Second Quarter 2019 Summary
- Net income of $38.5 million, or $0.62 per diluted share
- Return on average assets of 1.33%, return on average equity of 7.71%, and return on average tangible common equity of 15.16%
- Repurchased 2.2 million shares of our common stock representing 3.5% of shares outstanding
- Returned $79.8 million of capital to shareholders through share repurchases and dividends
- Total assets increased to $11.8 billion
- 10% annualized growth for non-maturity deposits, or $178.1 million, since March 31,2019
- Noninterest bearing deposits as a percent of total deposits of 39%
- Nonperforming assets as a percent of total assets of 0.07%
IRVINE, Calif.–(BUSINESS WIRE)–$PPBI #PPBI–Pacific Premier Bancorp, Inc. (NASDAQ: PPBI) (the “Company”), the holding company of Pacific Premier Bank (the “Bank”), reported net income for the second quarter of 2019 of $38.5 million, or $0.62 per diluted share, compared with net income of $38.7 million, or $0.62 per diluted share, for the first quarter of 2019 and net income of $27.3 million, or $0.58 per diluted share, for the second quarter of 2018.
For the three months ended June 30, 2019, the Company’s return on average assets (“ROAA”) was 1.33%, return on average equity (“ROAE”) was 7.71% and return on average tangible common equity (“ROATCE”) was 15.16%, compared to 1.34%, 7.78% and 15.45%, respectively, for the three months ended March 31, 2019 and 1.35%, 8.53% and 15.42%, respectively, for the three months ended June 30, 2018. Total assets as of June 30, 2019 were $11.8 billion compared with $11.6 billion at March 31, 2019 and $8.2 billion at June 30, 2018. A reconciliation of the non–U.S. GAAP measure of ROATCE to the U.S. 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, “Our focus on core deposit growth, proactive capital management, disciplined cost controls and strong asset quality continues to produce a superior level of risk-adjusted profitability. In the second quarter of 2019, we generated a ROAA of 1.33% and a ROATCE of 15.16%. We are making good progress on our core deposit growth initiatives, which resulted in strong inflows in lower-cost, transaction accounts. Organic deposit growth of transaction and non-maturity accounts increased $178.1 million in the current quarter.
“Our high level of profitability and on-going risk management discipline is enabling us to return significant amounts of capital to shareholders. During the second quarter, we took the opportunity to further optimize our capital structure by issuing $125 million in subordinated debt and using a portion of the proceeds to repurchase nearly $66 million of our common stock. We believe that replacing higher cost common equity with lower cost subordinated debt allows us to reduce our overall cost of capital and creates additional value for our shareholders.
“The success we are having in generating lower-cost core deposits provides us the flexibility to prudently increase our loan growth while protecting our net interest margin. Given our improved funding mix and historically consistent ability to originate high-quality loans at attractive yields, we believe we are well-positioned to deliver revenue and earnings growth over the second half of 2019,” said Mr. Gardner.
|
Three Months Ended |
||||||||||||
|
June 30, |
|
March 31, |
|
June 30, |
||||||||
|
2019 |
|
2019 |
|
2018 |
||||||||
| Financial Highlights |
(dollars in thousands, except per share data) |
|||||||||||
|
Net income |
$ |
38,527 |
|
$ |
38,718 |
|
$ |
27,303 |
|
|||
|
Diluted earnings per share |
|
0.62 |
|
|
0.62 |
|
|
0.58 |
|
|||
|
Return on average assets |
|
1.33 |
% |
|
1.34 |
% |
|
1.35 |
% |
|||
|
Return on average equity |
|
7.71 |
|
|
7.78 |
|
|
8.53 |
|
|||
|
Return on average tangible common equity (1) |
|
15.16 |
|
|
15.45 |
|
|
15.42 |
|
|||
|
Net interest margin |
|
4.28 |
|
|
4.37 |
|
|
4.41 |
|
|||
|
Core net interest margin |
|
4.08 |
|
|
4.21 |
|
|
4.29 |
|
|||
|
