Third Quarter 2019 Summary
- Net income of $41.4 million, or $0.69 per diluted share
- Return on average assets of 1.44%, return on average equity of 8.32% and return on average tangible common equity of 16.27%
- Net interest margin increased to 4.36%, core net interest margin increased to 4.12%
- 12% annualized growth for non-maturity deposits, or $214.3 million, since June 30, 2019
- Noninterest bearing deposits increased to 41% of total deposits, compared to 39% in the prior quarter
- Nonperforming assets as a percentage of total assets of 0.07%
- Completed $100 million share repurchase program authorized in October 2018
IRVINE, Calif.–(BUSINESS WIRE)–$PPBI #PPBI–Pacific Premier Bancorp, Inc. (NASDAQ: PPBI) (the “Company”), the holding company of Pacific Premier Bank (the “Bank”), reported net income of $41.4 million, or $0.69 per diluted share for the third quarter of 2019, compared with net income of $38.5 million, or $0.62 per diluted share, for the second quarter of 2019 and net income of $28.4 million, or $0.46 per diluted share, for the third quarter of 2018.
For the three months ended September 30, 2019, the Company’s return on average assets (“ROAA”) was 1.44%, return on average equity (“ROAE”) was 8.32% and return on average tangible common equity (“ROATCE”) was 16.27%, compared to 1.33%, 7.71% and 15.16%, respectively, for the second quarter of 2019 and 1.00%, 5.95% and 12.89%, respectively, for the third quarter of 2018. Total assets were $11.8 billion at September 30, 2019 compared with $11.8 billion at June 30, 2019 and $11.5 billion at September 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 third quarter results reflect successful execution on the strategies we are employing to manage risk and enhance franchise value in the current environment of economic uncertainty and slowing growth. During the third quarter, we were able to effectively manage our cost of funds, protect our net interest margin, and realize a high level of efficiencies.
“Our performance continues to produce a superior level of risk-adjusted profitability, as we generated an ROAA of 1.44% and an ROATCE of 16.27% in the third quarter of 2019. Our strong profitability enabled us to return approximately $140 million of capital to our shareholders during the first nine months of the year through our quarterly dividend and stock repurchase program.
“Our focus on core deposit gathering continues to produce positive results. During the third quarter, our noninterest-bearing and money market deposits increased by $233.2 million, which enabled us to reduce higher cost funding, improved our overall deposit mix and helped drive a six basis point reduction in our cost of funds.
“While the markets in our geographic footprint remain healthy, we continue to be disciplined in our approach to loan production given the length of the economic expansion and our commitment to maintaining our conservative underwriting and pricing criteria. In the current environment, our focus will be on enhancing our franchise value through further improving our deposit mix, maintaining disciplined expense control and efficiently managing our capital,” said Mr. Gardner.
|
FINANCIAL HIGHLIGHTS |
||||||||||||
|
|
|
Three Months Ended |
||||||||||
|
|
|
September 30, |
|
June 30, |
|
September 30, |
||||||
|
|
|
2019 |
|
2019 |
|
2018 |
||||||
|
Financial Highlights |
|
(dollars in thousands, except per share data) |
||||||||||
|
Net income |
|
$ |
41,375 |
|
|
$ |
38,527 |
|
|
$ |
28,392 |
|
|
Diluted earnings per share |
|
0.69 |
|
|
0.62 |
|
|
0.46 |
|
|||
|
Return on average assets |
|
1.44 |
% |
|
1.33 |
% |
|
1.00 |
% |
|||
|
Return on average equity |
|
8.32 |
|
|
7.71 |
|
|
5.95 |
|
|||
|
