0001028918-17-000008.txt : 20170124 0001028918-17-000008.hdr.sgml : 20170124 20170124172920 ACCESSION NUMBER: 0001028918-17-000008 CONFORMED SUBMISSION TYPE: 425 PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20170124 DATE AS OF CHANGE: 20170124 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: PACIFIC PREMIER BANCORP INC CENTRAL INDEX KEY: 0001028918 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 330743196 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 425 SEC ACT: 1934 Act SEC FILE NUMBER: 000-22193 FILM NUMBER: 17544573 BUSINESS ADDRESS: STREET 1: 17901 VON KARMAN AVE STREET 2: SUITE 1200 CITY: IRVINE STATE: CA ZIP: 92614 BUSINESS PHONE: 949-864-8000 MAIL ADDRESS: STREET 1: 17901 VON KARMAN AVE STREET 2: SUITE 1200 CITY: IRVINE STATE: CA ZIP: 92614 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: PACIFIC PREMIER BANCORP INC CENTRAL INDEX KEY: 0001028918 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 330743196 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 425 BUSINESS ADDRESS: STREET 1: 17901 VON KARMAN AVE STREET 2: SUITE 1200 CITY: IRVINE STATE: CA ZIP: 92614 BUSINESS PHONE: 949-864-8000 MAIL ADDRESS: STREET 1: 17901 VON KARMAN AVE STREET 2: SUITE 1200 CITY: IRVINE STATE: CA ZIP: 92614 425 1 rule425_8-kxppbixearningsx.htm 425 Document



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

FORM 8-K

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


Date of Report (Date of earliest event reported)
January 24, 2017
PACIFIC PREMIER BANCORP, INC.
(Exact name of registrant as specified in its charter)
DELAWARE
0-22193
33-0743196
(State or other jurisdiction
of incorporation)
(Commission
File Number)
(I.R.S. Employer
Identification No.)
17901 Von Karman Avenue, Suite 1200, Irvine, CA
92614
(Address of principal executive offices)
(Zip Code)
Registrant’s telephone number, including area code
(949) 864-8000
Not Applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
[x] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 

ITEM 2.02         RESULTS OF OPERATIONS AND FINANCIAL CONDITION

On January 24, 2017, Pacific Premier Bancorp, Inc. (PPBI) issued a press release setting forth PPBI's fourth quarter 2016 unaudited financial results. A copy of PPBI’s press release is attached hereto as Exhibit 99.1 and hereby incorporated by reference.

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

ITEM 8.01.         OTHER EVENTS

The only information contained in this Form 8-K being filed for the purposes of Rule 425 the Securities Act is the information relating solely to the proposed merger between the Company and Heritages Oaks Bancorp contained in the press release furnished herewith as Exhibit 99.1 and being filed under this Item 8.01.










ITEM 9.01    FINANCIAL STATEMENTS AND EXHIBITS

99.1 Press Release dated January 24, 2017 with respect to the Registrant's unaudited financial results for the fourth quarter and year-to-date ended December 31, 2016.

SIGNATURES

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


PACIFIC PREMIER BANCORP, INC.
 
 
 
 
Dated:
January 24, 2017
By:
/s/ STEVEN R. GARDNER
 
Steven R. Gardner
 
Chairman, President and Chief Executive Officer




 EX-99.1 2 rule425_ppbixexx991xearnin.htm EXHIBIT 99.1 Exhibit


Exhibit 99.1

Filed by Pacific Premier Bancorp, Inc.
Pursuant to Rule 425 under the
Securities Act of 1933
Subject Company: Heritage Oaks Bancorp
SEC Registration Statement No.: 333-215620

Pacific Premier Bancorp, Inc. Announces Fourth Quarter 2016 Results (Unaudited)
 
Fourth Quarter 2016 Summary
 
•
Net income of $12.0 million, or $0.43 per diluted share, an increase of 30% from prior quarter
•
ROAA of 1.24% and ROATCE of 14.42%
•
Loan originations of $385 million, a 20% increase over prior quarter
•
Total loans increased $150 million, 19% annualized
•
Non-maturity deposits increased $83 million, 13% annualized growth, 81.7% of total deposits
•
Maintained strong asset quality with loan delinquencies of 0.03%
•
Net interest margin of 4.59%, core NIM increased 10bps to 4.32%
•
Efficiency ratio of 50.9%
•
Announced merger agreement for acquisition of Heritage Oaks Bancorp

Irvine, Calif., January 24, 2017 -- Pacific Premier Bancorp, Inc. (NASDAQ: PPBI) (the “Company” or "Pacific Premier"), the holding company of Pacific Premier Bank (the “Bank”), reported net income for the fourth quarter of 2016 of $12.0 million, or $0.43 per diluted share. This compares with net income of $9.2 million, or $0.33 per diluted share, for the third quarter of 2016 and net income of $8.1 million, or $0.37 per diluted share, for the fourth quarter of 2015. Net income for the fourth quarter of 2016 includes $772,000 of merger related expenses associated with the pending acquisition of Heritage Oaks Bancorp ("Heritage Oaks").

For the three months ended December 31, 2016, the Company’s return on average assets was 1.24% and return on average tangible common equity was 14.42%. For the three months ended September 30, 2016, the return on average assets was 1.00% and the return on average tangible common equity was 11.52%. For the three months ended December 31, 2015, the return on average assets was 1.18% and the return on average tangible common equity was 14.09%.    

Steven R. Gardner, Chairman, President and Chief Executive Officer of the Company, commented on the results, “We had a productive quarter from a number of perspectives, demonstrating our ability to deliver solid organic growth while also continuing to add value to our franchise through our M&A strategy. We had another quarter of record loan production, generating $385 million in new loan commitments, which resulted in annualized growth in our loan portfolio of approximately 20%. Our loan production continues to be balanced and well diversified, with more than $50 million in originations in each of our commercial, commercial real estate, construction and franchise lending businesses.

“We are making good headway in the integration of our pending acquisition of Heritage Oaks Bancorp, and are excited about the opportunities created through this transaction. The acquisition of Heritage Oaks will not only increase our scale and operational efficiencies, but also will enable us to extend our franchise into the highly attractive, deposit-rich California Central Coast market. We believe that the strong deposit franchise that Heritage Oaks has developed, combined with our proven approach to business development, will enable us to steadily increase our market share in the Central Coast in the years ahead.

“Looking ahead to 2017, we intend to continue employing the same strategies that have generated strong value creation for our shareholders over the past several years. We expect to continue generating profitable organic balance sheet growth, supplemented by additional acquisitions of commercial banks that will deepen our penetration of existing markets and expand our franchise to other markets along the West Coast. We look forward to continuing to strengthen Pacific Premier’s position as one of the leading commercial banks in California and further enhancing the value of our franchise,” said Mr. Gardner.




FINANCIAL HIGHLIGHTS
 
 
Three Months Ended
 
 
December 31,
 
September 30,
 
December 31,
 
 
2016
 
2016
 
2015
Financial Highlights
 
(dollars in thousands, except per share data)
Net income
 
$
11,953

 
$
9,227

 
$
8,065

Diluted earnings per share
 
0.43

 
0.33

 
0.37

Return on average assets
 
1.24
%
 
1.00
%
 
1.18
%
Return on average tangible common equity
 
14.42
%
 
11.52
%
 
14.09
%
Net interest margin
 
4.59
%
 
4.41
%
 
4.40
%
Cost of deposits
 
0.27
%
 
0.28
%
 
0.31
%
Efficiency ratio (1)
 
50.9
%
 
57.0
%
 
53.8
%
 
 
 
 
 
 
 
(1) Represents the ratio of noninterest expense less other real estate owned operations, core deposit intangible amortization and merger related and litigation expenses to the sum of net interest income before provision for loan losses and total noninterest income, less gains/(loss) on sale of securities and other-than-temporary impairment recovery (loss) on investment securities.

