Increases Quarterly Cash Dividend by 12% to $0.28 Per Share
Third Quarter 2020 Summary
- Net income of $66.6 million, or $0.70 per diluted share
- Return on average assets of 1.31%, return on average equity of 9.90%, and return on average tangible common equity of 16.44%
- Net interest margin of 3.54% and core net interest margin of 3.23%
- Cost of deposits of 0.20% in the third quarter, compared with 0.32% in the prior quarter
- Non-maturity deposits of $14.6 billion, or 89.5% of total deposits
- Noninterest bearing deposits represent 36.1% of total deposits
- Nonperforming assets represent 0.14% of total assets
- Converted Opus Bank’s operating system and consolidated 20 branches in early October
IRVINE, Calif.–(BUSINESS WIRE)–$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 of $66.6 million, or $0.70 per diluted share, for the third quarter of 2020, compared with a net loss of $99.1 million, or $1.41 per diluted share, for the second quarter of 2020 and net income of $41.4 million, or $0.69 per diluted share, for the third quarter of 2019. Financial results for the third quarter of 2020 reflected the Company’s return to profitability after increasing its credit loss reserves in the first half of the year. These reserve increases were primarily due to the adverse impact of the COVID-19 pandemic on economic forecasts utilized by the Company in its current expected credit losses (“CECL”) model and the initial establishment of the Day 1 reserves required by CECL methodology in conjunction with the closing of the Opus Bank (“Opus”) acquisition during the second quarter of 2020.
Total assets were $19.84 billion at September 30, 2020, compared with $20.52 billion at June 30, 2020, and $11.81 billion at September 30, 2019. 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, “We delivered solid financial results during the third quarter as we continued to execute well on our strategic priorities, including managing through the COVID-19 crisis, integrating the Opus Bank team, and enhancing our ability to drive franchise value. Pre-provision net revenue increased to $98 million, up 61% from the prior quarter, excluding merger-related expenses, and our efficiency ratio improved to 47%, which reflects our increased operating leverage, earnings power, and the sale of $1.13 billion of SBA PPP loans.
“Since the closing of the Opus Bank acquisition on June 1, 2020, we have successfully executed on our approach to integrating the two teams. In early October, we converted Opus’ core operating system and consolidated 20 branches. We have realized the estimated cost savings of 25% of Opus’ pre-merger noninterest expenses and expect to achieve fully phased in cost savings by the end of this year. Our loan pipeline has grown during the quarter and we expect stronger production going forward. Our team is focused on driving new business opportunities and expanding existing relationships to grow deposits, loans, and fee income.
“While the COVID-19 pandemic is far from over, we are seeing encouraging trends in asset quality. Of the nearly $2.3 billion in temporary loan modifications we granted to clients earlier this year, the majority have resumed payments and 1.8% of total loans are currently subject to modifications. We believe the strength of our asset quality during an unprecedented economic downturn reflects the resilience of our clients’ businesses, our conservative underwriting standards, and our proactive approach to credit risk management.”
Mr. Gardner concluded, “Given our strong capital position, our results of operations during the third quarter, and our current expectations regarding our future financial performance, I am pleased to announce that the Board of Directors has approved an increase in our common stock dividend to $0.28 per share. We believe we are well positioned to manage through the ongoing economic uncertainty, and that we have the ability to pursue additional strategic transactions to further enhance the value of our franchise should a compelling opportunity present itself.”
