October 18, 2021

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Pacific Premier Bancorp, Inc. Announces Fourth Quarter 2020 Financial Results and Increases Quarterly Cash Dividend to $0.30 per Share

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Fourth Quarter 2020 Summary

  • Net income of $67.1 million, or $0.71 per diluted share
  • Return on average assets of 1.34%, return on average equity of 9.91%, and return on average tangible common equity of 16.32%
  • Net interest margin of 3.61% and core net interest margin of 3.32%
  • Cost of deposits of 0.14% in the fourth quarter compared with 0.20% in the prior quarter
  • Noninterest bearing deposits represent 37% of total deposits
  • Nonperforming assets represent 0.15% of total assets
  • Total loan delinquency of 0.10% compared with 0.22% in the prior quarter
  • Increased common equity quarterly dividend by $0.02 to $0.30 per share
  • Approved a new $150 million share repurchase program in January 2021

IRVINE, Calif.–(BUSINESS WIRE)–$PPBI #PPBI–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 2020 of $67.1 million, or $0.71 per diluted share, compared with net income of $66.6 million, or $0.70 per diluted share, for the third quarter of 2020 and net income of $41.1 million, or $0.69 per diluted share, for the fourth quarter of 2019.

For the three months ended December 31, 2020, the Company’s return on average assets (“ROAA”) was 1.34%, return on average equity (“ROAE”) was 9.91%, and return on average tangible common equity (“ROATCE”) was 16.32%, compared to 1.31%, 9.90%, and 16.44%, respectively, for the third quarter of 2020 and 1.42%, 8.20%, and 15.89%, respectively, for the fourth quarter of 2019. Total assets as of December 31, 2020 were $19.7 billion compared to $19.8 billion at September 30, 2020 and $11.8 billion at December 31, 2019. A reconciliation of the non–U.S. generally accepted accounting principles (“GAAP”) measure of ROATCE to the GAAP measure of common stockholders’ equity is set forth at the end of this press release.

Steven R. Gardner, Chairman, President, and Chief Executive Officer of the Company, commented, “We delivered a strong quarter to end 2020 that reflects our improved earnings power and overall operational strength. Despite the low interest rate environment and the uncertainty around the pandemic, we generated a return on average assets and average tangible common equity, exclusive of merger-related expenses, of 1.41% and 17.2%, respectively.

“Having completed the Opus integration in early October, we were able to increase our focus on business development throughout the remainder of the fourth quarter. As a result, we ended the year with a strong loan pipeline as our teams are attracting larger, more sophisticated clients. During the fourth quarter, our new loan commitments were up substantially from the prior quarter, although elevated payoffs and strategic loan sales reduced our loan balances at quarter end.

“Our strong earnings continue to enhance our capital levels, and we remain committed to a disciplined, prudent capital management strategy. We recently adopted a new stock repurchase program, increasing the size over the program previously adopted in late 2019. We also announced today that we increased our common stock dividend to $0.30 per share, from $0.28 per share in the prior quarter. Since initiating our dividend program two years ago, we have steadily increased the amount of capital we are returning to shareholders, which has positively influenced total shareholder returns.

“As we begin 2021, we are well-positioned to manage through the impact of the ongoing pandemic and capitalize on the economic recovery. We expect increasing levels of organic growth in our various markets, and we will continue to pursue strategic growth opportunities that can expand and enhance our franchise. Over the past several years we have made investments in talent and technology to create a robust, highly scalable platform to generate profitable growth, and we are confident in our ability to execute and deliver for our shareholders in the years ahead.”

Mr. Gardner concluded, “I want to thank all of the Pacific Premier team members for their strong commitment to our clients, our communities, and each other. Their incredible resiliency and talents are what drive our results.”

FINANCIAL HIGHLIGHTS

 

 

Three Months Ended

 

 

December 31,

 

September 30,

 

December 31,

 

 

2020

 

2020

 

2019

Financial Highlights

 

(Dollars in thousands, except per share data)

Net income

 

$

67,136

 

 

$

66,566

 

 

$

41,098

 

Diluted earnings per share

 

0.71

 

 

0.70

 

 

0.69

 

Common equity dividend per share

 

0.28

 

 

0.25

 

 

0.22

 

Return on average assets

 

1.34

%

 

1.31

%

 

1.42

%

Return on average equity

 

9.91

 

 

9.90

 

 

8.20

 

Return on average tangible common equity (1)

 

16.32

 

 

16.44

 

 

15.89

 

Pre-provision net revenue on average assets (1)

 

1.92

 

 

1.92

 

 

1.95

 

Net interest margin

 

3.61

 

 

3.54

 

 