Cost of deposits |
|
0.73 |
|
|
0.63 |
|
|
0.50 |
|
|||
|
Efficiency ratio (2) |
|
51.1 |
|
|
49.3 |
|
|
53.0 |
|
|||
|
Total assets |
$ |
11,783,781 |
|
$ |
11,580,495 |
|
$ |
8,158,131 |
|
|||
|
Total deposits |
|
8,861,922 |
|
|
8,715,175 |
|
|
6,308,350 |
|
|||
|
Core deposits as a percent of total deposits (3) |
|
89 |
% |
|
88 |
% |
|
89 |
% |
|||
|
Book value per share |
$ |
32.80 |
|
$ |
31.97 |
|
$ |
27.63 |
|
|||
|
Tangible book value per share (1) |
|
17.92 |
|
|
17.56 |
|
|
16.21 |
|
|||
|
Total risk-based capital ratio |
|
13.54 |
% |
|
12.58 |
% |
|
12.75 |
% |
|||
|
(1) A reconciliation of the non-U.S. GAAP measures of average tangible common equity and tangible book value per share to the U.S. GAAP measures of 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, core deposit intangible amortization and merger- related expense to the sum of net interest income before provision for credit losses and total noninterest income, less gains/(loss) on sale of securities, other-than-temporary impairment recovery/(loss) on investment securities and gain/(loss) from other real estate owned. |
|
(3) Core deposits are all transaction accounts and non-brokered certificates of deposit less than $250,000. |
INCOME STATEMENT HIGHLIGHTS
Net Interest Income and Net Interest Margin
Net interest income totaled $110.6 million in the second quarter of 2019, a decrease of $765,000, or 0.7%, from the first quarter of 2019. The decrease in net interest income reflected our higher cost of funds and lower average loan balances as well as the issuance of $125.0 million of subordinated notes in May 2019, partially offset by the impact of one more day of interest and higher accretion income.
The net interest margin for the second quarter was 4.28%, compared with 4.37% in the prior quarter. The decrease was primarily driven by our higher cost of funds and lower average loan balances partially offset by higher accretion income of $5.0 million compared to $3.8 million in the prior quarter. Our core net interest margin, which excludes the impact of accretion, decreased 13 basis points to 4.08%, compared to 4.21% in the prior quarter. The core net interest margin was negatively impacted by 4 basis points due to the issuance of the previously mentioned $125.0 million of subordinated notes at an annual coupon of 4.875% during the second quarter of 2019. The remaining 9 basis-point decrease was primarily attributable to a higher cost of funds and lower average loan balances.
We anticipate our core net interest margin will be in the range of 4.00% to 4.10% in the third quarter of 2019.
Net interest income for the second quarter of 2019 increased $29.5 million, or 36.3%, compared to the second quarter of 2018. The increase was primarily related to an increase in average interest-earning assets of $2.98 billion, which resulted primarily from our acquisition of Grandpoint Capital, Inc. (“Grandpoint”) in the third quarter of 2018, as well as organic loan growth since the end of the second quarter of 2018.
|
PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES |
|||||||||||||||||||||||||||
|
CONSOLIDATED AVERAGE BALANCES AND YIELD DATA |
|||||||||||||||||||||||||||
|
Three Months Ended |
|||||||||||||||||||||||||||
|
June 30, 2019 |
March 31, 2019 |
June 30, 2018 |
|||||||||||||||||||||||||
|
|
|
Interest |
Average |
|
Interest |
Average |
|
Interest |
Average |
||||||||||||||||||
|
|
Average |
Income/ |
Yield/ |
Average |
Income/ |
Yield/ |
Average |
Income/ |
Yield/ |
||||||||||||||||||
|
|
Balance |
Expense |
Cost |
Balance |
Expense |
Cost |
Balance |
Expense |
Cost |
||||||||||||||||||
|
Assets |
(dollars in thousands) |
||||||||||||||||||||||||||
|
Cash and cash equivalents |
$ |
187,963 |
$ |
435 |
0.93 |
% |
$ |
173,613 |
$ |
378 |
0.88 |
% |
$ |
146,279 |
$ |
277 |
0.76 |
% |
|||||||||
|
Investment securities |
|
1,396,585 |
|
10,119 |
2.90 |
|
|
1,298,476 |
|
9,389 |
2.89 |
|
|
980,334 |
|
6,797 |
2.77 |
|