INCOME STATEMENT HIGHLIGHTS

Net Interest Income and Net Interest Margin
 
Net interest income totaled $42.3 million in the fourth quarter of 2016, an increase of $3.3 million, or 8.4%, from the third quarter of 2016. The increase in net interest income reflected higher average interest-earning assets of $151 million, and an increase in the net interest margin of 18 basis points to 4.59%. The increase in average interest-earning assets during the fourth quarter of 2016 was primarily related to organic loan growth from new loan originations, with average loan balances increasing $181 million, and to a lesser extent, increases in our securities portfolio during the quarter, which also included a special FHLB dividend of $492,000.

Net interest margin for the fourth quarter of 2016 was 4.59% compared with 4.41% from the third quarter of 2016. Core net interest margin, which excludes the impact of accretion and other one-time items, was 4.32% compared with 4.22% from the prior quarter, an increase of 10 basis points. The fourth and third quarter core net interest margin includes the benefit of loan prepayments, which added 14 and 17 basis points to each quarter, respectively. The 10 basis point core margin increase was driven by an improved overall mix of earning assets and securities investments. Our core investment portfolio yield improved to 2.31%, excluding the FHLB special dividend of $492,000, compared with 2.16% from the prior quarter and core loan yields were 4.97% and 4.96% without the benefit of loan prepayments, and 5.13% and 5.16% with loan prepayments for the fourth quarter and third quarter, respectively.

Net interest income for the fourth quarter of 2016 increased $13.5 million or 46.7% compared to the fourth quarter of 2015. The increase was related to higher average interest-earning assets of $1.1 billion, primarily related to our organic loan growth since the end of the fourth quarter of 2015 and our acquisition of Security Bank of California "Security Bank" during the first quarter of 2016. Our net interest margin increased 19 basis points from the prior year margin of 4.40%. The expansion of the net interest margin was driven by a 10 basis point increase in the yield on earning assets coupled with an 8 basis point decrease in cost of funds.


 




CONSOLIDATED AVERAGE BALANCES AND YIELD DATA
 
 
 
 
 
Three Months Ended
 
Three Months Ended
 
Three Months Ended
 
 
December 31, 2016
 
September 30, 2016
 
December 31, 2015
 
 
Average Balance
 
Interest
 
Average
Yield/
Cost
 
Average Balance
 
Interest
 
Average
Yield/
Cost
 
Average Balance
 
Interest
 
Average Yield/ Cost
Assets
 
(dollars in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
106,811

 
$
103

 
0.38
%
 
$
201,140

 
$
232

 
0.46
%
 
$
114,027

 
$
57

 
0.20
%
Investment securities
 
381,081

 
2,688

 
2.82

 
316,253

 
1,710

 
2.16

 
312,008

 
1,673

 
2.14

Loans receivable, net (1)
 
3,178,779

 
43,006

 
5.38

 
2,998,153

 
40,487

 
5.37

 
2,175,345

 
30,181

 
5.50

Total interest-earning assets
 
$
3,666,671

 
$
45,797

 
4.97
%
 
3,515,546

 
42,429

 
4.80
%
 
2,601,380

 
31,911

 
4.87
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing deposits
 
$
1,979,240

 
$
2,176

 
0.44
%
 
$
1,921,741

 
$
2,136

 
0.44
%
 
$
1,461,599

 
$
1,713

 
0.46
%
Borrowings
 
190,761

 
1,317

 
2.75

 
166,880

 
1,284

 
3.06

 
237,061

 
1,361

 
2.28

Total interest-bearing liabilities
 
$
2,170,001

 
$
3,493

 
0.64
%
 
$
2,088,621

 
$
3,420

 
0.65
%
 
$
1,698,660

 
$
3,074

 
0.72
%
Noninterest-bearing deposits
 
$
1,200,461

 
 
 
 
 
$
1,134,318

 
 
 
 
 
$
709,982

 
 
 
 
Net interest income
 
 
 
$
42,304

 
 
 
 
 
$
39,009

 
 
 
 
 
$
28,837

 
 
Net interest margin (2)
 
 

 
 
 
4.59
%
 
 

 
 
 
4.41
%
 
 

 
 
 
4.40
%
 
(1) Average balance includes nonperforming loans and is net of deferred loan origination fees, unamortized discounts and premiums.
(2) Represents net interest income divided by average interest-earning assets.
 
 

 
 

 
 

 
 


Provision for Loan Losses

A provision for loan losses was recorded for the fourth quarter of 2016 in the amount of $2.1 million, compared with a provision for loan losses of $4.0 million, which included $2.4 million of specific reserves, in the prior quarter. Net loan charge-offs were $2.6 million for the quarter, of which $2.15 million was fully reserved. In addition to covering the unreserved net charge-offs, approximately $1.6 million of the provision for loan losses during the quarter was added for loan growth.

Noninterest income
 
Noninterest income for the fourth quarter of 2016 was $4.3 million, a decrease of $1.7 million, or 27.6%, from the third quarter of 2016. The decrease from the third quarter of 2016 was primarily attributable to a decrease in net gain on sale of securities of $512,000 due to no securities sales in the fourth quarter, a decrease of $283,000 in net gain on sales of loans as we sold fewer SBA loans in the fourth quarter compared to the prior quarter, and lower sales of other loans in the fourth quarter compared to the prior quarter which had gains of $452,000 compared to none for the fourth quarter. In addition, the Company had lower recoveries of $195,000 from pre-acquisition charge-offs, and an increase in asset write-offs of $281,000.

Noninterest income for the fourth quarter of 2016 increased by $101,000, or 2.4%, compared to the fourth quarter of 2015. The increase was primarily related to an increase in deposit fees of $248,000 and, to a lesser extent, higher loan servicing fees and other income, partially offset by a decrease in gain on the sale of loans of $318,000.




 
 
Three Months Ended
 
 
December 31,
 
September 30,
 
December 31,
 
 
2016
 
2016
 
2015
NONINTEREST INCOME
 
(dollars in thousands)
Loan servicing fees
 
$
263

 
$
288

 
$
216

Deposit fees
 
934

 
829

 
686

Net gain from sales of loans
 
2,387

 
3,122

 
2,705

Net gain from sales of investment securities
 
—

 
512

 
(4
)
Other-than-temporary-impairment recovery on investment securities
 
—

 
2

 
—

Other income
 
734

 
1,215

 
614

Total noninterest income
 
$
4,318

 
$
5,968

 
$
4,217


 Noninterest Expense
 
Noninterest expense totaled $25.4 million for the fourth quarter of 2016, a decrease of $483,000, or 1.9%, compared with the third quarter of 2016. The decrease was primarily driven by one-time items in marketing expenses, compensation and benefits, and additions to the other expense off-balance sheet reserve realized in the third quarter. The fourth quarter included merger related expenses of $772,000 for the pending Heritage Oaks acquisition and OREO expense of $369,000.