Return on average tangible common equity (1) |
|
16.27 |
|
|
15.16 |
|
|
12.89 |
|
|||
|
Net interest margin |
|
4.36 |
|
|
4.28 |
|
|
4.38 |
|
|||
|
Core net interest margin (1) |
|
4.12 |
|
|
4.08 |
|
|
4.19 |
|
|||
|
Cost of deposits |
|
0.71 |
|
|
0.73 |
|
|
0.54 |
|
|||
|
Efficiency ratio (2) |
|
50.9 |
|
|
51.1 |
|
|
53.5 |
|
|||
|
Total assets |
|
$ |
11,811,497 |
|
|
$ |
11,783,781 |
|
|
$ |
11,503,881 |
|
|
Total deposits |
|
8,859,288 |
|
|
8,861,922 |
|
|
8,502,145 |
|
|||
|
Non-maturity deposits as a percent of total deposits |
|
85 |
% |
|
82 |
% |
|
85 |
% |
|||
|
Book value per share |
|
$ |
33.50 |
|
|
$ |
32.80 |
|
|
$ |
30.68 |
|
|
Tangible book value per share (1) |
|
18.41 |
|
|
17.92 |
|
|
16.06 |
|
|||
|
Total risk-based capital ratio |
|
13.40 |
% |
|
13.54 |
% |
|
12.05 |
% |
|||
|
(1) A reconciliation of the non-U.S. GAAP measures of average tangible common equity, core net interest margin 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, gain/(loss) from other real estate owned and gain/(loss) from debt extinguishment. |
INCOME STATEMENT HIGHLIGHTS
Net Interest Income and Net Interest Margin
Net interest income totaled $112.3 million in the third quarter of 2019, an increase of $1.7 million, or 1.5%, from the second quarter of 2019. The increase in net interest income reflected one more day of interest, higher accretion and loan-related fees as well as lower cost of funds driven primarily by lower average balances of Federal Home Loan Bank of San Francisco (“FHLB”) advances and rates, partially offset by lower interest-earning asset yields and average balances.
The net interest margin for the third quarter of 2019 was 4.36%, compared with 4.28% in the prior quarter. The increase was primarily driven by higher accretion income of $6.0 million compared to $5.0 million in the prior quarter. Our core net interest margin, which excludes the impact of accretion, increased four basis points to 4.12%, compared to 4.08% in the prior quarter. The increase in our core net interest margin was primarily attributable to higher loan-related fees and lower cost of funds.
We anticipate our core net interest margin will be in the range of 4.00% to 4.10% in the fourth quarter of 2019.
Net interest income for the third quarter of 2019 decreased $378,000, or 0.3%, compared to the third quarter of 2018. The decrease was primarily related to an increase in our cost of funds since the end of the third quarter of 2018, partially offset by an increase in average interest-earning asset balances, which resulted primarily from investment securities purchases and organic loan growth since the end of the third quarter of 2018.
|
PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES |
|||||||||||||||||||||||||||||||||
|
CONSOLIDATED AVERAGE BALANCES AND YIELD DATA |
|||||||||||||||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||||||||||||
|
|
|
Three Months Ended |
|||||||||||||||||||||||||||||||
|
|
|
September 30, 2019 |
|
June 30, 2019 |
|
September 30, 2018 |
|||||||||||||||||||||||||||
|
|
|
Average |
|
Interest |
|
Average |
|
Average |
|
Interest |
|
Average |
|
Average |
|
Interest |
|
Average |
|||||||||||||||
|
Assets |
|
(dollars in thousands) |
|||||||||||||||||||||||||||||||
|
Cash and cash equivalents |
|
$ |
188,693 |
|
|
$ |
403 |
|
|
0.85 |
% |
|
$ |
187,963 |
|
|
$ |
435 |
|
|
0.93 |
% |
|
$ |
339,064 |
|
|
$ |
898 |
|
|
1.05 |
% |
|
Investment securities |
|
1,311,649 |
|
|
9,227 |
|
|
2.81 |
|
|
1,396,585 |
|
|
10,119 |
|
|
2.90 |
|
|
1,198,362 |
|
|
8,707 |
|
|
2.91 |
|
||||||
|
Loans receivable, net (1) (2) |
|
8,728,536 |
|
|
122,974 |
|
|
5.59 |
|
|
8,779,440 |
|
|
121,860 |
|
|
5.57 |
|
|
8,664,796 |
|
|
119,271 |
|
|
5.46 |
|
||||||
