EX-99.1 2 e19328ex99_1.htm PRESS RELEASE

Exhibit 99.1

Pacific Premier Bancorp, Inc. Announces Third Quarter
and Year-to-Date 2004 Results

        COSTA MESA, Calif., Oct. 19 /PRNewswire-FirstCall/ -- Pacific Premier Bancorp, Inc. (Nasdaq: PPBI) (the “Company”), the holding company of Pacific Premier Bank, F.S.B. (the “Bank”), announced its results of operations for the quarter and nine months ended September 30, 2004. The Company recorded third quarter net income of $1.2 million, or $0.17 per diluted share, compared to net income of $724,000, or $0.28 per diluted share, for the third quarter of 2003. The net income for the nine months ended September 30, 2004 was $5.4 million, or $0.82 per diluted share, compared to net income of $1.3 million, or $0.52 per diluted share, for the nine months ended September 30, 2003. All diluted earnings per share amounts have been adjusted to reflect warrants and stock options outstanding. The Company’s basic and diluted book value per share increased to $8.13 and $6.89, respectively, at September 30, 2004, $1.03 and $0.91 higher than at December 31, 2003.

        Return on average assets (ROAA) for the nine months ended September 30, 2004 was 1.85%, compared to 0.73% for the same period in 2003. The Company’s return on average equity (ROAE) for the nine months ended September 30, 2004 was 17.92% compared to 15.50% for the nine months ended September 30, 2003.

        Steven R. Gardner, the Company’s President and Chief Executive Officer, stated, “During the third quarter, we continued to move forward with the transition of the Bank to a community banking platform. We launched on-line banking and cash management services, we hired a commercial lending manager and made organizational changes, which involved the segregation of the production and credit functions. Through the naming of a Chief Lending Officer and the hiring of a replacement Chief Credit Officer, we expect to increase both loan and core deposit production in future periods. Our third quarter loan originations totaled $78.1 million, while our pipeline grew to $98.5 million.” Mr. Gardner further stated, “We have agreed to settle or resolve most of our outstanding litigation, including the Funke class action lawsuit. These settlements, along with the continuing decline in non- performing assets, are expected to significantly lower our legal expense in the coming quarters.”

        For the three and nine months ended September 30, 2004, net interest income increased to $3.8 million and $11.6 million, respectively, from $2.3 million and $6.6 million for the same periods a year earlier. The increase is predominately attributable to an increase in average loans outstanding of $147.3 million over the prior year period as well as an overall reduction in interest expense. The Company’s average net interest margin for the quarter and nine months ended September 30, 2004 was 3.63% and 4.12%, respectively, compared to 3.86% and 3.88% for the same periods a year ago. The increase in the net interest margin for the nine months ended September 30, 2004, compared to the prior year period was primarily attributable to a decrease in the average cost of funds of 130 basis points, which was partially offset by a decrease in the average yield on loans of 111 basis points. The decrease in loan yield is due to the origination of higher quality apartment loans coupled with the lower overall interest rate environment and the runoff of the Bank’s discontinued higher yielding subprime loans. The discount accretion from the Participation Contract included in interest income for the three and nine months ended September 30, 2004 was $371,000 and $1.9 million, respectively, compared to $846,000 and $2.4 million for the same periods a year earlier. The amount of discount accretion was reduced in the third quarter of 2004 due to the sale of the 1998-1 residual interest component of the Participation Contract in the first quarter of 2004 and the termination of the 1997-2 securitization during August 2004. The Bank’s net interest margin, which does not include the accretion income from the Participation Contract, was 3.35% and 3.50% for the three and nine months ended September 30, 2004, compared to 3.41% and 3.49% for the same periods a year earlier.

        The provision for loan losses was $195,000 and $460,000 for the three and nine months ended September 30, 2004, compared to ($1,000) and $680,000 for the same periods in 2003. The decrease in the provision for the nine months ended September 30, 2004 is primarily due to a reduction in net charge-offs from $1.4 million for the nine months ended September 30, 2003 to $41,000 for the same period of 2004.