FINANCIAL HIGHLIGHTS
|
|
|
Three Months Ended |
||||||||||
|
|
|
September 30, |
|
June 30, |
|
September 30, |
||||||
|
|
|
2020 |
|
2020 |
|
2019 |
||||||
|
Financial Highlights |
|
(Dollars in thousands, except per share data) |
||||||||||
|
Net income (loss) |
|
$ |
66,566 |
|
|
$ |
(99,091 |
) |
|
$ |
41,375 |
|
|
Diluted earnings (loss) per share |
|
0.70 |
|
|
(1.41 |
) |
|
0.69 |
|
|||
|
Pre-provision net revenue (1) |
|
$ |
97,713 |
|
|
$ |
60,566 |
|
|
$ |
58,425 |
|
|
Return on average assets |
|
1.31 |
% |
|
(2.61 |
)% |
|
1.44 |
% |
|||
|
Return on average equity |
|
9.90 |
|
|
(17.76 |
) |
|
8.32 |
|
|||
|
Return on average tangible common equity (1) |
|
16.44 |
|
|
(29.40 |
) |
|
16.27 |
|
|||
|
Pre-provision net revenue on average assets (1) |
|
1.92 |
|
|
1.60 |
|
|
2.04 |
|
|||
|
Net interest margin |
|
3.54 |
|
|
3.79 |
|
|
4.36 |
|
|||
|
Core net interest margin (1) |
|
3.23 |
|
|
3.59 |
|
|
4.12 |
|
|||
|
Cost of deposits |
|
0.20 |
|
|
0.32 |
|
|
0.71 |
|
|||
|
Efficiency ratio (2) |
|
47.4 |
|
|
52.9 |
|
|
50.9 |
|
|||
|
Total assets |
|
$ |
19,844,240 |
|
|
$ |
20,517,074 |
|
|
$ |
11,811,497 |
|
|
Total deposits |
|
16,330,807 |
|
|
16,976,693 |
|
|
8,859,288 |
|
|||
|
Non-maturity deposits as a percent of total deposits |
|
89.5 |
% |
|
88.7 |
% |
|
84.8 |
% |
|||
|
Book value per share |
|
$ |
28.48 |
|
|
$ |
28.14 |
|
|
$ |
33.50 |
|
|
Tangible book value per share (1) |
|
18.01 |
|
|
17.58 |
|
|
18.41 |
|
|||
|
Total risk-based capital ratio |
|
16.00 |
% |
|
15.69 |
% |
|
13.40 |
% |
|||
| ________________ | ||
|
(1) |
A reconciliation of the non-U.S. GAAP measures of pre-provision net revenue, return on average tangible common equity, pre-provision net revenue on average assets, core net interest margin, and tangible book value per share to the U.S. 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 gains/(loss) on sale of 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 $166.5 million in the third quarter of 2020, an increase of $36.3 million, or 27.8%, from the second quarter of 2020. The increase in net interest income reflected higher average interest-earning assets of $4.88 billion, related to the full quarter’s impact of the Opus acquisition, compared with the second quarter of 2020, as well as increased investment securities purchases, higher accretion income, and a lower cost of funds driven by a lower cost of deposits.
The net interest margin for the third quarter of 2020 was 3.54%, compared with 3.79% in the prior quarter. Our core net interest margin, which excludes the impact of loan accretion income of $12.2 million, compared to $5.8 million in the prior quarter, certificates of deposit mark-to-market amortization, and other one-time adjustments, decreased 36 basis points to 3.23%, compared to 3.59% in the prior quarter. Excluding the Small Business Administration’s Paycheck Protection Program (“PPP”) loan portfolio, our core net interest margin decreased 39 basis points to 3.26%, compared to 3.65% in the prior quarter. The decrease was primarily attributable to the shift in interest-earning asset mix and lower loan and investment yields, partially offset by a lower cost of deposits. The lower interest-earning asset yield was driven primarily by the full quarter’s impact of the Opus loan portfolio added in June that had lower yields, and the deployment of excess liquidity into lower yielding investment securities. The lower cost of funds was driven principally by lower rates paid on deposits.
