders of record on May 1, 2019. The Company did not repurchase any shares under the recently approved stock repurchase program, which authorized the repurchase of up to $100 million of its common stock.

10



Conference Call and Webcast
 
The Company will host a conference call at 9:00 a.m. PT / 12:00 p.m. ET on April 23, 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 April 30, 2019 at (877) 344-7529, conference ID 10130038.

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 $11.6 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, 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 re 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, such as our recent acquisition of Grandpoint Capital Inc., 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; The effect of changes in accounting policies and practices, as may be adopted from time-to-time by bank regulatory agencies, the U.S. Securities and Exchange Commission (“SEC”), the Public Company Accounting Oversight Board, the Financial Accounting Standards Board or other accounting standards setters; possible 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 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

11



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).

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 and Chief Financial Officer
(949) 864-8000


12



PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(dollars in thousands)
(Unaudited)
 
 
March 31,
 
December 31,
 
September 30,
 
June 30,
 
March 31,
ASSETS
 
2019
 
2018
 
2018
 
2018
 
2018
Cash and due from banks
 
$
122,947

 
$
125,036

 
$
151,983

 
$
96,224

 
$
110,480

Interest-bearing deposits with financial institutions
 
55,435

 
78,370

 
111,229

 
35,244

 
15,576

Cash and cash equivalents
 
178,382

 
203,406

 
263,212

 
131,468

 
126,056

Interest-bearing time deposits with financial institutions
 
5,896

 
6,143

 
6,386

 
6,633

 
6,633

Investments held-to-maturity, at amortized cost
 
43,894

 
45,210

 
46,385

 
31,965

 
24,559

Investment securities available-for-sale, at fair value
 
1,171,410

 
1,103,222

 
1,054,877

 
874,700

 
863,243

FHLB, FRB and other stock, at cost
 
94,751

 
94,918

 
98,779

 
69,663

 
69,567

Loans held for sale, at lower of cost or fair value
 
11,671

 
5,719

 
52,880

 
13,879

 
29,034

Loans held for investment
 
8,865,855

 
8,836,818

 
8,759,204

 
6,277,586

 
6,241,841

Allowance for loan losses
 
(37,856
)
 
(36,072
)
 
(33,306
)
 
(31,747
)
 
(30,502
)
Loans held for investment, net
 
8,827,999

 
8,800,746

 
8,725,898

 
6,245,839

 
6,211,339

Accrued interest receivable
 
40,302

 
37,837

 
37,683

 
27,420

 
27,073

Other real estate owned
 
180

 
147

 
356

 
220

 
206

Premises and equipment
 
61,523

 
64,691

 
66,103

 
54,049

 
53,146

Deferred income taxes, net
 
9,275

 
15,627

 
26,848

 
17,183

 
13,941

Bank owned life insurance
 
111,400

 
110,871

 
110,354

 
76,937

 
76,454

Intangible assets
 
96,120

 
100,556

 
105,187

 
37,938

 
40,740

Goodwill
 
808,726

 
808,726

 
807,892

 
494,672

 
493,785

Other assets
 
118,966

 
89,568

 
101,041

 
75,565

 
51,040

Total assets
 
$
11,580,495

 
$
11,487,387

 
$
11,503,881

 
$
8,158,131

 
$
8,086,816

LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 

 
 
 
 

 
 
 
 
LIABILITIES:
 
 

 
 
 
 

 
 
 
 
Deposit accounts:
 
 

 
 
 
 

 
 
 
 
Noninterest-bearing checking
 
$
3,423,893

 
$
3,495,737

 
$
3,434,674

 
$
2,349,464

 
$
2,312,586

Interest-bearing:
 
 
 
 
 
 
 
 
 
 
Checking
 
560,274

 
526,088

 
495,483

 
342,986

 
355,895

Money market/savings
 
3,138,875

 
3,225,849

 
3,261,544

 
2,446,849

 
2,405,869

Retail certificates of deposit
 
1,007,559

 
1,009,066

 
1,045,334

 
823,425

 
744,214

Wholesale/brokered certificates of deposit
 
584,574

 
401,611

 
265,110

 
345,626

 
373,709

Total interest-bearing
 
5,291,282

 
5,162,614

 
5,067,471

 
3,958,886

 
3,879,687

Total deposits
 
8,715,175

 
8,658,351

 
8,502,145

 
6,308,350

 
6,192,273

FHLB advances and other borrowings
 
609,591

 
667,681

 
861,972

 
379,100

 
483,525

Subordinated debentures
 
110,381

 
110,313

 
110,244

 
105,253

 
105,188

Accrued expenses and other liabilities
 
138,284

 
81,345

 
113,143

 
76,903

 
43,922

Total liabilities
 
9,573,431

 
9,517,690

 
9,587,504

 
6,869,606

 
6,824,908

STOCKHOLDERS’ EQUITY:
 