|
Total interest-earning assets |
|
$ |
10,228,878 |
|
|
$ |
132,604 |
|
|
5.14 |
|
|
$ |
10,363,988 |
|
|
$ |
132,414 |
|
|
5.12 |
|
|
$ |
10,202,222 |
|
|
$ |
128,876 |
|
|
5.01 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Interest-bearing deposits |
|
$ |
5,343,043 |
|
|
$ |
15,878 |
|
|
1.18 |
|
|
$ |
5,345,388 |
|
|
$ |
15,991 |
|
|
1.20 |
|
|
$ |
5,316,195 |
|
|
$ |
11,942 |
|
|
0.89 |
|
|
Borrowings |
|
436,979 |
|
|
4,391 |
|
|
3.99 |
|
|
675,345 |
|
|
5,782 |
|
|
3.43 |
|
|
583,400 |
|
|
4,221 |
|
|
2.87 |
|
||||||
|
Total interest-bearing liabilities |
|
$ |
5,780,022 |
|
|
$ |
20,269 |
|
|
1.39 |
|
|
$ |
6,020,733 |
|
|
$ |
21,773 |
|
|
1.45 |
|
|
$ |
5,899,595 |
|
|
$ |
16,163 |
|
|
1.09 |
|
|
Noninterest-bearing deposits |
|
$ |
3,533,797 |
|
|
|
|
|
|
$ |
3,426,508 |
|
|
|
|
|
|
$ |
3,473,056 |
|
|
|
|
|
|||||||||
|
Net interest income |
|
|
|
$ |
112,335 |
|
|
|
|
|
|
$ |
110,641 |
|
|
|
|
|
|
$ |
112,713 |
|
|
|
|||||||||
|
Net interest margin (3) |
|
|
|
|
|
4.36 |
|
|
|
|
|
|
4.28 |
|
|
|
|
|
|
4.38 |
|
||||||||||||
|
Cost of deposits |
|
|
|
|
|
0.71 |
|
|
|
|
|
|
0.73 |
|
|
|
|
|
|
0.54 |
|
||||||||||||
|
Cost of funds (4) |
|
|
|
|
|
0.86 |
|
|
|
|
|
|
0.92 |
|
|
|
|
|
|
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 $6.0 million, $5.0 million and $4.1 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
Provision for credit losses for the third quarter of 2019 was $1.6 million, an increase of $1.2 million from the second quarter of 2019. The increase was primarily due to the replenishment of $1.4 million of net charge-offs in the third quarter, compared to $360,000 replenishment in the second quarter. Additionally, the provision for unfunded commitments was $197,000 compared with a reduction of $408,000 in the prior quarter. Provision for credit losses for the third quarter of 2019 decreased $419,000 compared to the third quarter of 2018 primarily driven by lower loan balances and commitments, and continued strength in asset quality.
|
|
|
Three Months Ended |
||||||||||
|
|
|
September 30, |
|
June 30, |
|
September 30, |
||||||
|
|
|
2019 |
|
2019 |
|
2018 |
||||||
|
Provision for Credit Losses |
|
(dollars in thousands) |
||||||||||
|
Provision for loan losses |
|
$ |
1,365 |
|
|
$ |
742 |
|
|
$ |
1,646 |
|
|
Provision for unfunded commitments |
|
197 |
|
|
(408 |
) |
|
335 |
|
|||
|
Total provision for credit losses |
|
$ |
1,562 |
|
|
$ |
334 |
|
|
$ |
1,981 |
|
Noninterest Income
Noninterest income for the third quarter of 2019 was $11.4 million, an increase of $5.1 million, or 80.7%, from the second quarter of 2019. The increase was primarily due to a $4.0 million increase in net gain from sales of investment securities and a $1.4 million increase in net gain from the sales of loans, partially offset by a $724,000 decrease in debit card interchange fee income. The decrease in debit card interchange fee income was the result of the Bank becoming a non-exempt institution, effective July 1, 2019, under the Durbin Amendment that regulates debit card interchange fee income.
During the third quarter of 2019, the Bank sold $26.3 million of Small Business Administration (“SBA”) loans for a net gain of $2.3 million, compared with the sale of $24.4 million of SBA loans for a net gain of $2.2 million during the prior quarter. The current quarter also included the sale of $684,000 of non-SBA loans for a net gain of $8,000 compared with sales of $82.5 million of non-SBA loans for a net loss of $1.3 million during the prior quarter.
We anticipate our noninterest income will range from $6.5 million to $7.0 million for the fourth quarter of 2019 based upon current SBA loan sale gain rates and normal, recurring business activities.
