Benefit Plans

12 Months Ended

Dec. 31, 2021

Retirement Benefits [Abstract]

Benefit Plans

Benefit Plans

401(k) Plan. The Bank maintains an Employee Savings Plan (the “401(k) Plan”) which qualifies under Section 401(k) of the Internal Revenue Code. Under the 401(k) Plan, employees may contribute from 1% to 99% of their compensation, up to the dollar limit imposed by the IRS for tax purposes. In 2021, 2020, and 2019, the Bank matched 100% of contributions for the first three percent contributed and 50% on the next two percent contributed. Contributions made to the 401(k) Plan by the Bank amounted to $4.9 million for 2021, $4.1 million for 2020, and $2.9 million for 2019.

Heritage Oaks Bancorp, Inc. 2005 Equity Based Compensation Plan (the “2005 Plan”). The 2005 Plan was acquired from Heritage Oaks Bancorp, Inc. on April 1, 2017. The 2005 Plan authorized the granting of Incentive Stock Options, Non-Qualified Stock Options, Stock Appreciation Rights, Restricted Stock Awards, Restricted Stock Units, and Performance Share Cash Only Awards. As of December 31, 2016, no further grants can be made from this plan; however, Pacific Premier assumed all unvested and unexercised awards.

Pacific Premier Bancorp, Inc. 2012 Long-Term Incentive Plan (the “2012 Plan”). The 2012 Plan was approved by the Corporation’s stockholders in May 2012. The 2012 Plan originally authorized the granting of Awards equal to 620,000 shares of the common stock of the Corporation for issuances to executives, key employees, officers, and directors. The 2012 Plan will be in effect for a period of ten years from May 30, 2012, the date the 2012 Plan was adopted. Awards granted under the 2012 Plan will be made at an exercise price equal to the fair market value of the stock on the date of grant. Awards granted to officers and employees may include incentive stock options, non-qualified stock options, restricted stock, restricted stock units, and stock appreciation rights. The awards have vesting periods ranging from one to five years, where such vesting may occur in either equal annual installments or one lump sum at the end of the vesting term. In May 2014, the Corporation’s stockholders approved an amendment to the 2012 Plan to increase the shares available under the plan by 800,000 shares to total 1,420,000 shares. In May 2015, the Corporation’s stockholders approved an amendment to the 2012 Plan to permit the grant of performance-based awards, including equity compensation awards that may not be subject to the deduction limitation of Section 162(m) of the Internal Revenue Code. The performance-based awards include (i) both performance-based equity compensation awards and performance-based cash bonus payments and (ii) restricted stock units. In May 2017, the Corporation’s stockholders approved an amendment to the 2012 Plan to increase the shares available under the plan by 3,580,000 shares to total 5,000,000 shares.

Heritage Oaks Bancorp, Inc. 2015 Equity Based Compensation Plan (the “2015 Plan”). The 2015 Plan was acquired from Heritage Oaks Bancorp, Inc. on April 1, 2017. The 2015 plan was approved by the stockholders of Heritage Oaks Bancorp, Inc. in May 2015. The 2015 Plan authorized the granting of various types of share-based compensation awards to the employees and Board of Directors such as stock options, restricted stock awards, and restricted stock units. Under the 2015 Plan and following the Corporation’s assumption of the 2015 Plan, a maximum of 630,473 shares of the Corporation’s common stock at the date of acquisition were reserved and available to be issued. Shares issued under this plan, other than stock options and stock appreciation rights, were counted against the plan on a two shares for every one share actually issued basis. Awards that were canceled, expired, forfeited, fail to vest, or otherwise resulted in issued shares not being delivered to the grantee, were made available for the issuance of future share-based compensation awards. Additionally, under this plan, no one individual was to be granted shares in aggregate that exceed more than 250,000 shares during any calendar year. The 2015 Plan is still active and the Corporation assumed all unvested and unexercised awards.

The Heritage Oaks Bancorp, Inc. 2005 Equity Based Compensation Plan, Pacific Premier Bancorp, Inc. 2012 Long-Term Incentive Plan, and the Heritage Oaks Bancorp, Inc. 2015 Equity Based Compensation Plan are collectively the “Plans.”

