UNITED STATES SECURITIES AND EXCHANGE COMMISSION
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(X)
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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DELAWARE
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33-0743196
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(State or other jurisdiction of incorporation or organization)
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(I.R.S Employer Identification No.)
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17901 VON KARMAN AVENUE, SUITE 1200, IRVINE, CALIFORNIA 92614
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(Address of principal executive offices and zip code)
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(949) 864-8000
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(Registrant’s telephone number, including area code)
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Large accelerated filer
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[ ]
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Accelerated filer
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[X]
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Non-accelerated filer
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[ ]
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Smaller reporting company
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[ ]
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(Do not check if a smaller
reporting company)
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PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES
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||||||||||||
(dollars in thousands, except share data)
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||||||||||||
ASSETS
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June 30, 2013
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December 31, 2012
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June 30, 2012
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|||||||||
(Unaudited)
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(Audited)
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(Unaudited)
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||||||||||
Cash and due from banks
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$ | 103,946 | $ | 59,325 | $ | 64,945 | ||||||
Federal funds sold
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26 | 27 | 27 | |||||||||
Cash and cash equivalents
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103,972 | 59,352 | 64,972 | |||||||||
Investment securities available for sale
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313,047 | 84,066 | 146,134 | |||||||||
FHLB/Federal Reserve Bank/TIB stock, at cost
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11,917 | 11,247 | 12,744 | |||||||||
Loans held for sale, net
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3,617 | 3,681 | 2,401 | |||||||||
Loans held for investment
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1,055,430 | 982,207 | 795,319 | |||||||||
Allowance for loan losses
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(7,994 | ) | (7,994 | ) | (7,658 | ) | ||||||
Loans held for investment, net
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1,047,436 | 974,213 | 787,661 | |||||||||
Accrued interest receivable
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5,766 | 4,126 | 3,968 | |||||||||
Other real estate owned
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1,186 | 2,258 | 9,339 | |||||||||
Premises and equipment
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9,997 | 8,575 | 9,429 | |||||||||
Deferred income taxes
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8,644 | 6,887 | 5,585 | |||||||||
Bank owned life insurance
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23,674 | 13,485 | 13,240 | |||||||||
Intangible assets
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7,135 | 2,626 | 2,781 | |||||||||
Goodwill
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18,234 | - | - | |||||||||
Other assets
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3,833 | 3,276 | 6,781 | |||||||||
TOTAL ASSETS
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$ | 1,558,458 | $ | 1,173,792 | $ | 1,065,035 | ||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
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LIABILITIES:
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||||||||||||
Deposit accounts:
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||||||||||||
Noninterest bearing
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$ | 345,063 | $ | 213,636 | $ | 150,538 | ||||||
Interest bearing:
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||||||||||||
Transaction accounts
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631,951 | 329,925 | 327,556 | |||||||||
Retail certificates of deposit
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332,015 | 361,207 | 435,097 | |||||||||
Wholesale certificates of deposit
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5,160 | - | - | |||||||||
Total deposits
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1,314,189 | 904,768 | 913,191 | |||||||||
FHLB advances and other borrowings
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48,082 | 115,500 | 28,500 | |||||||||
Subordinated debentures
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10,310 | 10,310 | 10,310 | |||||||||
Accrued expenses and other liabilities
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17,066 | 8,697 | 16,965 | |||||||||
TOTAL LIABILITIES
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1,389,647 | 1,039,275 | 968,966 | |||||||||
STOCKHOLDERS’ EQUITY:
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||||||||||||
Common stock, $.01 par value; 25,000,000 shares authorized; 16,635,786 shares at June 30, 2013, 13,661,648 shares at December 31, 2012, and 10,329,934 shares at June 30, 2012 issued and outstanding
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166 | 137 | 103 | |||||||||
Additional paid-in capital
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142,759 | 107,453 | 76,258 | |||||||||
Retained earnings
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27,545 | 25,822 | 18,549 | |||||||||
Accumulated other comprehensive income (loss), net of tax (benefit) of ($1,160) at June 30, 2013, $772 at December 31, 2012, and $810 at June 30, 2012
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(1,659 | ) | 1,105 | 1,159 | ||||||||
TOTAL STOCKHOLDERS’ EQUITY
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168,811 | 134,517 | 96,069 | |||||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
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$ | 1,558,458 | $ | 1,173,792 | $ | 1,065,035 |
PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES
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||||||||||||||||
(dollars in thousands, except per share data)
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||||||||||||||||
(unaudited)
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||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, 2013
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June 30, 2012
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June 30, 2013
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June 30, 2012
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INTEREST INCOME
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Loans
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$ | 13,688 | $ | 12,098 | $ | 27,084 | $ | 23,335 | ||||||||
Investment securities and other interest-earning assets
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1,248 | 948 | 2,087 | 1,827 | ||||||||||||
Total interest income
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14,936 | 13,046 | 29,171 | 25,162 | ||||||||||||
INTEREST EXPENSE
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Interest-bearing deposits:
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||||||||||||||||
Interest on transaction accounts
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280 | 223 | 498 | 552 | ||||||||||||
Interest on certificates of deposit
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753 | 1,224 | 1,554 | 2,651 | ||||||||||||
Total interest-bearing deposits
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1,033 | 1,447 | 2,052 | 3,203 | ||||||||||||
FHLB advances and other borrowings
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238 | 235 | 478 | 470 | ||||||||||||
Subordinated debentures
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76 | 82 | 153 | 166 | ||||||||||||
Total interest expense
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1,347 | 1,764 | 2,683 | 3,839 | ||||||||||||
NET INTEREST INCOME BEFORE PROVISION FOR LOAN LOSSES
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13,589 | 11,282 | 26,488 | 21,323 | ||||||||||||
PROVISION FOR LOAN LOSSES
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322 | - | 618 | - | ||||||||||||
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES
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13,267 | 11,282 | 25,870 | 21,323 | ||||||||||||
NONINTEREST INCOME
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Loan servicing fees
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318 | 214 | 644 | 391 | ||||||||||||
Deposit fees
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457 | 472 | 897 | 973 | ||||||||||||
Net gain from sales of loans
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222 | 10 | 945 | 10 | ||||||||||||
Net gain from sales of investment securities
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1,068 | 174 | 1,068 | 174 | ||||||||||||
Other-than-temporary impairment loss on investment securities, net
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(5 | ) | (45 | ) | (35 | ) | (82 | ) | ||||||||
Gain on FDIC transaction
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- | 5,340 | - | 5,340 | ||||||||||||
Other income
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371 | 364 | 636 | 662 | ||||||||||||
Total noninterest income
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2,431 | 6,529 | 4,155 | 7,468 | ||||||||||||
NONINTEREST EXPENSE
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Compensation and benefits
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5,687 | 3,947 | 10,784 | 7,467 | ||||||||||||
Premises and occupancy
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1,329 | 981 | 2,622 | 1,859 | ||||||||||||
Data processing and communications
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755 | 817 | 1,390 | 1,184 | ||||||||||||
Other real estate owned operations, net
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574 | 590 | 611 | 737 | ||||||||||||
FDIC insurance premiums
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196 | 168 | 336 | 301 | ||||||||||||
Legal, audit and professional expense
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249 | 552 | 844 | 1,038 | ||||||||||||
Marketing expense
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264 | 264 | 470 | 479 | ||||||||||||
Office and postage expense
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322 | 217 | 585 | 380 | ||||||||||||
Loan expense
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184 | 177 | 432 | 413 | ||||||||||||
Deposit expense
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515 | 34 | 675 | 98 | ||||||||||||
Merger related expense
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4,978 | - | 6,723 | - | ||||||||||||
Other expense
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803 | 458 | 1,563 | 890 | ||||||||||||
Total noninterest expense
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15,856 | 8,205 | 27,035 | 14,846 | ||||||||||||
NET INCOME (LOSS) BEFORE INCOME TAXES
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(158 | ) | 9,606 | 2,990 | 13,945 | |||||||||||
INCOME TAX
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91 | 3,795 | 1,267 | 5,442 | ||||||||||||
NET INCOME (LOSS)
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$ | (249 | ) | $ | 5,811 | $ | 1,723 | $ | 8,503 | |||||||
EARNINGS (LOSS) PER SHARE
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Basic
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$ | (0.02 | ) | $ | 0.56 | $ | 0.12 | $ | 0.82 | |||||||
Diluted
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$ | (0.02 | ) | $ | 0.55 | $ | 0.11 | $ | 0.80 | |||||||
WEIGHTED AVERAGE SHARES OUTSTANDING
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Basic
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15,516,537 | 10,329,934 | 14,939,179 | 10,332,935 | ||||||||||||
Diluted
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15,516,537 | 10,669,005 | 15,721,262 | 10,647,590 |
PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES
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(dollars in thousands)
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(unaudited)
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Three Months Ended
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Six Months Ended
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June 30,
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June 30,
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2013
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2012
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2013
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2012
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Net income (loss)
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$ | (249 | ) | $ | 5,811 | $ | 1,723 | $ | 8,503 | |||||||
Other comprehensive income (loss), net of tax (benefit):
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||||||||||||||||
Unrealized holding gains on securities arising during the period
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(6,548 | ) | 1,118 | (5,764 | ) | 1,256 | ||||||||||
Reclassification adjustment for net gain on sale of securities included in net income (1)
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1,068 | 174 | 1,068 | 174 | ||||||||||||
Income tax (benefit)
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(2,255 | ) | 532 | (1,932 | ) | 589 | ||||||||||
Net unrealized gain (loss) on securities, net of tax
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(3,225 | ) | 760 | (2,764 | ) | 841 | ||||||||||
Comprehensive income (loss)
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$ | (3,474 | ) | $ | 6,571 | $ | (1,041 | ) | $ | 9,344 | ||||||
(1) Income tax expense associated with the reclassification adjustment for the three months ended June 30, 2013 and 2012 was $438 and $71, respectively, and the six months ended June 30, 2013 and 2012 was $438 and $71, respectively.
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PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES
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FOR THE SIX MONTHS ENDED JUNE 30, 2013 AND 2012
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(dollars in thousands)
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(unaudited)
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Common Stock
Shares
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Common Stock
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Additional Paid-in Capital
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Accumulated Retained
Earnings
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Accumulated Other Comprehensive Income
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Total Stockholders’ Equity
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Balance at December 31, 2012
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13,661,648 | $ | 137 | $ | 107,453 | $ | 25,822 | $ | 1,105 | $ | 134,517 | |||||||||||||
Net Income
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1,723 | 1,723 | ||||||||||||||||||||||
Other comprehensive loss
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(2,764 | ) | (2,764 | ) | ||||||||||||||||||||
Share-based compensation expense
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423 | 423 | ||||||||||||||||||||||
Common stock repurchased and retired
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(3,666 | ) | - | (22 | ) | (22 | ) | |||||||||||||||||
Common stock issued
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2,972,472 | 29 | 34,895 | 34,924 | ||||||||||||||||||||
Stock options exercised
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5,332 | - | 10 | 10 | ||||||||||||||||||||
Balance at June 30, 2013
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16,635,786 | $ | 166 | $ | 142,759 | $ | 27,545 | $ | (1,659 | ) | $ | 168,811 | ||||||||||||
Balance at December 31, 2011
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10,337,626 | $ | 103 | $ | 76,310 | $ | 10,046 | $ | 318 | $ | 86,777 | |||||||||||||
Net Income
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8,503 | 8,503 | ||||||||||||||||||||||
Other comprehensive income
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841 | 841 | ||||||||||||||||||||||
Share-based compensation expense
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27 | 27 | ||||||||||||||||||||||
Common stock repurchased and retired
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(13,022 | ) | - | (102 | ) | (102 | ) | |||||||||||||||||
Stock options exercised
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5,330 | - | 23 | 23 | ||||||||||||||||||||
Balance at June 30, 2012
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10,329,934 | $ | 103 | $ | 76,258 | $ | 18,549 | $ | 1,159 | $ | 96,069 |
PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES
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(in thousands)
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(unaudited)
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Six Months Ended June 30,
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2013
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2012
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CASH FLOWS FROM OPERATING ACTIVITIES
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Net income
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$ | 1,723 | $ | 8,503 | ||||
Adjustments to net income:
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||||||||
Depreciation and amortization expense
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904 | 642 | ||||||
Provision for loan losses
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618 | - | ||||||
Share-based compensation expense
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423 | 27 | ||||||
Loss (gain) on sale of other real estate owned
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226 | 305 | ||||||
Write down of other real estate owned
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354 | 302 | ||||||
Amortization of premium/discounts on securities held for sale, net
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1,366 | 378 | ||||||
Amortization of loan mark-to-market discount from FDIC transaction
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(1,529 | ) | (1,048 | ) | ||||
Gain on sale of loans held for sale
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- | (10 | ) | |||||
Gain on sale of investment securities available for sale
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(1,068 | ) | (174 | ) | ||||
Other-than-temporary impairment loss on investment securities, net
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35 | 82 | ||||||
Gain on sale of loans held for investment
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(945 | ) | - | |||||
Purchase and origination of loans held for sale
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- | (2,995 | ) | |||||
Recoveries on loans
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229 | 95 | ||||||
Principal payments from loans held for sale
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64 | 595 | ||||||
Gain on FDIC transaction
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- | (5,340 | ) | |||||
Deferred income tax provision
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(1,757 | ) | 3,413 | |||||
Change in accrued expenses and other liabilities, net
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6,011 | (159 | ) | |||||
Income from bank owned life insurance, net
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(282 | ) | (263 | ) | ||||
Change in accrued interest receivable and other assets, net
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437 | (1,364 | ) | |||||
Net cash provided by operating activities
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6,809 | 2,989 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES
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||||||||
Proceeds from sale and principal payments on loans held for investment
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86,720 | 92,770 | ||||||
Net change in undisbursed loan funds
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146,741 | 57,361 | ||||||
Purchase and origination of loans held for investment
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(236,886 | ) | (143,900 | ) | ||||
Proceeds from sale of other real estate owned
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1,488 | 5,315 | ||||||
Principal payments on securities available for sale
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16,600 | 7,505 | ||||||
Purchase of securities available for sale
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(6,208 | ) | (70,467 | ) | ||||
Proceeds from sale or maturity of securities available for sale
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102,755 | 44,151 | ||||||
Purchases of premises and equipment
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(1,055 | ) | (252 | ) | ||||
Purchase of Federal Reserve Bank stock
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(1,276 | ) | 63 | |||||
Redemption of FHLB stock
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1,259 | 1,058 | ||||||
Cash acquired in PDNB transaction
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- | 39,491 | ||||||
Cash acquired in acquisitions, net
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138,752 | - | ||||||
Net cash provided by investing activities
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248,890 | 33,095 | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES
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||||||||
Net (decrease) increase in deposit accounts
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(131,304 | ) | (31,268 | ) | ||||
Repayment of FHLB advances and other borrowings
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(84,323 | ) | - | |||||
Proceeds from issuance of common stock, net of issuance cost
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4,560 | - | ||||||
Proceeds from exercise of stock options
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10 | 23 | ||||||
Repurchase of common stock
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(22 | ) | (102 | ) | ||||
Net cash (used in) provided by financing activities
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(211,079 | ) | (31,347 | ) | ||||
NET INCREASE IN CASH AND CASH EQUIVALENTS
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44,620 | 4,737 | ||||||
CASH AND CASH EQUIVALENTS, beginning of period
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59,352 | 60,235 | ||||||
CASH AND CASH EQUIVALENTS, end of period
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$ | 103,972 | $ | 64,972 |
PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES
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CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
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(in thousands)
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||||||||
(unaudited)
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Six Months Ended June 30,
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2013
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2012
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|||||||
SUPPLEMENTAL CASH FLOW DISCLOSURES
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Interest paid
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$ | 2,637 | $ | 3,827 | ||||
Income taxes paid
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5,850 | 3,775 | ||||||
Assets acquired (liabilities assumed and capital created) in acquisitions (See Note 3):
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||||||||
Investment securities
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347,196 | 101 | ||||||
FRB and FHLB Stock
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- | 1,390 | ||||||
FHLB Stock and TIB Stock
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653 | - | ||||||
FDIC receivable
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- | 167 | ||||||
Loans
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68,815 | 63,773 | ||||||
Core deposit intangible
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4,766 | 840 | ||||||
Other real estate owned
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752 | 11,533 | ||||||
Goodwill
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18,234 | - | ||||||
Fixed assets
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1,446 | - | ||||||
Other assets
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7,800 | 3,656 | ||||||
Deposits
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(540,725 | ) | (115,582 | ) | ||||
Other borrowings
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(16,905 | ) | - | |||||
Other liabilities
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(6,276 | ) | (29 | ) | ||||
Additional paid-in capital
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(30,364 | ) | - | |||||
NONCASH INVESTING ACTIVITIES DURING THE PERIOD
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Transfers from loans to other real estate owned
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$ | 244 | $ | 2,497 | ||||
Investment securities available for sale purchased and not settled
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$ | - | $ | 10,460 |
●
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$125.9 million in investment securities, including Federal Home Loan Bank (“FHLB”) stock;
|
●
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$42.4 million of loans;
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●
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$14.1 million of cash and cash equivalents;
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●
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$6.4 million in goodwill;
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●
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$5.8 million in bank owned life insurance;
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●
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$3.7 million of other types of assets; and
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●
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$2.8 million of a core deposit intangible.
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●
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$178.8 million in deposit transaction accounts;
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●
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$5.1 million in retail certificates of deposit;
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●
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$1.9 million other liabilities; and
|
●
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$922,000 in deferred tax liability.
