EX-99.1 3 a4614702ex99.txt PRESS RELEASE Exhibit 99.1 Pacific Premier Bancorp, Inc. Announces First Quarter 2004 Results COSTA MESA, Calif.--(BUSINESS WIRE)--April 14, 2004--Pacific Premier Bancorp, Inc. (NASDAQ:PPBI) (the "Company"), the holding company of Pacific Premier Bank, F.S.B. (the "Bank"), announced first quarter earnings of $2.9 million, or $0.56 per basic share and $0.44 per diluted share, compared with a net loss of $258,000, or ($0.19) per basic and diluted share from a year ago. Results for the quarter included a one time gain of $1.6 million from the sale of one of three residual interest components which comprise the Participation Contract. Net income excluding the gain recognized on the aforementioned sale of the residual interest was $1.3 million or $0.25 per basic share and $0.20 per diluted share for the quarter. All diluted earnings per share amounts have been adjusted to reflect the dilutive effect of all warrants and stock options outstanding. The Company's return on average equity (ROAE) for the quarter ended March 31, 2004 was 30.80% compared to (9.07)% for the quarter ended March 31, 2003. Return on average assets (ROAA) for the quarter was 3.53% compared to (0.43)% for the same period in the prior year. The Company's basic and diluted book value per share increased to $7.69 and $6.46, respectively, at March 31, 2004, $0.59 and $0.47 higher than December 31, 2003. "Performance highlights for the quarter included net loan growth of 19.3%, deposit growth of 13.7% and a 26.2% decline in nonperforming assets," said Steven R. Gardner, President and Chief Executive Officer. He further stated, "During the first quarter we completed several key transactions including the issuance of $10 million in trust preferred securities at very favorable terms, the sale of the residual interest for $6.3 million, and the establishment of a new $100 million credit facility. The Company has further solidified its balance sheet which has provided us with the flexibility to continue to accelerate asset and earnings growth in the coming quarters." Mr. Gardner added, "Our retail banking group began offering home loans and equity credit lines in April, which are being referred to a third party originator, thus generating additional fee income while avoiding the costs associated with the personnel needed to originate, underwrite and fund these loans. Other products the group will be adding in the next two quarters include internet banking, cash management services, and commercial lending. Each of these products is designed to facilitate our continued growth of core deposits from both consumers and small businesses." For the quarter ended March 31, 2004, net interest income increased to $3.8 million from $2.1 million for the same period a year earlier. The increase is in part attributable to an increase of $119.3 million in outstanding loan balances and the pay-off of the senior secured note in the fourth quarter. The average net interest margin for the quarter ended March 31, 2004 was 4.81% compared to 3.67% for the same period a year ago. The increase in the margin is attributable to a decrease in the average cost of funds of 144 basis points, partially offset by a decrease in the average yield on loans of 105 basis points compared to the same period a year earlier. The discount accretion from the Participation Contract included in interest income for the first quarter of 2004 was $902,000, compared to $730,000 for the same period a year earlier. The amount of discount accretion will be substantially reduced in future periods due to the sale of the 1998-1 residual interest. The Bank's net interest margin, which does not include the accretion income from the Participation Contract, was 3.74% for the three months ended March 31, 2004. For the quarter ended March 31, 2004, the Company's provision for loan losses totaled $57,000 compared with $639,000 for the same period a year earlier. The decrease is primarily attributable to a reduction of $740,000 in net charge-offs of for the quarter ended March 31, 2004 as compared to the same period in 2003 and the continuing improvement in the Bank's overall asset quality. For the quarter ended March 31, 2004, total noninterest income increased to $2.0 million compared with $639,000 for the same period a year earlier. The increase for the quarter was primarily the result of the $1.6 million gain from the sale of the residual interest component of the Participation Contract, which was partially offset by a reduction in the gain on the sale of investments of $156,000. Noninterest expense for the quarter ended March 31, 2004 was $2.8 million, a $458,000 increase compared to the same period in the prior year. The increase in noninterest expense was primarily the result of an increase in compensation and benefits of $455,000 due to additional staff in the Bank's lending