        Noninterest income was $761,000 and $3.2 million for the three and nine months September 30, 2004, compared to $575,000 and $1.9 million for the same periods ended September 30, 2003. The increase in noninterest income over the three month periods is primarily due to a $387,000 gain on sale from the termination of the 1997-2 residual interest component of the Participation Contract and the simultaneous sale of its performing assets in August 2004. The Company still owns a 50% interest in the securitization’s charged-off loans.

        Noninterest expenses were $3.0 million and $8.5 million for the three and nine months ended September 30, 2004, respectively, compared to $2.3 million and $7.1 million for the same periods ended September 30, 2003. The $706,000 and $1.4 million increases were primarily due to increases in compensation attributed to the Bank’s hiring of additional lending personnel, severance costs associated with the departure of the Bank’s Director of Branch Banking and an additional $250,000 in legal expenses relating to the resolution of the Funke class action lawsuit.

        At September 30, 2004, the Company had 77 full-time equivalent employees.

        The Company’s income tax provision for the three and nine months ended September 30, 2004 was $219,000 and $425,000, respectively. For the same periods a year earlier, the Company had tax benefits of $197,000 and $594,000, respectively. The Company benefited from a reduction in its valuation allowance for deferred taxes in the three and nine months ended September 30, 2004 and for the three and nine months ended September 30, 2003 of $61,000, $1.7 million, $200,000 and $600,000, respectively. The Company’s valuation allowance for deferred taxes was $3.7 million at September 30, 2004.

        Total assets of the Company were $488.1 million as of September 30, 2004, compared to $309.4 million as of December 31, 2003. The $178.7 million or 58% increase in total assets was the result of increases of $158.3 million in net loans and $22.0 million in Federal funds sold, which were partially offset by a decrease in the Participation Contract of $4.9 million. The increase in net loans was the result of $215.7 million in new adjustable-rate loans being funded during the first three quarters of 2004 with $78.1 million funded in the third quarter. The Bank’s loan pipeline was $98.5 million as of September 30, 2004.

        The allowance for loan losses increased by $419,000 to $2.4 million as of September 30, 2004, compared to December 31, 2003. The allowance for loan losses as a percent of non-accrual loans was 94% and 73% as of September 30, 2004 and December 31, 2003, respectively. Net non-accrual loans and other real estate owned were $2.2 million and $282,000, respectively, at September 30, 2004, down from $2.4 million and $979,000, respectively, as of December 31, 2003. The ratio of net nonperforming assets to total assets at September 30, 2004 was 0.52%.

        Total deposits increased by $57.1 million to $278.5 million at September 30, 2004, compared to $221.4 million at December 31, 2003. The increase in deposits was comprised of an increase of $54.6 million of certificates of deposit and $2.5 million in transaction accounts. The cost of deposits as of September 30, 2004 was 2.10%.

        At September 30, 2004, total borrowings of the Company were comprised of the Bank’s $143.5 million of FHLB term borrowings, $8.4 million of other borrowings and the Company’s $10.3 million of trust preferred securities. The total cost of the Company’s borrowings at September 30, 2004 was 2.12%, compared to 1.85% at December 31, 2003. The Company’s total cost of funds for the nine months ended September 30, 2004 was 1.97%, compared to 2.54% for the nine months ended September 30, 2003.

        The Bank’s tier 1 capital and total risk-based capital ratios at September 30, 2004 were 9.09% and 13.64%, respectively. The minimum ratios for well-capitalized banks are 5% and 10% for tier 1 capital and risk-based capital, respectively. The Bank’s total equity capital was $44.0 million at September 30, 2004.

        The Company is a savings and loan holding company that owns 100% of the capital stock of the Bank, the Company’s operating subsidiary. The Bank is a federally chartered stock savings bank whose primary business is community banking. The Bank currently operates three full-service branches in Southern California located in the cities of San Bernardino, Seal Beach and Huntington Beach.