Noninterest income for the third quarter of 2019 increased $3.2 million, or 38.7%, compared to the third quarter of 2018. The increase was primarily related to a $3.2 million increase in net gain from sales of investment securities as well as a $698,000 increase in other income, partially offset by a $640,000 decrease in debit card interchange fee income and a $409,000 decrease in earnings on bank-owned life insurance (“BOLI”), primarily the result of a death benefit received in the third quarter of 2018.
The increase in net gain from sales of loans for the third quarter of 2019 compared to the same period last year was primarily due to a higher premium on SBA loans sales of 109%, compared with 107% in the third quarter of 2018. The Bank sold $29.9 million of SBA loans for a net gain of $2.0 million during the third quarter of 2018.
|
|
|
Three Months Ended |
||||||||||
|
|
|
September 30, |
|
June 30, |
|
September 30, |
||||||
|
|
|
2019 |
|
2019 |
|
2018 |
||||||
|
Noninterest Income |
|
(dollars in thousands) |
||||||||||
|
Loan servicing fees |
|
$ |
546 |
|
|
$ |
409 |
|
|
$ |
400 |
|
|
Service charges on deposit accounts |
|
1,440 |
|
|
1,441 |
|
|
1,570 |
|
|||
|
Other service fee income |
|
360 |
|
|
363 |
|
|
317 |
|
|||
|
Debit card interchange fee income |
|
421 |
|
|
1,145 |
|
|
1,061 |
|
|||
|
Earnings on BOLI |
|
861 |
|
|
851 |
|
|
1,270 |
|
|||
|
Net gain from sales of loans |
|
2,313 |
|
|
902 |
|
|
2,029 |
|
|||
|
Net gain from sales of investment securities |
|
4,261 |
|
|
212 |
|
|
1,063 |
|
|||
|
Other income |
|
1,228 |
|
|
1,001 |
|
|
530 |
|
|||
|
Total noninterest income |
|
$ |
11,430 |
|
|
$ |
6,324 |
|
|
$ |
8,240 |
|
Noninterest Expense
Noninterest expense totaled $65.3 million for the third quarter of 2019, an increase of $1.4 million, or 2.2%, compared to the second quarter of 2019. The increase was driven by a $1.7 million increase in compensation primarily as a result of higher incentive and benefits expense and, to a lesser extent, a $641,000 increase in other expense. These increases were partially offset by a $750,000 decline in FDIC insurance premiums due to small institution assessment credits and a $487,000 decline in legal, audit and professional expense.
The Company anticipates that total operating expense will range from $65.0 million to $66.0 million for the fourth quarter of 2019.
Noninterest expense decreased by $17.4 million, or 21.1%, compared to the third quarter of 2018. The decrease was primarily related to a reduction in merger-related expense and additional cost savings from personnel and operations from the acquisition of Grandpoint Capital, Inc. (“Grandpoint”), partially offset by our continued investment to support our organic growth.
|
|
|
Three Months Ended |
||||||||||
|
|
|
September 30, |
|
June 30, |
|
September 30, |
||||||
|
|
|
2019 |
|
2019 |
|
2018 |
||||||
|
Noninterest Expense |
|
(dollars in thousands) |
||||||||||
|
Compensation and benefits |
|
$ |
35,543 |
|
|
$ |
33,847 |
|
|
$ |
37,901 |
|
|
Premises and occupancy |
|
7,593 |
|
|
7,517 |
|
|
7,214 |
|
|||
|
Data processing |
|
3,094 |
|
|
3,036 |
|
|
4,095 |
|
|||
|
Other real estate owned operations, net |
|
64 |
|
|
62 |
|
|
— |
|
|||
|
FDIC insurance premiums |
|
(10 |
) |
|
740 |
|
|
1,060 |
|
|||
|
Legal, audit and professional expense |
|
3,058 |
|
|
3,545 |
|
|
3,280 |
|
|||
|
Marketing expense |
|
1,767 |
|
|
1,425 |
|
|
1,569 |
|
|||
|
Office, telecommunications and postage expense |
|
1,200 |
|
|
1,311 |
|
|
1,538 |
|
|||
|
Loan expense |
|
1,137 |
|
|
1,005 |
|
|
1,139 |
|
|||
|
Deposit expense |
|
3,478 |
|
|
3,668 |
|
|
2,833 |
|
|||
|
Merger-related expense |
|
(4 |
) |
|
5 |
|
|
13,978 |
|
|||
|
CDI amortization |
|
4,281 |
|
|
4,281 |
|
|
4,693 |
|
|||
|
Other expense |
|
4,135 |
|
|
3,494 |
|
|
3,482 |
|
|||
|
Total noninterest expense |
|
$ |
65,336 |
|
|
$ |
63,936 |
|
|
$ |
82,782 |
|
Income Tax
For the third quarter of 2019, our effective tax rate was 27.2%, compared with 26.9% for the second quarter of 2019 and 21.5% for the third quarter of 2018. The increase in the effective tax rate from the third quarter of 2018 was the result of a $2.3 million one-time benefit associated with the filing of the 2017 federal and state tax returns, and the remeasurement of deferred tax items realized in the third 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 $8.76 billion at September 30, 2019, a decrease of $14.5 million, or 0.2%, from June 30, 2019, and a decrease of $1.7 million, or 0.02%, from September 30, 2018. The decreases were primarily driven by higher loan prepayments and payoffs, as well as lower line utilization and fundings when compared to the prior quarter, partially offset by lower loan sales and higher loan purchases. Loan sales during the third quarter of 2019 included $26.3 million of SBA loans and $684,000 of non-SBA loans, compared with $24.4 million of SBA loans and $82.5 million of non-SBA loans sold in the second quarter of 2019.