department, which were added during the fourth quarter of 2003. At March 31, 2004, the Company had 72 full-time equivalent employees compared to 59 at March 31, 2003. The Company's tax provision for the quarter ended March 31, 2004 was $12,000 which was comprised of $1.1 million of current income tax that was offset by a $1.1 million reduction in the valuation allowance for the deferred tax assets. The remaining valuation allowance balance at March 31, 2004 was $4.4 million. Total assets of the Company were $372.8 million as of March 31, 2004 compared to $309.4 million as of December 31, 2003. The $63.4 million or 20.5% increase in total assets is the result of increases of $47.7 million in net loans, and $21.7 million in cash, which were partially offset by decreases in investment securities and the Participation Contract of $1.9 million and $4.4 million, respectively. The increase in net loans was the result of $63.7 million in new adjustable rate loans being funded during the quarter. The Bank's pipeline was $65.8 million as of March 31, 2004, an increase of $13.1 million over the amount at December 31, 2003. The allowance for loan losses increased slightly by $76,000 to $2.1 million as of March 31, 2004 compared to December 31, 2003. Although net loans increased by 19%, the allowance increased moderately due to reductions in sub-prime loans and non-accrual loans during the quarter of $813,000 and $636,000, respectively. Additionally the Bank had $13,000 of net recoveries from previously charged off loans and the unallocated reserve was reduced by $70,000 during the quarter. The allowance for loan losses as a percent of non-accrual loans was 98% and 74% as of March 31, 2004 and December 31, 2003, respectively. Non-accrual loans and other real estate owned were $2.1 million and $701,000, respectively, at March 31, 2004, compared to $2.7 million and $979,000, respectively, as of December 31, 2003. The ratio of net nonperforming assets to total assets at March 31, 2004 was 0.69%. Total deposits were $251.7 million as of March 31, 2004, compared to $221.4 million at December 31, 2003. The increase in deposits is comprised of an increase of $29.1 million of certificates of deposits and $1.1 million in transaction accounts. The cost of deposits as of March 31, 2004 was 2.01%, a decrease of 13 basis points since December 31, 2003. At March 31, 2004, total borrowings of the Company were comprised of the Bank's $60.0 million of FHLB term borrowings, $8.4 million of other borrowings and the Company's $10.3 million of trust preferred securities. The total cost of the Company's borrowings at March 31, 2004 was 1.66% compared to 1.85% at December 31, 2003. The Bank's tier 1 capital and total risk-based capital ratios at March 31, 2004 were 8.86% and 13.71%, respectively. The Bank's capital levels were positively impacted by the contribution of $5.0 million in additional paid in capital contributed by the Company during the quarter ended March 31, 2004. The minimum ratios for well-capitalized banks are 5.00% and 10.00% for tier 1 capital and risk-based capital, respectively. The Bank's total equity capital was $32.6 million at March 31, 2004. The Company is a savings and loan holding company that owns 100% of the capital stock of the Bank, the Company's principal operating subsidiary. The Bank is a federally chartered stock savings bank whose primary business is community banking. The Bank currently operates three full-service branches located in Orange and San Bernardino Counties, in Southern California. FORWARD-LOOKING COMMENTS The statements contained herein that are not historical facts are forward-looking statements based on management's current expectations and beliefs concerning future developments and their potential effects on the Company. There can be no assurance that future developments affecting the Company will be the same as those anticipated by management. Actual results may differ from those projected in the forward-looking statements. These forward-looking statements involve risks and uncertainties. These include, but are not limited to, the following risks: (1) changes in the performance of the financial markets, (2) changes in the demand for and market acceptance of the Company's products and services, (3) changes in general economic conditions including interest rates, presence of competitors with greater financial resources, and the impact of competitive projects and pricing, (4) the effect of the Company's policies, (5) the continued availability of adequate funding sources, (6) actual prepayment rates and credit losses as compared to prepayment rates and credit losses assumed by the Company for purposes of its valuation of mortgage derivative securities (the "Participation Contract"), (7) the effect of changes in market interest rates on the spread between the coupon rate and the pass through