  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. There can be no assurance that future developments affecting the Company will be the same as those anticipated by management. Actual results may differ from those projected in the forward-looking statements. These forward-looking statements involve risks and uncertainties. These include, but are not limited to, the following risks: (1) changes in the performance of the financial markets, (2) changes in the demand for and market acceptance of the Company’s products and services, (3) changes in general economic conditions including interest rates, presence of competitors with greater financial resources, and the impact of competitive projects and pricing, (4) the effect of the Company’s policies, (5) the continued availability of adequate funding sources, (6) various legal, regulatory and litigation risks.

        For further information please contact: Steven R. Gardner, President/CEO, or John Shindler, Senior Vice President/CFO, both of Pacific Premier Bancorp, Inc., +1-714-431-4000

PACIFIC PREMIER BANCORP
AND SUBSIDIARY CONSOLIDATED BALANCE SHEET
UNAUDITED (In thousands)

ASSETS   September 30,
2004		 December 31,
2003
  Cash and due from banks   $     4,324   $     2,440  
  Federal Funds Sold   22,000   —  
    26,324   2,440  
  Investment securities available for sale   36,587   39,845  
  Investment securities held to maturity   6,745   2,430  
  Loans held for sale   615   804  
  Loans held for investment, net of  
   allowance for loan losses of $2,403  
   in 2004 and $1,984 in 2003 respectively   405,238   246,796  
  Accrued interest receivable   1,662   1,122  
  Foreclosed real estate   282   979  
  Premises and equipment   5,172   5,330  
  Deferred income taxes   3,446   2,950  
  Participation Contract   1,105   5,977  
  Other assets   969   695  
     Total assets   $ 488,145   $ 309,368  
LIABILITIES AND STOCKHOLDERS’ EQUITY  
LIABILITIES:  
  Deposit accounts   $ 278,535   $ 221,447  
  Other borrowings   151,900   48,600  
  Subordinated debentures   10,310   —  
  Accrued expenses and other liabilities   4,622   1,989  
     Total liabilities   445,367   272,036  
STOCKHOLDERS’ EQUITY:  
  Common stock, $.01 par value   53   53  
  Additional paid-in capital   67,564   67,546  
  Accumulated deficit   (24,596 ) (30,021 )
  Accumulated adjustments to  
   stockholders’ equity   (243 ) (246 )
     Total stockholders’ equity   42,778   37,332  
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY   $ 488,145   $ 309,368  

PACIFIC PREMIER BANCORP AND SUBSIDIARY
CONSOLIDATED INCOME STATEMENT
UNAUDITED (In thousands, except per share data)

    Three Months Ended Nine Months Ended
    September 30,
2004		 September 30,
2003		 September 30,
2004		 September 30,
2003
INTEREST INCOME:          
 Loans   $        5,123   $        3,032   $      13,820   $        8,983  
 Other interest-  
  earning assets   804   1,141   3,072   3,362  
    Total  
     interest  
     income   5,927   4,173   16,892   12,345  
INTEREST EXPENSE:  
 Interest-bearing  
  deposits   1,440   1,230   3,948   3,771  
 Other borrowings   530   119   1,116   373  
 Notes payable   —   485   —   1,440  
 Subordinated  
  debentures   112   52   218   158  
    Total  
     interest  
     expense   2,082   1,886   5,282   5,742  
NET INTEREST  
 INCOME   3,845   2,287   11,610   6,603  
PROVISION  
 (BENEFIT) FOR  
 LOAN LOSSES   195   (1 ) 460   680  
NET INTEREST  
 INCOME AFTER  
 PROVISION FOR  
 LOAN LOSSES   3,650   2,288   11,150   5,923  
NONINTEREST INCOME:  
 Loan servicing  
  fee income   139   86   382   459  
 Bank and other  
  fee income   154   124   447   332  
 Net gain from  
  loan sales   47   122   105   329  
 Net gain from  
  investment  
  securities   358   —   1,931   143  
 Other income   63   243   379   683  
    Total  
     noninterest  
     income   761   575   3,244   1,946  
NONINTEREST EXPENSE:  
 Compensation  
  and benefits   1,842   1,321   5,106   3,661  
 Premises and  
  occupancy   333   352   1,030   1,060  
 Data processing   80   99   233   296  
 Net (gain) loss  
  on foreclosed  
  real estate   (54 ) 25   (13 ) 76  
 Other expense   841   539   2,188   2,041  
    Total  
     noninterest  
     expense   3,042   2,336   8,544   7,134  
NET INCOME  
 BEFORE TAXES   1,369   527   5,850   735  
PROVISION FOR  
 (BENEFIT FROM)  
 INCOME TAXES   219   (197 ) 425   (594 )
NET INCOME FROM  
 OPERATIONS   $        1,150   $           724   $        5,425   $        1,329  
Basic Average  
 Shares  
 Outstanding   5,256,427   1,333,572   5,255,527   1,333,572  
Basic  
 Earnings  
 per Share   $          0.22   $          0.54   $          1.03   $          1.00  
Diluted Average  
 Shares  
 Outstanding   6,652,867   2,581,635   6,596,092   2,561,829  
Diluted  
 Earnings  
 per Share   $          0.17   $          0.28   $          0.82   $          0.52  