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●
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$223.0 million in investment securities, including FHLB and TIB-The Independent Bankers Bank (“TIB”) stock;
|
●
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$124.7 million of cash and cash equivalents;
|
●
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$26.4 million of loans;
|
●
|
$11.9 million in goodwill;
|
●
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$6.2 million of other types of assets; and
|
●
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$1.9 million of a core deposit intangible.
|
●
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$329.5 million in deposit transaction accounts;
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●
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$17.4 million in retail certificates of deposit;
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●
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$9.9 million in wholesale deposits;
|
●
|
$16.9 million in other borrowings;
|
●
|
$3.9 million in deferred tax liability; and
|
●
|
$536,000 of other liabilities.
|
June 30, 2013
|
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Amortized Cost
|
Unrealized
Gain
|
Unrealized
Loss
|
Estimated
Fair Value
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Investment securities available for sale:
|
|
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U.S. Treasury
|
$ | 73 | $ | 10 | $ | - | $ | 83 | ||||||||
Corporate
|
9,169 | - | - | 9,169 | ||||||||||||
Municipal bonds
|
96,257 | 226 | (1,736 | ) | 94,747 | |||||||||||
Mortgage-backed securities
|
210,367 | 736 | (2,055 | ) | 209,048 | |||||||||||
Total securities available for sale
|
315,866 | 972 | (3,791 | ) | 313,047 | |||||||||||
December 31, 2012
|
||||||||||||||||
Amortized Cost
|
Unrealized
Gain
|
Unrealized
Loss
|
Estimated
Fair Value
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Investment securities available for sale:
|
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U.S. Treasury
|
$ | 147 | $ | 12 | $ | - | $ | 159 | ||||||||
Municipal bonds
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25,401 | 1,186 | (1 | ) | 26,586 | |||||||||||
Mortgage-backed securities
|
56,641 | 1,162 | (482 | ) | 57,321 | |||||||||||
Total securities available for sale
|
82,189 | 2,360 | (483 | ) | 84,066 | |||||||||||
June 30, 2012
|
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Amortized Cost
|
Unrealized
Gain
|
Unrealized
Loss
|
Estimated
Fair Value
|
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(in thousands)
|
||||||||||||||||
Investment securities available for sale:
|
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U.S. Treasury
|
$ | 247 | $ | 14 | $ | - | $ | 261 | ||||||||
Municipal bonds
|
39,928 | 1,259 | (71 | ) | 41,116 | |||||||||||
Mortgage-backed securities
|
103,990 | 1,389 | (622 | ) | 104,757 | |||||||||||
Total securities available for sale
|
144,165 | 2,662 | (693 | ) | 146,134 |
June 30, 2013
|
||||||||||||||||||||||||||||||||||||
Less than 12 months
|
12 months or Longer
|
Total
|
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Gross
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Gross
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Gross
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||||||||||||||||||||||||||||||||||
Unrealized
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Unrealized
|
Unrealized
|
||||||||||||||||||||||||||||||||||
Fair
|
Holding
|
Fair
|
Holding
|
Fair
|
Holding
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Number
|
Value
|
Losses
|
Number
|
Value
|
Losses
|
Number
|
Value
|
Losses
|
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(dollars in thousands)
|
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Municipal bonds
|
122 | $ | 51,937 | $ | (1,736 | ) | - | $ | - | $ | - | 122 | $ | 51,937 | $ | (1,736 | ) | |||||||||||||||||||
Mortgage-backed securities
|
29 | 86,940 | (1,916 | ) | 17 | 713 | (138 | ) | 46 | 87,653 | (2,054 | ) | ||||||||||||||||||||||||
Total
|
151 | $ | 138,877 | $ | (3,652 | ) | 17 | $ | 713 | $ | (138 | ) | 168 | $ | 139,590 | $ | (3,790 | ) | ||||||||||||||||||
December 31, 2012
|
||||||||||||||||||||||||||||||||||||
Less than 12 months
|
12 months or Longer
|
Total
|
||||||||||||||||||||||||||||||||||
Gross
|
Gross
|
Gross
|
||||||||||||||||||||||||||||||||||
Unrealized
|
Unrealized
|
Unrealized
|
||||||||||||||||||||||||||||||||||
Fair
|
Holding
|
Fair
|
Holding
|
Fair
|
Holding
|
|||||||||||||||||||||||||||||||
Number
|
Value
|
Losses
|
Number
|
Value
|
Losses
|
Number
|
Value
|
Losses
|
||||||||||||||||||||||||||||
(dollars in thousands)
|
||||||||||||||||||||||||||||||||||||
Municipal bonds
|
1 | $ | 292 | $ | (1 | ) | - | $ | - | $ | - | 1 | $ | 292 | $ | (1 | ) | |||||||||||||||||||
Mortgage-backed securities
|
2 | 15,128 | (152 | ) | 31 | 1,012 | (330 | ) | 33 | 16,140 | (482 | ) | ||||||||||||||||||||||||
Total
|
3 | $ | 15,420 | $ | (153 | ) | 31 | $ | 1,012 | $ | (330 | ) | 34 | $ | 16,432 | $ | (483 | ) | ||||||||||||||||||
June 30, 2012
|
||||||||||||||||||||||||||||||||||||
Less than 12 months
|
12 months or Longer
|
Total
|
||||||||||||||||||||||||||||||||||
Gross
|
Gross
|
Gross
|
||||||||||||||||||||||||||||||||||
Unrealized
|
Unrealized
|
Unrealized
|
||||||||||||||||||||||||||||||||||
Fair
|
Holding
|
Fair
|
Holding
|
Fair
|
Holding
|
|||||||||||||||||||||||||||||||
Number
|
Value
|
Losses
|
Number
|
Value
|
Losses
|
Number
|
Value
|
Losses
|
||||||||||||||||||||||||||||
(dollars in thousands)
|
||||||||||||||||||||||||||||||||||||
Municipal bonds
|
12 | $ | 5,245 | $ | (71 | ) | - | $ | - | $ | - | 12 | $ | 5,245 | $ | (71 | ) | |||||||||||||||||||
Mortgage-backed securities
|
7 | 21,090 | (82 | ) | 41 | 1,185 | (540 | ) | 48 | 22,275 | (622 | ) | ||||||||||||||||||||||||
Total
|
19 | $ | 26,335 | $ | (153 | ) | 41 | $ | 1,185 | $ | (540 | ) | 60 | $ | 27,520 | $ | (693 | ) |
One Year
|
More than One
|
More than Five Years
|
More than
|
|
||||||||||||||||||||||||||||||||||||
or Less
|
Year to Five Years
|
to Ten Years
|
Ten Years
|
Total
|
||||||||||||||||||||||||||||||||||||
Amortized
|
Fair
|
Amortized
|
Fair
|
Amortized
|
Fair
|
Amortized
|
Fair
|
Amortized
|
Fair
|
|||||||||||||||||||||||||||||||
Cost
|
Value
|
Cost
|
Value
|
Cost
|
Value
|
Cost
|
Value
|
Cost
|
Value
|
|||||||||||||||||||||||||||||||
(dollars in thousands)
|
||||||||||||||||||||||||||||||||||||||||
Investment securities available for sale:
|
||||||||||||||||||||||||||||||||||||||||
U.S. Treasury
|
$ | - | $ | - | $ | 73 | $ | 83 | $ | - | $ | - | $ | - | $ | - | $ | 73 | $ | 83 | ||||||||||||||||||||
Corporate
|
2,006 | 2,006 | 7,163 | 7,163 | - | - | - | - | 9,169 | 9,169 | ||||||||||||||||||||||||||||||
Municipal bonds
|
- | - | 7,998 | 7,900 | 43,271 | 42,550 | 44,988 | 44,297 | 96,257 | 94,747 | ||||||||||||||||||||||||||||||
Mortgage-backed securities
|
- | - | 51 | 54 | 16,080 | 15,931 | 194,235 | 193,063 | 210,366 | 209,048 | ||||||||||||||||||||||||||||||
Total investment securities available for sale
|
2,006 | 2,006 | 15,285 | 15,200 | 59,351 | 58,481 | 239,223 | 237,360 | 315,865 | 313,047 |
June 30, 2013
|
December 31, 2012
|
June 30, 2012
|
||||||||||
(in thousands)
|
||||||||||||
Business loans:
|
||||||||||||
Commercial and industrial
|
$ | 146,240 | $ | 115,354 | $ | 84,191 | ||||||
Commercial owner occupied (1)
|
201,802 | 150,934 | 150,428 | |||||||||
SBA
|
5,820 | 6,882 | 3,995 | |||||||||
Warehouse facilities
|
135,317 | 195,761 | 61,111 | |||||||||
Real estate loans:
|
||||||||||||
Commercial non-owner occupied
|
295,767 | 253,409 | 242,700 | |||||||||
Multi-family
|
172,797 | 156,424 | 183,742 | |||||||||
One-to-four family (2)
|
84,672 | 97,463 | 56,694 | |||||||||
Construction
|
2,135 | - | 281 | |||||||||
Land
|
10,438 | 8,774 | 11,191 | |||||||||
Other loans
|
4,969 | 1,193 | 4,019 | |||||||||
Total gross loans (3)
|
1,059,957 | 986,194 | 798,352 | |||||||||
Less loans held for sale, net
|
3,617 | 3,681 | 2,401 | |||||||||
Total gross loans held for investment
|
1,056,340 | 982,513 | 795,951 | |||||||||
Less:
|
||||||||||||
Deferred loan origination costs (fees) and premiums (discounts), net
|
(910 | ) | (306 | ) | (632 | ) | ||||||
Allowance for loan losses
|
(7,994 | ) | (7,994 | ) | (7,658 | ) | ||||||
Loans held for investment, net
|
$ | 1,047,436 | $ | 974,213 | $ | 787,661 | ||||||
(1) Majority secured by real estate.
|
||||||||||||
(2) Includes second trust deeds.
|
||||||||||||
(3) Total gross loans for June 30, 2013 is net of the mark-to-market discounts on Canyon National loans of $2.1 million, on Palm Desert National loans of $4.0 million, and on SDTB loans of $560,000 and of the mark-to-market premium on FAB loans of $103,000.
|
June 30, 2013
|
||||||||||||
Canyon National
|
Palm Desert National
|
Total
|
||||||||||
(in thousands)
|
||||||||||||
Business loans:
|
||||||||||||
Commercial and industrial
|
$ | 81 | $ | 185 | $ | 266 | ||||||
Commercial owner occupied (1)
|
942 | - | 942 | |||||||||
Real estate loans:
|
||||||||||||
Commercial non-owner occupied
|
1,019 | - | 1,019 | |||||||||
One-to-four family (2)
|
- | 24 | 24 | |||||||||
Land
|
1,066 | - | 1,066 | |||||||||
Total purchase credit impaired
|
$ | 3,108 | $ | 209 | $ | 3,317 |
Six Months Ended
|
||||||||||||
June 30, 2013
|
||||||||||||
Canyon National
|
Palm Desert National
|
Total
|
||||||||||
(in thousands)
|
||||||||||||
Balance at the beginning of period
|
$ | 2,029 | $ | 247 | $ | 2,276 | ||||||
Accretable yield at acquisition
|
- | - | - | |||||||||
Accretion
|
(243 | ) | (44 | ) | (287 | ) | ||||||
Disposals and other
|
- | (514 | ) | (514 | ) | |||||||
Change in accretable yield
|
157 | 448 | 605 | |||||||||
Balance at the end of period
|
$ | 1,943 | $ | 137 | $ | 2,080 |
Impaired Loans
|
||||||||||||||||||||||||||||
Contractual
Unpaid Principal Balance
|
Recorded Investment
|
With Specific Allowance
|
Without Specific Allowance
|
Specific Allowance for Impaired Loans
|
Average Recorded Investment
|
Interest Income Recognized
|
||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||
June 30, 2013
|
||||||||||||||||||||||||||||
Business loans:
|
||||||||||||||||||||||||||||
Commercial and industrial
|
$ | 423 | $ | 308 | $ | 233 | $ | 76 | $ | 233 | $ | 454 | $ | 19 | ||||||||||||||
Commercial owner occupied
|
- | - | - | - | - | 122 | - | |||||||||||||||||||||
SBA
|
- | - | - | - | - | 84 | 1 | |||||||||||||||||||||
Real estate loans:
|
||||||||||||||||||||||||||||
Commercial non-owner occupied
|
531 | 450 | - | 450 | - | 1,254 | 3 | |||||||||||||||||||||
Multi-family
|
1,046 | 1,035 | - | 1,035 | - | 217 | 2 | |||||||||||||||||||||
One-to-four family
|
836 | 813 | 501 | 312 | 360 | 837 | 26 | |||||||||||||||||||||
Totals
|
$ | 2,836 | $ | 2,606 | $ | 734 | $ | 1,873 | $ | 593 | $ | 2,968 | $ | 51 | ||||||||||||||
Impaired Loans
|
||||||||||||||||||||||||||||
Contractual
Unpaid Principal Balance
|
Recorded Investment
|
With Specific Allowance
|
Without Specific Allowance
|
Specific Allowance for Impaired Loans
|
Average Recorded Investment
|
Interest Income Recognized
|
||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||
December 31, 2012
|
||||||||||||||||||||||||||||
Business loans:
|
||||||||||||||||||||||||||||
Commercial and industrial
|
$ | 707 | $ | 593 | $ | 287 | $ | 306 | $ | 270 | $ | 203 | $ | 29 | ||||||||||||||
Commercial owner occupied
|
- | - | - | - | - | 444 | - | |||||||||||||||||||||
SBA
|
810 | 259 | - | 259 | - | 468 | 21 | |||||||||||||||||||||
Real estate loans:
|
||||||||||||||||||||||||||||
Commercial non-owner occupied
|
746 | 670 | - | 670 | - | 1,031 | 59 | |||||||||||||||||||||
Multi-family
|
315 | 266 | - | 266 | - | 1,123 | 22 | |||||||||||||||||||||
One-to-four family
|
960 | 948 | 541 | 407 | 395 | 720 | 59 | |||||||||||||||||||||
Totals
|
$ | 3,538 | $ | 2,736 | $ | 828 | $ | 1,908 | $ | 665 | $ | 3,989 | $ | 190 | ||||||||||||||
Impaired Loans
|
||||||||||||||||||||||||||||
Contractual
Unpaid Principal Balance
|
Recorded Investment
|
With Specific Allowance
|
Without Specific Allowance
|
Specific Allowance for Impaired Loans
|
Average Recorded Investment
|
Interest Income Recognized
|
||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||
June 30, 2012
|
||||||||||||||||||||||||||||
Business loans:
|
||||||||||||||||||||||||||||
Commercial and industrial
|
$ | - | $ | - | $ | - | $ | - | $ | - | $ | 200 | $ | - | ||||||||||||||
Commercial owner occupied
|
507 | 478 | - | 478 | - | 889 | - | |||||||||||||||||||||
SBA
|
1,723 | 549 | - | 549 | - | 564 | 16 | |||||||||||||||||||||
Real estate loans:
|
||||||||||||||||||||||||||||
Commercial non-owner occupied
|
2,304 | 2,095 | - | 2,095 | - | 1,279 | 32 | |||||||||||||||||||||
Multi-family
|
1,442 | 1,404 | - | 1,404 | - | 1,412 | 45 | |||||||||||||||||||||
One-to-four family
|
670 | 667 | - | 667 | - | 708 | 22 | |||||||||||||||||||||
Totals
|
$ | 6,646 | $ | 5,193 | $ | - | $ | 5,193 | $ | - | $ | 5,052 | $ | 115 |
June 30, 2013
|
December 31, 2012
|
June 30, 2012
|
||||||||||
(in thousands)
|
||||||||||||
Nonaccruing loans
|
$ | 1,969 | $ | 1,988 | $ | 3,826 | ||||||
Accruing loans
|
637 | 748 | 1,367 | |||||||||
Total impaired loans
|
$ | 2,606 | $ | 2,736 | $ | 5,193 |
●
|
Pass classifications represent assets with a level of credit quality which contain no well-defined deficiency or weakness.
|
●
|
Special Mention assets do not currently expose the Bank to a sufficient risk to warrant classification in one of the adverse categories, but possess correctable deficiency or potential weaknesses deserving management’s close attention.
|
●
|
Substandard assets are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. These assets are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected. OREO acquired from foreclosure is also classified as substandard.
|
●
|
Doubtful credits have all the weaknesses inherent in substandard credits, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.
|
●
|
Loss assets are those that are considered uncollectible and of such little value that their continuance as assets is not warranted. Amounts classified as loss are promptly charged off.