Noninterest expense grew by $6.8 million, or 36.9%, in comparison to the fourth quarter of 2015. The increase in expense was primarily related to the additional costs from the personnel and branches retained from the acquisition of Security Bank, combined with our continued investment in personnel to support our organic growth in loans and deposits.

 
 
Three Months Ended
 
 
December 31,
 
September 30,
 
December 31,
 
 
2016
 
2016
 
2015
NONINTEREST EXPENSE
 
(dollars in thousands)
Compensation and benefits
 
$
13,815

 
$
14,179

 
$
9,669

Premises and occupancy
 
2,531

 
2,577

 
2,043

Data processing and communications
 
1,240

 
1,223

 
715

Other real estate owned operations, net
 
369

 
5

 
7

FDIC insurance premiums
 
320

 
442

 
345

Legal, audit and professional expense
 
830

 
676

 
826

Marketing expense
 
865

 
1,683

 
519

Office and postage expense
 
441

 
612

 
478

Loan expense
 
714

 
534

 
439

Deposit expense
 
1,388

 
1,315

 
938

Merger related expense
 
772

 
—

 
407

CDI amortization
 
525

 
525

 
345

Other expense
 
1,567

 
2,089

 
1,808

     Total noninterest expense
 
$
25,377

 
$
25,860

 
$
18,539






 
 
Three Months Ended
 
 
December 31,
 
September 30,
 
December 31,
 
 
2016
 
2016
 
2015
Operating Metrics
 
 
Efficiency ratio (1)
 
50.9
%
 
57.0
%
 
53.8
%
Noninterest expense to average total assets
 
2.58

 
2.74

 
2.67

Full-time equivalent employees, at period end
 
446

 
448

 
332

 
 
 
 
 
 
 
(1) Represents the ratio of noninterest expense less other real estate owned operations, core deposit intangible amortization and merger related and litigation expenses to the sum of net interest income before provision for loan losses and total noninterest income less, gains/(loss) on sale of securities and other-than-temporary impairment recovery (loss) on investment securities.


Income Tax
 
For the fourth quarter of 2016, our effective tax rate was 37.7%, compared with 38.9% and 37.1% for the third quarter of 2016 and fourth quarter of 2015, respectively. The decrease in the effective tax rate from the third quarter of 2016 was the result of finalizing 2015 tax filings, and minor adjustments to the 2016 provision.


BALANCE SHEET HIGHLIGHTS

Loans

Loans held for investment totaled $3.24 billion at December 31, 2016, an increase of $151 million, or 4.9%, from September 30, 2016, and an increase of $987 million, or 43.8%, from December 31, 2015. The increase from September 30, 2016 was due to growth in commercial real estate, construction lending, franchise loans and commercial and industrial loans. The $987 million increase in loans from December 31, 2015 included $456 million in loans acquired from Security Bank. The total end of period weighted average interest rate on loans, excluding fees and discounts, at December 31, 2016 was 4.81%, compared to 4.80% at September 30, 2016 and 4.91% at December 31, 2015.
 
Loan activity during the fourth quarter of 2016 included organic loan originations of $385 million, an increase of $62.9 million or 20% compared to prior quarter. Originations of loan commitments included commercial real estate loan originations of $103 million, construction loan originations of $89.9 million, franchise loan originations of $57.4 million, commercial and industrial loan originations of $52.3 million and SBA loan originations of $36.4 million. At December 31, 2016 our loans held for investment to deposit ratio was 103.1%, compared with 101.0% and 102.7% at September 30, 2016 and December 31, 2015, respectively.





 
 
Three Months Ended
 
 
December 31,
 
September 30,
 
December 31,
 
 
2016
 
2016
 
2015
LOAN ACTIVITY
 
(dollars in thousands)
Loans originated
 
$
385,304

 
$
322,405

 
$
252,241

Loans purchased
 
—

 
85,395

 
—

Repayments/amortization/utilization
 
(199,551
)
 
(172,815
)
 
(113,528
)
Loans sold
 
(30,157
)
 
(38,847
)
 
(32,668
)
Change in undisbursed
 
(3,733
)
 
(31,915
)
 
(11,937
)
Other
 
(2,387
)
 
4,890

 
916

Increase in total loans, gross
 
149,476

 
169,113

 
95,024

Change in allowance
 
547

 
(2,888
)
 
(1,172
)
Increase in loans, net
 
$
150,023

 
$
166,225

 
$
93,852


 
 
December 31,
 
September 30,
 
December 31,
 
 
2016
 
2016
 
2015
Loan Portfolio
 
(dollars in thousands)
Business loans:
 
 
 
 
 
 
Commercial and industrial
 
$
563,169

 
$
537,809

 
$
309,741

Franchise
 
459,421

 
431,618

 
328,925

Commercial owner occupied
 
454,918

 
460,068

 
294,726

SBA
 
96,705

 
92,195

 
62,256

Warehouse facilities
 
—

 
—

 
143,200

Real estate loans:
 
 
 
 
 
 
Commercial non-owner occupied
 
586,975

 
527,412

 
421,583

Multi-family
 
690,955

 
689,813

 
429,003

One-to-four family
 
100,451

 
101,377

 
80,050

Construction
 
269,159

 
231,098

 
169,748

Land
 
19,829

 
18,472

 
18,340

Other loans
 
4,112

 
5,678

 
5,111

 Total gross loans
 
3,245,694

 
3,095,540

 
2,262,683

Less loans held for sale, net
 
7,711

 
9,009

 
8,565

Total gross loans held for investment
 
3,237,983

 
3,086,531

 
2,254,118

Plus:
 
 
 
 
 
 
Deferred loan origination costs/(fees) and premiums/(discounts)
 
3,630

 
4,308

 
197

Allowance for loan losses
 
(21,296
)
 
(21,843
)
 
(17,317
)
Loans held for investment, net
 
$
3,220,317

 
$
3,068,996

 
$
2,236,998


Asset Quality and Allowance for Loan Losses
 
At December 31, 2016, the allowance for loan losses was $21.3 million, a decrease of $547,000 from September 30, 2016. Loan loss provision for the quarter was $2.1 million while net charge-offs were $2.6 million, of which $2.1 million was previously reserved.

At December 31, 2016, our allowance for loan losses as a percent of nonaccrual loans was 1,868%, an increase from 381% at September 30, 2016 and an increase from 436% at December 31, 2015, and the ratio of allowance for loan losses to loans held for investment was 0.66%, a decrease from 0.71% at September 30, 2016 and 0.77% at December 31, 2015. Including the loan fair market value discounts recorded in connection with our




acquisitions, the allowance for loan losses to loans held for investment ratio was 0.81% at December 31, 2016, compared with 0.90% at September 30, 2016 and 0.92% at December 31, 2015.

Nonperforming assets totaled $1.6 million or 0.04% of total assets at December 31, 2016, compared to $6.4 million or 0.17% of total assets at September 30, 2016. During the fourth quarter of 2016, nonperforming loans decreased $4.6 million to $1.1 million, and other real estate owned decreased to $460,000. Loan delinquencies decreased to $832,000, or 0.03% of loans held for investment compared to $5.7 million, or 0.18% of loans held for investment at September 30, 2016. All of the above measures were favorably impacted by charge-offs and the sale of nonperforming loans during the fourth quarter of 2016.