Net interest income for the third quarter of 2020 increased $54.2 million, or 48.3%, compared to the third quarter of 2019. The increase was attributable to an increase in average interest-earning assets of $8.48 billion, which primarily resulted from the acquisition of Opus in the second quarter of 2020 and organic loan growth, as well as a higher average investment securities balance and a lower cost of funds, partially offset by lower average loan and investment yields and a higher average balance of deposits.
|
PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES |
|||||||||||||||||||||||||||
|
CONSOLIDATED AVERAGE BALANCES AND YIELD DATA |
|||||||||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||||||
|
|
|
Three Months Ended |
|||||||||||||||||||||||||
|
|
|
September 30, 2020 |
|
June 30, 2020 |
|
September 30, 2019 |
|||||||||||||||||||||
|
|
|
Average |
|
Interest |
|
Average |
|
Average |
|
Interest |
|
Average |
|
Average |
|
Interest |
|
Average |
|||||||||
|
Assets |
(Dollars in thousands) |
||||||||||||||||||||||||||
|
Cash and cash equivalents |
$ |
1,388,897 |
$ |
305 |
0.09 |
% |
$ |
796,761 |
$ |
215 |
0.11 |
% |
$ |
188,693 |
$ |
403 |
0.85 |
% |
|||||||||
|
Investment securities |
3,283,840 |
14,231 |
1.73 |
|
1,792,432 |
10,568 |
2.36 |
|
1,311,649 |
9,227 |
2.81 |
|
|||||||||||||||
|
Loans receivable, net (1) (2) |
14,034,868 |
167,455 |
4.75 |
|
11,242,721 |
133,339 |
4.77 |
|
8,728,536 |
122,974 |
5.59 |
|
|||||||||||||||
|
Total interest-earning assets |
$ |
18,707,605 |
$ |
181,991 |
3.87 |
|
$ |
13,831,914 |
$ |
144,122 |
4.19 |
|
$ |
10,228,878 |
$ |
132,604 |
5.14 |
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
Liabilities |
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
Interest-bearing deposits |
$ |
10,703,431 |
$ |
8,509 |
0.32 |
|
$ |
7,317,675 |
$ |
9,655 |
0.53 |
|
$ |
5,343,043 |
$ |
15,878 |
1.18 |
|
|||||||||
|
Borrowings |
542,437 |
6,936 |
5.09 |
|
431,181 |
4,175 |
3.89 |
|
436,979 |
4,391 |
3.99 |
|
|||||||||||||||
|
Total interest-bearing liabilities |
$ |
11,245,868 |
$ |
15,445 |
0.55 |
|
$ |
7,748,856 |
$ |
13,830 |
0.72 |
|
$ |
5,780,022 |
$ |
20,269 |
1.39 |
|
|||||||||
|
Noninterest-bearing deposits |
$ |
5,877,619 |
|
|
$ |
4,970,812 |
|
|
$ |
3,533,797 |
|
|
|||||||||||||||
|
Net interest income |
|
$ |
166,546 |
|
|
$ |
130,292 |
|
|
$ |
112,335 |
|
|||||||||||||||
|
Net interest margin (3) |
|
|
3.54 |
|
|
|
3.79 |
|
|
|
4.36 |
|
|||||||||||||||
|
Cost of deposits |
|
|
0.20 |
|
|
|
0.32 |
|
|
|
0.71 |
|
|||||||||||||||
|
Cost of funds (4) |
|
|
0.36 |
|
|
|
0.44 |
|
|
|
0.86 |
|
|||||||||||||||
|
Ratio of interest-earning assets to interest-bearing liabilities |
166.35 |
|
|
|
178.50 |
|
|
|
176.97 |
|
|||||||||||||||||
| ________________ | ||
|
(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 $12.2 million, $5.8 million, and $6.0 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 2020 was $4.2 million, a decrease of $156.4 million from the second quarter of 2020 and an increase of $2.6 million from the third quarter of 2019. The decrease from the second quarter of 2020 reflected improved economic conditions, lower loans held for investment, and the impact of Day 1 provision for credit losses associated with the acquisition of Opus during the second quarter of 2020. The credit loss reserve during the second quarter of 2020 resulted from unfavorable changes in economic forecasts employed in the Bank’s CECL model and an $84.4 million Day 1 provision for credit losses resulting from the acquisition of Opus in June of 2020. The Company recognized a recapture of $492,000 of the provision for unfunded commitments in the third quarter of 2020, primarily due to lower outstanding unfunded commitments, compared with a provision of $10.4 million in the second quarter of 2020, $8.6 million of which represented the Day 1 provision related to the unfunded commitments from the Opus acquisition, and a $197,000 provision for unfunded commitments in the third quarter of 2019.