rate and on the discount rate assumed by the Company in its valuation of its Participation Contract, and (8) various legal, regulatory and litigation risks. ANNUAL MEETING The Board of Directors has established April 1, 2004, as the record date for determining stockholders entitled to receive notice of, to attend and to vote at, the Annual Meeting or any postponement or adjournment thereof. Only record holders of Common Stock of the Company at the close of business on such record date will be entitled to vote at the Annual Meeting or any postponement or adjournment thereof. The annual meeting will be held on Wednesday, May 26, 2004, at 9:00 a.m., Pacific Time, at the corporate headquarters of the Bank located at 1600 Sunflower Avenue, 2nd Floor, Costa Mesa, California, 92626. PACIFIC PREMIER BANCORP AND SUBSIDIARY CONSOLIDATED BALANCE SHEET UNAUDITED (In thousands) March 31, Dec. 31, ASSETS 2004 2003 Cash and due from banks $24,179 $2,440 Investment securities available for sale 37,090 39,845 Investment securities held to maturity 3,292 2,430 Loans held for sale 706 804 Loans held for investment, net of allowance for loan losses of $2,060 in 2004 and $1,984 in 2003 respectively 294,589 246,796 Accrued interest receivable 1,388 1,122 Foreclosed real estate 701 979 Premises and equipment 5,228 5,330 Deferred income taxes 3,000 2,950 Participation Contract 1,626 5,977 Other assets 1,019 695 Total assets $372,818 $309,368 LIABILITIES AND STOCKHOLDERS' EQUITY LIABILITIES: Deposit accounts $251,743 $221,447 Other borrowings 68,400 48,600 Subordinated debentures 10,310 - Accrued expenses and other liabilities 1,931 1,989 Total liabilities 332,384 272,036 STOCKHOLDERS' EQUITY: Common stock, $.01 par value 53 53 Additional paid-in capital 67,546 67,546 Accumulated deficit (27,095) (30,021) Accumulated adjustments to stockholders' equity (70) (246) Total stockholders' equity 40,434 37,332 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $372,818 $309,368 PACIFIC PREMIER BANCORP AND SUBSIDIARY CONSOLIDATED INCOME STATEMENT UNAUDITED (In thousands, except per share data) Three Months Ended March 31, March 31, INTEREST INCOME: 2004 2003 Loans $4,053 $2,892 Other interest-earning assets 1,212 1,137 Total interest income 5,265 4,029 INTEREST EXPENSE: Interest-bearing deposits 1,218 1,291 Other borrowings 232 154 Notes payable - 476 Subordinated debentures 8 53 Total interest expense 1,458 1,974 NET INTEREST INCOME 3,807 2,055 PROVISION FOR LOAN LOSSES 57 639 NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 3,750 1,416 NONINTEREST INCOME: Loan servicing fee income 144 164 Bank and other fee income 141 101 Net gain from investment securities 1,573 143 Other income 101 231 Total noninterest income 1,959 639 NONINTEREST EXPENSE: Compensation and benefits 1,622 1,167 Premises and occupancy 363 347 Data processing 79 99 Net loss on foreclosed real estate 18 94 Other expense 689 606 Total noninterest expense 2,771 2,313 NET INCOME (LOSS) FROM OPERATIONS 2,938 (258) PROVISION FOR INCOME TAXES 12 - NET INCOME (LOSS) FROM OPERATIONS $2,926 ($258) Basic Average Shares Outstanding 5,255,072 1,333,572 Basic Earnings per Share $0.56 ($0.19) Diluted Average Shares Outstanding 6,575,431 2,542,416 Diluted Earnings per Share $0.44 ($0.19) PACIFIC PREMIER BANCORP AND SUBSIDIARY Statistical Information UNAUDITED (In thousands) As of As of As of March 31, March 31, Dec. 31, 2004 2003 2003 Asset Quality: Non-accrual loans $2,094 $4,889 $2,730 Nonperforming assets $2,834 $ - $3,453 Real estate owned $ 701 $1,298 $ 979 Net charge-offs for the quarter ended $ (13) $ 727 $ 131 Allowance for loan losses $2,060 $2,747 $1,984 Charge-offs to average loans, annualized -0.02% 1.78% 0.25% Non-accrual loans to total loans 0.70% 2.73% 1.09% Non-accrual loans to total assets 0.56% 2.10% 0.88% Allowance for credit losses to total loans 0.69% 1.53% 0.79% Allowance for credit losses to non- accrual loans 98.38% 56.19% 72.67% Average Balance Sheet: for the Quarter ended Total assets $331,118 $241,873 $279,734 Loans $268,740 $163,377 $211,065 Deposits $236,005 $196,242 $214,796 Borrowings $ 54,007 $ 19,631 $ 28,432 Notes payable & Subordinated notes $ 773 $ 12,957 $ 2,269 Share Data: Basic Book Value $ 7.69 $8.23 $ 7.10 Diluted Book Value $ 6.46 $4.25 $ 5.98 Closing Stock Price $13.45 $6.00 $11.09 3 months 3 months 12 months ended ended ended March 31, March 31, Dec. 31, 2004 2003 2003 Profitability and Productivity: Return on average assets 3.53% (0.43%) 0.82% Return on average equity 30.80% (9.07%) 12.43% Net interest margin 4.81% 3.67% 4.06% Non-interest expense to total assets 2.97% 3.98% 3.16% Efficiency ratio 47.75% 85.86% 81.19% Pacific Premier Bank Capital Ratios: Tier 1 Capital Ratio 8.86% 6.98% 8.94% Total Risk-based Capital Ratio 13.71% 10.87% 13.22% CONTACT: Pacific Premier Bancorp, Inc. Steven R. Gardner or John Shindler, 714-431-4000