 
 
December 31,
 
September 30,
 
December 31,
 
 
2016
 
2016
 
2015
Asset Quality
 
(dollars in thousands)
Nonaccrual loans
 
$
1,140

 
$
5,734

 
$
3,970

Other real estate owned
 
460

 
711

 
1,161

Nonperforming assets
 
$
1,600

 
$
6,445

 
$
5,131

Allowance for loan losses
 
$
21,296

 
$
21,843

 
$
17,317

Allowance for loan losses as a percent of total nonperforming loans
 
1,868
%
 
381
%
 
436
%
Nonperforming loans as a percent of loans held for investment
 
0.04
%
 
0.19
%
 
0.18
%
Nonperforming assets as a percent of total assets
 
0.04
%
 
0.17
%
 
0.18
%
Net loan charge-offs for the quarter ended
 
$
2,600

 
$
1,125

 
$
528

Net loan charge-offs for quarter to average total loans, net
 
0.08
%
 
0.04
%
 
0.02
%
Allowance for loan losses to loans held for investment
 
0.66
%
 
0.71
%
 
0.77
%
Delinquent Loans:
 
 
 
 

 
 
30 - 59 days
 
$
122

 
$
1,042

 
$
323

60 - 89 days
 
71

 
1,990

 
355

90+ days
 
639

 
2,646

 
1,954

Total delinquency
 
$
832

 
$
5,678

 
$
2,632

Delinquency as a percent of loans held for investment
 
0.03
%
 
0.18
%
 
0.12
%

Investment Securities

Investment securities available for sale totaled $381 million at December 31, 2016, an increase of $67.8 million, or 21.6%, from September 30, 2016, and an increase of $101 million, or 35.9%, from December 31, 2015. The increase in the fourth quarter was primarily the result of purchases of approximately $88 million, partially offset by $13.7 million in principal payments/amortization/redemptions and a mark-to-market fair value adjustment of $7.0 million.





 
 
December 31,
 
September 30,
 
December 31,
 
 
2016
 
2016
 
2015
Investment securities:
 
(dollars in thousands)
Corporate
 
$
37,642

 
$
23,330

 
$
—

Municipal bonds
 
118,803

 
116,838

 
130,245

Collateralized mortgage obligation
 
31,388

 
33,866

 
24,543

Mortgage-backed securities
 
193,130

 
139,166

 
125,485

Total securities available for sale
 
$
380,963

 
$
313,200

 
$
280,273

 
 
 
 
 
 
 
Investments held to maturity
 
$
8,461

 
$
9,004

 
$
9,572


Deposits

At December 31, 2016, deposits totaled $3.15 billion, an increase of $85.7 million, or 2.8%, from September 30, 2016 and $950 million, or 43.3%, from December 31, 2015. At December 31, 2016, non-maturity deposits totaled $2.57 billion, an increase of $83.4 million, or 3.4%, from September 30, 2016 and $897 million, or 53.6%, from December 31, 2015. During the fourth quarter of 2016, deposit increases included $56.8 million in money market/savings deposits, $25.3 million of noninterest bearing deposits and $11.2 million in wholesale/brokered certificates of deposit, partially offset by a decrease of $8.9 million in retail certificates of deposit. The increase in deposits since the end of the fourth quarter of 2015 was due to organic growth and the acquisition of Security Bank, which added $637 million in deposits.
 
The weighted average cost of deposits for the three month period ending December 31, 2016 was 0.27%, a decrease from 0.28% for the third quarter of 2016 and a decrease from 0.31% for the fourth quarter of 2015.

 
 
December 31,
 
September 30,
 
December 31,
 
 
2016
 
2016
 
2015
Deposit Accounts
 
(dollars in thousands)
Noninterest-bearing checking
 
$
1,185,672

 
$
1,160,394

 
$
711,771

Interest-bearing:
 
 
 
 
 
 
Checking
 
182,893

 
181,534

 
137,975

Money market/savings
 
1,202,361

 
1,145,609

 
824,402

Retail certificates of deposit
 
375,203

 
384,083

 
365,911

Wholesale/brokered certificates of deposit
 
199,356

 
188,132

 
155,064

Total interest-bearing
 
1,959,813

 
1,899,358

 
1,483,352

Total deposits
 
$
3,145,485

 
$
3,059,752

 
$
2,195,123

 
 
 
 
 
 
 
Deposit Mix (% of total deposits)
 
 
 
 
 
 
Noninterest-bearing deposits
 
37.7
%
 
37.9
%
 
32.4
%
Non-maturity deposits
 
81.7

 
81.3

 
76.3


Borrowings

At December 31, 2016, total borrowings amounted to $397 million, an increase of $192 million, or 93.3%, from September 30, 2016 and an increase of $132 million, or 49.7%, from December 31, 2015. At December 31, 2016, total borrowings represented 9.8% of total assets, compared to 5.5% and 9.5%, as of September 30, 2016 and December 31, 2015, respectively.





 
December 31, 2016
 
September 30, 2016
 
December 31, 2015
 
Balance
 
Weighted
Average Rate
 
Balance
 
Weighted
Average Rate
 
Balance
 
Weighted
 Average Rate
 
(dollars in thousands)
FHLB advances
$
278,000

 
0.55
%
 
$
90,000

 
0.38
%
 
$
148,000

 
0.42
%
Reverse repurchase agreements
49,971

 
1.87

 
46,247

 
2.01

 
48,125

 
1.94

Subordinated debentures
69,383

 
5.35

 
69,353

 
5.35

 
69,263

 
5.35

Total borrowings
$
397,354

 
1.56
%
 
$
205,600

 
2.44
%
 
$
265,388

 
2.00
%
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average cost of
borrowings during the quarter
2.75
%
 
 

 
3.06
%
 
 

 
2.28
%
 
 

Borrowings as a percent of total assets
9.8

 
 

 
5.5

 
 

 
9.5

 
 


Capital Ratios
 
At December 31, 2016, our ratio of tangible common equity to total assets was 8.85%, our tangible book value was $12.51 per share and book value per share was $16.52.
 
At December 31, 2016, the Bank exceeded all regulatory capital requirements with a ratio for tier 1 leverage capital of 10.94%, common equity tier 1 risk-based capital of 11.69%, tier 1 risk-based capital of 11.69% and total risk-based capital of 12.32%. These capital ratios exceeded the “well capitalized” standards defined by the federal banking regulators of 5.00% for tier 1 leverage capital, 6.5% for common equity tier 1 risk-based capital, 8.00% for tier 1 risk-based capital and 10.00% for total risk-based capital. At December 31, 2016, the Company had a ratio for tier 1 leverage capital of 9.77%, common equity tier 1 risk-based capital of 10.15%, tier 1 risk-based capital of 10.43% and total risk-based capital of 12.75%.




 
 
December 31,
 
September 30,
 
December 31,
 
 
2016
 
2016
 
2015
Pacific Premier Bank Capital Ratios
 
 
Tier 1 leverage ratio
 
10.94
%
 
11.03
%
 
11.41
%
Common equity tier 1 risk-based capital ratio
 
11.69

 
12.07

 
12.35

Tier 1 risk-based capital ratio
 
11.69

 
12.07

 
12.35

Total risk-based capital ratio
 
12.32

 
12.77

 
13.07

Pacific Premier Bancorp, Inc. Capital Ratios
 
 
 
 

 
 

Tier 1 leverage ratio
 
9.77
%
 
9.80
%
 
9.52
%
Common equity tier 1 risk-based capital ratio
 
10.15

 
10.42

 
9.91

Tier 1 risk-based capital ratio
 
10.43

 
10.72

 
10.28

Total risk-based capital ratio
 
12.75

 
13.21

 
13.43

Tangible common equity ratio (1)
 
8.85

 
9.28

 
8.82

Share Data
 
 
 
 

 
 

Book value per share
 
$
16.52

 
$
16.27

 
$
13.86

Shares issued and outstanding
 
27,798,283

 
27,656,533

 
21,570,746

Tangible book value per share (1)
 
$
12.51

 
$
12.22

 
$
11.17

Closing stock price
 
35.35

 
26.46

 
21.25

 
 
 
 
 
 
 
(1) A reconciliation of the non-GAAP measures of tangible common equity and tangible book value per share to the GAAP measures of common stockholders' equity and book value per share is set forth below.