|
|
Three Months Ended |
|||||||||
|
|
September 30, |
|
June 30, |
|
September 30, |
|||||
|
|
2020 |
2020 |
2019 |
|||||||
|
Provision for Credit Losses |
(Dollars in thousands) |
|||||||||
|
Provision for loan losses |
$ |
4,702 |
|
$ |
150,257 |
$ |
1,365 |
|||
|
Provision for unfunded commitments |
(492 |
) |
10,378 |
197 |
||||||
|
Total provision for credit losses |
$ |
4,210 |
|
$ |
160,635 |
$ |
1,562 |
|||
Noninterest Income
Noninterest income for the third quarter of 2020 was $26.8 million, an increase of $19.9 million from the second quarter of 2020. The increase was primarily due to a $11.6 million increase in net gain from the sales of loans, a $4.6 million increase in custodial account fees from a full quarter’s impact of Pacific Premier Trust acquired in the Opus acquisition, a $1.2 million increase in net gain from sales of investment securities, as well as a $956,000 increase in earnings on bank-owned life insurance (“BOLI”), primarily due to additional BOLI from Opus. In addition, other income increased $687,000, primarily due to an $877,000 increase in escrow and exchange fee income attributable to the Commerce Escrow division acquired in the Opus acquisition.
During the third quarter of 2020, the Bank sold $1.16 billion of Small Business Administration (“SBA”) loans, primarily PPP loans, for a net gain of $19.0 million and sold $96.2 million of other loans for a net loss of $9.4 million, compared with sales of $15.4 million of other loans for a net loss of $2.0 million during the prior quarter.
Noninterest income for the third quarter of 2020 increased $15.3 million, or 134.1%, compared to the third quarter of 2019. The increase was primarily related to a $7.2 million increase in net gain from the sales of loans, the addition of $7.0 million of custodial account fees following the Opus acquisition, a $2.1 million increase in other income primarily due to a $1.1 million increase of escrow and exchange fee income following the Opus acquisition, and a $1.4 million increase in earnings on BOLI, partially offset by a $3.1 million decrease in net gain from sales of investment securities.
The increase in net gain from sales of loans for the third quarter of 2020 compared to the same period last year was primarily due to the sales of $1.16 billion of SBA, primarily PPP loans, for a net gain of $19.0 million and the sale of $96.2 million of other loans for a net loss of $9.4 million, compared with sales of $26.3 million of SBA loans for a net gain of $2.3 million and $684,000 of other loans for a net gain of $8,000 during the third quarter of 2019.
|
|
Three Months Ended |
|||||||||
|
|
September 30, |
|
June 30, |
|
September 30, |
|||||
|
|
2020 |
|
2020 |
|
2019 |
|||||
|
Noninterest Income |
(Dollars in thousands) |
|||||||||
|
Loan servicing fees |
$ |
481 |
$ |
434 |
|
$ |
546 |
|||
|
Service charges on deposit accounts |
1,593 |
1,399 |
|
1,440 |
||||||
|
Other service fee income |
487 |
297 |
|
360 |
||||||
|
Debit card interchange fee income |
944 |
457 |
|
421 |
||||||
|
Earnings on BOLI |
2,270 |
1,314 |
|
861 |
||||||
|
Net gain (loss) from sales of loans |
9,542 |
(2,032 |
) |
2,313 |
||||||
|
Net gain (loss) from sales of investment securities |
1,141 |
(21 |
) |
4,261 |
||||||
|
Custodial account fees |
6,960 |
2,397 |
|
— |
||||||
|
Other income |
3,340 |
2,653 |
|
1,228 |
||||||
|
Total noninterest income |
$ |
26,758 |
$ |
6,898 |
|
$ |
11,430 |
|||
Noninterest Expense
Noninterest expense totaled $98.6 million for the third quarter of 2020, a decrease of $17.4 million, or 15.0%, compared to the second quarter of 2020, primarily due to the decrease of $36.4 million in merger expense related to the Opus acquisition. Excluding merger-related expense, noninterest expense totaled $95.6 million, an increase of $19.0 million, or 24.8%, compared to the second quarter of 2020 driven primarily by a $8.0 million increase in compensation and benefits, a $2.9 million increase in premises and occupancy, a $2.3 million increase in data processing, and a $2.0 million increase in legal, audit and professional expense, all of which was primarily the result of the full quarter’s impact of operations, personnel, and branches retained with the acquisition of Opus.