|||||||||
|
Loans receivable, net (1) (2) |
|
8,779,440 |
|
121,860 |
5.57 |
|
|
8,867,159 |
|
121,476 |
5.56 |
|
|
6,253,987 |
|
85,625 |
5.49 |
|
|||||||||
|
Total interest-earning assets |
$ |
10,363,988 |
$ |
132,414 |
5.12 |
|
$ |
10,339,248 |
$ |
131,243 |
5.15 |
|
$ |
7,380,600 |
$ |
92,699 |
5.04 |
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
Liabilities |
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
Interest-bearing deposits |
$ |
5,345,388 |
$ |
15,991 |
1.20 |
|
$ |
5,073,723 |
$ |
13,284 |
1.06 |
|
$ |
3,888,553 |
$ |
7,756 |
0.80 |
|
|||||||||
|
Borrowings |
|
675,345 |
|
5,782 |
3.43 |
|
|
880,671 |
|
6,553 |
3.02 |
|
|
560,706 |
|
3,772 |
2.70 |
|
|||||||||
|
Total interest-bearing liabilities |
$ |
6,020,733 |
$ |
21,773 |
1.45 |
|
$ |
5,954,394 |
$ |
19,837 |
1.35 |
|
$ |
4,449,259 |
$ |
11,528 |
1.04 |
|
|||||||||
|
Noninterest bearing deposits |
$ |
3,426,508 |
|
|
$ |
3,480,791 |
|
|
$ |
2,310,714 |
|
|
|||||||||||||||
|
Net interest income |
|
$ |
110,641 |
|
|
$ |
111,406 |
|
|
$ |
81,171 |
|
|||||||||||||||
|
Net interest margin (3) |
|
|
4.28 |
|
|
|
4.37 |
|
|
|
4.41 |
|
|||||||||||||||
|
Cost of deposits |
|
|
0.73 |
|
|
|
0.63 |
|
|
|
0.50 |
|
|||||||||||||||
|
Cost of funds (4) |
|
|
0.92 |
|
|
|
0.85 |
|
|
|
0.68 |
|
|||||||||||||||
|
(1) Average balance includes loans held for sale and nonperforming loans and is net of deferred loan origination fees/costs and discounts/premiums. |
|
(2) Interest income includes net discount accretion of $5.0 million, $3.8 million and $1.9 million, respectively. |
|
(3) Represents annualized net interest income divided by average interest-earning assets. |
|
(4) Represents annualized total interest expense divided by the sum of average total interest-bearing liabilities and noninterest-bearing deposits. |
Provision for Credit Losses
A provision for credit losses of $334,000 was recorded for the second quarter of 2019, compared with a provision for credit losses of $1.5 million for the first quarter of 2019 and $1.8 million for the second quarter of 2018. The decrease in provision for credit losses was primarily driven by lower loan balances, continued strength in asset quality, and a reduction in the reserve for unfunded commitments.
The reduction of provision for unfunded commitments was attributable to lower loan commitments and loss rates as of June 30, 2019.
|
Three Months Ended |
|||||||||||
|
June 30, |
March 31, |
June 30, |
|||||||||
| 2019 |
2019 |
2018 |
|||||||||
| Provision for Credit Losses |
(dollars in thousands) |
||||||||||
|
Provision for loans and leases losses |
$ |
742 |
|
$ |
2,012 |
|
$ |
1,353 |
|||
|
Provision for unfunded commitments |
|
(408 |
) |
|
(486 |
) |
|
408 |
|||
|
Total provision for credit losses |
$ |
334 |
|
$ |
1,526 |
|
$ |
1,761 |
|||
Noninterest Income
Noninterest income for the second quarter of 2019 was $6.3 million, a decrease of $1.4 million, or 17.7%, from the first quarter of 2019. The decrease was primarily due to a $827,000 decrease in net gain from the sales of loans, a $459,000 decrease in other income and a $215,000 decrease in net gain from sales of investment securities. The decrease in other income was primarily due to a positive fair value adjustment of $238,000 in Community Reinvestment Act (“CRA”) related equity investments, compared to a $612,000 positive fair value adjustment in the prior quarter.
During the second quarter of 2019, the Bank sold $24.4 million of Small Business Administration (“SBA”) loans for a net gain of $2.2 million, compared with the sale of $25.5 million of SBA loans for a net gain of $1.7 million during the prior quarter. The current quarter also included the sale of $82.5 million of non-SBA loans for a net loss of $1.3 million.
We anticipate our noninterest income will range from $6.5 million to $7.5 million for the third quarter of 2019 based upon current SBA loan sale gain rates and normal, recurring business activities.