Conference Call and Webcast
 
The Company will host a conference call at 9:00 a.m. PT / 12:00 p.m. ET on January 24, 2017 to discuss its financial results. Analysts and investors may participate in the question-and-answer session. A live webcast will be available on the Webcasts page of the Company's investor relations website. An archived version of the webcast will be available in the same location shortly after the live call has ended. The conference call can be accessed by telephone at (866) 290-5977 and asking to be joined to the Pacific Premier Bancorp conference call. Additionally a telephone replay will be made available through January 31, 2017 at (877) 344-7529, conference ID 10098575.

Heritage Oaks Merger Announcement

On December 13, 2016 Pacific Premier announced that it had entered into a definitive agreement to acquire Heritage Oaks, the holding company of Heritage Oaks Bank, a Paso Robles, California based state-chartered bank (“Heritage Oaks Bank”) with $2.0 billion in total assets, $1.3 billion in gross loans and $1.6 billion in total deposits at September 30, 2016 (unaudited). Heritage Oaks Bank has 12 branches located in San Luis Obispo County and Santa Barbara County and a loan production office located in Ventura County.

About Pacific Premier
 
Pacific Premier Bancorp, Inc. is the holding company for Pacific Premier Bank, one of the largest community banks headquartered in Southern California. Pacific Premier Bank is a business bank primarily focused on serving small and middle market business in the counties of Los Angeles, Orange, Riverside, San Bernardino and San Diego, California. Pacific Premier Bank offers a diverse range of lending products including commercial, commercial real estate, construction and SBA loans, as well as specialty banking products for homeowners associations and franchise lending nationwide. Pacific Premier Bank serves its customers currently through its 15 full-service depository branches in Southern California located in the cities of Corona, Encinitas, Huntington Beach, Irvine, Los Alamitos, Murrieta, Newport Beach, Palm Desert, Palm Springs, Redlands, Riverside, San Bernardino, San Diego and Tustin. Pacific Premier Bank's branch in Orange, California will be closed on January 27, 2017.
 
FORWARD-LOOKING COMMENTS
 
The statements contained herein that are not historical facts are forward-looking statements based on management's current expectations and beliefs concerning future developments and their potential effects on the Company. Such statements involve inherent risks and uncertainties, many of which are difficult to predict and are generally beyond the control of the Company. There can be no assurance that future developments affecting the Company will be the same as those anticipated by management. The Company cautions readers that a number of important factors could cause actual results to differ materially from those expressed in, or implied or projected by, such forward-looking statements. These risks and uncertainties include, but are not limited to, the following: the strength of the United States economy in general and the strength of the local economies in which we conduct operations; the effects of, and changes in, trade, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System; inflation, interest rate, market and monetary fluctuations; the timely development of competitive new products and services and the acceptance of these products and services by new and existing customers; the willingness of users to substitute competitors’ products and services for the Company’s products and services; the impact of changes in financial services policies, laws and regulations (including the Dodd-Frank Wall Street Reform and Consumer Protection Act) and of governmental efforts to restructure the U.S. financial regulatory system; technological changes; the effect of acquisitions that the Company may make, if any, including, without limitation, the failure to achieve the expected revenue growth and/or expense savings from its acquisitions; changes in the level of the Company’s nonperforming assets and charge-offs; any oversupply of inventory and deterioration in values of California real estate, both residential and commercial; the effect of changes in accounting policies and practices, as may be adopted from time-to-time by bank regulatory agencies, the Securities and Exchange Commission (“SEC”), the Public Company Accounting Oversight Board, the Financial Accounting Standards Board or other accounting standards setters; possible other-than-temporary impairment of securities held by us; changes in consumer spending, borrowing and savings habits; the effects of the Company’s lack of a diversified loan portfolio, including the risks of geographic and industry concentrations; ability to attract deposits and other sources of liquidity; changes in the financial performance and/or condition of our borrowers; changes in the competitive environment among financial and bank holding companies and other financial service providers; unanticipated regulatory or judicial proceedings; and the Company’s ability to manage the risks involved in the foregoing. Additional factors that could cause actual results to differ materially from those expressed in the forward-looking statements are discussed in the 2015 Annual Report on Form 10-K of Pacific Premier Bancorp, Inc. filed with the SEC and available at the SEC’s Internet site (http://www.sec.gov).
 
The Company specifically disclaims any obligation to update any factors or to publicly announce the result of revisions to any of the forward-looking statements included herein to reflect future events or developments.

Notice to Heritage Oaks Bancorp and Pacific Premier Shareholders

This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. In connection with the proposed acquisition of Heritage Oaks by Pacific Premier. Pacific Premier filed a registration statement on Form S-4 (The "Registration Statement") with the SEC. The registration statement contains a joint proxy statement/prospectus. After the Registration Statement is declared by the SEC to be effective, a definitive joint proxy statement/prospectus will be distributed to the shareholders of Heritage Oaks and the Pacific Premier in connection with the respective special meetings of Heritage Oaks and the Pacific Premier shareholders and their respective votes concerning the acquisition. As of the date of this press release, the Registration Statement has not been declared effective by the SEC.

SHAREHOLDERS OF HERITAGE OAKS AND PACIFIC PREMIER ARE ENCOURAGED TO READ THE REGISTRATION STATEMENT AND THE DEFINITIVE JOINT PROXY STATEMENT/PROSPECTUS WHEN IT BECOMES AVAILABLE AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, AS WELL AS SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED ACQUISITION. The definitive joint proxy statement/prospectus will be mailed to shareholders of Pacific Premier and Heritage Oaks. Investors and security holders will be able to obtain the documents, including the definitive joint proxy statement/prospectus free of charge at the SEC’s website, www.sec.gov. In addition, documents filed with the SEC by Pacific Premier will be available free of charge by (1) accessing Pacific Premier’s website at www.ppbi.com under the “Investor Relations” link and then under the heading “SEC Filings,” (2) writing to Pacific Premier at 17901 Von Karman Avenue, Suite 1200, Irvine, CA 92614, Attention: Investor Relations or (3) writing Heritage Oaks at 1222 Vine Street, Paso Robles, CA 93446, Attention: Corporate Secretary.
 
The Pacific Premier directors, executive officers and certain other members of management and employees of Pacific Premier may be deemed to be participants in the solicitation of proxies from the Pacific Premier shareholders in respect of the proposed acquisition. Pacific Premier has also engaged D.F. King & Co., Inc. as its proxy solicitation firm. Information about the Pacific Premier directors and executive officers is included in the proxy statement for its 2016 annual meeting, which was filed with the SEC on April 27, 2016. The Heritage Oaks directors, executive officers and certain other members of management and employees of Heritage Oaks may also be deemed to be participants in the solicitation of proxies in favor of the acquisition from the shareholders of Heritage Oaks. Heritage Oaks has also engaged Okapi Partners LLC as its proxy solicitation firm. Additional information regarding the interests of those participants and other persons who may be deemed participants in the transaction may be obtained by reading the definitive joint proxy statement/prospectus regarding the proposed acquisition when it becomes available. Free copies of this document may be obtained as described in the preceding paragraph.