Noninterest expense increased by $33.2 million, or 50.9%, compared to the third quarter of 2019. The increase was primarily due to a $3.0 million merger-related expense related to the Opus acquisition, a $15.5 million increase in compensation and benefits, a $4.8 million increase in premises and occupancy, a $3.7 million increase in data processing, a $2.1 million increase in legal, audit and professional expense, and a $1.3 million increase in deposit expense as a result of the addition of operations, personnel, and branches retained with the acquisition of Opus.
|
|
Three Months Ended |
||||||||||
|
|
September 30, |
|
June 30, |
|
September 30, |
||||||
|
|
2020 |
|
2020 |
|
2019 |
||||||
|
Noninterest Expense |
(Dollars in thousands) |
||||||||||
|
Compensation and benefits |
$ |
51,021 |
|
$ |
43,011 |
$ |
35,543 |
|
|||
|
Premises and occupancy |
12,373 |
|
9,487 |
7,593 |
|
||||||
|
Data processing |
6,783 |
|
4,465 |
3,094 |
|
||||||
|
Other real estate owned operations, net |
(17 |
) |
9 |
64 |
|
||||||
|
FDIC insurance premiums |
1,145 |
|
846 |
(10 |
) |
||||||
|
Legal, audit and professional expense |
5,108 |
|
3,094 |
3,058 |
|
||||||
|
Marketing expense |
1,718 |
|
1,319 |
1,767 |
|
||||||
|
Office, telecommunications and postage expense |
2,389 |
|
1,533 |
1,200 |
|
||||||
|
Loan expense |
802 |
|
823 |
1,137 |
|
||||||
|
Deposit expense |
4,728 |
|
4,958 |
3,478 |
|
||||||
|
Merger-related expense |
2,988 |
|
39,346 |
(4 |
) |
||||||
|
Amortization of intangible assets |
4,538 |
|
4,066 |
4,281 |
|
||||||
|
Other expense |
5,003 |
|
3,013 |
4,135 |
|
||||||
|
Total noninterest expense |
$ |
98,579 |
|
$ |
115,970 |
$ |
65,336 |
|
|||
Income Tax
For the third quarter of 2020, our income tax expense totaled $23.9 million, resulting in an effective tax rate of 26.5%, compared with an income tax benefit of $40.3 million and an effective tax rate of 28.9% for the second quarter of 2020, and an income tax expense of $15.5 million and an effective tax rate of 27.2% for the third quarter of 2019. The decrease in effective tax rate for the third quarter of 2020 was primarily due to permanent tax benefits which reduced the tax rate for the third quarter, while the same benefits increased the pre-tax loss rate in the second quarter. The income tax benefit from the second quarter of 2020 was the result of the significant pre-tax loss driven by the provision for credit losses and our merger-related costs associated with the Opus acquisition.
BALANCE SHEET HIGHLIGHTS
Loans
Loans held for investment totaled $13.45 billion at September 30, 2020, a decrease of $1.63 billion, or 10.8%, from June 30, 2020, and an increase of $4.69 billion, or 53.6%, from September 30, 2019. The decrease from June 30, 2020 was driven by the $1.26 billion sale of loans, primarily SBA PPP loans, as well as higher loan prepayments and payoffs, and lower line utilization rates in the third quarter of 2020. The increase from September 30, 2019 was primarily due to the acquisition of Opus, which added $5.94 billion in gross loans, or $5.81 billion of loans held for investment after purchase accounting adjustments at the time of acquisition.
