Regulatory Capital Requirements and Other Regulatory Matters

12 Months Ended

Dec. 31, 2018

Banking and Thrift [Abstract]

Regulatory Capital Requirements and Other Regulatory Matters

Regulatory Capital Requirements and Other Regulatory Matters

The Company and the Bank are subject to various regulatory capital requirements administered by federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory, and possibly additional discretionary, actions by regulators that, if undertaken, could have a direct material effect on the Company’s and the Bank’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and the Bank must meet specific capital guidelines that involve quantitative measures of the Company’s and the Bank’s assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices. The Company’s and the Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors.

Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain capital in order to meet certain capital ratios to be considered adequately capitalized or well capitalized under the regulatory framework for prompt corrective action. As of the most recent formal notification from the Federal Reserve, the Bank was categorized as “well capitalized.” There are no conditions or events since that notification that management believes have changed the Bank’s categorization.

Final comprehensive regulatory capital rules for U.S. banking organizations pursuant to the capital framework of the Basel Committee on Banking Supervision, generally referred to as “Basel III”, became effective for the Company and the Bank on January 1, 2015, subject to phase-in periods for certain of their components and other provisions, and fully phased in by January 1, 2019. The most significant of the provisions of the Final Capital Rules, which applied to the Company and the Bank were as follows: the phase-out of trust preferred securities from Tier 1 capital, the higher risk-weighting of high volatility and past due real estate loans and the capital treatment of deferred tax assets and liabilities above certain thresholds. Under the Basel III rules, the Company must hold a capital conservation buffer above the adequately capitalized risk-based capital ratios. The capital conservation buffer increased by 0.625% each year from 0.00% for 2015 to 2.50% in 2019. The capital conservation buffer for 2019 is 2.50% and for 2018 is 1.875%. The net unrealized gain or loss on available-for-sale securities is not included in computing regulatory capital.

As defined in applicable regulations and set forth in the table below, which excludes the capital conservation buffer, at December 31, 2018 and 2017, the Company and the Bank continue to exceed the “well capitalized” standards as well as exceed the Basel III minimum capital ratios of the conservation buffer for each of the risk-based capital ratios:

	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 December 31, 2018
Pacific Premier Bancorp, Inc. Consolidated
Tier 1 Leverage Ratio	$	1,112,132	10.38	%	$	428,751	4.00	%	N/A		N/A
Common Equity Tier 1 to Risk-Weighted Assets	1,087,164		10.88	%	449,505		4.50	%	N/A		N/A
Tier 1 Capital to Risk-Weighted Assets	1,112,132		11.13	%	599,340		6.00	%	N/A		N/A
Total Capital to Risk-Weighted Assets	1,237,315		12.39	%	799,120		8.00	%	N/A		N/A
Pacific Premier Bank
Tier 1 Leverage Ratio	$	1,185,544	11.06	%	$	428,703	4.00	%	$	535,879	5.00	%
Common Equity Tier 1 to Risk-Weighted Assets	1,185,544		11.87	%	449,481		4.50	%	649,251		6.50	%
Tier 1 Capital to Risk-Weighted Assets	1,185,544		11.87	%	599,308		6.00	%	799,078		8.00	%
Total Capital to Risk-Weighted Assets	1,226,258		12.28	%	799,078		8.00	%	998,847		10.00	%
At December 31, 2017
Pacific Premier Bancorp, Inc. Consolidated
Tier 1 Leverage Ratio	$	737,173	10.61	%	$	277,900	4.00	%	N/A		N/A
Common Equity Tier 1 to Risk-Weighted Assets	717,145		10.48	%	307,818		4.50	%	N/A		N/A
Tier 1 Capital to Risk-Weighted Assets	737,173		10.78	%	410,424		6.00	%	N/A		N/A
Total Capital to Risk-Weighted Assets	852,382		12.46	%	547,232		8.00	%	N/A		N/A
Pacific Premier Bank
Tier 1 Leverage Ratio	$	805,110	11.59	%	$	277,870	4.00	%	$	347,337	5.00	%
Common Equity Tier 1 to Risk-Weighted Assets	805,110		11.77	%	307,742		4.50	%	444,516		6.50	%
Tier 1 Capital to Risk-Weighted Assets	805,110		11.77	%	410,322		6.00	%	547,096		8.00	%
Total Capital to Risk-Weighted Assets	835,945		12.22	%	547,096		8.00	%	683,870		10.00	%