Noninterest income for the second quarter of 2019 decreased $1.8 million, or 22.4%, compared to the second quarter of 2018. The decrease was primarily related to a $2.9 million decrease in net gain from sales of loans and a $118,000 decrease in net gain from sales of investment securities, partially offset by a $384,000 increase in service charges on deposit accounts, a $234,000 increase in earnings on bank-owned life insurance (“BOLI”) as well as increases in loan servicing fees, other service fee income, debit card interchange fee income, and other income, whose increases amounted to $614,000 in the aggregate.
The decrease in net gain from sales of loans for the second quarter of 2019 compared to the same period last year was primarily due to higher SBA loans sales and the gain from sale of commercial real estate loans during the second quarter of 2018. The Bank sold $31.9 million of SBA loans and $20.4 million of commercial real estate loans for a net gain of $2.9 million and $927,000, respectively, during the second quarter of 2018.
|
Three Months Ended |
|||||||||
|
June 30, |
March 31, |
June 30, |
|||||||
|
2019 |
2019 |
2018 |
|||||||
| Noninterest Income |
(dollars in thousands) |
||||||||
|
Loan servicing fees |
$ |
409 |
$ |
398 |
$ |
292 |
|||
|
Service charges on deposit accounts |
|
1,441 |
|
1,330 |
|
1,057 |
|||
|
Other service fee income |
|
363 |
|
356 |
|
169 |
|||
|
Debit card interchange fee income |
|
1,145 |
|
1,071 |
|
1,090 |
|||
|
Earnings on BOLI |
|
851 |
|
910 |
|
617 |
|||
|
Net gain from sales of loans |
|
902 |
|
1,729 |
|
3,843 |
|||
|
Net gain from sales of investment securities |
|
212 |
|
427 |
|
330 |
|||
|
Other income |
|
1,001 |
|
1,460 |
|
753 |
|||
|
Total noninterest income |
$ |
6,324 |
$ |
7,681 |
$ |
8,151 |
|||
Noninterest Expense
Noninterest expense totaled $63.9 million for the second quarter of 2019, an increase of $359,000, or 0.6%, compared with the first quarter of 2019. The increase was driven by higher compensation and benefits expense of $33.8 million, compared to $33.4 million in the prior quarter, and to a lesser extent, higher legal, audit and professional expense of $3.5 million, $547,000 higher than the prior quarter. These increases were partially offset by a $650,000 decline in merger-related expense.
The Company anticipates that total operating expense will range from $64.5 million to $65.5 million for the third quarter of 2019.
Noninterest expense grew by $13.9 million, or 27.7%, compared to the second quarter of 2018. The increase was primarily related to the additional costs from operations, personnel and branches retained from the acquisition of Grandpoint, core deposit intangible (“CDI”) amortization expense, combined with our continued investment in personnel to support our organic growth in loans and deposits, partially offset by a reduction in merger-related expense.
|
Three Months Ended |
|||||||||
|
June 30, |
March 31, |
June 30, |
|||||||
|
2019 |
2019 |
2018 |
|||||||
| Noninterest Expense |
(dollars in thousands) |
||||||||
|
Compensation and benefits |
$ |
33,847 |
$ |
33,388 |
$ |
29,274 |
|||
|
Premises and occupancy |
|
7,517 |
|
7,535 |
|
5,045 |
|||
|
Data processing |
|
3,036 |
|
2,930 |
|
2,747 |
|||
|
Other real estate owned operations, net |
|
62 |
|
3 |
|
2 |
|||
|
FDIC insurance premiums |
|
740 |
|
800 |
|
581 |
|||
|
Legal, audit and professional expense |
|
3,545 |
|
2,998 |
|
1,816 |
|||
|
Marketing expense |
|
1,425 |
|
1,497 |
|
1,352 |
|||
|
Office, telecommunications and postage expense |
|
1,311 |
|
1,210 |
|
1,115 |
|||
|
Loan expense |
|
1,005 |
|
873 |
|
594 |
|||
|
Deposit expense |
|
3,668 |
|
3,583 |
|
2,302 |
|||
|
Merger-related expense |
|
5 |
|
655 |
|
943 |
|||
|
CDI amortization |
|
4,281 |
|
4,436 |
|
1,996 |
|||
|
Other expense |
|
3,494 |
|
3,669 |
|
2,309 |
|||
|
Total noninterest expense |
$ |
63,936 |
$ |
63,577 |
$ |
50,076 |
|||
Income Tax
For the second quarter of 2019, our effective tax rate was 26.9%, compared with 28.3% for the first quarter of 2019 and 27.2% for the second quarter of 2018.