 

 
 

 
 

 
 

 
 

Common stock
 
617

 
617

 
617

 
459

 
472

Additional paid-in capital
 
1,676,024

 
1,674,274

 
1,671,673

 
1,067,907

 
1,065,218

Retained earnings
 
325,363

 
300,407

 
260,764

 
232,372

 
205,069

Accumulated other comprehensive (loss) income
 
5,060

 
(5,601
)
 
(16,677
)
 
(12,213
)
 
(8,851
)
Total stockholders' equity
 
2,007,064

 
1,969,697

 
1,916,377

 
1,288,525

 
1,261,908

Total liabilities and stockholders' equity
 
$
11,580,495

 
$
11,487,387

 
$
11,503,881

 
$
8,158,131

 
$
8,086,816


13



PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in thousands, except per share data)
(Unaudited)
 
 
Three Months Ended
 
 
March 31,
 
December 31,
 
March 31,
 
 
2019
 
2018
 
2018
INTEREST INCOME
 
 

 
 

 
 

Loans
 
$
121,476

 
$
126,341

 
$
84,173

Investment securities and other interest-earning assets
 
9,767

 
9,680

 
6,654

Total interest income
 
131,243

 
136,021

 
90,827

INTEREST EXPENSE
 
 
 
 
 
 
Deposits
 
13,284

 
12,041

 
5,914

FHLB advances and other borrowings
 
4,802

 
4,701

 
2,023

Subordinated debentures
 
1,751

 
1,733

 
1,609

Total interest expense
 
19,837

 
18,475

 
9,546

Net interest income before provision for credit losses
 
111,406

 
117,546

 
81,281

Provision for credit losses
 
1,526

 
2,258

 
2,253

Net interest income after provision for credit losses
 
109,880

 
115,288

 
79,028

NONINTEREST INCOME
 
 
 
 
 
 
Loan servicing fees
 
398

 
408

 
345

Service charges on deposit accounts
 
1,330

 
1,351

 
1,150

Other service fee income
 
356

 
270

 
146

Debit card interchange fee income
 
1,071

 
1,139

 
1,036

Earnings on BOLI
 
910

 
929

 
611

Net gain from sales of loans
 
1,729

 
1,929

 
2,958

Net gain from sales of investment securities
 
427

 

 
6

Other income
 
1,460

 
944

 
1,414

Total noninterest income
 
7,681

 
6,970

 
7,666

NONINTEREST EXPENSE
 
 
 
 
 
 
Compensation and benefits
 
33,388

 
33,838

 
28,873

Premises and occupancy
 
7,535

 
7,504

 
4,781

Data processing
 
2,930

 
3,868

 
2,702

Other real estate owned operations, net
 
3

 
1

 
1

FDIC insurance premiums
 
800

 
750

 
611

Legal, audit and professional expense
 
2,998

 
3,105

 
1,839

Marketing expense
 
1,497

 
1,700

 
1,530

Office, telecommunications and postage expense
 
1,210

 
1,579

 
1,080

Loan expense
 
873

 
1,046

 
591

Deposit expense
 
3,583

 
3,105

 
1,676

Merger-related expense
 
655

 
2,597

 
936

CDI amortization
 
4,436

 
4,631

 
2,274

Other expense
 
3,669

 
3,515

 
2,914

Total noninterest expense
 
63,577

 
67,239

 
49,808

Net income before income taxes
 
53,984

 
55,019

 
36,886

Income tax
 
15,266

 
15,376

 
8,884

Net income
 
$
38,718

 
$
39,643

 
$
28,002

EARNINGS PER SHARE
 
 
 
 
 
 
Basic
 
$
0.62

 
$
0.64

 
$
0.61

Diluted
 
$
0.62

 
$
0.63

 
$
0.60

WEIGHTED AVERAGE SHARES OUTSTANDING
 
 
 
 
 
 
Basic
 
61,987,605

 
61,917,184

 
45,893,496

Diluted
 
62,285,783

 
62,457,100

 
46,652,059


14



SELECTED FINANCIAL DATA

PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED AVERAGE BALANCES AND YIELD DATA
 
 
 
 
 
Three Months Ended
 
 
March 31, 2019
 
December 31, 2018
 
March 31, 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
 
$
173,613

 
$
378

 
0.88
%
 
$
230,377

 
$
634

 
1.09
%
 
$
167,236

 
$
313

 
0.76
%
Investment securities
 
1,298,476

 
9,389

 
2.89

 
1,243,240

 
9,046

 
2.91

 
919,526

 
6,341

 
2.76

Loans receivable, net (1)(2)
 
8,867,159

 
121,476

 
5.56

 
8,909,407

 
126,341

 
5.63

 
6,237,968

 
84,173

 
5.47

Total interest-earning assets
 
10,339,248

 
131,243

 
5.15

 
10,383,024

 
136,021

 
5.20

 
7,324,730

 
90,827

 
5.03

Noninterest-earning assets
 
1,224,281

 
 