4.33

 

Core net interest margin (1)

 

3.32

 

 

3.23

 

 

4.10

 

Cost of deposits

 

0.14

 

 

0.20

 

 

0.58

 

Efficiency ratio (2)

 

48.5

 

 

47.4

 

 

51.9

 

Noninterest expense (excluding merger-related expense) as a percent of average assets (1)

 

1.89

 

 

1.88

 

 

2.29

 

Total assets

 

$

19,736,544

 

 

$

19,844,240

 

 

$

11,776,012

 

Total deposits

 

16,214,177

 

 

16,330,807

 

 

8,898,509

 

Loans to deposit ratio

 

82

%

 

82

%

 

98

%

Non-maturity deposits as a percent of total deposits

 

90

 

 

89

 

 

88

 

Book value per share

 

$

29.07

 

 

$

28.48

 

 

$

33.82

 

Tangible book value per share (1)

 

18.65

 

 

18.01

 

 

18.84

 

Total risk-based capital ratio (3)

 

16.31

%

 

16.11

%

 

13.81

%

(1)

A reconciliation of the non-GAAP measures of return on average tangible common equity, pre-provision net revenue on average assets, core net interest margin, noninterest expense (excluding merger-related expense) as a percent of average assets, and tangible book value per share to the GAAP measures of net income, common stockholders’ equity, and book value are set forth at the end of this press release.

(2)

Represents the ratio of noninterest expense less other real estate owned operations, amortization of intangible assets, and merger-related expense to the sum of net interest income before provision for credit losses and total noninterest income, less gain/(loss) on sale of securities, gain/(loss) from other real estate owned, and gain/(loss) from debt extinguishment.

(3)

The Company’s total risk-based capital ratio as of September 30, 2020 reflects the reclassification of $502.6 million of cash and due from banks as of September 30, 2020 to interest-bearing deposits with financial institutions as of that same date. This reclassification resulted in an increase in the ratio as of September 30, 2020 from what was previously reported.

INCOME STATEMENT HIGHLIGHTS

Net Interest Income and Net Interest Margin

Net interest income totaled $168.2 million in the fourth quarter of 2020, an increase of $1.7 million from the third quarter of 2020. The increase in net interest income was driven by higher average investment securities, higher loan related fees, and lower rates paid on deposits, partially offset by the impact of lower average loans and yields.

Net interest margin for the fourth quarter of 2020 was 3.61%, compared with 3.54% for the third quarter of 2020. Our core net interest margin, which excludes the impact of loan accretion, certificates of deposit mark-to-market amortization, and other one-time adjustments, increased 9 basis points to 3.32%, compared to 3.23% in the prior quarter. The increase was a result of higher loan related fees driven by elevated prepayments and lower cost of funds driven by lower rates paid on deposits, partially offset by the decrease attributable to the shift in interest-earning asset mix and lower loan yields.

Net interest income for the fourth quarter of 2020 increased $55.3 million, compared to the fourth quarter of 2019. The increase was primarily attributable to an increase in average interest-earning assets of $8.17 billion, which primarily resulted from the acquisition of Opus Bank (“Opus”) in the second quarter of 2020 and organic loan growth, as well as a higher average investment securities and a lower cost of funds, partially offset by lower average loan and investment yields, and higher average deposits.

PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED AVERAGE BALANCES AND YIELD DATA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

December 31, 2020

 

September 30, 2020

 

December 31, 2019

 

 

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

 

$

1,239,035

 

 

$

286

 

 

0.09

%

 

$

1,388,897

 

 

$

305

 

 

0.09

%

 

$

201,161

 

 

$

283

 

 

0.56

%

Investment securities

 

3,964,592

 

 

17,039

 

 

1.72

 

 

3,283,840

 

 

14,231

 

 

1.73

 

 

1,445,158

 

 

10,210

 

 

2.83

 

Loans receivable, net (1) (2)

 

13,315,810

 

 

163,499

 

 

4.88

 

 

14,034,868

 

 

167,455

 

 

4.75

 

 

8,700,690

 

 

119,353

 

 

5.44

 

Total interest-earning assets

 

$

18,519,437

 

 

$

180,824

 

 

3.88

 

 

$

18,707,605

 

 

$

181,991

 

 

3.87

 

 

$

10,347,009

 

 

$

129,846

 

 

4.98

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits

 

$

10,384,229

 

 

$

5,685

 

 

0.22

 

 

$

10,703,431

 

 

$

8,509

 

 

0.32

 

 

$

5,216,658

 

 

$

13,144

 

 

1.00

 

Borrowings

 

539,021

 

 

6,941

 

 

5.12

 

 

542,437

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