The Company expects our 2019 annual effective tax rate to be in the range of 27% to 28%.
BALANCE SHEET HIGHLIGHTS
Loans
Loans held for investment totaled $8.77 billion at June 30, 2019, a decrease of $93.9 million, or 1.1%, from March 31, 2019, and an increase of $2.49 billion, or 39.7%, from June 30, 2018. The decrease was driven by higher loan prepayments and payoffs, and lower line utilization in the second quarter of 2019, as well as higher loan sales of $106.9 million, which included $82.5 million of non-SBA loans and $24.4 million of SBA loans, compared with $25.5 million of SBA loans sold in the prior quarter. The increase compared to the second quarter of 2018 was impacted by both organic loan growth and by the acquisition of Grandpoint, the latter of which added $2.4 billion of loans before fair value adjustments in the third quarter of 2018.
During the second quarter of 2019, the Bank generated $568.2 million of new loan commitments and $394.8 million of new loan fundings, compared with $549.7 million in new loan commitments and $391.8 million in new loan fundings for the first quarter of 2019 and $530.4 million in new loan commitments and $352.5 million in new loan fundings for the second quarter of 2018.
At June 30, 2019, the ratio of loans held for investment to total deposits was 99.0%, compared with 101.7% and 99.5% at March 31, 2019 and June 30, 2018, respectively.
The following table presents the composition of the loan portfolio for the period indicated:
|
|
June 30, 2019 |
March 31, 2019 |
June 30, 2018 |
|||||||||
|
|
(dollars in thousands) |
|||||||||||
|
Business loans: |
|
|||||||||||
|
Commercial and industrial |
$ |
1,300,083 |
|
$ |
1,336,520 |
|
$ |
1,102,586 |
|
|||
|
Franchise |
|
860,299 |
|
|
813,057 |
|
|
708,957 |
|
|||
|
Commercial owner occupied |
|
1,667,912 |
|
|
1,648,762 |
|
|
1,310,722 |
|
|||
|
SBA |
|
180,363 |
|
|
188,757 |
|
|
176,696 |
|
|||
|
Agribusiness |
|
126,857 |
|
|
134,603 |
|
|
136,962 |
|
|||
|
Total business loans |
|
4,135,514 |
|
|
4,121,699 |
|
|
3,435,923 |
|
|||
|
Real estate loans: |
|
|
|
|||||||||
|
Commercial non-owner occupied |
|
2,121,312 |
|
|
2,124,250 |
|
|
1,219,747 |
|
|||
|
Multi-family |
|
1,520,135 |
|
|
1,511,942 |
|
|
805,494 |
|
|||
|
One-to-four family |
|
248,392 |
|
|
279,467 |
|
|
249,495 |
|
|||
|
Construction |
|
505,401 |
|
|
538,197 |
|
|
321,423 |
|
|||
|
Farmland |
|
169,724 |
|
|
167,345 |
|
|
136,548 |
|
|||
|
Land |
|
40,748 |
|
|
46,848 |
|
|
30,246 |
|
|||
|
Total real estate loans |
|
4,605,712 |
|
|
4,668,049 |
|
|
2,762,953 |
|
|||
|
Consumer loans: |
|
|
|
|||||||||
|
Consumer loans |
|
40,680 |
|
|
85,302 |
|
|
81,973 |
|
|||
|
Gross loans held for investment |
|
8,781,906 |
|
|
8,875,050 |
|
|
6,280,849 |
|
|||
|
Deferred loan origination costs/(fees) and premiums/(discounts), net |
|
(9,968 |
) |
|
(9,195 |
) |
|
(3,263 |
) |
|||
|
Loans held for investment |
|
8,771,938 |
|
|
8,865,855 |
|
|
6,277,586 |
|
|||
|
Allowance for loan losses |
|
(35,026 |
) |
|
(37,856 |
) |
|
(31,747 |
) |
|||
|
Loans held for investment, net |
$ |
8,736,912 |
|
$ |
8,827,999 |
|
$ |
6,245,839 |
|
|||
|
Loans held for sale, at lower of cost or fair value |
$ |
8,529 |
|
$ |
11,671 |
|
$ |
13,879 |
|
|||
The total end-of-period weighted average interest rate on loans, excluding fees and discounts, at June 30, 2019 was 5.11%, compared to 5.13% at March 31, 2019 and 5.12% at June 30, 2018.