During the third quarter of 2020, the Bank generated $360.0 million of new loan commitments and funded $280.8 million of new loans, compared with $1.21 billion in new loan commitments and $1.19 billion in new funded loans for the second quarter of 2020, which primarily consisted of SBA PPP loans of $1.13 billion, and $536.9 million in new loan commitments and $356.6 million in new funded loans for the third quarter of 2019. The year-over-year decrease in new loans funded was primarily the result of a slowdown in loan demand. Business line utilization rates decreased to 33.9% at the end of the third quarter of 2020, compared with 37.9% at the end of the second quarter of 2020 and 40.3% at the end of third quarter of 2019.
At September 30, 2020, the ratio of loans held for investment to total deposits was 82.4%, compared with 88.8% and 98.9% at June 30, 2020 and September 30, 2019, respectively.
The following table presents the composition of the loan portfolio as of the dates indicated:
|
|
September 30, |
June 30, |
September 30, |
|||||||||
|
|
2020 |
2020 |
2019 |
|||||||||
|
|
(Dollars in thousands) |
|||||||||||
|
Investor loans secured by real estate |
|
|
|
|||||||||
|
Commercial real estate (“CRE”) non-owner-occupied |
$ |
2,707,930 |
|
$ |
2,783,692 |
|
$ |
2,052,118 |
|
|||
|
Multifamily |
5,142,069 |
|
5,225,557 |
|
1,610,643 |
|
||||||
|
Construction and land |
337,872 |
|
357,426 |
|
507,114 |
|
||||||
|
SBA secured by real estate (1) |
57,610 |
|
59,482 |
|
68,689 |
|
||||||
|
Total investor loans secured by real estate |
8,245,481 |
|
8,426,157 |
|
4,238,564 |
|
||||||
|
Business loans secured by real estate (2) |
|
|
|
|||||||||
|
CRE owner-occupied |
2,119,788 |
|
2,170,154 |
|
1,847,443 |
|
||||||
|
Franchise real estate secured |
359,329 |
|
364,647 |
|
344,954 |
|
||||||
|
SBA secured by real estate (3) |
84,126 |
|
85,542 |
|
91,101 |
|
||||||
|
Total business loans secured by real estate |
2,563,243 |
|
2,620,343 |
|
2,283,498 |
|
||||||
|
Commercial loans (4) |
|
|
|
|||||||||
|
Commercial and industrial |
1,820,995 |
|
2,051,313 |
|
1,353,793 |
|
||||||
|
Franchise non-real estate secured |
515,980 |
|
523,755 |
|
549,711 |
|
||||||
|
SBA non-real estate secured |
16,748 |
|
21,057 |
|
17,891 |
|
||||||
|
SBA PPP |
— |
|
1,128,780 |
|
— |
|
||||||
|
Total commercial loans |
2,353,723 |
|
3,724,905 |
|
1,921,395 |
|
||||||
|
Retail loans |
|
|
|
|||||||||
|
Single family residential (5) |
243,359 |
|
265,170 |
|
273,416 |
|
||||||
|
Consumer |
45,034 |
|
46,309 |
|
40,603 |
|
||||||
|
Total retail loans |
288,393 |
|
311,479 |
|
314,019 |
|
||||||
|
Gross loans held for investment (6) |
13,450,840 |
|
15,082,884 |
|
8,757,476 |
|
||||||
|
Allowance for credit losses for loans held for investment (7) |
(282,503 |
) |
(282,271 |
) |
(35,000 |
) |
||||||
|
Loans held for investment, net |
$ |
13,168,337 |
|
$ |
14,800,613 |
|
$ |
8,722,476 |
|
|||
|
|
|
|
|
|||||||||
|
Loans held for sale, at lower of cost or fair value |
$ |
1,032 |
|
$ |
1,007 |
|
$ |
7,092 |
|
|||
| ________________ | ||
|
(1) |
SBA loans that are collateralized by hotel/motel real property. |
|
|
(2) |
Loans to businesses that are collateralized by real estate where the operating cash flow of the business is the primary source of repayment. |
|
|
(3) |
SBA loans that are collateralized by real property other than hotel/motel real property. |
|
|
(4) |
Loans to businesses where the operating cash flow of the business is the primary source of repayment. |
|
|
(5) |