During the third quarter of 2019, the Bank generated $536.9 million of new loan commitments and $356.6 million of new loan fundings, compared with $568.2 million in new loan commitments and $394.8 million in new loan fundings for the second quarter of 2019, and $604.8 million in new loan commitments and $439.8 million in new loan fundings for the third quarter of 2018.
At September 30, 2019, the ratio of loans held for investment to total deposits was 98.9%, compared with 99.0% and 103.0% at June 30, 2019 and September 30, 2018, respectively.
The following table presents the composition of the loan portfolio for the period indicated:
|
|
|
September 30, |
|
June 30, |
|
September 30, |
||||||
|
|
|
2019 |
|
2019 |
|
2018 |
||||||
|
|
|
(dollars in thousands) |
||||||||||
|
Business loans: |
|
|
|
|
|
|
||||||
|
Commercial and industrial |
|
$ |
1,233,938 |
|
|
$ |
1,300,083 |
|
|
$ |
1,359,841 |
|
|
Franchise |
|
894,023 |
|
|
860,299 |
|
|
735,366 |
|
|||
|
Commercial owner occupied |
|
1,678,888 |
|
|
1,667,912 |
|
|
1,675,528 |
|
|||
|
SBA |
|
179,965 |
|
|
180,363 |
|
|
193,487 |
|
|||
|
Agribusiness |
|
119,633 |
|
|
126,857 |
|
|
133,241 |
|
|||
|
Total business loans |
|
4,106,447 |
|
|
4,135,514 |
|
|
4,097,463 |
|
|||
|
Real estate loans: |
|
|
|
|
|
|
||||||
|
Commercial non-owner occupied |
|
2,053,590 |
|
|
2,121,312 |
|
|
1,931,165 |
|
|||
|
Multi-family |
|
1,611,904 |
|
|
1,520,135 |
|
|
1,554,692 |
|
|||
|
One-to-four family |
|
273,182 |
|
|
248,392 |
|
|
376,617 |
|
|||
|
Construction |
|
478,961 |
|
|
505,401 |
|
|
504,708 |
|
|||
|
Farmland |
|
171,667 |
|
|
169,724 |
|
|
138,479 |
|
|||
|
Land |
|
30,717 |
|
|
40,748 |
|
|
49,992 |
|
|||
|
Total real estate loans |
|
4,620,021 |
|
|
4,605,712 |
|
|
4,555,653 |
|
|||
|
Consumer loans: |
|
|
|
|
|
|
||||||
|
Consumer loans |
|
40,548 |
|
|
40,680 |
|
|
114,736 |
|
|||
|
Gross loans held for investment |
|
8,767,016 |
|
|
8,781,906 |
|
|
8,767,852 |
|
|||
|
Deferred loan origination costs/(fees) and premiums/(discounts), net |
|
(9,540 |
) |
|
(9,968 |
) |
|
(8,648 |
) |
|||
|
Loans held for investment |
|
8,757,476 |
|
|
8,771,938 |
|
|
8,759,204 |
|
|||
|
Allowance for loan losses |
|
(35,000 |
) |
|
(35,026 |
) |
|
(33,306 |
) |
|||
|
Loans held for investment, net |
|
$ |
8,722,476 |
|
|
$ |
8,736,912 |
|
|
$ |
8,725,898 |
|
|
Loans held for sale, at lower of cost or fair value |
|
$ |
7,092 |
|
|
$ |
8,529 |
|
|
$ |
52,880 |
|
The total end-of-period weighted average interest rate on loans, excluding fees and discounts, at September 30, 2019 was 5.00%, compared to 5.11% at June 30, 2019 and 5.08% at September 30, 2018.