The following table presents the composition of the organic loan commitments originated during the period indicated:
|
|
June 30, 2019 |
March 31, 2019 |
June 30, 2018 |
||||||
|
|
(dollars in thousands) |
||||||||
|
Business loans: |
|
||||||||
|
Commercial and industrial |
$ |
149,766 |
$ |
112,074 |
$ |
130,833 |
|||
|
Franchise |
|
92,966 |
|
86,356 |
|
89,242 |
|||
|
Commercial owner occupied |
|
67,191 |
|
39,049 |
|
80,339 |
|||
|
SBA |
|
28,023 |
|
41,963 |
|
35,881 |
|||
|
Agribusiness |
|
9,859 |
|
13,388 |
|
11,945 |
|||
|
Total business loans |
|
347,805 |
|
292,830 |
|
348,240 |
|||
|
Real estate loans: |
|
|
|
||||||
|
Commercial non-owner occupied |
|
101,956 |
|
114,809 |
|
59,721 |
|||
|
Multi-family |
|
35,061 |
|
30,991 |
|
31,101 |
|||
|
One-to-four family |
|
3,140 |
|
14,689 |
|
5,641 |
|||
|
Construction |
|
64,059 |
|
74,203 |
|
79,033 |
|||
|
Farmland |
|
13,044 |
|
17,250 |
|
5,250 |
|||
|
Land |
|
1,625 |
|
4,050 |
|
750 |
|||
|
Total real estate loans |
|
218,885 |
|
255,992 |
|
181,496 |
|||
|
Consumer loans: |
|
|
|
||||||
|
Consumer loans |
|
1,551 |
|
840 |
|
690 |
|||
|
Total loan commitments |
$ |
568,241 |
$ |
549,662 |
$ |
530,426 |
|||
Asset Quality and Allowance for Loan and Lease Losses
At June 30, 2019, our allowance for loan and lease losses was $35.0 million, a decrease of $2.8 million from March 31, 2019 and an increase of $3.3 million from June 30, 2018. The provision for loan losses for the second quarter of 2019 was $742,000. During second quarter of 2019, the Company incurred $3.6 million of net charge-offs and released $3.2 million of related specific reserves.
The ratio of allowance for loan losses to loans held for investment at June 30, 2019 amounted to 0.40%, compared to 0.43% and 0.51% at March 31, 2019 and June 30, 2018, respectively. Under the guidance of ASC 820: Fair Value Measurements and Disclosures, the fair value net discount on loans acquired through total bank acquisitions was $52.0 million, or 0.59% of total loans held for investment as of June 30, 2019, compared to $57.2 million, or 0.65% of total loans held for investment as of March 31, 2019 and $22.2 million, or 0.35% of total loans held for investment as of June 30, 2018.
Nonperforming assets totaled $7.7 million, or 0.07% of total assets, at June 30, 2019, a decrease of $5.4 million from March 31, 2019 and an increase of $1.2 million from June 30, 2018. During the second quarter of 2019, nonperforming loans decreased $5.2 million to $7.6 million and other real estate owned decreased $145,000 to $35,000. Total loan delinquencies were $13.5 million, or 0.15% of loans held for investment, at June 30, 2019, compared to $15.8 million, or 0.18% of loans held for investment, at March 31, 2019, and $7.4 million, or 0.12% of loans held for investment, at June 30, 2018.
The decrease in nonperforming assets during the second quarter of 2019 was primarily attributable to the sale of a $4.3 million commercial owner occupied nonperforming loan and the payoff of a $1.1 million nonperforming SBA loan.