Contact:
 
Pacific Premier Bancorp, Inc.
 
Steven R. Gardner
Chairman, President and Chief Executive Officer
949.864.8000
 
Ronald J. Nicolas, Jr.
Sr. Executive Vice President and Chief Financial Officer
949.864.8000




PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(dollars in thousands)
(Unaudited)
 
 
December 31,
 
September 30,
 
June 30,
 
March 31,
 
December 31,
ASSETS
 
2016
 
2016
 
2016
 
2016
 
2015
Cash and due from banks
 
$
14,706

 
$
18,543

 
$
15,444

 
$
18,624

 
$
14,935

Interest-bearing deposits with financial institutions
 
142,151

 
85,361

 
169,855

 
174,890

 
63,482

Cash and cash equivalents
 
156,857

 
103,904

 
185,299

 
193,514

 
78,417

Interest-bearing time deposits with financial institutions
 
3,944

 
3,944

 
3,944

 
3,944

 
1,972

Investments held to maturity, at amortized cost
 
8,565

 
8,900

 
9,292

 
9,590

 
9,642

Investment securities available for sale, at fair value
 
380,963

 
313,200

 
245,471

 
269,711

 
280,273

FHLB, FRB and other stock, at cost
 
37,304

 
29,966

 
26,984

 
27,103

 
22,292

Loans held for sale, at lower of cost or fair value
 
7,711

 
9,009

 
10,116

 
7,281

 
8,565

Loans held for investment
 
3,241,613

 
3,090,839

 
2,920,619

 
2,851,432

 
2,254,315

Allowance for loan losses
 
(21,296
)
 
(21,843
)
 
(18,955
)
 
(18,455
)
 
(17,317
)
Loans held for investment, net
 
3,220,317

 
3,068,996

 
2,901,664

 
2,832,977

 
2,236,998

Accrued interest receivable
 
13,145

 
11,642

 
12,143

 
11,862

 
9,315

Other real estate owned
 
460

 
711

 
711

 
1,161

 
1,161

Premises and equipment
 
12,014

 
11,314

 
11,014

 
11,963

 
9,248

Deferred income taxes, net
 
27,458

 
20,001

 
16,552

 
17,000

 
11,511

Bank owned life insurance
 
40,409

 
40,116

 
39,824

 
39,535

 
39,245

Intangible assets
 
9,451

 
9,976

 
10,500

 
11,145

 
7,170

Goodwill
 
102,219

 
101,939

 
101,939

 
101,939

 
50,832

Other assets
 
19,566

 
21,213

 
22,213

 
23,343

 
22,958

Total Assets
 
$
4,040,383

 
$
3,754,831

 
$
3,597,666

 
$
3,562,068

 
$
2,789,599

LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 

 
 
 
 
 
 
 
 
LIABILITIES:
 
 

 
 
 
 
 
 
 
 
Deposit accounts:
 
 

 
 
 
 
 
 
 
 
Noninterest-bearing checking
 
$
1,185,672

 
$
1,160,394

 
$
1,043,361

 
$
1,064,457

 
$
711,771

Interest-bearing:
 
 
 
 
 
 
 
 
 
 
Checking
 
182,893

 
181,534

 
181,859

 
172,052

 
137,975

Money market/savings
 
1,202,361

 
1,145,609

 
1,086,255

 
1,084,989

 
824,402

Retail certificates of deposit
 
375,203

 
384,083

 
420,673

 
455,637

 
365,911

Wholesale/brokered certificates of deposit
 
199,356

 
188,132

 
198,853

 
129,129

 
155,064

Total interest-bearing
 
1,959,813

 
1,899,358

 
1,887,640

 
1,841,807

 
1,483,352

Total deposits
 
3,145,485

 
3,059,752

 
2,931,001

 
2,906,264

 
2,195,123

FHLB advances and other borrowings
 
327,971

 
136,213

 
120,252

 
124,956

 
196,125

Subordinated debentures
 
69,383

 
69,353

 
69,323

 
69,293

 
69,263

Accrued expenses and other liabilities
 
38,227

 
39,548

 
36,460

 
32,661

 
30,108

Total Liabilities
 
3,581,066

 
3,304,866

 
3,157,036

 
3,133,174

 
2,490,619

STOCKHOLDERS’ EQUITY:
 
 

 
 
 
 
 
 
 
 
Common stock
 
274

 
273

 
273

 
273

 
215

Additional paid-in capital
 
344,754

 
343,231

 
342,388

 
341,660

 
221,487

Retained earnings
 
117,054

 
105,098

 
95,869

 
85,500

 
76,946

Accumulated other comprehensive income (loss), net of tax (benefit)
 
(2,765
)
 
1,363

 
2,100

 
1,461

 
332

TOTAL STOCKHOLDERS’ EQUITY
 
459,317

 
449,965

 
440,630

 
428,894

 
298,980

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
 
$
4,040,383

 
$
3,754,831

 
$
3,597,666

 
$
3,562,068

 
$
2,789,599





PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in thousands, except per share data)
(Unaudited)
 
 
 
 
 
 
 
Three Months Ended
 
Year Ended
 
 
December 31,
 
September 30,
 
December 31,
 
December 31,
 
December 31,
 
 
2016
 
2016
 
2015
 
2016
 
2015
INTEREST INCOME
 
 

 
 

 
 

 
 
 
 
Loans
 
$
43,006

 
$
40,487

 
$
30,181

 
$
157,935

 
$
111,097

Investment securities and other interest-earning assets
 
2,791

 
1,942

 
1,730

 
8,670

 
7,259

Total interest income
 
45,797

 
42,429

 
31,911

 
166,605

 
118,356

INTEREST EXPENSE
 
 
 
 
 
 
 
 

 
 

Deposits
 
2,176

 
2,136

 
1,713

 
8,391

 
6,630

FHLB advances and other borrowings
 
332

 
314

 
370

 
1,295

 
1,490

Subordinated debentures
 
985

 
970

 
991

 
3,844

 
3,937

Total interest expense
 
3,493

 
3,420

 
3,074

 
13,530

 
12,057

Net interest income before provision for loan losses
 
42,304

 
39,009

 
28,837

 
153,075

 
106,299

Provision for loan losses
 
2,054

 
4,013

 
1,700

 
8,776

 
6,425

Net interest income after provision for loan losses
 
40,250

 
34,996

 
27,137

 
144,299

 
99,874

NONINTEREST INCOME
 
 
 
 
 
 
 
 

 
 

Loan servicing fees
 
263

 
288

 
216

 
1,032

 
371

Deposit fees
 
934

 
829

 
686

 
3,408

 
2,532

Net gain from sales of loans
 
2,387

 
3,122

 
2,705

 
9,539

 
7,970

Net gain (loss) from sales of investment securities
 
—

 
512

 
(4
)
 
1,797

 
290

Other-than-temporary-impairment recovery (loss) on investment securities
 
—

 
2

 
—

 
(205
)
 