The following table presents the composition of the organic loan commitments originated during the period indicated:
|
|
September 30, |
|
June 30, |
|
September 30, |
||||||
|
|
2019 |
|
2019 |
|
2018 |
||||||
|
|
(dollars in thousands) |
||||||||||
|
Business loans: |
|
|
|
|
|
||||||
|
Commercial and industrial |
$ |
130,494 |
|
|
$ |
149,766 |
|
|
$ |
133,938 |
|
|
Franchise |
91,018 |
|
|
92,966 |
|
|
60,179 |
|
|||
|
Commercial owner occupied |
64,080 |
|
|
67,191 |
|
|
123,785 |
|
|||
|
SBA |
35,516 |
|
|
28,023 |
|
|
38,103 |
|
|||
|
Agribusiness |
6,241 |
|
|
9,859 |
|
|
9,016 |
|
|||
|
Total business loans |
327,349 |
|
|
347,805 |
|
|
365,021 |
|
|||
|
Real estate loans: |
|
|
|
|
|
||||||
|
Commercial non-owner occupied |
90,464 |
|
|
101,956 |
|
|
97,585 |
|
|||
|
Multi-family |
41,289 |
|
|
35,061 |
|
|
70,683 |
|
|||
|
One-to-four family |
6,110 |
|
|
3,140 |
|
|
18,056 |
|
|||
|
Construction |
59,639 |
|
|
64,059 |
|
|
50,182 |
|
|||
|
Farmland |
9,350 |
|
|
13,044 |
|
|
— |
|
|||
|
Land |
1,285 |
|
|
1,625 |
|
|
1,175 |
|
|||
|
Total real estate loans |
208,137 |
|
|
218,885 |
|
|
237,681 |
|
|||
|
Consumer loans: |
|
|
|
|
|
||||||
|
Consumer loans |
1,463 |
|
|
1,551 |
|
|
2,080 |
|
|||
|
Total loan commitments |
$ |
536,949 |
|
|
$ |
568,241 |
|
|
$ |
604,782 |
|
The weighted average interest rate on new loan production was 5.28% in the third quarter of 2019 compared with 5.42% in the second quarter of 2019 and 5.21% in the third quarter of 2018. During the third quarter of 2019, the Bank also purchased $94.9 million of multi-family loans at a weighted average interest rate of 4.27% and $35.5 million of commercial non-owner occupied loans at a weighted average interest rate of 4.52%.
Asset Quality and Allowance for Loan Losses
At September 30, 2019, our allowance for loan losses was $35.0 million, a decrease of $26,000, or 0.1%, from June 30, 2019 and an increase of $1.7 million, or 5.1%, from September 30, 2018. The provision for loan losses for the third quarter of 2019 was $1.4 million, compared to $742,000 and $1.6 million, for the second quarter of 2019 and the third quarter of 2018, respectively. During the third quarter of 2019, the Company incurred $1.4 million of net charge-offs, compared to $3.6 million and $87,000, at June 30, 2019 and September 30, 2018, respectively.
The ratio of allowance for loan losses to loans held for investment at September 30, 2019 amounted to 0.40%, compared to 0.40% and 0.38%, at June 30, 2019 and September 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 $46.8 million, or 0.53% of total loans held for investment as of September 30, 2019, compared to $52.0 million, or 0.59% of total loans held for investment as of June 30, 2019, and $71.7 million, or 0.82% of total loans held for investment as of September 30, 2018.