|
Credit Risk Grades
|
||||||||||||||||
Special
|
Total Gross
|
|||||||||||||||
Pass
|
Mention
|
Substandard
|
Loans
|
|||||||||||||
June 30, 2013
|
(in thousands)
|
|||||||||||||||
Business loans:
|
||||||||||||||||
Commercial and industrial
|
$ | 143,034 | $ | 88 | $ | 3,118 | $ | 146,240 | ||||||||
Commercial owner occupied
|
186,271 | 2,298 | 13,233 | 201,802 | ||||||||||||
SBA
|
5,820 | - | - | 5,820 | ||||||||||||
Warehouse facilities
|
135,317 | - | - | 135,317 | ||||||||||||
Real estate loans:
|
||||||||||||||||
Commercial non-owner occupied
|
289,210 | 356 | 6,201 | 295,767 | ||||||||||||
Multi-family
|
170,726 | 515 | 1,556 | 172,797 | ||||||||||||
One-to-four family
|
83,395 | - | 1,277 | 84,672 | ||||||||||||
Construction
|
2,135 | - | - | 2,135 | ||||||||||||
Land
|
10,430 | - | 8 | 10,438 | ||||||||||||
Other loans
|
4,960 | - | 9 | 4,969 | ||||||||||||
Totals
|
$ | 1,031,298 | $ | 3,257 | $ | 25,402 | $ | 1,059,957 | ||||||||
Credit Risk Grades
|
||||||||||||||||
Special
|
Total Gross
|
|||||||||||||||
Pass
|
Mention
|
Substandard
|
Loans
|
|||||||||||||
December 31, 2012
|
(in thousands)
|
|||||||||||||||
Business loans:
|
||||||||||||||||
Commercial and industrial
|
$ | 111,895 | $ | 92 | $ | 3,367 | $ | 115,354 | ||||||||
Commercial owner occupied
|
136,330 | 2,674 | 11,930 | 150,934 | ||||||||||||
SBA
|
6,819 | - | 63 | 6,882 | ||||||||||||
Warehouse facilities
|
195,761 | - | - | 195,761 | ||||||||||||
Real estate loans:
|
||||||||||||||||
Commercial non-owner occupied
|
240,585 | 687 | 12,137 | 253,409 | ||||||||||||
Multi-family
|
143,003 | 11,583 | 1,838 | 156,424 | ||||||||||||
One-to-four family
|
96,061 | - | 1,402 | 97,463 | ||||||||||||
Land
|
8,762 | - | 12 | 8,774 | ||||||||||||
Other loans
|
1,177 | - | 16 | 1,193 | ||||||||||||
Totals
|
$ | 940,393 | $ | 15,036 | $ | 30,765 | $ | 986,194 | ||||||||
Credit Risk Grades
|
||||||||||||||||
Special
|
Total Gross
|
|||||||||||||||
Pass
|
Mention
|
Substandard
|
Loans
|
|||||||||||||
June 30, 2012
|
(in thousands)
|
|||||||||||||||
Business loans:
|
||||||||||||||||
Commercial and industrial
|
$ | 81,359 | $ | 1,753 | $ | 1,079 | $ | 84,191 | ||||||||
Commercial owner occupied
|
134,749 | 4,036 | 11,643 | 150,428 | ||||||||||||
SBA
|
3,858 | - | 137 | 3,995 | ||||||||||||
Warehouse facilities
|
61,111 | - | - | 61,111 | ||||||||||||
Real estate loans:
|
||||||||||||||||
Commercial non-owner occupied
|
236,685 | 668 | 5,347 | 242,700 | ||||||||||||
Multi-family
|
166,309 | 9,898 | 7,535 | 183,742 | ||||||||||||
One-to-four family
|
55,303 | - | 1,391 | 56,694 | ||||||||||||
Construction
|
281 | - | - | 281 | ||||||||||||
Land
|
8,591 | - | 2,600 | 11,191 | ||||||||||||
Other loans
|
3,892 | - | 127 | 4,019 | ||||||||||||
Totals
|
$ | 752,138 | $ | 16,355 | $ | 29,859 | $ | 798,352 |
Days Past Due
|
Non-
|
||||||||||||||||||
Current
|
30-59 | 60-89 | 90+ |
Total
|
Accruing
|
||||||||||||||
June 30, 2013
|
(in thousands)
|
||||||||||||||||||
Business loans:
|
|||||||||||||||||||
Commercial and industrial
|
$ | 146,000 | $ | 7 | $ | 233 | $ | - | $ | 146,240 | $ | 96 | |||||||
Commercial owner occupied
|
201,162 | 640 | - | - | 201,802 | - | |||||||||||||
SBA
|
5,795 | - | 25 | - | 5,820 | - | |||||||||||||
Warehouse facilities
|
135,317 | - | - | - | 135,317 | - | |||||||||||||
Real estate loans:
|
|||||||||||||||||||
Commercial non-owner occupied
|
295,767 | - | - | - | 295,767 | 450 | |||||||||||||
Multi-family
|
171,762 | - | - | 1,035 | 172,797 | 1,035 | |||||||||||||
One-to-four family
|
84,290 | 22 | 322 | 38 | 84,672 | 451 | |||||||||||||
Land
|
10,438 | - | - | - | 10,438 | - | |||||||||||||
Other loans
|
4,969 | - | - | - | 4,969 | - | |||||||||||||
Totals
|
$ | 1,057,635 | $ | 669 | $ | 580 | $ | 1,073 | $ | 1,059,957 | $ | 2,032 | |||||||
Days Past Due
|
Non-
|
||||||||||||||||||
Current
|
30-59 | 60-89 | 90+ |
Total
|
Accruing
|
||||||||||||||
December 31, 2012
|
(in thousands)
|
||||||||||||||||||
Business loans:
|
|||||||||||||||||||
Commercial and industrial
|
$ | 115,078 | $ | - | $ | 58 | $ | 218 | $ | 115,354 | $ | 347 | |||||||
Commercial owner occupied
|
150,689 | - | 245 | - | 150,934 | 14 | |||||||||||||
SBA
|
6,697 | - | - | 185 | 6,882 | 260 | |||||||||||||
Warehouse facilities
|
195,761 | - | - | - | 195,761 | - | |||||||||||||
Real estate loans:
|
|||||||||||||||||||
Commercial non-owner occupied
|
253,409 | - | - | - | 253,409 | 670 | |||||||||||||
Multi-family
|
156,424 | - | - | - | 156,424 | 266 | |||||||||||||
One-to-four family
|
97,283 | 101 | - | 79 | 97,463 | 522 | |||||||||||||
Land
|
8,774 | - | - | - | 8,774 | 127 | |||||||||||||
Other loans
|
1,188 | 5 | - | - | 1,193 | - | |||||||||||||
Totals
|
$ | 985,303 | $ | 106 | $ | 303 | $ | 482 | $ | 986,194 | $ | 2,206 | |||||||
Days Past Due
|
Non-
|
||||||||||||||||||
Current
|
30-59 | 60-89 | 90+ |
Total
|
Accruing
|
||||||||||||||
June 30, 2012
|
(in thousands)
|
||||||||||||||||||
Business loans:
|
|||||||||||||||||||
Commercial and industrial
|
$ | 84,141 | $ | - | $ | 50 | $ | - | $ | 84,191 | $ | 9 | |||||||
Commercial owner occupied
|
148,900 | - | - | 1,528 | 150,428 | 1,528 | |||||||||||||
SBA
|
3,475 | 46 | - | 474 | 3,995 | 503 | |||||||||||||
Warehouse facilities
|
61,111 | - | - | - | 61,111 | - | |||||||||||||
Real estate loans:
|
|||||||||||||||||||
Commercial non-owner occupied
|
241,290 | 259 | - | 1,151 | 242,700 | 2,094 | |||||||||||||
Multi-family
|
180,907 | - | 2,835 | - | 183,742 | 3,115 | |||||||||||||
One-to-four family
|
56,588 | 93 | - | 13 | 56,694 | 486 | |||||||||||||
Construction
|
281 | - | - | - | 281 | - | |||||||||||||
Land
|
10,934 | - | - | 257 | 11,191 | 691 | |||||||||||||
Other loans
|
4,018 | 1 | - | - | 4,019 | - | |||||||||||||
Totals
|
$ | 791,645 | $ | 399 | $ | 2,885 | $ | 3,423 | $ | 798,352 | $ | 8,426 |
●
|
Changes in national, regional and local economic conditions, including trends in real estate values and the interest rate environment,
|
●
|
Changes in the nature and volume of the loan portfolio, including new types of lending,
|
●
|
Changes in volume and severity of past due loans, the volume of nonaccrual loans, and the volume and severity of adversely classified or graded loans, and
|
●
|
The existence and effect of concentrations of credit, and changes in the level of such concentrations.
|
●
|
Changes in national, regional and local economic conditions, including trends in real estate values and the interest rate environment,
|
●
|
Changes in volume and severity of past due loans, the volume of nonaccrual loans, and the volume and severity of adversely classified or graded loans, and
|
●
|
The existence and effect of concentrations of credit, and changes in the level of such concentrations.
|
●
|
Changes in national, regional and local economic conditions, including trends in real estate values and the interest rate environment, and
|
●
|
Changes in volume and severity of past due loans, the volume of nonaccrual loans, and the volume and severity of adversely classified or graded loans.
|
●
|
Changes in national, regional and local economic conditions, including trends in real estate values and the interest rate environment,
|
●
|
Changes in the nature and volume of the loan portfolio, including new types of lending, and
|
●
|
The existence and effect of concentrations of credit, and changes in the level of such concentrations.
|
Commercial and industrial
|
Commercial owner occupied
|
SBA
|
Warehouse
|
Commercial non-owner occupied
|
Multi-family
|
One-to-four family
|
Construction
|
Land
|
Other loans
|
Total
|
||||||||||||||||||||||||||||||||||
(dollars in thousands)
|
||||||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2012
|
$ | 1,310 | $ | 1,512 | $ | 79 | $ | 1,544 | $ | 1,459 | $ | 1,145 | $ | 862 | $ | - | $ | 31 | $ | 52 | $ | 7,994 | ||||||||||||||||||||||
Charge-offs
|
(58 | ) | - | (5 | ) | - | (757 | ) | (11 | ) | (10 | ) | - | - | (6 | ) | (847 | ) | ||||||||||||||||||||||||||
Recoveries
|
21 | - | 44 | - | - | - | 44 | - | - | 120 | 229 | |||||||||||||||||||||||||||||||||
Provisions for (reduction in) loan losses
|
806 | 229 | (50 | ) | (844 | ) | 806 | (593 | ) | 243 | - | 149 | (128 | ) | 618 | |||||||||||||||||||||||||||||
Balance, June 30, 2013
|
$ | 2,079 | $ | 1,741 | $ | 68 | $ | 700 | $ | 1,508 | $ | 541 | $ | 1,139 | $ | - | $ | 180 | $ | 38 | $ | 7,994 | ||||||||||||||||||||||
Amount of allowance attributed to:
|
||||||||||||||||||||||||||||||||||||||||||||
Specifically evaluated impaired loans
|
$ | 233 | $ | - | $ | - | $ | - | $ | - | $ | - | $ | 360 | $ | - | $ | - | $ | - | $ | 593 | ||||||||||||||||||||||
General portfolio allocation
|
1,846 | 1,741 | 68 | 700 | 1,508 | 541 | 779 | - | 180 | 38 | 7,401 | |||||||||||||||||||||||||||||||||
Loans individually evaluated for impairment
|
308 | - | - | - | 450 | 1,035 | 813 | - | - | - | 2,606 | |||||||||||||||||||||||||||||||||
Specific reserves to total loans individually evaluated for impairment
|
75.65 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 44.28 | % | 0.00 | % | 0.00 | % | 0.00 | % | 22.76 | % | ||||||||||||||||||||||
Loans collectively evaluated for impairment
|
$ | 145,932 | $ | 201,802 | $ | 5,820 | $ | 135,317 | $ | 295,317 | $ | 171,762 | $ | 83,859 | $ | 2,135 | $ | 10,438 | $ | 4,969 | $ | 1,057,351 | ||||||||||||||||||||||
General reserves to total loans collectively evaluated for impairment
|
1.26 | % | 0.86 | % | 1.17 | % | 0.52 | % | 0.51 | % | 0.31 | % | 0.93 | % | 0.00 | % | 1.72 | % | 0.76 | % | 0.70 | % | ||||||||||||||||||||||
Total gross loans
|
$ | 146,240 | $ | 201,802 | $ | 5,820 | $ | 135,317 | $ | 295,767 | $ | 172,797 | $ | 84,672 | $ | 2,135 | $ | 10,438 | $ | 4,969 | $ | 1,059,957 | ||||||||||||||||||||||
Total allowance to gross loans
|
1.42 | % | 0.86 | % | 1.17 | % | 0.52 | % | 0.51 | % | 0.31 | % | 1.35 | % | 0.00 | % | 1.72 | % | 0.76 | % | 0.75 | % | ||||||||||||||||||||||
Commercial and industrial
|
Commercial owner occupied
|
SBA
|
Warehouse
|
Commercial non-owner occupied
|
Multi-family
|
One-to-four family
|
Construction
|
Land
|
Other loans
|
Total
|
||||||||||||||||||||||||||||||||||
(dollars in thousands)
|
||||||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2011
|
$ | 1,361 | $ | 1,119 | $ | 80 | $ | 1,347 | $ | 1,287 | $ | 2,281 | $ | 931 | $ | - | $ | 39 | $ | 77 | $ | 8,522 | ||||||||||||||||||||||
Charge-offs
|
(191 | ) | (265 | ) | (109 | ) | - | (88 | ) | - | (305 | ) | - | - | (1 | ) | (959 | ) | ||||||||||||||||||||||||||
Recoveries
|
2 | - | 77 | - | - | - | 5 | - | - | 11 | 95 | |||||||||||||||||||||||||||||||||
Provisions for (reduction in) loan losses
|
78 | 222 | 103 | (439 | ) | 468 | 3 | (328 | ) | - | (39 | ) | (68 | ) | - | |||||||||||||||||||||||||||||
Balance, June 30, 2012
|
$ | 1,250 | $ | 1,076 | $ | 151 | $ | 908 | $ | 1,667 | $ | 2,284 | $ | 303 | $ | - | $ | - | $ | 19 | $ | 7,658 | ||||||||||||||||||||||
Amount of allowance attributed to:
|
||||||||||||||||||||||||||||||||||||||||||||
Specifically evaluated impaired loans
|
$ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||||||||||||
General portfolio allocation
|
1,250 | 1,076 | 151 | 908 | 1,667 | 2,284 | 303 | - | - | 19 | 7,658 | |||||||||||||||||||||||||||||||||
Loans individually evaluated for impairment
|
- | 478 | 549 | - | 2,095 | 1,404 | 667 | - | - | - | 5,193 | |||||||||||||||||||||||||||||||||
Specific reserves to total loans individually evaluated for impairment
|
0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | ||||||||||||||||||||||
Loans collectively evaluated for impairment
|
$ | 84,191 | $ | 149,950 | $ | 3,446 | $ | 61,111 | $ | 240,605 | $ | 182,338 | $ | 56,027 | $ | 281 | $ | 11,191 | $ | 4,019 | $ | 793,159 | ||||||||||||||||||||||
General reserves to total loans collectively evaluated for impairment
|
1.48 | % | 0.72 | % | 4.38 | % | 1.49 | % | 0.69 | % | 1.25 | % | 0.54 | % | 0.00 | % | 0.00 | % | 0.47 | % | 0.97 | % | ||||||||||||||||||||||
Total gross loans
|
$ | 84,191 | $ | 150,428 | $ | 3,995 | $ | 61,111 | $ | 242,700 | $ | 183,742 | $ | 56,694 | $ | 281 | $ | 11,191 | $ | 4,019 | $ | 798,352 | ||||||||||||||||||||||
Total allowance to gross loans
|
1.48 | % | 0.72 | % | 3.78 | % | 1.49 | % | 0.69 | % | 1.24 | % | 0.53 | % | 0.00 | % | 0.00 | % | 0.47 | % | 0.96 | % |
Three Months Ended
|
Six Months Ended
|
|||
June 30,
|
June 30,
|
|||
2013
|
2012
|
2013
|
2012
|
|
Stock options excluded
|
61,870
|
410,179
|
81,919
|
434,595
|
Three Months Ended June 30,
|
||||||||||||||||||||||||
2013
|
2012
|
|||||||||||||||||||||||
Net
|
Per Share
|
Net
|
Per Share
|
|||||||||||||||||||||
Income
|
Shares
|
Amount
|
Income
|
Shares
|
Amount
|
|||||||||||||||||||
(dollars in thousands, except per share data)
|
||||||||||||||||||||||||
Net income
|
$ | (249 | ) | $ | 5,811 | |||||||||||||||||||
Basic income available to common stockholders
|
(249 | ) | 15,516,537 | $ | (0.02 | ) | 5,811 | 10,329,934 | $ | 0.56 | ||||||||||||||
Effect of warrants and dilutive stock options
|
- | - | - | 339,071 | ||||||||||||||||||||
Diluted income available to common stockholders plus assumed conversions
|
$ | (249 | ) | 15,516,537 | $ | (0.02 | ) | $ | 5,811 | 10,669,005 | $ | 0.55 | ||||||||||||
Six Months Ended June 30,
|
||||||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||||||
Net
|
Per Share
|
Net
|
Per Share
|
|||||||||||||||||||||
Income
|
Shares
|
Amount
|
Income
|
Shares
|
Amount
|
|||||||||||||||||||
(dollars in thousands, except per share data)
|
||||||||||||||||||||||||
Net income
|
$ | 1,723 | $ | 8,503 | ||||||||||||||||||||
Basic income available to common stockholders
|
1,723 | 14,939,179 | $ | 0.12 | 8,503 | 10,332,935 | $ | 0.82 | ||||||||||||||||
Effect of warrants and dilutive stock options
|
- | 782,083 | - | 314,655 | ||||||||||||||||||||
Diluted income available to common stockholders plus assumed conversions
|
$ | 1,723 | 15,721,262 | $ | 0.11 | $ | 8,503 | 10,647,590 | $ | 0.80 |
|
At June 30, 2013
|
|||||||||||||||||||
Carrying
Amount
|
Level 1
|
Level 2
|
Level 3
|
Estimated
Fair Value
|
||||||||||||||||
(in thousands)
|
||||||||||||||||||||
Assets:
|
||||||||||||||||||||
Cash and cash equivalents
|
$ | 103,972 | $ | 103,972 | $ | - | $ | - | $ | 103,972 | ||||||||||
Securities available for sale
|
313,047 | 206,226 | 105,764 | 1,057 | 313,047 | |||||||||||||||
Federal Reserve Bank, TIB and FHLB stock, at cost
|
11,917 | 11,917 | - | - | 11,917 | |||||||||||||||
Loans held for sale, net
|
3,617 | - | 3,617 | - | 3,617 | |||||||||||||||
Loans held for investment, net
|
1,047,436 | - | - | 1,124,670 | 1,124,670 | |||||||||||||||
Accrued interest receivable
|
5,766 | 5,766 | - | - | 5,766 | |||||||||||||||
Liabilities:
|
||||||||||||||||||||
Deposit accounts
|
1,314,189 | 978,117 | 336,238 | - | 1,314,355 | |||||||||||||||
Other borrowings
|
48,082 | - | 50,074 | - | 50,074 | |||||||||||||||
Subordinated debentures
|
10,310 | - | 4,818 | - | 4,818 | |||||||||||||||
Accrued interest payable
|
213 | 213 | - | - | 213 | |||||||||||||||
Notional Amount
|
Level 1
|
Level 2
|
Level 3
|
Cost to Cede
or Assume
|
||||||||||||||||
Off-balance sheet commitments and standby letters of credit
|
$ | 236,425 | $ | - | $ | 23,643 | $ | - | $ | 23,643 | ||||||||||