|
|
June 30, 2019 |
March 31, 2019 |
June 30, 2018 |
|||||||||
|
Asset Quality |
(dollars in thousands) |
|||||||||||
|
Nonperforming loans |
$ |
7,637 |
|
$ |
12,858 |
|
$ |
6,039 |
|
|||
|
Other real estate owned |
|
35 |
|
|
180 |
|
|
220 |
|
|||
|
Other assets owned |
— |
|
13 |
|
|
183 |
|
|||||
|
Nonperforming assets |
$ |
7,672 |
|
$ |
13,051 |
|
$ |
6,442 |
|
|||
|
|
|
|
|
|||||||||
|
Allowance for loan losses |
$ |
35,026 |
|
$ |
37,856 |
|
$ |
31,747 |
|
|||
|
Allowance for loan losses as a percent of total nonperforming loans |
|
459 |
% |
|
294 |
% |
|
526 |
% |
|||
|
Nonperforming loans as a percent of loans held for investment |
|
0.09 |
|
|
0.15 |
|
|
0.10 |
|
|||
|
Nonperforming assets as a percent of total assets |
|
0.07 |
|
|
0.11 |
|
|
0.08 |
|
|||
|
Net loan charge-offs/(recoveries) for the quarter ended |
$ |
3,572 |
|
$ |
228 |
|
$ |
108 |
|
|||
|
Net loan charge-offs for quarter to average total loans (1) |
|
0.04 |
% |
— |
% |
— |
% |
|||||
|
Allowance for loan losses to loans held for investment (2) |
|
0.40 |
|
|
0.43 |
|
|
0.51 |
|
|||
|
Delinquent Loans |
|
|
|
|||||||||
|
30 – 59 days |
$ |
3,416 |
|
$ |
2,299 |
|
$ |
3,583 |
|
|||
|
60 – 89 days |
|
801 |
|
|
1,982 |
|
|
1,290 |
|
|||
|
90+ days |
|
9,261 |
|
|
11,481 |
|
|
2,574 |
|
|||
|
Total delinquency |
$ |
13,478 |
|
$ |
15,762 |
|
$ |
7,447 |
|
|||
|
Delinquency as a percentage of loans held for investment |
|
0.15 |
% |
|
0.18 |
% |
|
0.12 |
% |
|||
|
(1) The ratios are less than 0.01% as of March 31, 2019 and December 31, 2018. |
|
(2) At June 30, 2019, 44% of loans held for investment include a fair value net discount of $52.0 million, or 0.59% of loans held for investment. At March, 2019, 47% of loans held for investment include a fair value net discount of $57.2 million, or 0.65% of loans held for investment. At June, 30, 2018, 40% of loans held for investment include a fair value net discount of $22.2 million, or 0.35% of loans held for investment. |
Investment Securities
Investments securities totaled $1.30 billion at June 30, 2019, an increase of $86.1 million, or 7.1%, from March 31, 2019, and $394.7 million, or 43.5%, from June 30, 2018. The increase in the second quarter of 2019 compared to the prior quarter was primarily the result of $147.9 million in purchases and a $24.4 million increase in mark-to-market fair value adjustment, partially offset by $57.0 million in sales and $29.2 million in principal payments, amortization and redemptions. The increase compared to the same period last year was primarily the result of $392.9 million of investment securities from the acquisition of Grandpoint.
Deposits
At June 30, 2019, deposits totaled $8.86 billion, an increase of $146.7 million, or 1.7%, from March 31, 2019 and $2.55 billion, or 40.5%, from June 30, 2018. At June 30, 2019, non-maturity deposits totaled $7.30 billion, or 82% of total deposits, an increase of $178.1 million, or 2.5%, from March 31, 2019 and an increase of $2.16 billion, or 42.1%, from June 30, 2018. During the second quarter of 2019, deposit increases included $133.6 million in money market/savings deposits, $57.6 million in retail certificates of deposits, and $56.4 million in noninterest-bearing deposits, partially offset by decreases of $89.0 million in brokered certificates of deposit and $12.0 million in interest checking, as compared to the first quarter of 2019.
The weighted average cost of deposits for the three-month period ending June 30, 2019 was 0.73%, compared to 0.63% for the three-month period ending March 31, 2019, and 0.50% for the three-month period ending June 30, 2018. The increase in the weighted average cost of deposits in the second quarter of 2019 compared to the prior quarter was primarily driven by higher rates and volume in money market and retail and brokered certificates of deposits as well as lower average noninterest-bearing deposit balances.
Contacts
Pacific Premier Bancorp, Inc.
Steven R. Gardner
Chairman, President and Chief Executive Officer
(949) 864-8000
Ronald J. Nicolas, Jr.
Senior Executive Vice President and Chief Financial Officer
(949) 864-8000