Stock Options

As of December 31, 2021, there were 6,087 options outstanding on the 2005 Plan with zero available for future awards. As of December 31, 2021, there were 201,456 options outstanding on the 2012 Plan with 1,682,130 available for future awards. As of December 31, 2021, there were 5,534 options outstanding on the 2015 Plan with 657,167 available for future awards. Below is a summary of the stock option activity in the Plans for the year ended December 31, 2021:

	2021
(Dollars in thousands, except per share data)	Number of Stock Options Outstanding	Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic value
Outstanding at January 1, 2021	309,315	$	16.84
Granted	—	—
Exercised	(95,522)	17.24
Forfeited and expired	(716)	21.61
Outstanding at December 31, 2021	213,077	$	16.64	2.91	$	4,983
Vested and exercisable at December 31, 2021	213,077	$	16.64	2.91	$	4,983

The total intrinsic value of options exercised during the years ended December 31, 2021, 2020, and 2019 was $2.4 million, $1.7 million, and $4.2 million, respectively.

There was no compensation expense related to stock options for the year ended December 31, 2021. The amount charged against compensation expense in relation to the stock options was $8,000 for 2020, and $132,000 for 2019. At December 31, 2021, there was no unrecognized compensation expense related to the options.

Restricted Stock Awards and Restricted Stock Units

Below is a summary of the activity for restricted stock and restricted stock units in the Plans for the year ended December 31, 2021:

	2021
	Shares	Weighted Average Grant-Date Fair Value Per Share
Unvested at the beginning of the year	1,269,244	$	26.35
Granted	536,940	45.47
Vested	(384,803)	32.48
Forfeited	(55,603)	34.44
Unvested at the end of the year	1,365,778	$	31.81

Compensation expense for the years ended December 31, 2021, 2020, and 2019 related to the above restricted stock grants amounted to $13.3 million, $10.8 million, and $10.4 million, respectively. Restricted stock awards and restricted stock units are valued at the closing stock price on the date of grant and are expensed to stock- based compensation expense over the period for which the related service is performed. The total grant date fair value of awards was $24.4 million for 2021 awards. At December 31, 2021, unrecognized compensation expense related to restricted stock award and units is approximately $26.4 million, which is expected to be recognized over a weighted-average period of 3.07 years.

Other Plans

Salary Continuation Plan. The Bank implemented a non-qualified supplemental retirement plan in 2006 (the “Salary Continuation Plan”) for certain executive officers of the Bank. The Salary Continuation Plan is unfunded.

Deferred Compensation Plans. The Bank implemented a non-qualified supplemental retirement plan in 2006 (the “Supplemental Executive Retirement Plan” or “SERP”) for certain executive officers of the Bank. The Bank has acquired additional SERPs through the acquisitions of San Diego Trust Bank, Independence Bank, and Heritage Oaks Bancorp, Inc. The SERP is unfunded. The expense incurred for the SERP for each of the last three years ended December 31, 2021, 2020, and 2019 was $503,000, $511,000, and $674,000, respectively, resulting in a deferred compensation liability of $10.0 million and $10.4 million as of the years ended 2021 and 2020, respectively. In addition, with the acquisition of Plaza Bancorp, Inc., the Company acquired a deferred compensation plan that is unfunded and results in a deferred compensation liability in the amount of $1.7 million and $1.7 million as of the years ended December 31, 2021 and 2020, respectively.

With the acquisition of Opus Bank in June 2020, the Company inherited a terminated non-qualified deferred compensation plan originally funded through the purchase of bank-owned life insurance plans. Final distributions under this plan were made in January 2021. At December 31, 2020, the deferred compensation liability was $98,224.

The amounts expensed in 2021, 2020, and 2019 for salary continuation and deferred compensation plans amounted to $503,000, $511,000, and $674,000 respectively. As of December 31, 2021 and 2020, the total deferred compensation liabilities recorded in other liabilities on the consolidated statements of condition for these plans were $11.7 million and $12.2 million, respectively.