At December 31, 2012
|
||||||||||||||||||||
Carrying
Amount
|
Level 1
|
Level 2
|
Level 3
|
Estimated
Fair Value
|
||||||||||||||||
(in thousands)
|
||||||||||||||||||||
Assets:
|
||||||||||||||||||||
Cash and cash equivalents
|
$ | 59,352 | $ | 59,352 | $ | - | $ | - | $ | 59,352 | ||||||||||
Securities available for sale
|
84,066 | 81,042 | 2,072 | 952 | 84,066 | |||||||||||||||
Federal Reserve Bank and FHLB stock, at cost
|
11,247 | 11,247 | - | - | 11,247 | |||||||||||||||
Loans held for sale, net
|
3,681 | - | 3,681 | - | 3,681 | |||||||||||||||
Loans held for investment, net
|
974,213 | - | - | 1,049,589 | 1,049,589 | |||||||||||||||
Accrued interest receivable
|
4,126 | 4,126 | - | - | 4,126 | |||||||||||||||
Liabilities:
|
||||||||||||||||||||
Deposit accounts
|
904,768 | 548,101 | 363,382 | - | 911,483 | |||||||||||||||
FHLB advances
|
87,000 | 87,000 | - | - | 87,000 | |||||||||||||||
Other borrowings
|
28,500 | - | 31,267 | - | 31,267 | |||||||||||||||
Subordinated debentures
|
10,310 | - | 4,973 | - | 4,973 | |||||||||||||||
Accrued interest payable
|
142 | 142 | - | - | 142 | |||||||||||||||
Notional Amount
|
Level 1
|
Level 2
|
Level 3
|
Cost to Cede
or Assume
|
||||||||||||||||
Off-balance sheet commitments and standby letters of credit
|
$ | 131,450 | $ | - | $ | 13,145 | $ | - | $ | 13,145 | ||||||||||
At June 30, 2012
|
||||||||||||||||||||
Carrying
Amount
|
Level 1
|
Level 2
|
Level 3
|
Estimated
Fair Value
|
||||||||||||||||
(in thousands)
|
||||||||||||||||||||
Assets:
|
||||||||||||||||||||
Cash and cash equivalents
|
$ | 64,972 | $ | 64,972 | $ | - | $ | - | $ | 64,972 | ||||||||||
Securities available for sale
|
146,134 | 102,004 | 43,203 | 927 | 146,134 | |||||||||||||||
Federal Reserve Bank and FHLB stock, at cost
|
12,744 | 12,744 | - | - | 12,744 | |||||||||||||||
Loans held for sale, net
|
2,401 | - | 2,401 | - | 2,401 | |||||||||||||||
Loans held for investment, net
|
787,661 | - | - | 869,751 | 869,751 | |||||||||||||||
Accrued interest receivable
|
3,968 | 3,968 | - | - | 3,968 | |||||||||||||||
Liabilities:
|
||||||||||||||||||||
Deposit accounts
|
913,191 | 477,661 | 439,328 | - | 916,989 | |||||||||||||||
Other borrowings
|
28,500 | - | 32,177 | - | 32,177 | |||||||||||||||
Subordinated debentures
|
10,310 | - | 7,513 | - | 7,513 | |||||||||||||||
Accrued interest payable
|
151 | 151 | - | - | 151 | |||||||||||||||
Notional Amount
|
Level 1
|
Level 2
|
Level 3
|
Cost to Cede
or Assume
|
||||||||||||||||
Off-balance sheet commitments and standby letters of credit
|
$ | 126,544 | $ | - | $ | 12,654 | $ | - | $ | 12,654 |
June 30, 2013
|
||||||||||||||||
Fair Value Measurement Using
|
||||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Securities at
Fair Value
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Investment securities available for sale:
|
|
|||||||||||||||
U.S. Treasury
|
$ | 83 | $ | - | $ | - | $ | 83 | ||||||||
Corporate
|
- | 9,169 | - | 9,169 | ||||||||||||
Municipal bonds
|
- | 94,747 | - | 94,747 | ||||||||||||
Mortgage-backed securities
|
206,143 | 1,848 | 1,057 | 209,048 | ||||||||||||
Total securities available for sale
|
$ | 206,226 | $ | 105,764 | $ | 1,057 | $ | 313,047 | ||||||||
Stock:
|
||||||||||||||||
FHLB stock
|
$ | 8,622 | $ | - | $ | - | $ | 8,622 | ||||||||
Federal Reserve Bank stock
|
3,295 | - | - | 3,295 | ||||||||||||
Total stock
|
$ | 11,917 | $ | - | $ | - | $ | 11,917 | ||||||||
Total securities
|
$ | 218,143 | $ | 105,764 | $ | 1,057 | $ | 324,964 | ||||||||
June 30, 2012
|
||||||||||||||||
Fair Value Measurement Using
|
||||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Securities at
Fair Value
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Investment securities available for sale:
|
||||||||||||||||
U.S. Treasury
|
$ | 261 | $ | - | $ | - | $ | 261 | ||||||||
Municipal bonds
|
- | 41,116 | - | 41,116 | ||||||||||||
Mortgage-backed securities
|
101,743 | 2,087 | 927 | 104,757 | ||||||||||||
Total securities available for sale
|
$ | 102,004 | $ | 43,203 | $ | 927 | $ | 146,134 | ||||||||
Stock:
|
||||||||||||||||
FHLB stock
|
$ | 10,725 | $ | - | $ | - | $ | 10,725 | ||||||||
Federal Reserve Bank stock
|
2,019 | - | - | 2,019 | ||||||||||||
Total stock
|
$ | 12,744 | $ | - | $ | - | $ | 12,744 | ||||||||
Total securities
|
$ | 114,748 | $ | 43,203 | $ | 927 | $ | 158,878 |
Six Months Ended
|
||||||||
June 30, 2013
|
June 30, 2012
|
|||||||
(in thousands)
|
||||||||
Balance, beginning of period
|
$ | 952 | $ | 991 | ||||
Total gains or (losses) realized/unrealized:
|
||||||||
Included in earnings (or changes in net assets)
|
(35 | ) | (82 | ) | ||||
Included in other comprehensive income
|
186 | 124 | ||||||
Purchases, issuances, and settlements
|
(117 | ) | (146 | ) | ||||
Transfer in and/or out of Level 3
|
71 | 40 | ||||||
Balance, end of period
|
$ | 1,057 | $ | 927 |
June 30, 2013
|
||||||||||||||||
Fair Value Measurement Using
|
||||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Assets at
Fair Value
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Assets
|
||||||||||||||||
Impaired loans
|
$ | - | $ | - | $ | 2,606 | $ | 2,606 | ||||||||
Other real estate owned
|
- | - | 1,186 | 1,186 | ||||||||||||
Total assets
|
$ | - | $ | - | $ | 3,792 | $ | 3,792 | ||||||||
June 30, 2012
|
||||||||||||||||
Fair Value Measurement Using
|
||||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Assets at
Fair Value
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Assets
|
||||||||||||||||
Impaired loans
|
$ | - | $ | - | $ | 5,193 | $ | 5,193 | ||||||||
Other real estate owned
|
- | - | 9,339 | 9,339 | ||||||||||||
Total assets
|
$ | - | $ | - | $ | 14,532 | $ | 14,532 |
●
|
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 (the “Federal Reserve”);
|
●
|
Inflation/deflation, interest rate, market and monetary fluctuations;
|
●
|
The timely development of competitive new products and services and the acceptance of these products and services by new and existing customers;
|
●
|
The willingness of users to substitute competitors’ products and services for our products and services;
|
●
|
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;
|
●
|
Technological changes;
|
●
|
The effect of the SDTB Acquisition, the FAB Acquisition, the Palm Desert National Acquisition, the Canyon National Acquisition and other acquisitions we may make, if any, including, without limitation, the failure to achieve the expected revenue growth and/or expense savings from such acquisitions;
|
●
|
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 SEC, the Public Company Accounting Oversight Board, the FASB or other accounting standards setters;
|
●
|
Possible other-than-temporary impairments (“OTTI”) of securities held by us;
|
●
|
The impact of current governmental efforts to restructure the United States financial regulatory system, including enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank 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;
|
●
|
Ability to attract deposits and other sources of liquidity;
|
●
|
Changes in the financial performance and/or condition of our borrowers;
|
●
|
Changes in the competitive environment among financial and bank holding companies and other financial service providers;
|
●
|
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;
|
●
|
Unanticipated regulatory or judicial proceedings; and
|
●
|
Our ability to manage the risks involved in the foregoing.
|
●
|
$125.9 million in investment securities, including FHLB stock;
|
●
|
$42.4 million of loans;
|
●
|
$14.1 million of cash and cash equivalents;
|
●
|
$6.4 million in goodwill;
|
●
|
$5.8 million in bank owned life insurance;
|
●
|
$3.7 million of other types of assets; and
|
●
|
$2.8 million of a core deposit intangible.
|
●
|
$178.8 million in deposit transaction accounts;
|
●
|
$5.1 million in retail certificates of deposit;
|
●
|
$1.9 million other liabilities; and
|
●
|
$922,000 in deferred tax liability.
|
●
|
$223.0 million in investment securities, including FHLB and TIB Bank stock;
|
●
|
$124.7 million of cash and cash equivalents;
|
●
|
$26.4 million of loans;
|
●
|
$11.9 million in goodwill;
|
●
|
$6.2 million of other types of assets; and
|
●
|
$1.9 million of a core deposit intangible.
|
●
|
$329.5 million in deposit transaction accounts;
|
●
|
$17.4 million in retail certificates of deposit;
|
●
|
$9.9 million in wholesale deposits;
|
●
|
$16.9 million in other borrowings;
|
●
|
$3.9 million in deferred tax liability; and
|
●
|
$536,000 of other liabilities.
|
●
|
Interest income earned from average interest-earning assets and the resultant yields; and
|
●
|
Interest expense incurred from average interest-bearing liabilities and resultant costs, expressed as rates.
|
Average Balance Sheet
|
||||||||||||||||||||||||
Three Months Ended
|
Three Months Ended
|
|||||||||||||||||||||||
June 30, 2013
|
June 30, 2012
|
|||||||||||||||||||||||
Average
|
Average
|
Average
|
Average
|
|||||||||||||||||||||
Balance
|
Interest
|
Yield/Cost
|
Balance
|
Interest
|
Yield/Cost
|
|||||||||||||||||||
Assets
|
(dollars in thousands)
|
|||||||||||||||||||||||
Interest-earning assets:
|
||||||||||||||||||||||||
Cash and cash equivalents
|
$ | 98,451 | $ | 60 | 0.24 | % | $ | 72,988 | $ | 35 | 0.19 | % | ||||||||||||
Federal funds sold
|
26 | - | 0.00 | % | 27 | - | 0.00 | % | ||||||||||||||||
Investment securities
|
297,912 | 1,188 | 1.60 | % | 163,151 | 913 | 2.24 | % | ||||||||||||||||
Loans receivable, net (1)
|
964,486 | 13,688 | 5.69 | % | 736,178 | 12,098 | 6.57 | % | ||||||||||||||||
Total interest-earning assets
|
1,360,875 | 14,936 | 4.40 | % | 972,344 | 13,046 | 5.36 | % | ||||||||||||||||
Noninterest-earning assets
|
44,064 | 48,880 | ||||||||||||||||||||||
Total assets
|
$ | 1,404,939 | $ | 1,021,224 | ||||||||||||||||||||
Liabilities and Equity
|
||||||||||||||||||||||||
Deposit accounts:
|
||||||||||||||||||||||||
Noninterest-bearing
|
$ | 309,311 | $ | - | 0.00 | % | $ | 140,352 | $ | - | 0.00 | % | ||||||||||||
Interest-bearing:
|
||||||||||||||||||||||||
Transaction accounts
|
521,784 | 280 | 0.22 | % | 323,813 | 223 | 0.28 | % | ||||||||||||||||
Retail certificates of deposit
|
336,165 | 745 | 0.89 | % | 416,818 | 1,221 | 1.18 | % | ||||||||||||||||
Wholesale certificates of deposit
|
4,690 | 8 | 0.68 | % | 3,514 | 3 | 0.34 | % | ||||||||||||||||
Total deposits
|
1,171,950 | 1,033 | 0.35 | % | 884,497 | 1,447 | 0.66 | % | ||||||||||||||||
FHLB advances and other borrowings
|
53,891 | 238 | 1.77 | % | 28,588 | 235 | 3.31 | % | ||||||||||||||||
Subordinated debentures
|
10,310 | 76 | 2.96 | % | 10,310 | 82 | 3.20 | % | ||||||||||||||||
Total borrowings
|
64,201 | 314 | 1.96 | % | 38,898 | 317 | 3.28 | % | ||||||||||||||||
Total deposits and borrowings
|
1,236,151 | 1,347 | 0.44 | % | 923,395 | 1,764 | 0.77 | % | ||||||||||||||||
Other liabilities
|
9,645 | 5,627 | ||||||||||||||||||||||
Total liabilities
|
1,245,796 | 929,022 | ||||||||||||||||||||||
Stockholders' equity
|
159,143 | 92,202 | ||||||||||||||||||||||
Total liabilities and equity
|
$ | 1,404,939 | $ | 1,021,224 | ||||||||||||||||||||
Net interest income
|
$ | 13,589 | $ | 11,282 | ||||||||||||||||||||
Net interest rate spread (2)
|
3.96 | % | 4.59 | % | ||||||||||||||||||||
Net interest margin (3)
|
4.01 | % | 4.64 | % | ||||||||||||||||||||
Ratio of interest-earning assets to deposits and borrowings
|
110.09 | % | 105.30 | % | ||||||||||||||||||||
(1) Average balance includes loans held for sale and nonperforming loans and is net of deferred loan origination fees, unamortized discounts and premiums, and ALLL. | ||||||||||||||||||||||||
(2) Represents the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities. | ||||||||||||||||||||||||
(3) Represents net interest income divided by average interest-earning assets. |
Average Balance Sheet
|
||||||||||||||||||||||||
Six Months Ended
|
Six Months Ended
|
|||||||||||||||||||||||
June 30, 2013
|
June 30, 2012
|
|||||||||||||||||||||||
Average
|
Average
|
Average
|
Average
|
|||||||||||||||||||||
Balance
|
Interest
|
Yield/Cost
|
Balance
|
Interest
|
Yield/Cost
|
|||||||||||||||||||
Assets
|
(dollars in thousands)
|
|||||||||||||||||||||||
Interest-earning assets:
|
||||||||||||||||||||||||
Cash and cash equivalents
|
$ | 83,879 | $ | 98 | 0.24 | % | $ | 84,583 | $ | 86 | 0.20 | % | ||||||||||||
Federal funds sold
|
27 | - | 0.00 | % | 27 | - | 0.00 | % | ||||||||||||||||
Investment securities
|
216,854 | 1,989 | 1.83 | % | 149,683 | 1,741 | 2.33 | % | ||||||||||||||||
Loans receivable, net (1)
|
946,631 | 27,084 | 5.77 | % | 717,551 | 23,335 | 6.50 | % | ||||||||||||||||
Total interest-earning assets
|
1,247,391 | 29,171 | 4.71 | % | 951,844 | 25,162 | 5.28 | % | ||||||||||||||||
Noninterest-earning assets
|
41,789 | 44,690 | ||||||||||||||||||||||
Total assets
|
$ | 1,289,180 | $ | 996,534 | ||||||||||||||||||||
Liabilities and Equity
|
||||||||||||||||||||||||
Deposit accounts:
|
||||||||||||||||||||||||
Noninterest-bearing
|
$ | 273,440 | $ | - | 0.00 | % | $ | 129,269 | $ | - | 0.00 | % | ||||||||||||
Interest-bearing:
|
||||||||||||||||||||||||
Transaction accounts
|
451,104 | 498 | 0.22 | % | 309,614 | 552 | 0.36 | % | ||||||||||||||||
Retail certificates of deposit
|
342,782 | 1,545 | 0.91 | % | 420,226 | 2,649 | 1.27 | % | ||||||||||||||||
Wholesale certificates of deposit
|
2,772 | 9 | 0.65 | % | 1,757 | 2 | 0.23 | % | ||||||||||||||||
Total deposits
|
1,070,098 | 2,052 | 0.39 | % | 860,866 | 3,203 | 0.75 | % | ||||||||||||||||
FHLB advances and other borrowings
|
49,355 | 478 | 1.95 | % | 28,577 | 470 | 3.31 | % | ||||||||||||||||
Subordinated debentures
|
10,310 | 153 | 2.99 | % | 10,310 | 166 | 3.24 | % | ||||||||||||||||
Total borrowings
|
59,665 | 631 | 2.13 | % | 38,887 | 636 | 3.29 | % | ||||||||||||||||
Total deposits and borrowings
|
1,129,763 | 2,683 | 0.48 | % | 899,753 | 3,839 | 0.86 | % | ||||||||||||||||
Other liabilities
|
9,685 | 6,689 | ||||||||||||||||||||||
Total liabilities
|
1,139,448 | 906,442 | ||||||||||||||||||||||
Stockholders' equity
|
149,732 | 90,092 | ||||||||||||||||||||||
Total liabilities and equity
|
$ | 1,289,180 | $ | 996,534 | ||||||||||||||||||||
Net interest income
|
$ | 26,488 | $ | 21,323 | ||||||||||||||||||||
Net interest rate spread (2)
|
4.23 | % | 4.42 | % | ||||||||||||||||||||
Net interest margin (3)
|
4.28 | % | 4.48 | % | ||||||||||||||||||||
Ratio of interest-earning assets to deposits and borrowings
|
110.41 | % | 105.79 | % | ||||||||||||||||||||
(1) Average balance includes loans held for sale and nonperforming loans and is net of deferred loan origination fees, unamortized discounts and premiums, and ALLL. | ||||||||||||||||||||||||
(2) Represents the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities. | ||||||||||||||||||||||||
(3) Represents net interest income divided by average interest-earning assets. |
●
|
Changes in interest rates (changes in interest rates multiplied by prior volume);
|
●
|
Changes in volume (changes in volume multiplied by prior rate); and
|
●
|
The net change or the combined impact of volume and rate changes allocated proportionately to changes in volume and changes in interest rates.