—

Other income
 
734

 
1,215

 
614

 
4,013

 
3,278

Total noninterest income
 
4,318

 
5,968

 
4,217

 
19,584

 
14,441

NONINTEREST EXPENSE
 
 
 
 
 
 
 
 

 
 

Compensation and benefits
 
13,815

 
14,179

 
9,669

 
52,831

 
37,108

Premises and occupancy
 
2,531

 
2,577

 
2,043

 
9,838

 
7,810

Data processing and communications
 
1,240

 
1,223

 
715

 
4,261

 
2,816

Other real estate owned operations, net
 
369

 
5

 
7

 
367

 
121

FDIC insurance premiums
 
320

 
442

 
345

 
1,545

 
1,376

Legal, audit and professional expense
 
830

 
676

 
826

 
2,817

 
2,514

Marketing expense
 
865

 
1,683

 
519

 
3,981

 
2,305

Office and postage expense
 
441

 
612

 
478

 
2,107

 
2,005

Loan expense
 
714

 
534

 
439

 
2,191

 
1,268

Deposit expense
 
1,388

 
1,315

 
938

 
4,904

 
3,643

Merger-related expense
 
772

 
—

 
407

 
4,388

 
4,799

CDI amortization
 
525

 
525

 
345

 
2,039

 
1,350

Other expense
 
1,567

 
2,089

 
1,808

 
7,296

 
6,476

Total noninterest expense
 
25,377

 
25,860

 
18,539

 
98,565

 
73,591

Net income before income taxes
 
19,191

 
15,104

 
12,815

 
65,318

 
40,724

Income tax
 
7,238

 
5,877

 
4,750

 
25,215

 
15,209

Net income
 
$
11,953

 
$
9,227

 
$
8,065

 
$
40,103

 
$
25,515

EARNINGS PER SHARE
 
 
 
 
 
 
 
 

 
 

Basic
 
$
0.44

 
$
0.34

 
$
0.38

 
$
1.49

 
$
1.21

Diluted
 
0.43

 
0.33

 
0.37

 
1.46

 
1.19

WEIGHTED AVERAGE SHARES OUTSTANDING
 
 
 
 
 
 
 
 

 
 

Basic
 
27,394,737

 
27,387,123

 
21,510,746

 
26,931,634

 
21,156,668

Diluted
 
28,027,479

 
27,925,351

 
21,941,035

 
27,439,159

 
21,488,698





SELECTED FINANCIAL DATA

PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED AVERAGE BALANCES AND YIELD DATA
 
 
 
 
 
Three Months Ended
 
Three Months Ended
 
Three Months Ended
 
 
December 31, 2016
 
September 30, 2016
 
December 31, 2015
 
 
Average Balance
 
Interest
 
Average
 Yield/
 Cost
 
Average Balance
 
Interest
 
Average
Yield/
Cost
 
Average Balance
 
Interest
 
Average Yield/ Cost
Assets
 
(dollars in thousands)
Interest-earning assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
106,811

 
$
103

 
0.38
%
 
$
201,140

 
$
232

 
0.46
%
 
$
114,027

 
$
57

 
0.20
%
Investment securities
 
381,081

 
2,688

 
2.82

 
316,253

 
1,710

 
2.16

 
312,008

 
1,673

 
2.14

Loans receivable, net (1)
 
3,178,779

 
43,006

 
5.38

 
2,998,153

 
40,487

 
5.37

 
2,175,345

 
30,181

 
5.50

Total interest-earning assets
 
3,666,671

 
45,797

 
4.97

 
3,515,546

 
42,429

 
4.80

 
2,601,380

 
31,911

 
4.87

Noninterest-earning assets
 
189,849

 
 
 
 
 
186,127

 
 
 
 
 
124,077

 
 
 
 
Total assets
 
$
3,856,520

 
 
 
 
 
$
3,701,673

 
 
 
 
 
$
2,725,457

 
 
 
 
Liabilities and Equity
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing deposits:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest checking
 
$
177,787

 
$
50

 
0.11
%
 
$
185,344

 
$
53

 
0.11
%
 
$
132,812

 
$
38

 
0.11
%
Money market
 
1,105,701

 
1,001

 
0.36

 
1,036,350

 
923

 
0.35

 
735,810

 
642

 
0.35

Savings
 
101,170

 
38

 
0.15

 
98,496

 
38

 
0.15

 
86,363

 
34

 
0.16

Retail certificates of deposit
 
379,892

 
696

 
0.73

 
402,371

 
745

 
0.74

 
378,761

 
774

 
0.81

Wholesale/brokered certificates of deposit
 
214,690

 
391

 
0.72

 
199,180

 
377

 
0.75

 
127,853

 
225

 
0.70

Total interest-bearing deposits
 
1,979,240

 
2,176

 
0.44

 
1,921,741

 
2,136

 
0.44

 
1,461,599

 
1,713

 
0.46

FHLB advances and other borrowings
 
121,397

 
332

 
1.09

 
97,547

 
314

 
1.28

 
167,817

 
370

 
0.87

Subordinated debentures
 
69,364

 
985

 
5.68

 
69,333

 
970

 
5.60

 
69,244

 
991

 
5.72

Total borrowings
 
190,761

 
1,317

 
2.75

 
166,880

 
1,284

 
3.06

 
237,061

 
1,361

 
2.28

Total interest-bearing liabilities
 
2,170,001

 
3,493

 
0.64

 
2,088,621

 
3,420

 
0.65

 
1,698,660

 
3,074

 
0.72

Noninterest-bearing deposits
 
1,200,461

 
 
 
 
 
1,134,318

 
 
 
 
 
709,982

 
 
 
 
Other liabilities
 
33,486

 
 
 
 
 
35,019

 
 
 
 
 
23,481

 
 
 
 
Total liabilities
 
3,403,948

 
 
 
 
 
3,257,958

 
 
 
 
 
2,432,123

 
 
 
 
Stockholders' equity
 
452,572

 
 
 
 
 
443,715

 
 
 
 
 
293,334

 
 
 
 
Total liabilities and equity
 
$
3,856,520

 
 
 
 
 
$
3,701,673

 
 
 
 
 
$
2,725,457

 
 
 
 
Net interest income
 
 
 
$
42,304

 
 
 
 
 
$
39,009

 
 
 
 
 
$
28,837

 
 
Net interest rate spread (2)
 
 

 
4.33
%
 
 

 
 

 
4.15
%
 
 
 
 
 
4.15
%
Net interest margin (3)
 
 

 
 

 
4.59
%
 
 

 
 

 
4.41
%
 
 
 
 
 
4.40
%
Ratio of interest-earning assets to interest-bearing liabilities
 
168.97
%
 
 

 
 

 
168.32
%
 
 
 
 
 
153.14
%
 
(1) Average balance includes nonperforming loans and is net of deferred loan origination fees, unamortized discounts and premiums.
(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.
 