Nonperforming assets totaled $8.2 million, or 0.07% of total assets, at September 30, 2019, an increase of $559,000 from June 30, 2019 and an increase of $478,000 from September 30, 2018. During the third quarter of 2019, nonperforming loans increased $468,000 to $8.1 million and other real estate owned increased $91,000 to $126,000. Total loan delinquencies were $11.2 million, or 0.13% of loans held for investment, at September 30, 2019, compared to $13.5 million, or 0.15% of loans held for investment, at June 30, 2019, and $7.7 million, or 0.09% of loans held for investment, at September 30, 2018.
|
|
|
September 30, |
|
June 30, |
|
September 30, |
||||||
|
|
|
2019 |
|
2019 |
|
2018 |
||||||
|
Asset Quality |
|
(dollars in thousands) |
||||||||||
|
Nonperforming loans |
|
$ |
8,105 |
|
|
$ |
7,637 |
|
|
$ |
7,268 |
|
|
Other real estate owned |
|
126 |
|
|
35 |
|
|
356 |
|
|||
|
Other assets owned |
|
— |
|
|
— |
|
|
129 |
|
|||
|
Nonperforming assets |
|
$ |
8,231 |
|
|
$ |
7,672 |
|
|
$ |
7,753 |
|
|
|
|
|
|
|
|
|
||||||
|
Allowance for loan losses |
|
$ |
35,000 |
|
|
$ |
35,026 |
|
|
$ |
33,306 |
|
|
Allowance for loan losses as a percent of total nonperforming loans |
|
432 |
% |
|
459 |
% |
|
458 |
% |
|||
|
Nonperforming loans as a percent of loans held for investment |
|
0.09 |
|
|
0.09 |
|
|
0.08 |
|
|||
|
Nonperforming assets as a percent of total assets |
|
0.07 |
|
|
0.07 |
|
|
0.07 |
|
|||
|
Net loan charge-offs/(recoveries) for the quarter ended |
|
$ |
1,391 |
|
|
$ |
3,572 |
|
|
$ |
87 |
|
|
Net loan charge-offs for quarter to average total loans (1) |
|
0.02 |
% |
|
0.04 |
% |
|
— |
% |
|||
|
Allowance for loan losses to loans held for investment (2) |
|
0.40 |
|
|
0.40 |
|
|
0.38 |
|
|||
|
Delinquent Loans |
|
|
|
|
|
|
||||||
|
30 – 59 days |
|
$ |
1,725 |
|
|
$ |
3,416 |
|
|
$ |
1,977 |
|
|
60 – 89 days |
|
3,212 |
|
|
801 |
|
|
720 |
|
|||
|
90+ days |
|
6,293 |
|
|
9,261 |
|
|
5,048 |
|
|||
|
Total delinquency |
|
$ |
11,230 |
|
|
$ |
13,478 |
|
|
$ |
7,745 |
|
|
Delinquency as a percentage of loans held for investment |
|
0.13 |
% |
|
0.15 |
% |
|
0.09 |
% |
|||
|
(1) The ratio is less than 0.01% as of September 30, 2018. |
||||||||||||
|
(2) At September 30, 2019, 41% of loans held for investment include a fair value net discount of $46.8 million or 0.53% of loans held for investment. 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 September 30, 2018, 53% of loans held for investment include a fair value net discount of $71.7 million or 0.82% of loans held for investment. |
Investment Securities
Investments securities totaled $1.30 billion at September 30, 2019, a decrease of $4.3 million, or 0.3%, from June 30, 2019, and an increase of $195.8 million, or 17.8%, from September 30, 2018. The small decrease in the third quarter of 2019 compared to the prior quarter was primarily the result of $187.1 million in sales and $33.3 million in principal payments, amortization and redemptions, offset by $205.1 million in purchases and an $11.0 million increase in mark-to-market fair value adjustment. The increase compared to the same period last year was primarily the result of $667.3 million in purchases and a $66.1 million increase in mark-to-market fair value adjustment, partially offset by $413.6 million in sales and $124.0 million in principal payments, amortization and redemptions.
Deposits
At September 30, 2019, deposits totaled $8.86 billion, a decrease of $2.6 million, or 0.03%, from June 30, 2019 and an increase of $357.1 million, or 4.2%, from September 30, 2018. At September 30, 2019, non-maturity deposits totaled $7.52 billion, or 85% of total deposits, an increase of $214.3 million, or 2.9%, from June 30, 2019 and an increase of $323.7 million, or 4.5%, from September 30, 2018. During the third quarter of 2019, deposit decreases included $171.
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