|
Three Months Ended June 30, 2013
|
Six Months Ended June 30, 2013
|
|||||||||||||||||||||||
Compared to
|
Compared to
|
|||||||||||||||||||||||
Three Months Ended June 30, 2012
|
Six Months Ended June 30, 2012
|
|||||||||||||||||||||||
Increase (decrease) due to
|
Increase (decrease) due to
|
|||||||||||||||||||||||
Rate
|
Volume
|
Net
|
Rate
|
Volume
|
Net
|
|||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||
Interest-earning assets
|
||||||||||||||||||||||||
Cash and cash equivalents
|
$ | 11 | $ | 14 | $ | 25 | $ | 13 | $ | (1 | ) | $ | 12 | |||||||||||
Investment securities
|
(317 | ) | 592 | 275 | (420 | ) | 668 | 248 | ||||||||||||||||
Loans receivable, net
|
(1,811 | ) | 3,401 | 1,590 | (3,045 | ) | 6,794 | 3,749 | ||||||||||||||||
Total interest-earning assets
|
$ | (2,117 | ) | $ | 4,007 | $ | 1,890 | $ | (3,452 | ) | $ | 7,461 | $ | 4,009 | ||||||||||
Interest-bearing liabilities
|
||||||||||||||||||||||||
Transaction accounts
|
$ | (57 | ) | $ | 114 | $ | 57 | $ | (258 | ) | $ | 204 | $ | (54 | ) | |||||||||
Retail certificates of deposit
|
(267 | ) | (209 | ) | (476 | ) | (671 | ) | (433 | ) | (1,104 | ) | ||||||||||||
Wholesale/brokered certificates of deposit
|
4 | 1 | 5 | 6 | 1 | 7 | ||||||||||||||||||
FHLB advances and other borrowings
|
(142 | ) | 145 | 3 | (244 | ) | 252 | 8 | ||||||||||||||||
Subordinated debentures
|
(6 | ) | - | (6 | ) | (13 | ) | - | (13 | ) | ||||||||||||||
Total interest-bearing liabilities
|
$ | (468 | ) | $ | 51 | $ | (417 | ) | $ | (1,180 | ) | $ | 24 | $ | (1,156 | ) | ||||||||
Change in net interest income
|
$ | (1,649 | ) | $ | 3,956 | $ | 2,307 | $ | (2,272 | ) | $ | 7,437 | $ | 5,165 |
●
|
One-time merger related expenses increased by $5.0 million;
|
●
|
Compensation and benefits costs increased by $1.7 million, primarily due to the increase in employees from our acquisition activities and new hires in the lending and credit areas to increase our production of commercial and industrial (“C&I”) loans, commercial real estate (“CRE”) loans, SBA loans, homeowner association (“HOA”) loans, and construction loans;
|
●
|
Deposit expenses of $481,000, primarily due to our acquisition activities;
|
●
|
Premises and occupancy by $348,000, primarily due to our acquisition activities and a new leased corporate headquarters needed to support our growth; and
|
●
|
Other expense of $345,000, primarily related to core deposit intangible amortization and higher miscellaneous expenses related to our acquisition activities.
|
June 30, 2013
|
December 31, 2012
|
June 30, 2012
|
||||||||||||||||||||||||||||||||||
Weighted
|
Weighted
|
Weighted
|
||||||||||||||||||||||||||||||||||
Percent
|
Average
|
Percent
|
Average
|
Percent
|
Average
|
|||||||||||||||||||||||||||||||
Amount
|
of Total
|
Interest Rate
|
Amount
|
of Total
|
Interest Rate
|
Amount
|
of Total
|
Interest Rate
|
||||||||||||||||||||||||||||
(dollars in thousands)
|
||||||||||||||||||||||||||||||||||||
Business loans:
|
||||||||||||||||||||||||||||||||||||
Commercial and industrial
|
$ | 146,240 | 13.8 | % | 5.10 | % | $ | 115,354 | 11.7 | % | 5.25 | % | $ | 84,191 | 10.5 | % | 5.47 | % | ||||||||||||||||||
Commercial owner occupied (1)
|
201,802 | 19.0 | % | 5.57 | % | 150,934 | 15.3 | % | 6.11 | % | 150,428 | 18.8 | % | 6.31 | % | |||||||||||||||||||||
SBA
|
5,820 | 0.5 | % | 5.02 | % | 6,882 | 0.7 | % | 6.04 | % | 3,995 | 0.5 | % | 6.06 | % | |||||||||||||||||||||
Warehouse facilities
|
135,317 | 12.8 | % | 4.26 | % | 195,761 | 19.9 | % | 4.80 | % | 61,111 | 7.7 | % | 5.34 | % | |||||||||||||||||||||
Real estate loans:
|
||||||||||||||||||||||||||||||||||||
Commercial non-owner occupied
|
295,767 | 27.9 | % | 5.47 | % | 253,409 | 25.6 | % | 5.68 | % | 242,700 | 30.4 | % | 5.99 | % | |||||||||||||||||||||
Multi-family
|
172,797 | 16.3 | % | 5.21 | % | 156,424 | 15.9 | % | 5.78 | % | 183,742 | 23.0 | % | 5.95 | % | |||||||||||||||||||||
One-to-four family (2)
|
84,672 | 8.0 | % | 6.05 | % | 97,463 | 9.9 | % | 4.67 | % | 56,694 | 7.1 | % | 5.11 | % | |||||||||||||||||||||
Construction
|
2,135 | 0.2 | % | 8.44 | % | - | 0.0 | % | 0.00 | % | 281 | 0.1 | % | 5.25 | % | |||||||||||||||||||||
Land
|
10,438 | 1.0 | % | 7.19 | % | 8,774 | 0.9 | % | 4.89 | % | 11,191 | 1.4 | % | 5.37 | % | |||||||||||||||||||||
Other loans
|
4,969 | 0.5 | % | 5.90 | % | 1,193 | 0.1 | % | 6.20 | % | 4,019 | 0.5 | % | 6.99 | % | |||||||||||||||||||||
Total gross loans (3)
|
1,059,957 | 100.0 | % | 5.18 | % | 986,194 | 100.0 | % | 5.44 | % | 798,352 | 100.0 | % | 5.88 | % | |||||||||||||||||||||
Less loans held for sale
|
3,617 | 3,681 | 2,401 | |||||||||||||||||||||||||||||||||
Total gross loans held for investment
|
1,056,340 | 982,513 | 795,951 | |||||||||||||||||||||||||||||||||
Less:
|
||||||||||||||||||||||||||||||||||||
Deferred loan origination costs/(fees) and premiums/(discounts)
|
(910 | ) | (306 | ) | (632 | ) | ||||||||||||||||||||||||||||||
Allowance for loan losses
|
(7,994 | ) | (7,994 | ) | (7,658 | ) | ||||||||||||||||||||||||||||||
Loans held for investment, net
|
$ | 1,047,436 | $ | 974,213 | $ | 787,661 | ||||||||||||||||||||||||||||||
(1) Majority secured by real estate.
|
||||||||||||||||||||||||||||||||||||
(2) Includes second trust deeds.
|
||||||||||||||||||||||||||||||||||||
(3) Total gross loans for June 30, 2013 is net of the unaccreted mark-to-market discounts on Canyon National loans of $2.1 million, on Palm Desert National loans of $4.0 million, and on SDTB loans of $560,000 and of the mark-to-market premium on FAB loans of $103,000.
|
Six Months Ended
|
||||||||
June 30, 2013
|
June 30, 2012
|
|||||||
(in thousands)
|
||||||||
Beginning balance gross loans
|
$ | 986,194 | $ | 739,254 | ||||
Loans originated:
|
||||||||
Business loans:
|
||||||||
Commercial and industrial
|
28,474 | 16,894 | ||||||
Commercial owner occupied (1)
|
20,859 | 6,516 | ||||||
SBA
|
3,995 | 1,332 | ||||||
Warehouse facilities
|
74,860 | 51,449 | ||||||
Real estate loans:
|
||||||||
Commercial non-owner occupied
|
39,970 | 32,529 | ||||||
Multi-family
|
41,608 | 6,497 | ||||||
One-to-four family (2)
|
825 | 6,086 | ||||||
Other loans
|
3,068 | 663 | ||||||
Total loans originated
|
213,659 | 121,966 | ||||||
Loans purchased:
|
||||||||
Business loans:
|
||||||||
Commercial and industrial
|
30,084 | 5,033 | ||||||
Commercial owner occupied
|
38,635 | 11,786 | ||||||
Real estate loans:
|
||||||||
Commercial non-owner occupied
|
16,763 | 55,313 | ||||||
Multi-family
|
36 | 3,690 | ||||||
One-to-four family
|
1,639 | 4,437 | ||||||
Construction
|
1,399 | 198 | ||||||
Land
|
2,770 | 5,395 | ||||||
Other loans
|
716 | 2,256 | ||||||
Total loans purchased
|
92,042 | 88,108 | ||||||
Total loan production
|
305,701 | 210,074 | ||||||
Principal repayments
|
(78,619 | ) | (92,186 | ) | ||||
Sales of loans
|
(7,220 | ) | (584 | ) | ||||
Change in undisbursed loan funds, net
|
(146,741 | ) | (57,361 | ) | ||||
Charge-offs
|
(847 | ) | (959 | ) | ||||
Change in mark-to-market discounts from acquisitions
|
2,485 | 2,611 | ||||||
Transfer to other real estate owned
|
(996 | ) | (2,497 | ) | ||||
Net increase in gross loans
|
73,763 | 59,098 | ||||||
Ending balance gross loans
|
$ | 1,059,957 | $ | 798,352 | ||||
(1) Majority secured by real estate.
|
||||||||
(2) Includes second trust deeds.
|
June 30, 2013
|
||||||||||||||||
Weighted
|
Weighted
|
|||||||||||||||
Number
|
Average
|
Average Months
|
||||||||||||||
Periods to Repricing
|
of Loans
|
Amount
|
Interest Rate
|
to Reprice
|
||||||||||||
(dollars in thousands)
|
||||||||||||||||
1 Year and less
|
858 | $ | 497,542 | 5.40 | % | 3.25 | ||||||||||
Over 1 Year to 3 Years
|
38 | 32,734 | 4.67 | % | 24.47 | |||||||||||
Over 3 Years to 5 Years
|
251 | 262,087 | 4.66 | % | 50.87 | |||||||||||
Over 5 Years to 7 Years
|
31 | 66,960 | 4.19 | % | 76.07 | |||||||||||
Over 7 Years to 10 Years
|
12 | 14,828 | 4.44 | % | 101.72 | |||||||||||
Total adjustable
|
1,190 | 874,151 | 5.04 | % | 25.57 | |||||||||||
Fixed
|
787 | 185,806 | 5.87 | % | ||||||||||||
Total
|
1,977 | $ | 1,059,957 | 5.18 | % |
30 - 59 Days
|
60 - 89 Days
|
90 Days or More (1)
|
Total
|
|||||||||||||||||||||||||||||
# of
Loans
|
Principal
Balance
of Loans
|
# of
Loans
|
Principal
Balance
of Loans
|
# of
Loans
|
Principal
Balance
of Loans
|
# of
Loans
|
Principal
Balance
of Loans
|
|||||||||||||||||||||||||
(dollars in thousands)
|
||||||||||||||||||||||||||||||||
At June 30, 2013
|
||||||||||||||||||||||||||||||||
Business loans:
|
||||||||||||||||||||||||||||||||
Commercial and industrial
|
1 | $ | 7 | 1 | $ | 233 | - | $ | - | 2 | $ | 240 | ||||||||||||||||||||
Commercial owner occupied
|
1 | 640 | - | - | - | - | 1 | 640 | ||||||||||||||||||||||||
SBA
|
- | - | 1 | 25 | - | - | 1 | 25 | ||||||||||||||||||||||||
Real estate loans:
|
||||||||||||||||||||||||||||||||
Multi-family
|
- | - | - | - | 1 | 1,035 | 1 | 1,035 | ||||||||||||||||||||||||
One-to-four family
|
1 | 22 | 3 | 322 | 2 | 38 | 6 | 382 | ||||||||||||||||||||||||
Total
|
3 | $ | 669 | 5 | $ | 580 | 3 | $ | 1,073 | 11 | $ | 2,322 | ||||||||||||||||||||
Delinquent loans to total gross loans
|
0.06 | % | 0.05 | % | 0.10 | % | 0.22 | % | ||||||||||||||||||||||||
At December 31, 2012
|
||||||||||||||||||||||||||||||||
Business loans:
|
||||||||||||||||||||||||||||||||
Commercial and industrial
|
- | $ | - | 1 | $ | 58 | 1 | $ | 218 | 2 | $ | 276 | ||||||||||||||||||||
Commercial owner occupied
|
- | - | 1 | 245 | - | - | 1 | 245 | ||||||||||||||||||||||||
SBA
|
- | - | - | - | 4 | 185 | 4 | 185 | ||||||||||||||||||||||||
Real estate loans:
|
||||||||||||||||||||||||||||||||
One-to-four family
|
2 | 101 | - | - | 2 | 79 | 4 | 180 | ||||||||||||||||||||||||
Other
|
1 | 5 | - | - | - | - | 1 | 5 | ||||||||||||||||||||||||
Total
|
3 | $ | 106 | 2 | $ | 303 | 7 | $ | 482 | 12 | $ | 891 | ||||||||||||||||||||
Delinquent loans to total gross loans
|
0.01 | % | 0.03 | % | 0.05 | % | 0.09 | % | ||||||||||||||||||||||||
At June 30, 2012
|
||||||||||||||||||||||||||||||||
Business loans:
|
||||||||||||||||||||||||||||||||
Commercial and industrial
|
- | $ | - | 1 | $ | 50 | - | $ | - | 1 | $ | 50 | ||||||||||||||||||||
Commercial owner occupied
|
- | - | - | - | 3 | 1,528 | 3 | 1,528 | ||||||||||||||||||||||||
SBA
|
1 | 46 | - | - | 6 | 474 | 7 | 520 | ||||||||||||||||||||||||
Real estate loans:
|
||||||||||||||||||||||||||||||||
Commercial non-owner occupied
|
1 | 259 | - | - | 2 | 1,151 | 3 | 1,410 | ||||||||||||||||||||||||
Multi-family
|
- | - | 1 | 2,835 | - | - | 1 | 2,835 | ||||||||||||||||||||||||
One-to-four family
|
1 | 93 | - | - | 1 | 13 | 2 | 106 | ||||||||||||||||||||||||
Land
|
- | - | - | - | 1 | 257 | 1 | 257 | ||||||||||||||||||||||||
Other
|
2 | 1 | - | - | - | - | 2 | 1 | ||||||||||||||||||||||||
Total
|
5 | $ | 399 | 2 | $ | 2,885 | 13 | $ | 3,423 | 20 | $ | 6,707 | ||||||||||||||||||||
Delinquent loans to total gross loans
|
0.05 | % | 0.36 | % | 0.43 | % | 0.84 | % | ||||||||||||||||||||||||
(1) All loans that are delinquent 90 days or more are on nonaccrual status and reported as part of nonperforming loans.