PACIFIC PREMIER BANCORP AND SUBSIDIARY
Statistical Information
UNAUDITED (In thousands)

    As of
September 30,
2004		 As of
December 31,
2003		 As of
September 30,
2003
Asset Quality:        
Non-accrual loans,  
 net of specific allowance   $     2,235   $    2,430   $    2,356  
Nonperforming assets,  
 net of specific allowance   $     2,517   $    3,453   $    3,660  
Real estate owned   $        282   $       979   $    1,281  
Net charge-offs (recoveries)  
 for the quarter ended   $        (13 ) $       131   $       514  
Allowance for loan losses   $    2,403   $    1,984   $    2,141  
Net charge-offs to average  
 loans, annualized   -0.01%   0.25 % 1.11 %
Non-accrual loans to  
 total loans   0.55 % 1.09 % 1.40 %
Non-accrual loans to  
 total assets   0.46 % 0.88 % 1.06 %
Allowance for credit  
 losses to total loans   0.59 % 0.79 % 1.10 %
Allowance for credit  
 losses to non-accrual loans   94.35 % 72.67 % 78.86 %
Average Balance Sheet:  
 for the Quarter ended  
Total assets   $ 438,693   $279,734   $251,477  
Loans   $ 373,262   $211,065   $185,669  
Deposits   $ 275,806   $214,796   $206,743  
Borrowings   $ 106,601   $  28,432   $  18,060  
Notes payable  
 Subordinated notes   $   10,310   $    2,269   $  13,025  
Share Data:  
Basic Book Value   $       8.13   $      7.10   $      9.23  
Diluted Book Value   $       6.89   $      5.98   $      5.26  
Closing Stock Price   $     11.83   $    11.09   $      7.09  
Pacific Premier Bank  
 Capital Ratios:  
Tier 1 Capital Ratio   9.09 % 8.94 % 6.73 %
Total Risk-based  
 Capital Ratio   13.64 % 13.22 % 10.83 %
Loan Portfolio  
Real Estate Loans:  
Multi-family   $ 339,341   $188,939   $126,102  
Commercial   42,401   20,667   21,029  
Construction and Land   --   3,646   4,458  
One-to-four family   25,266   36,632   43,780  
Other Loans   82   233   192  
Total Gross Loans   $ 407,090   $250,117   $195,561  

 

   
    9 months ended
September 30, 2004		 9 months ended
September 30, 2003
Profitability and      
 Productivity:  
Return on average assets   1.85 % 0.73 %
Return on average equity   17.92 % 15.50 %
Net interest margin   4.12 % 3.88 %
Non-interest expense to  
 total assets   233 % 370 %
Efficiency ratio   57.61 % 82.56 %

SOURCE Pacific Premier Bancorp, Inc.

        -0- 10/19/2004

        /CONTACT: Steven R. Gardner, President/CEO, or John Shindler, Senior Vice
President/CFO, both of Pacific Premier Bancorp, Inc., +1-714-431-4000/

        /Web site: http://www.ppbi.net /
        (PPBI)

CO: Pacific Premier Bancorp, Inc.; Pacific Premier Bank, F.S.B.
ST: California
IN: FIN
SU: ERN