Single family residential includes home equity lines of credit, as well as second trust deeds. |
|
|
(6) |
Includes unaccreted fair value net purchase discounts of $126.3 million, $144.5 million, and $46.8 million as of September 30, 2020, June 30, 2020, and September 30, 2019, respectively. |
|
|
(7) |
The allowance for credit losses as of December 31, 2019 was accounted for under ASC 450 and ASC 310, which is reflective of probable incurred losses as of the balance sheet date. Effective January 1, 2020, the allowance for credit losses is accounted for under ASC 326, which is reflective of estimated expected lifetime credit losses. |
|
The total end-of-period weighted average interest rate on loans, excluding fees and discounts, at September 30, 2020 was 4.34%, compared to 4.12% at June 30, 2020 and 5.00% at September 30, 2019. Excluding the SBA PPP loans, which had a coupon rate of 1%, the end-of-period weighted average interest rate on loans, excluding fees and discounts, at June 30, 2020 was 4.46%. The quarter-over-quarter and year-over-year decreases reflect the impact of lower rates on new originations as well as the repricing of loans as a result of the Board of Governors of the Federal Reserve System’s (the “Federal Reserve Board”) federal funds rate decreases in March 2020.
The following table presents the composition of new organic loan commitments originated during the quarters indicated:
|
|
September 30, |
|
June 30, |
|
September 30, |
||||
|
|
2020 |
|
2020 |
|
2019 |
||||
|
|
(Dollars in thousands) |
||||||||
|
Investor loans secured by real estate |
|
|
|
||||||
|
CRE non-owner-occupied |
$ |
40,518 |
$ |
11,811 |
$ |
90,464 |
|||
|
Multifamily |
182,575 |
24,425 |
41,289 |
||||||
|
Construction and land |
37,087 |
6,210 |
60,924 |
||||||
|
SBA secured by real estate (1) |
— |
— |
14,302 |
||||||
|
Total investor loans secured by real estate |
260,180 |
42,446 |
206,979 |
||||||
|
Business loans secured by real estate (2) |
|
|
|
||||||
|
CRE owner-occupied |
30,594 |
17,594 |
84,450 |
||||||
|
Franchise real estate secured |
— |
— |
39,205 |
||||||
|
SBA secured by real estate (3) |
799 |
1,204 |
9,655 |
||||||
|
Total business loans secured by real estate |
31,393 |
18,798 |
133,310 |
||||||
|
Commercial loans (4) |
|
|
|
||||||
|
Commercial and industrial |
56,959 |
23,782 |
136,735 |
||||||
|
Franchise non-real estate secured |
9,665 |
— |
51,813 |
||||||
|
SBA non-real estate secured |
— |
315 |
539 |
||||||
|
SBA PPP |
— |
1,124,485 |
— |
||||||
|
Total commercial loans |
66,624 |
1,148,582 |
189,087 |
||||||
|
Retail loans |
|
|
|
||||||
|
Single family residential (5) |
— |
2,137 |
6,110 |
||||||
|
Consumer |
1,825 |
195 |
1,463 |
||||||
|
Total retail loans |
1,825 |
2,332 |
7,573 |
||||||
|
Total loan commitments |
$ |
360,022 |
$ |
1,212,158 |
$ |
536,949 |
|||
| ________________ | ||
|
(1) |
SBA loans that are collateralized by hotel/motel real property. |
|
|
(2) |
Loans to businesses that are collateralized by real estate where the operating cash flow of the business is the primary source of repayment. |
|
|
(3) |
SBA loans that are collateralized by real property other than hotel/motel real property. |
|
|
(4) |
Loans to businesses where the operating cash flow of the business is the primary source of repayment. |
|
|
(5) |
Single family residential includes home equity lines of credit, as well as second trust deeds. |
|
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
Brett Villaume
Senior Vice President and Director of Investor Relations
(949) 553-9042
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