|
June 30, 2013
|
December 31, 2012
|
June 30, 2012
|
||||||||||||||||||||||||||||||||||
Allowance
|
% of Loans
|
Allowance
|
% of Loans
|
Allowance
|
% of Loans
|
|||||||||||||||||||||||||||||||
Balance at End of
|
as a % of
|
in Category to
|
as a % of
|
in Category to
|
as a % of
|
in Category to
|
||||||||||||||||||||||||||||||
Period Applicable to
|
Amount
|
Category Total
|
Total Loans
|
Amount
|
Category Total
|
Total Loans
|
Amount
|
Category Total
|
Total Loans
|
|||||||||||||||||||||||||||
(dollars in thousands)
|
||||||||||||||||||||||||||||||||||||
Business loans:
|
||||||||||||||||||||||||||||||||||||
Commercial and industrial
|
$ | 2,079 | 1.42 | % | 13.8 | % | $ | 1,310 | 1.14 | % | 11.7 | % | $ | 1,250 | 1.48 | % | 10.5 | % | ||||||||||||||||||
Commercial owner occupied
|
1,741 | 0.86 | % | 19.0 | % | 1,512 | 1.00 | % | 15.3 | % | 1,076 | 0.72 | % | 18.8 | % | |||||||||||||||||||||
SBA
|
68 | 1.17 | % | 0.5 | % | 79 | 1.15 | % | 0.7 | % | 151 | 3.78 | % | 0.5 | % | |||||||||||||||||||||
Warehouse facilities
|
700 | 0.52 | % | 12.8 | % | 1,544 | 0.79 | % | 19.9 | % | 908 | 1.49 | % | 7.7 | % | |||||||||||||||||||||
Real estate loans:
|
||||||||||||||||||||||||||||||||||||
Commercial non-owner occupied
|
1,508 | 0.51 | % | 27.9 | % | 1,459 | 0.58 | % | 25.6 | % | 1,667 | 0.69 | % | 30.4 | % | |||||||||||||||||||||
Multi-family
|
541 | 0.31 | % | 16.3 | % | 1,145 | 0.73 | % | 15.9 | % | 2,284 | 1.24 | % | 23.0 | % | |||||||||||||||||||||
One-to-four family
|
1,139 | 1.35 | % | 8.0 | % | 862 | 0.88 | % | 9.9 | % | 303 | 0.53 | % | 7.1 | % | |||||||||||||||||||||
Construction
|
- | 0.00 | % | 0.2 | % | - | 0.00 | % | 0.0 | % | - | 0.00 | % | 0.1 | % | |||||||||||||||||||||
Land
|
180 | 1.72 | % | 1.0 | % | 31 | 0.35 | % | 0.9 | % | - | 0.00 | % | 1.4 | % | |||||||||||||||||||||
Other Loans
|
38 | 0.76 | % | 0.5 | % | 52 | 4.36 | % | 0.1 | % | 19 | 0.47 | % | 0.5 | % | |||||||||||||||||||||
Total
|
$ | 7,994 | 0.75 | % | 100.0 | % | $ | 7,994 | 0.81 | % | 100.0 | % | $ | 7,658 | 0.96 | % | 100.0 | % |
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||
2013
|
2012
|
2013
|
2012
|
|||||||||||||
(dollars in thousands)
|
||||||||||||||||
Balance, beginning of period
|
$ | 7,994 | $ | 8,116 | $ | 7,994 | $ | 8,522 | ||||||||
Provision for loan losses
|
322 | - | 618 | - | ||||||||||||
Charge-offs:
|
||||||||||||||||
Business loans:
|
||||||||||||||||
Commercial and industrial
|
- | - | (58 | ) | (191 | ) | ||||||||||
Commercial owner occupied
|
- | (265 | ) | - | (265 | ) | ||||||||||
SBA
|
- | (1 | ) | (5 | ) | (109 | ) | |||||||||
Real estate:
|
||||||||||||||||
Commercial non-owner occupied
|
(356 | ) | (87 | ) | (757 | ) | (88 | ) | ||||||||
Multi-family
|
(11 | ) | - | (11 | ) | - | ||||||||||
One-to-four family
|
- | (183 | ) | (10 | ) | (305 | ) | |||||||||
Other loans
|
- | - | (6 | ) | (1 | ) | ||||||||||
Total charge-offs
|
(367 | ) | (536 | ) | (847 | ) | (959 | ) | ||||||||
Recoveries :
|
||||||||||||||||
Business loans:
|
||||||||||||||||
Commercial and industrial
|
14 | 1 | 21 | 2 | ||||||||||||
SBA
|
25 | 66 | 44 | 77 | ||||||||||||
Real estate:
|
||||||||||||||||
One-to-four family
|
1 | 4 | 44 | 5 | ||||||||||||
Other loans
|
5 | 7 | 120 | 11 | ||||||||||||
Total recoveries
|
45 | 78 | 229 | 95 | ||||||||||||
Net loan charge-offs
|
(322 | ) | (458 | ) | (618 | ) | (864 | ) | ||||||||
Balance at end of period
|
$ | 7,994 | $ | 7,658 | $ | 7,994 | $ | 7,658 | ||||||||
Ratios:
|
||||||||||||||||
Net charge-offs to average total loans, net
|
0.13 | % | 0.25 | % | 0.13 | % | 0.24 | % | ||||||||
Allowance for loan losses to gross loans at end of period
|
0.75 | % | 0.96 | % | 0.75 | % | 0.96 | % |
June 30, 2013
|
||||||||||||||||
Amortized Cost
|
Unrealized
Gain
|
Unrealized
Loss
|
Estimated
Fair Value
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Investment securities available for sale:
|
|
|||||||||||||||
U.S. Treasury
|
$ | 73 | $ | 10 | $ | - | $ | 83 | ||||||||
Corporate
|
9,169 | - | - | 9,169 | ||||||||||||
Municipal bonds
|
96,257 | 226 | (1,736 | ) | 94,747 | |||||||||||
Mortgage-backed securities
|
210,367 | 736 | (2,055 | ) | 209,048 | |||||||||||
Total securities available for sale
|
315,866 | 972 | (3,791 | ) | 313,047 | |||||||||||
December 31, 2012
|
||||||||||||||||
Amortized Cost
|
Unrealized
Gain
|
Unrealized
Loss
|
Estimated
Fair Value
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Investment securities available for sale:
|
||||||||||||||||
U.S. Treasury
|
$ | 147 | $ | 12 | $ | - | $ | 159 | ||||||||
Municipal bonds
|
25,401 | 1,186 | (1 | ) | 26,586 | |||||||||||
Mortgage-backed securities
|
56,641 | 1,162 | (482 | ) | 57,321 | |||||||||||
Total securities available for sale
|
82,189 | 2,360 | (483 | ) | 84,066 | |||||||||||
June 30, 2012
|
||||||||||||||||
Amortized Cost
|
Unrealized
Gain
|
Unrealized
Loss
|
Estimated
Fair Value
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Investment securities available for sale:
|
||||||||||||||||
U.S. Treasury
|
$ | 247 | $ | 14 | $ | - | $ | 261 | ||||||||
Municipal bonds
|
39,928 | 1,259 | (71 | ) | 41,116 | |||||||||||
Mortgage-backed securities
|
103,990 | 1,389 | (622 | ) | 104,757 | |||||||||||
Total securities available for sale
|
144,165 | 2,662 | (693 | ) | 146,134 |
June 30, 2013
|
||||||||||||||||||||||||||||||||||||||||
One Year
|
More than One
|
More than Five Years
|
More than
|
|
||||||||||||||||||||||||||||||||||||
or Less
|
to Five Years
|
to Ten Years
|
Ten Years
|
Total
|
||||||||||||||||||||||||||||||||||||
Weighted
|
Weighted
|
Weighted
|
Weighted
|
Weighted
|
||||||||||||||||||||||||||||||||||||
Fair
|
Average
|
Fair
|
Average
|
Fair
|
Average
|
Fair
|
Average
|
Fair
|
Average
|
|||||||||||||||||||||||||||||||
Value
|
Yield
|
Value
|
Yield
|
Value
|
Yield
|
Value
|
Yield
|
Value
|
Yield
|
|||||||||||||||||||||||||||||||
(dollars in thousands)
|
||||||||||||||||||||||||||||||||||||||||
Investment securities available for sale:
|
||||||||||||||||||||||||||||||||||||||||
U.S. Treasury
|
$ | - | 0.00 | % | $ | 83 | 4.15 | % | $ | - | 0.00 | % | $ | - | 0.00 | % | $ | 83 | 4.15 | % | ||||||||||||||||||||
Corporate
|
2,006 | 0.75 | % | 7,163 | 2.09 | % | - | 0.00 | % | - | 0.00 | % | 9,169 | 1.80 | % | |||||||||||||||||||||||||
Municipal bonds
|
- | 0.00 | % | 7,900 | 0.93 | % | 42,550 | 1.73 | % | 44,297 | 3.10 | % | 94,747 | 2.31 | % | |||||||||||||||||||||||||
Mortgage-backed securities
|
- | 0.00 | % | 54 | 5.27 | % | 15,931 | 1.07 | % | 193,063 | 2.02 | % | 209,048 | 1.95 | % | |||||||||||||||||||||||||
Total investment securities available for sale
|
2,006 | 0.75 | % | 15,200 | 1.51 | % | 58,481 | 1.55 | % | 237,360 | 2.22 | % | 313,047 | 2.05 | % | |||||||||||||||||||||||||
Stock:
|
||||||||||||||||||||||||||||||||||||||||
FHLB
|
8,622 | 0.00 | % | - | 0.00 | % | - | 0.00 | % | - | 0.00 | % | 8,622 | 0.00 | % | |||||||||||||||||||||||||
Federal Reserve Bank/TIB
|
3,295 | 5.04 | % | - | 0.00 | % | - | 0.00 | % | - | 0.00 | % | 3,295 | 5.04 | % | |||||||||||||||||||||||||
Total stock
|
11,917 | 1.39 | % | - | 0.00 | % | - | 0.00 | % | - | 0.00 | % | 11,917 | 1.39 | % | |||||||||||||||||||||||||
Total securities
|
$ | 13,923 | 1.30 | % | $ | 15,200 | 1.51 | % | $ | 58,481 | 1.55 | % | $ | 237,360 | 2.22 | % | $ | 324,964 | 2.03 | % |
●
|
An evaluation of the present value of estimated cash flows from the security using the current yield to accrete beneficial interest and including assumptions in the prepayment rate, default rate, delinquencies, loss severity and percentage of nonperforming assets;
|
●
|
An evaluation of the estimated payback period to recover principal;
|
●
|
An analysis of the credit support available in the underlying security to absorb losses; and
|
●
|
A review of the financial condition and near term prospects of the issuer.
|
Three Months Ended
|
Three Months Ended
|
|||||||||||||||||||||||||||
June 30, 2013
|
June 30, 2012
|
|||||||||||||||||||||||||||
Rating |
Number
|
Fair Value
|
OTTI Credit Gain (Loss)
|
Non Credit Gain in Accumulated Other Comprehensive Income (AOCI)
|
Number
|
Fair Value
|
OTTI Credit Loss
|
Non Credit Gain in Accumulated Other Comprehensive Income (AOCI)
|
||||||||||||||||||||
(dollars in thousands)
|
||||||||||||||||||||||||||||
Caa3
|
1 | $ | 71 | $ | (11 | ) | $ | 7 | - | $ | - | $ | - | $ | - | |||||||||||||
C | - | - | - | - | 1 | - | (4 | ) | 2 | |||||||||||||||||||
CC
|
- | - | - | - | 2 | 394 | (33 | ) | 26 | |||||||||||||||||||
D | 3 | 420 | 6 | 5 | 1 | 39 | (8 | ) | 13 | |||||||||||||||||||
Total
|
4 | $ | 491 | $ | (5 | ) | $ | 12 | 4 | $ | 433 | $ | (45 | ) | $ | 41 | ||||||||||||
Six Months Ended
|
Six Months Ended
|
|||||||||||||||||||||||||||
June 30, 2013
|
June 30, 2012
|
|||||||||||||||||||||||||||
Rating |
Number
|
Fair Value
|
OTTI Credit Gain (Loss)
|
Non Credit Gain in Accumulated Other Comprehensive Income (AOCI)
|
Number
|
Fair Value
|
OTTI credit loss
|
Non Credit Gain in Accumulated Other Comprehensive Income (AOCI)
|
||||||||||||||||||||
(dollars in thousands)
|
||||||||||||||||||||||||||||
Caa2
|
1 | $ | 71 | $ | (11 | ) | $ | 9 | - | $ | - | $ | - | $ | - | |||||||||||||
C | - | - | - | - | 1 | - | (3 | ) | 2 | |||||||||||||||||||
CC
|
- | - | - | - | 2 | 394 | (33 | ) | 31 | |||||||||||||||||||
D | 5 | 420 | (24 | ) | 46 | 6 | 180 | (46 | ) | 66 | ||||||||||||||||||
Total
|
6 | $ | 491 | $ | (35 | ) | $ | 55 | 9 | $ | 574 | $ | (82 | ) | $ | 99 |
June 30,
|
December 31,
|
June 30,
|
||||||||||
2013
|
2012
|
2012
|
||||||||||
(dollars in thousands)
|
||||||||||||
Nonperforming assets
|
||||||||||||
Business loans:
|
||||||||||||
Commercial and industrial
|
$ | 96 | $ | 347 | $ | 9 | ||||||
Commercial owner occupied
|
- | 14 | 1,528 | |||||||||
SBA (1)
|
- | 260 | 503 | |||||||||
Real estate:
|
||||||||||||
Commercial non-owner occupied
|
450 | 670 | 2,094 | |||||||||
Multi-family
|
1,035 | 266 | 3,115 | |||||||||
One-to-four family
|
451 | 522 | 486 | |||||||||
Land
|
- | 127 | 691 | |||||||||
Total nonaccrual loans
|
2,032 | 2,206 | 8,426 | |||||||||
Other real estate owned:
|
||||||||||||
Commercial non-owner occupied
|
- | - | 117 | |||||||||
One-to-four family
|
- | - | 179 | |||||||||
Land
|
942 | 2,258 | 7,579 | |||||||||
Commercial owner occupied
|
244 | - | 1,464 | |||||||||
Total other real estate owned
|
1,186 | 2,258 | 9,339 | |||||||||
Total nonperforming assets, net
|
$ | 3,218 | $ | 4,464 | $ | 17,765 | ||||||
Allowance for loan losses
|
$ | 7,994 | $ | 7,994 | $ | 7,658 | ||||||
Allowance for loan losses as a percent of
total nonperforming loans
|
393.41 | % | 362.38 | % | 90.89 | % | ||||||
Nonperforming loans as a percent of gross loans
|
0.19 | % | 0.22 | % | 1.06 | % | ||||||
Nonperforming assets as a percent of total assets
|
0.21 | % | 0.38 | % | 1.67 | % | ||||||
(1) The SBA totals include the guaranteed amount of $185,000 as of December 31, 2012, and $237,000 as of June 30, 2012. |
June 30, 2013
|
December 31, 2012
|
June 30, 2012
|
||||||||||||||||||||||||||||||||||
Balance
|
% of Total Deposits
|
Weighted Average Rate
|
Balance
|
% of Total Deposits
|
Weighted Average Rate
|
Balance
|
% of Total Deposits
|
Weighted Average Rate
|
||||||||||||||||||||||||||||
(dollars in thousands)
|
||||||||||||||||||||||||||||||||||||
Transaction accounts:
|
||||||||||||||||||||||||||||||||||||
Noninterest bearing checking
|
$ | 345,063 | 26.3 | % | 0.00 | % | $ | 213,636 | 23.6 | % | 0.00 | % | $ | 150,538 | 16.5 | % | 0.00 | % | ||||||||||||||||||
Interest bearing checking
|
124,790 | 9.5 | % | 0.11 | % | 14,299 | 1.6 | % | 0.10 | % | 92,270 | 10.1 | % | 0.16 | % | |||||||||||||||||||||
Money market
|
425,884 | 32.4 | % | 0.29 | % | 236,206 | 26.1 | % | 0.32 | % | 145,727 | 16.0 | % | 0.36 | % | |||||||||||||||||||||
Regular passbook
|
81,277 | 6.2 | % | 0.15 | % | 79,420 | 8.8 | % | 0.22 | % | 89,559 | 9.8 | % | 0.26 | % | |||||||||||||||||||||
Total transaction accounts
|
977,014 | 74.4 | % | 0.15 | % | 543,561 | 60.1 | % | 0.19 | % | 478,094 | 52.4 | % | 0.19 | % | |||||||||||||||||||||
Certificates of deposit accounts:
|
||||||||||||||||||||||||||||||||||||
Less than 1.00%
|
163,550 | 12.4 | % | 0.51 | % | 147,813 | 16.3 | % | 0.58 | % | 128,398 | 14.1 | % | 0.71 | % | |||||||||||||||||||||
1.00 - 199 | 158,871 | 12.1 | % | 1.14 | % | 197,554 | 21.8 | % | 1.16 | % | 286,137 | 31.3 | % | 1.16 | % | |||||||||||||||||||||
2.00 - 2.99 | 12,404 | 0.9 | % | 2.80 | % | 13,439 | 1.5 | % | 2.78 | % | 17,515 | 1.9 | % | 2.72 | % | |||||||||||||||||||||
3.00 - 3.99 | 1,143 | 0.1 | % | 3.44 | % | 1,130 | 0.1 | % | 3.44 | % | 1,331 | 0.1 | % | 3.45 | % | |||||||||||||||||||||
4.00 - 4.99 | 285 | 0.0 | % | 4.23 | % | 395 | 0.1 | % | 4.29 | % | 719 | 0.1 | % | 4.29 | % | |||||||||||||||||||||
5.00 and greater
|
922 | 0.1 | % | 5.26 | % | 876 | 0.1 | % | 5.27 | % | 997 | 0.1 | % | 5.28 | % | |||||||||||||||||||||
Total certificates of deposit accounts
|
337,175 | 25.6 | % | 0.91 | % | 361,207 | 39.9 | % | 1.00 | % | 435,097 | 47.6 | % | 1.12 | % | |||||||||||||||||||||
Total deposits
|
$ | 1,314,189 | 100.0 | % | 0.35 | % | $ | 904,768 | 100.0 | % | 0.51 | % | $ | 913,191 | 100.0 | % | 0.63 | % |
●
|
Three reverse repurchase agreements totaling $28.5 million at a weighted average rate of 3.26% and secured by approximately $36.0 million of government sponsored entity MBS;
|
●
|
HOA reverse repurchase agreements totaling $19.6 million at a weighted average rate of 0.02%; and
|
●
|
Subordinated Debentures used to fund the issuance of Trust Preferred Securities in 2004 of $10.3 million with a rate of 3.03%. For additional information about the Subordinated Debentures and Trust Preferred Securities, see Note 7 to the Consolidated Financial Statements in this report.