 

 
 

 
 

 
 






PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES
LOAN PORTFOLIO COMPOSITION
(dollars in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31,
 
September 30,
 
June 30,
 
March 31,
 
December 31,
 
 
2016
 
2016
 
2016
 
2016
 
2015
Loan Portfolio
 
 
 
 
 
 
Business loans:
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
 
$
563,169

 
$
537,809

 
$
508,141

 
$
491,112

 
$
309,741

Franchise
 
459,421

 
431,618

 
403,855

 
371,875

 
328,925

Commercial owner occupied
 
454,918

 
460,068

 
443,060

 
424,289

 
294,726

SBA
 
96,705

 
92,195

 
86,076

 
78,350

 
62,256

Warehouse facilities
 
—

 
—

 
—

 
1,394

 
143,200

Real estate loans:
 
 
 
 
 
 
 
 
 
 
Commercial non-owner occupied
 
586,975

 
527,412

 
526,362

 
522,080

 
421,583

Multi-family
 
690,955

 
689,813

 
613,573

 
619,485

 
429,003

One-to-four family
 
100,451

 
101,377

 
106,538

 
106,854

 
80,050

Construction
 
269,159

 
231,098

 
215,786

 
218,069

 
169,748

Land
 
19,829

 
18,472

 
18,341

 
18,222

 
18,340

Other loans
 
4,112

 
5,678

 
5,822

 
6,045

 
5,111

 Total Gross Loans
 
3,245,694

 
3,095,540

 
2,927,554

 
2,857,775

 
2,262,683

Less Loans held for sale, net
 
7,711

 
9,009

 
10,116

 
7,281

 
8,565

Total gross loans held for investment
 
3,237,983

 
3,086,531

 
2,917,438

 
2,850,494

 
2,254,118

Less:
 
 
 
 

 
 
 
 
 
 
Deferred loan origination costs/(fees) and premiums/(discounts)
 
3,630

 
4,308

 
3,181

 
938

 
197

Allowance for loan losses
 
(21,296
)
 
(21,843
)
 
(18,955
)
 
(18,455
)
 
(17,317
)
Loans held for investment, net
 
$
3,220,317

 
$
3,068,996

 
$
2,901,664

 
$
2,832,977

 
$
2,236,998






PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES
ASSET QUALITY INFORMATION
(dollars in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31,
 
September 30,
 
June 30,
 
March 31,
 
December 31,
 
 
2016
 
2016
 
2016
 
2016
 
2015
Asset Quality
 
 
Nonaccrual loans
 
$
1,140

 
$
5,734

 
$
4,062

 
$
4,823

 
$
3,970

Other real estate owned
 
460

 
711

 
711

 
1,161

 
1,161

Nonperforming assets
 
$
1,600

 
$
6,445

 
$
4,773

 
$
5,984

 
$
5,131

Allowance for loan losses
 
$
21,296

 
$
21,843

 
$
18,955

 
$
18,455

 
$
17,317

Allowance for loan losses as a percent of total nonperforming loans
 
1,868
%
 
381
%
 
467
%
 
383
 %
 
436
%
Nonperforming loans as a percent of loans held for investment
 
0.04
%
 
0.19
%
 
0.14
%
 
0.17
 %
 
0.18
%
Nonperforming assets as a percent of total assets
 
0.04
%
 
0.17
%
 
0.13
%
 
0.17
 %
 
0.18
%
Net loan charge-offs for the quarter ended
 
$
2,600

 
$
1,125

 
$
1,089

 
$
(18
)
 
$
528

Net loan charge-offs for quarter to average total loans, net
 
0.08
%
 
0.04
%
 
0.04
%
 
—
 %
 
0.02
%
Allowance for loan losses to loans held for investment
 
0.66
%
 
0.71
%
 
0.65
%
 
0.65
 %
 
0.77
%
Delinquent Loans:
 
 
 
 

 
 

 
 

 
 
30 - 59 days
 
$
122

 
$
1,042

 
$
1,144

 
$
247

 
$
323

60 - 89 days
 
71

 
1,990

 
2,487

 
—

 
355

90+ days
 
639

 
2,646

 
1,797

 
3,199

 
1,954

Total delinquency
 
$
832

 
$
5,678

 
$
5,428

 
$
3,446

 
$
2,632

Delinquency as a percent of loans held for investment
 
0.03
%
 
0.18
%
 
0.19
%
 
0.12
 %
 
0.12
%

PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES
DEPOSIT COMPOSITION
(dollars in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31,
 
September 30,
 
June 30,
 
March 31,
 
December 31,
 
 
2016
 
2016
 
2016
 
2016
 
2015
Deposit Accounts
 
 
Noninterest-bearing checking
 
$
1,185,672

 
$
1,160,394

 
$
1,043,361

 
$
1,064,457

 
$
711,771

Interest-bearing:
 
 
 
 
 
 
 
 
 
 
Checking
 
182,893

 
181,534

 
181,859

 
172,052

 
137,975

Money market/savings
 
1,202,361

 
1,145,609

 
1,086,255

 
1,084,989

 
824,402

Retail certificates of deposit
 
375,203

 
384,083

 
420,673

 
455,637

 
365,911

Wholesale/brokered certificates of deposit
 
199,356

 
188,132

 
198,853

 
129,129

 
155,064

Total interest-bearing
 
1,959,813

 
1,899,358

 
1,887,640

 
1,841,807

 
1,483,352

Total deposits
 
$
3,145,485

 
$
3,059,752

 
$
2,931,001

 
$
2,906,264

 
$
2,195,123






GAAP RECONCILIATIONS
PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES
GAAP RECONCILIATIONS
(dollars in thousands, except per share data)
Tangible common equity to tangible assets (the "tangible common equity ratio") and tangible book value per share are non-GAAP financial measures derived from GAAP-based amounts. We calculate the tangible common equity ratio by excluding the balance of intangible assets from common stockholders' equity and dividing by tangible assets. We calculate tangible book value per share by dividing tangible common equity by common shares outstanding, as compared to book value per share, which we calculate by dividing common stockholders' equity by shares outstanding. We believe that this information is consistent with the treatment by bank regulatory agencies, which exclude intangible assets from the calculation of risk-based capital ratios. Accordingly, we believe that these non-GAAP financial measures provide information that is important to investors and that is useful in understanding our capital position and ratios. However, these non-GAAP financial measures are supplemental and are not a substitute for an analysis based on GAAP measures. As other companies may use different calculations for these measures, this presentation may not be comparable to other similarly titled measures reported by other companies.
 
 
December 31,
 
September 30,
 
June 30,
 
March 31,
 
December 31,
 
 
2016
 
2016
 
2016
 
2016
 
2015
Total stockholders' equity
 
$
459,317

 
$
449,965

 
$
440,630

 
$
428,894

 
$
298,980

Less intangible assets
 
(111,670
)
 
(111,915
)
 
(112,439
)
 
(113,084
)
 
(58,002
)
Tangible common equity
 
$
347,647

 
$
338,050

 
$
328,191

 
$
315,810

 
$
240,978

Book value per share
 
$
16.52

 
$
16.27

 
$
15.94

 
$
15.58

 
$
13.86

Less intangible book value per share
 
(4.01
)
 
(4.05
)
 
(4.07
)
 
(4.12
)
 
(2.69
)
Tangible book value per share
 
$
12.51

 
$
12.22

 
$
11.87

 
$
11.46

 
$
11.17

Total assets
 
$
4,040,383

 
$
3,754,831

 
$
3,597,666

 
$
3,562,068

 
$
2,789,599

Less intangible assets
 
(111,670
)
 
(111,915
)
 
(112,439
)
 
(113,084
)
 
(58,002
)
Tangible assets
 
$
3,928,713

 
$
3,642,916

 
$
3,485,227

 
$
3,448,984

 
$
2,731,597

Tangible common equity ratio
 
8.85
%
 
9.28
%
 
9.42
%
 
9.16
%
 
8.82
%