 
 
 
1,199,343

 
 
 
 
 
720,569

 
 
 
 
Total assets
 
$
11,563,529

 
 
 
 
 
$
11,582,367

 
 
 
 
 
$
8,045,299

 
 
 
 
Liabilities and Equity
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing deposits:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest checking
 
$
536,117

 
$
474

 
0.36
%
 
$
521,778

 
$
456

 
0.35
%
 
$
348,110

 
$
114

 
0.13
%
Money market
 
2,912,819

 
6,534

 
0.91

 
2,963,437

 
6,074

 
0.81

 
2,189,912

 
3,159

 
0.59

Savings
 
249,621

 
86

 
0.14

 
258,634

 
98

 
0.15

 
223,992

 
79

 
0.14

Retail certificates of deposit
 
1,001,344

 
4,058

 
1.64

 
1,025,311

 
3,842

 
1.49

 
713,290

 
1,388

 
0.79

Wholesale/brokered certificates of deposit
 
373,822

 
2,132

 
2.31

 
296,345

 
1,571

 
2.10

 
377,549

 
1,174

 
1.26

Total interest-bearing deposits
 
5,073,723

 
13,284

 
1.06

 
5,065,505

 
12,041

 
0.94

 
3,852,853

 
5,914

 
0.62

FHLB advances and other borrowings
 
770,331

 
4,802

 
2.53

 
795,029

 
4,701

 
2.35

 
508,142

 
2,023

 
1.61

Subordinated debentures
 
110,340

 
1,751

 
6.35

 
110,271

 
1,733

 
6.29

 
105,153

 
1,609

 
6.12

Total borrowings
 
880,671

 
6,553

 
3.02

 
905,300

 
6,434

 
2.82

 
613,295

 
3,632

 
2.40

Total interest-bearing liabilities
 
5,954,394

 
19,837

 
1.35

 
5,970,805

 
18,475

 
1.23

 
4,466,148

 
9,546

 
0.87

Noninterest-bearing deposits
 
3,480,791

 
 
 
 
 
3,571,119

 
 
 
 
 
2,262,895

 
 
 
 
Other liabilities
 
136,483

 
 
 
 
 
95,820

 
 
 
 
 
60,627

 
 
 
 
Total liabilities
 
9,571,668

 
 
 
 
 
9,637,744

 
 
 
 
 
6,789,670

 
 
 
 
Stockholders' equity
 
1,991,861

 
 
 
 
 
1,944,623

 
 
 
 
 
1,255,629

 
 
 
 
Total liabilities and equity
 
$
11,563,529

 
 
 
 
 
$
11,582,367

 
 
 
 
 
$
8,045,299

 
 
 
 
Net interest income
 
 
 
$
111,406

 
 
 
 
 
$
117,546

 
 
 
 
 
$
81,281

 
 
Net interest margin (3)
 
 
 
 
 
4.37
%
 
 
 
 
 
4.49
%
 
 
 
 
 
4.50
%
Cost of deposits
 
 
 
 
 
0.63

 
 
 
 
 
0.55

 
 
 
 
 
0.39

Cost of funds (4)
 
 
 
 
 
0.85

 
 
 
 
 
0.77

 
 
 
 
 
0.58

Ratio of interest-earning assets to interest-bearing liabilities
 
173.64

 
 
 
 
 
173.90

 
 
 
 
 
164.01

 
(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 $3.8 million, $6.3 million and $3.7 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.


15



PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES
LOAN PORTFOLIO COMPOSITION
 
 
 
 
 
 
 
 
 
 
 
 
 
March 31,
 
December 31,
 
September 30,
 
June 30,
 
March 31,
 
 
2019
 
2018
 
2018
 
2018
 
2018
 
 
(dollars in thousands)
Business loans
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
 
$
1,336,520

 
$
1,364,423

 
$
1,359,841

 
$
1,102,586

 
$
1,062,385

Franchise
 
813,057

 
765,416

 
735,366

 
708,957

 
692,846

Commercial owner occupied
 
1,648,762

 
1,679,122

 
1,675,528

 
1,310,722

 
1,268,869

SBA
 
188,757

 
193,882

 
193,487

 
176,696

 
182,626

Agribusiness
 
134,603

 
138,519

 
133,241

 
136,962

 
149,256

    Total business loans
 
4,121,699

 
4,141,362

 
4,097,463

 
3,435,923

 
3,355,982

Real estate loans
 
 
 
 
 
 
 
 
 
 
Commercial non-owner occupied
 
2,124,250

 
2,003,174

 
1,931,165

 
1,219,747

 
1,227,693

Multi-family
 
1,511,942

 
1,535,289

 
1,554,692

 
805,494

 
817,963

One-to-four family
 
279,467