|
June 30, 2013
|
December 31, 2012
|
June 30, 2012
|
||||||||||||||||||||||
Balance
|
Weighted Average Rate
|
Balance
|
Weighted Average Rate
|
Balance
|
Weighted Average Rate
|
|||||||||||||||||||
(dollars in thousands)
|
||||||||||||||||||||||||
FHLB advances
|
$ | - | 0.00 | % | $ | 87,000 | 0.28 | % | $ | - | 0.00 | % | ||||||||||||
Reverse repurchase agreements
|
48,082 | 1.94 | % | 28,500 | 3.26 | % | 28,500 | 3.26 | % | |||||||||||||||
Subordinated debentures
|
10,310 | 3.03 | % | 10,310 | 3.09 | % | 10,310 | 3.22 | % | |||||||||||||||
Total borrowings
|
$ | 58,392 | 2.13 | % | $ | 125,810 | 1.19 | % | $ | 38,810 | 3.25 | % | ||||||||||||
Weighted average cost of
borrowings during the quarter
|
1.96 | % | 3.24 | % | 3.28 | % | ||||||||||||||||||
Borrowings as a percent of total assets
|
3.7 | % | 10.7 | % | 3.6 | % |
PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES
|
||||||||||||
GAAP Reconciliation
|
||||||||||||
(dollars in thousands)
|
||||||||||||
June 30, 2013
|
December 31, 2012
|
June 30, 2012
|
||||||||||
Total stockholders' equity
|
$ | 168,811 | $ | 134,517 | $ | 96,069 | ||||||
Less: Intangible assets
|
(25,369 | ) | (2,626 | ) | (2,781 | ) | ||||||
Tangible common equity
|
$ | 143,442 | $ | 131,891 | $ | 93,288 | ||||||
Total assets
|
$ | 1,558,458 | $ | 1,173,792 | $ | 1,065,035 | ||||||
Less: Intangible assets
|
(25,369 | ) | (2,626 | ) | (2,781 | ) | ||||||
Tangible assets
|
$ | 1,533,089 | $ | 1,171,166 | $ | 1,062,254 | ||||||
Tangible common equity ratio
|
9.36 | % | 11.26 | % | 8.78 | % |
●
|
Net change of $146.7 million of undisbursed loan funds;
|
●
|
Cash of $138.8 million acquired from the FAB and SDTB acquisitions;
|
●
|
Proceeds of $102.8 million from the sale of securities available for sale;
|
●
|
Proceeds of $86.7 million from the sale and principal payments on loans held for investment;
|
●
|
Principal payments of $16.6 million from securities available for sale; and
|
●
|
Net proceeds from the issuance of stock related to the underwriter’s over-allotment option of $4.7 million.
|
●
|
Purchase and originate loans held for investment of $236.9 million;
|
●
|
Absorb deposit outflows of $131.3 million; and
|
●
|
Repay FHLB advances and other borrowings of $84.3 million.
|
June 30, 2013
|
||||||||||||||||||||
Less than 1 year
|
1 - 3 years
|
3 -5 years
|
More than 5 years
|
Total
|
||||||||||||||||
(in thousands)
|
||||||||||||||||||||
Contractual obligations
|
||||||||||||||||||||
FHLB advances
|
$ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||
Other borrowings
|
19,582 | - | 10,000 | 18,500 | 48,082 | |||||||||||||||
Subordinated debentures
|
- | - | - | 10,310 | 10,310 | |||||||||||||||
Certificates of deposit
|
291,281 | 40,635 | 1,996 | 3,263 | 337,175 | |||||||||||||||
Operating leases
|
2,233 | 5,414 | 4,880 | 7,563 | 20,090 | |||||||||||||||
Total contractual cash obligations
|
$ | 313,096 | $ | 46,049 | $ | 16,876 | $ | 39,636 | $ | 415,657 |
June 30, 2013
|
||||||||||||||||||||
Less than 1 year
|
1 - 3 years
|
3 -5 years
|
More than 5 years
|
Total
|
||||||||||||||||
(in thousands)
|
||||||||||||||||||||
Other unused commitments
|
||||||||||||||||||||
Home equity lines of credit
|
$ | 101 | $ | 333 | $ | 1,437 | $ | 3,242 | $ | 5,113 | ||||||||||
Commercial and industrial
|
35,736 | 6,335 | 1,307 | 989 | 44,367 | |||||||||||||||
Warehouse facilities
|
- | - | - | 181,963 | 181,963 | |||||||||||||||
Standby letters of credit
|
2,829 | 744 | - | - | 3,573 | |||||||||||||||
All other
|
973 | 50 | - | 386 | 1,409 | |||||||||||||||
Total commitments
|
$ | 39,639 | $ | 7,462 | $ | 2,744 | $ | 186,580 | $ | 236,425 |
Actual
|
Minimum Required for Capital Adequacy Purposes
|
Required to be Well Capitalized Under Prompt Corrective Action Regulations
|
||||||||||||||||||||||
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
|||||||||||||||||||
(dollars in thousands)
|
||||||||||||||||||||||||
At June 30, 2013
|
||||||||||||||||||||||||
Tier 1 Capital (to adjusted tangible assets)
|
||||||||||||||||||||||||
Bank
|
$ | 151,488 | 10.97 | % | $ | 55,251 | 4.00 | % | $ | 69,063 | 5.00 | % | ||||||||||||
Consolidated
|
153,890 | 11.15 | % | 55,201 | 4.00 | % | N/A | N/A | ||||||||||||||||
Tier 1 Risk-Based Capital (to risk-weighted assets)
|
||||||||||||||||||||||||
Bank
|
151,488 | 13.34 | % | 45,419 | 4.00 | % | 68,129 | 6.00 | % | |||||||||||||||
Consolidated
|
153,890 | 13.54 | % | 45,456 | 4.00 | % | N/A | N/A | ||||||||||||||||
Total Capital (to risk-weighted assets)
|
||||||||||||||||||||||||
Bank
|
159,721 | 14.07 | % | 90,839 | 8.00 | % | 113,549 | 10.00 | % | |||||||||||||||
Consolidated
|
162,124 | 14.27 | % | 90,911 | 8.00 | % | N/A | N/A | ||||||||||||||||
At December 31, 2012
|
||||||||||||||||||||||||
Tier 1 Capital (to adjusted tangible assets)
|
||||||||||||||||||||||||
Bank
|
$ | 129,055 | 12.07 | % | $ | 42,773 | 4.00 | % | $ | 53,466 | 5.00 | % | ||||||||||||
Consolidated
|
135,883 | 12.71 | % | 42,771 | 4.00 | % | N/A | N/A | ||||||||||||||||
Tier 1 Risk-Based Capital (to risk-weighted assets)
|
||||||||||||||||||||||||
Bank
|
129,055 | 12.99 | % | 39,750 | 4.00 | % | 59,625 | 6.00 | % | |||||||||||||||
Consolidated
|
135,883 | 13.61 | % | 39,924 | 4.00 | % | N/A | N/A | ||||||||||||||||
Total Capital (to risk-weighted assets)
|
||||||||||||||||||||||||
Bank
|
137,049 | 13.79 | % | 79,500 | 8.00 | % | 99,375 | 10.00 | % | |||||||||||||||
Consolidated
|
144,004 | 14.43 | % | 79,848 | 8.00 | % | N/A | N/A | ||||||||||||||||
At June 30, 2012
|
||||||||||||||||||||||||
Tier 1 Capital (to adjusted tangible assets)
|
||||||||||||||||||||||||
Bank
|
$ | 96,086 | 9.48 | % | $ | 40,526 | 4.00 | % | $ | 50,657 | 5.00 | % | ||||||||||||
Consolidated
|
97,168 | 9.60 | % | 40,493 | 4.00 | % | N/A | N/A | ||||||||||||||||
Tier 1 Risk-Based Capital (to risk-weighted assets)
|
||||||||||||||||||||||||
Bank
|
96,086 | 11.28 | % | 34,060 | 4.00 | % | 51,090 | 6.00 | % | |||||||||||||||
Consolidated
|
97,168 | 11.35 | % | 34,245 | 4.00 | % | N/A | N/A | ||||||||||||||||
Total Capital (to risk-weighted assets)
|
||||||||||||||||||||||||
Bank
|
103,745 | 12.18 | % | 68,120 | 8.00 | % | 85,150 | 10.00 | % | |||||||||||||||
Consolidated
|
104,931 | 12.26 | % | 68,490 | 8.00 | % | N/A | N/A |
Exhibit 31.1
|
Certification of Chief Executive Officer Pursuant to Rule 13a-14(a)/15(d)-14(a) under the Securities Exchange Act of 1934, as amended
|
|
Exhibit 31.2
|
Certification of Chief Financial Officer Pursuant to Rule 13a-14(a)/15(d)-14(a) under the Securities Exchange Act of 1934, as amended
|
|
Exhibit 32
|
Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002
|
|
Exhibit 101.INS
|
XBRL Instance Document (1)
|
|
Exhibit 101.SCH
|
XBRL Taxonomy Extension Schema Document (1)
|
|
Exhibit 101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document (1)
|
|
Exhibit 101.DEF
|
XBRL Taxonomy Extension Definitions Linkbase Document (1)
|
|
Exhibit 101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document (1)
|
|
Exhibit 101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document (1)
|
August 9, 2013
|
By:
|
/s/ Steve Gardner
|
Date
|
Steve Gardner
|
|
President and Chief Executive Officer
|
||
(principal executive officer)
|
||
August 9, 2013
|
By:
|
/s/ Kent J. Smith
|
Date
|
Kent J. Smith
|
|
Executive Vice President and Chief Financial Officer
|
||
(principal financial and accounting officer)
|
|
Index to Exhibits
|
Exhibit 31.1
|
Certification of Chief Executive Officer Pursuant to Rule 13a-14(a)/15(d)-14(a) under the Securities Exchange Act of 1934, as amended
|
|
Exhibit 31.2
|
Certification of Chief Financial Officer Pursuant to Rule 13a-14(a)/15(d)-14(a) under the Securities Exchange Act of 1934, as amended
|
|
Exhibit 32
|
Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002
|
|
Exhibit 101.INS
|
XBRL Instance Document (1)
|
|
Exhibit 101.SCH
|
XBRL Taxonomy Extension Schema Document (1)
|
|
Exhibit 101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document (1)
|
|
Exhibit 101.DEF
|
XBRL Taxonomy Extension Definitions Linkbase Document (1)
|
|
Exhibit 101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document (1)
|
|
Exhibit 101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document (1)
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Pacific Premier Bancorp, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Dated:
|
August 9, 2013
|
/s/ Steve Gardner
|
|
Steve Gardner
|
|||
President and Chief Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Pacific Premier Bancorp, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Dated:
|
August 9, 2013
|
/s/ Kent J. Smith
|
|
Kent J. Smith
|
|||
Executive Vice President and Chief Financial Officer
|
a)
|
the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
b)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Investment Securities (Tables)
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
|
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Investment Securities | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of amortized cost and estimated fair value of securities |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of number, fair value and gross unrealized holding losses of the Company's investment securities by investment category and length of time that the securities have been in a continuous loss position |
|
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Schedule of amortized cost and estimated fair value of investment securities available for sale by contractual maturity |
|
Acquisitions
|
6 Months Ended |
---|---|
Jun. 30, 2013
|
|
Acquisitions | |
Acquisitions | Note 3 - Acquisitions
San Diego Trust Bank (“SDTB”) Acquisition
Effective June 25, 2013, the Bank acquired SDTB (“SDTB Acquisition”), a San Diego, California based state-chartered bank, pursuant to the terms of a definitive agreement entered into by the Corporation, the Bank and SDTB on March 6, 2013. As a result of the SDTB Acquisition, the Bank acquired and recorded at the acquisition date assets with a fair value of approximately $201.1 million, including:
· $125.9 million in investment securities, including Federal Home Loan Bank (“FHLB”) stock;
· $42.4 million of loans;
· $14.1 million of cash and cash equivalents;
· $6.4 million in goodwill;
· $5.8 million in bank owned life insurance;
· $3.7 million of other types of assets; and
· $2.8 million of a core deposit intangible.
Also as a result of the SDTB Acquisition, the Bank recorded equity of $14.4 million in connection with the Corporation’s stock issued to SDTB shareholders as part of the acquisition consideration and assumed at acquisition date liabilities with a fair value of approximately $186.7 million, including:
· $178.8 million in deposit transaction accounts;
· $5.1 million in retail certificates of deposit;
· $1.9 million other liabilities; and
· $922,000 in deferred tax liability.
The fair values of the assets acquired and liabilities assumed were determined based on the requirements of FASB Accounting Standards Codification (“ASC”) Topic 820: Fair Value Measurements and Disclosures.
The acquisition is an opportunity for the Company to acquire a banking network that will complement our existing banking franchise and expand our footprint into a new market. Additionally, this partnership will improve the Company’s deposit base, lower its cost of deposits and provide the opportunity to accelerate future core deposit growth. Additionally, the acquisition of SDTB allowed the Company to deploy a portion of its current capital base into a compelling investment.
First Associations Bank (“FAB”) Acquisition
Effective March 15, 2013, the Bank acquired FAB (“FAB Acquisition”), a Dallas, Texas, based Texas-chartered bank, pursuant to the terms of a definitive agreement entered into by the Corporation, the Bank and FAB on October 15, 2012. As a result of the FAB Acquisition, the Bank acquired and recorded at the acquisition date assets with a fair value of approximately $394.1 million, including:
· $223.0 million in investment securities, including FHLB and TIB-The Independent Bankers Bank (“TIB”) stock;
· $124.7 million of cash and cash equivalents;
· $26.4 million of loans;
· $11.9 million in goodwill;
· $6.2 million of other types of assets; and
· $1.9 million of a core deposit intangible.
Also as a result of the FAB Acquisition, the Bank recorded equity of $15.9 million in connection with the Corporation’s stock issued to FAB shareholders as part of the acquisition consideration and assumed at acquisition date liabilities with a fair value of approximately $378.2 million, including:
· $329.5 million in deposit transaction accounts;
· $17.4 million in retail certificates of deposit;
· $9.9 million in wholesale deposits;
· $16.9 million in other borrowings;
· $3.9 million in deferred tax liability; and
· $536,000 of other liabilities.
The fair values of the assets acquired and liabilities assumed were determined based on the requirements of FASB ASC Topic 820: Fair Value Measurements and Disclosures.
The acquisition is a unique opportunity for the Company to acquire a highly efficient, consistently profitable and niche focused business that will complement our existing banking franchise. Additionally, this partnership will improve the Company’s deposit base, lower its cost of deposits and provide the platform to accelerate future core deposit growth. Additionally, the acquisition of FAB allowed the Company to deploy a portion of its current capital base into a compelling investment.
Palm Desert National Bank (“Palm Desert National”) Acquisition
Effective April 27, 2012, the Bank acquired certain assets and assumed certain liabilities of Palm Desert National Bank (“Palm Desert National”) from the Federal Deposit Insurance Corporation (“FDIC”) as receiver for Palm Desert National (the “Palm Desert National Acquisition”), pursuant to the terms of a purchase and assumption agreement entered into by the Bank and the FDIC on April 27, 2012. The Palm Desert National Acquisition included one branch of Palm Desert National that became a branch of the Bank upon consummation of the Palm Desert National Acquisition. The Bank did not enter into any loss sharing agreements with the FDIC in connection the Palm Desert National Acquisition. As a result of the Palm Desert National Acquisition, the Bank acquired and recorded at the acquisition date certain assets with a fair value of approximately $120.9 million, including $63.8 million of loans, $39.5 million of cash and cash equivalents, $11.5 million of other real estate owned (“OREO”), $1.5 million in investment securities, including FHLB stock and Federal Reserve Bank stock, $840,000 of a core deposit intangible and $3.8 million of other types of assets. Liabilities with a fair value of approximately $118.0 million, including $50.1 million in deposit transaction accounts, $30.8 million in retail certificates of deposit, $34.1 million in whole sale certificates of deposits, which were purposefully run off during the second quarter of 2012, $2.4 million in deferred tax liability and $578,000 of other liabilities. The fair values of the assets acquired and liabilities assumed were determined based on the requirements of FASB ASC Topic 820: Fair Value Measurements and Disclosures.
Canyon National Bank (“Canyon National) Acquisition
Effective February 11, 2011, the Bank acquired certain assets and assumed certain liabilities of Canyon National Bank (“Canyon National”) from the FDIC as receiver for Canyon National (the “Canyon National Acquisition”), pursuant to the terms of a purchase and assumption agreement entered into by the Bank and the FDIC on February 11, 2011. The Canyon National Acquisition included the three branches of Canyon National, all of which became branches of the Bank upon consummation of the Canyon National Acquisition. The Bank did not enter into any loss sharing agreements with the FDIC in connection with the Canyon National Acquisition. As a result of the Canyon National Acquisition, the Bank acquired and received certain assets with a fair value of approximately $208.9 million, including $149.7 million of loans, $16.1 million of a FDIC receivable, $13.2 million of cash and cash equivalents, $12.8 million of investment securities, $12.0 million of OREO, $2.3 million of a core deposit intangibles, $1.5 million of other assets and $1.3 million of FHLB and Federal Reserve Bank stock. Liabilities with a fair value of approximately $206.6 million were also assumed, including $204.7 million of deposits, $1.9 million in deferred tax liability and $39,000 of other liabilities. The fair values of the assets acquired and liabilities assumed were determined based on the requirements of FASB ASC Topic 820: Fair Value Measurements and Disclosures.
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Loans Held for Investment (Tables)
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Loans Held for Investment | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of composition of loan portfolio |
(1) Majority secured by real estate.
(2) Includes second trust deeds.
(3) Total gross loans for June 30, 2013 is net of the unaccreted mark-to-market discounts on Canyon National loans of $2.1 million, on Palm Desert National loans of $4.0 million, and on SDTB loans of $560,000 and of the mark-to-market premium on FAB loans of $103,000.
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Summary of Company's investment in purchased credit impaired loans, acquired from Canyon National and Palm Desert National |
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Summary of accretable yield on purchased credit impaired |
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Summary of Company's investment in impaired loans |
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Summary of additional detail on components of impaired loans |
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Summary of loan portfolio by the Company's internal risk grading system |
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Schedule of delinquencies in the Company's loan portfolio |
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Fair Value of Financial Instruments (Details 4) (USD $)
In Thousands, unless otherwise specified |
Jun. 30, 2013
|
Dec. 31, 2012
|
Jun. 30, 2012
|
---|---|---|---|
Fair Value Disclosures | |||
Impaired loans | $ 2,606 | $ 2,736 | $ 5,193 |
Other real estate owned | 1,186 | 2,258 | 9,339 |
Non-recurring basis | Fair Value Measurement Using: Level 3
|
|||
Fair Value Disclosures | |||
Impaired loans | 2,606 | 5,193 | |
Other real estate owned | 1,186 | 9,339 | |
Total assets | 3,792 | 14,532 | |
Non-recurring basis | Assets at Fair Value
|
|||
Fair Value Disclosures | |||
Impaired loans | 2,606 | 5,193 | |
Other real estate owned | 1,186 | 9,339 | |
Total assets | $ 3,792 | $ 14,532 |
Loans Held for Investment (Details) (USD $)
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
|
Dec. 31, 2012
|
Jun. 30, 2012
|
Dec. 31, 2011
|
Jun. 30, 2013
Maximum
|
Jun. 30, 2013
Canyon National
|
Jun. 30, 2013
Palm Desert National
|
Jun. 30, 2013
FAB
|
Jun. 30, 2013
San Diego Trust Bank
|
Jun. 30, 2013
Business loans: Commercial and industrial
|
Dec. 31, 2012
Business loans: Commercial and industrial
|
Jun. 30, 2012
Business loans: Commercial and industrial
|
Dec. 31, 2011
Business loans: Commercial and industrial
|
Jun. 30, 2013
Business loans: Commercial owner occupied
|
Dec. 31, 2012
Business loans: Commercial owner occupied
|
Jun. 30, 2012
Business loans: Commercial owner occupied
|
Dec. 31, 2011
Business loans: Commercial owner occupied
|
Jun. 30, 2013
Business loans: SBA
|
Dec. 31, 2012
Business loans: SBA
|
Jun. 30, 2012
Business loans: SBA
|
Dec. 31, 2011
Business loans: SBA
|
Jun. 30, 2013
Business loans: Warehouse facilities
|
Dec. 31, 2012
Business loans: Warehouse facilities
|
Jun. 30, 2012
Business loans: Warehouse facilities
|
Dec. 31, 2011
Business loans: Warehouse facilities
|
Jun. 30, 2013
Real estate loans: Commercial non-owner occupied
|
Dec. 31, 2012
Real estate loans: Commercial non-owner occupied
|
Jun. 30, 2012
Real estate loans: Commercial non-owner occupied
|
Dec. 31, 2011
Real estate loans: Commercial non-owner occupied
|
Jun. 30, 2013
Real estate loans: Multi-family
|
Dec. 31, 2012
Real estate loans: Multi-family
|
Jun. 30, 2012
Real estate loans: Multi-family
|
Dec. 31, 2011
Real estate loans: Multi-family
|
Jun. 30, 2013
Real estate loans: One-to-four family
|
Dec. 31, 2012
Real estate loans: One-to-four family
|
Jun. 30, 2012
Real estate loans: One-to-four family
|
Dec. 31, 2011
Real estate loans: One-to-four family
|
Jun. 30, 2013
Real estate loans: Construction
|
Jun. 30, 2012
Real estate loans: Construction
|
Jun. 30, 2013
Real estate loans: Land
|
Dec. 31, 2012
Real estate loans: Land
|
Jun. 30, 2012
Real estate loans: Land
|
Dec. 31, 2011
Real estate loans: Land
|
Jun. 30, 2013
Other loans
|
Dec. 31, 2012
Other loans
|
Jun. 30, 2012
Other loans
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Dec. 31, 2011
Other loans
|
|
Loans Held for Investment | |||||||||||||||||||||||||||||||||||||||||||||||
Total gross loans | $ 1,059,957,000 | $ 986,194,000 | $ 798,352,000 | $ 146,240,000 | $ 115,354,000 | $ 84,191,000 | $ 201,802,000 | $ 150,934,000 | $ 150,428,000 | $ 5,820,000 | $ 6,882,000 | $ 3,995,000 | $ 135,317,000 | $ 195,761,000 | $ 61,111,000 | $ 295,767,000 | $ 253,409,000 | $ 242,700,000 | $ 172,797,000 | $ 156,424,000 | $ 183,742,000 | $ 84,672,000 | $ 97,463,000 | $ 56,694,000 | $ 2,135,000 | $ 281,000 | $ 10,438,000 | $ 8,774,000 | $ 11,191,000 | $ 4,969,000 | $ 1,193,000 | $ 4,019,000 | |||||||||||||||
Less loans held for sale, net | 3,617,000 | 3,681,000 | 2,401,000 | ||||||||||||||||||||||||||||||||||||||||||||
Total gross loans held for investment | 1,056,340,000 | 982,513,000 | 795,951,000 | ||||||||||||||||||||||||||||||||||||||||||||
Less: Deferred loan origination costs (fees) and premiums (discounts), net | (910,000) | (306,000) | (632,000) | ||||||||||||||||||||||||||||||||||||||||||||
Less: Allowance for loan losses | (7,994,000) | (7,994,000) | (7,658,000) | (8,522,000) | (2,079,000) | (1,310,000) | (1,250,000) | (1,361,000) | (1,741,000) | (1,512,000) | (1,076,000) | (1,119,000) | (68,000) | (79,000) | (151,000) | (80,000) | (700,000) | (1,544,000) | (908,000) | (1,347,000) | (1,508,000) | (1,459,000) | (1,667,000) | (1,287,000) | (541,000) | (1,145,000) | (2,284,000) | (2,281,000) | (1,139,000) | (862,000) | (303,000) | (931,000) | (180,000) | (31,000) | (39,000) | (38,000) | (52,000) | (19,000) | (77,000) | ||||||||
Loans held for investment, net | 1,047,436,000 | 974,213,000 | 787,661,000 | ||||||||||||||||||||||||||||||||||||||||||||
Mark-to-market discount | 2,100,000 | 4,000,000 | 560,000 | ||||||||||||||||||||||||||||||||||||||||||||
Mark-to-market premium | 103,000 | ||||||||||||||||||||||||||||||||||||||||||||||
Secured loans limit to one borrower (as a percent) | 25.00% | ||||||||||||||||||||||||||||||||||||||||||||||
Unsecured loans limit to one borrower (as a percent) | 15.00% | ||||||||||||||||||||||||||||||||||||||||||||||
Secured loans limit to one borrower | 45,200,000 | ||||||||||||||||||||||||||||||||||||||||||||||
Unsecured loans limit to one borrower | 27,100,000 | ||||||||||||||||||||||||||||||||||||||||||||||
Aggregate outstanding balance of loans to one borrower of secured credit | $ 35,000,000 |
Loans Held for Investment (Details 6) (USD $)
In Thousands, unless otherwise specified |
Jun. 30, 2013
|
Dec. 31, 2012
|
Jun. 30, 2012
|
---|---|---|---|
Other information concerning the credit quality | |||
Current | $ 1,057,635 | $ 985,303 | $ 791,645 |
30-59 Days Past Due | 669 | 106 | 399 |
60-89 Days Past Due | 580 | 303 | 2,885 |
90+ Days Past Due | 1,073 | 482 | 3,423 |
Total | 1,059,957 | 986,194 | 798,352 |
Non-Accruing | 2,032 | 2,206 | 8,426 |
Business loans: Commercial and industrial
|
|||
Other information concerning the credit quality | |||
Current | 146,000 | 115,078 | 84,141 |
30-59 Days Past Due | 7 | ||
60-89 Days Past Due | 233 | 58 | 50 |
90+ Days Past Due | 218 | ||
Total | 146,240 | 115,354 | 84,191 |
Non-Accruing | 96 | 347 | 9 |
Business loans: Commercial owner occupied
|
|||
Other information concerning the credit quality | |||
Current | 201,162 | 150,689 | 148,900 |
30-59 Days Past Due | 640 | ||
60-89 Days Past Due | 245 | ||
90+ Days Past Due | 1,528 | ||
Total | 201,802 | 150,934 | 150,428 |
Non-Accruing | 14 | 1,528 | |
Business loans: SBA
|
|||
Other information concerning the credit quality | |||
Current | 5,795 | 6,697 | 3,475 |
30-59 Days Past Due | 46 | ||
60-89 Days Past Due | 25 | ||
90+ Days Past Due | 185 | 474 | |
Total | 5,820 | 6,882 | 3,995 |
Non-Accruing | 260 | 503 | |
Business loans: Warehouse facilities
|
|||
Other information concerning the credit quality | |||
Current | 135,317 | 195,761 | 61,111 |
Total | 135,317 | 195,761 | 61,111 |
Real estate loans: Commercial non-owner occupied
|
|||
Other information concerning the credit quality | |||
Current | 295,767 | 253,409 | 241,290 |
30-59 Days Past Due | 259 | ||
90+ Days Past Due | 1,151 | ||
Total | 295,767 | 253,409 | 242,700 |
Non-Accruing | 450 | 670 | 2,094 |
Real estate loans: Multi-family
|
|||
Other information concerning the credit quality | |||
Current | 171,762 | 156,424 | 180,907 |
60-89 Days Past Due | 2,835 | ||
90+ Days Past Due | 1,035 | ||
Total | 172,797 | 156,424 | 183,742 |
Non-Accruing | 1,035 | 266 | 3,115 |
Real estate loans: One-to-four family
|
|||
Other information concerning the credit quality | |||
Current | 84,290 | 97,283 | 56,588 |
30-59 Days Past Due | 22 | 101 | 93 |
60-89 Days Past Due | 322 | ||
90+ Days Past Due | 38 | 79 | 13 |
Total | 84,672 | 97,463 | 56,694 |
Non-Accruing | 451 | 522 | 486 |
Real estate loans: Construction
|
|||
Other information concerning the credit quality | |||
Current | 281 | ||
Total | 2,135 | 281 | |
Real estate loans: Land
|
|||
Other information concerning the credit quality | |||
Current | 10,438 | 8,774 | 10,934 |
90+ Days Past Due | 257 | ||
Total | 10,438 | 8,774 | 11,191 |
Non-Accruing | 127 | 691 | |
Other loans
|
|||
Other information concerning the credit quality | |||
Current | 4,969 | 1,188 | 4,018 |
30-59 Days Past Due | 5 | 1 | |
Total | $ 4,969 | $ 1,193 | $ 4,019 |
Basis of Presentation
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6 Months Ended |
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Jun. 30, 2013
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Basis of Presentation | |
Basis of Presentation | Note 1 - Basis of Presentation
The consolidated financial statements include the accounts of Pacific Premier Bancorp, Inc. (the “Corporation”) and its wholly owned subsidiaries, including Pacific Premier Bank (the “Bank”) (collectively, the “Company,” “we,” “our” or “us”). All significant intercompany accounts and transactions have been eliminated in consolidation.
In the opinion of management, the consolidated financial statements contain all adjustments (consisting of normal recurring accruals) necessary to present fairly the Company’s financial position as of June 30, 2013, December 31, 2012, and June 30, 2012, the results of its operations and comprehensive income for the three and six months ended June 30, 2013 and 2012 and the changes in stockholders’ equity and cash flows for the three and six months ended June 30, 2013 and 2012. Operating results or comprehensive income for the three and six months ended June 30, 2013 are not necessarily indicative of the results or comprehensive income that may be expected for any other interim period or the full year ending December 31, 2013.
Certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012, as amended (the “2012 Annual Report”).
The Company accounts for its investments in its wholly owned special purpose entity, PPBI Trust I, under the equity method whereby the subsidiary’s net earnings are recognized in the Company’s statement of operations.
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Investment Securities
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Jun. 30, 2013
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Investment Securities | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment Securities | Note 4 - Investment Securities
The amortized cost and estimated fair value of securities were as follows:
At June 30, 2013, the Company had an $8.6 million investment in FHLB stock carried at cost. During the second quarter of 2013, the FHLB has repurchased $1.9 million of the Company’s excess FHLB stock through its stock repurchase program.
At June 30, 2013, mortgage-backed securities (“MBS”) with an estimated par value of $34.8 million and a fair value of $36.0 million were pledged as collateral for the Bank’s three reverse repurchase agreements which totaled $28.5 million.
The table below shows the number, fair value and gross unrealized holding losses of the Company’s investment securities by investment category and length of time that the securities have been in a continuous loss position.
The amortized cost and estimated fair value of investment securities available for sale at June 30, 2013, by contractual maturity are shown in the table below.
Any temporary impairment is a result of the change in market interest rates and not the underlying issuers’ ability to repay. The Company has the intent and ability to hold these securities until the temporary impairment is eliminated. Accordingly, the Company has not recognized the temporary impairment in earnings.
Unrealized gains and losses on investment securities available for sale are recognized in stockholders’ equity as accumulated other comprehensive income (loss). At June 30, 2013, the Company had accumulated other comprehensive loss of $2.8 million, or $1.7 million net of tax, compared to accumulated other comprehensive income of $1.9 million, or $1.1 million net of tax, at December 31, 2012.
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Recently Issued Accounting Pronouncements
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6 Months Ended |
---|---|
Jun. 30, 2013
|
|
Recently Issued Accounting Pronouncements | |
Recently Issued Accounting Pronouncements | Note 2 - Recently Issued Accounting Pronouncements
In December 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Updated (“ASU”) 2011-11, “Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities”. ASU 2011-11 affects all entities that have financial instruments and derivative instruments that are either (1) offset in accordance with either Section 210-20-45 or Section 815-10-45 or (2) subject to an enforceable master netting arrangement or similar agreement. The requirements amend the disclosure requirements on offsetting in Section 210-20-50. This information is intended to enable users of an entity’s financial statements to evaluate the effect or potential effect of netting arrangements on an entity’s financial position, including the effect or potential effect of rights of setoff associated with certain financial instruments and derivative instruments in the scope of this ASU. The amended guidance is effective for interim and annual periods beginning after January 1, 2013 and should be applied retrospectively to all periods presented. The adoption of the disclosure requirements had no impact on the Company’s consolidated financial statements.
In October 2012, the FASB issued ASU 2012-06, “Subsequent Accounting for an Indemnification Asset Recognized at the Acquisition Date as a Result of a Government-Assisted Acquisition of a Financial Institution.” The amendments in this update clarify the applicable guidance for subsequently measuring an indemnification asset recognized as a result of a government-assisted acquisition of a financial institution. The update provides that changes in cash flows expected to be collected on the indemnification asset arising subsequent to initial recognition as a result of changes in cash flows expected to be collected on the related indemnified assets should be accounted for on the same basis as the change in the assets subject to indemnification. Any amortization of changes in value should be limited to the contractual term of the indemnification agreement. The Company is required to adopt this update prospectively for the quarter ending June 30, 2013. The requirements of the update are consistent with the Company’s existing accounting policy; therefore, adoption has no impact on the Company’s consolidated financial position, results of operations or cash flows.
In February 2013, the FASB issued ASU 2013-02, “Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income.” This update requires entities to provide information about the amounts reclassified out of accumulated other comprehensive income by component. In addition, entities are required to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income. The adoption of the disclosure requirements had no impact on the Company’s consolidated financial statements.
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Loans Held for Investment (Details 3) (USD $)
In Thousands, unless otherwise specified |
6 Months Ended |
---|---|
Jun. 30, 2013
|
|
Accretable yield on purchased credit impaired | |
Balance at the beginning of period | $ 2,276 |
Accretion | (287) |
Disposals and other | (514) |
Change in accretable yield | 605 |
Balance at the end of period | 2,080 |
Canyon National
|
|
Accretable yield on purchased credit impaired | |
Balance at the beginning of period | 2,029 |
Accretion | (243) |
Change in accretable yield | 157 |
Balance at the end of period | 1,943 |
Palm Desert National
|
|
Accretable yield on purchased credit impaired | |
Balance at the beginning of period | 247 |
Accretion | (44) |
Disposals and other | (514) |
Change in accretable yield | 448 |
Balance at the end of period | $ 137 |
Fair Value of Financial Instruments (Details 3) (USD $)
In Thousands, unless otherwise specified |
6 Months Ended | |
---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
|
Reconciliation of the beginning and ending balance of assets measured at fair value on a recurring basis using significant unobservable (Level 3) inputs | ||
Balance, beginning of period | $ 952 | $ 991 |
Total gains or (losses) realized/unrealized: Included in earnings (or changes in net assets) | (35) | (82) |
Total gains or (losses) realized/unrealized: Included in other comprehensive income | 186 | 124 |
Total gains or (losses) realized/unrealized: Purchases, issuances, and settlements | (117) | (146) |
Total gains or (losses) realized/unrealized: Transfer in and/or out of Level 3 | 71 | 40 |
Balance, end of period | $ 1,057 | $ 927 |