First Quarter 2023 Summary
- Net income of $62.6 million, or $0.66 per diluted share
- Return on average assets of 1.15%, return on average equity of 8.87%, and return on average tangible common equity(1) of 13.89%
- Pre-provision net revenue (“PPNR”)(1) to average assets of 1.63%, annualized
- Net interest margin of 3.44%
- Cost of deposits of 0.94%, and cost of core deposits(1) of 0.54%; total deposits decreased $144.6 million, or 0.8%, from the prior quarter
- Nonperforming assets to total assets of 0.14%, and net charge-offs to average loans of 0.02%
- Total risk-based capital ratio of 16.33% and common equity tier 1 capital ratio of 13.54%
- Tangible book value per share(1) increased $0.23 to $19.61 compared to the prior quarter; tangible common equity ratio(1) of 9.20%
- Available liquidity of $10 billion; cash and cash equivalents increased to $1.42 billion and unused borrowing capacity of $8.55 billion at quarter end
IRVINE, Calif.–(BUSINESS WIRE)–$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 $62.6 million, or $0.66 per diluted share, for the first quarter of 2023, compared with net income of $73.7 million, or $0.77 per diluted share, for the fourth quarter of 2022, and net income of $66.9 million, or $0.70 per diluted share, for the first quarter of 2022.
For the quarter ended March 31, 2023, the Company’s return on average assets (“ROAA”) was 1.15%, return on average equity (“ROAE”) was 8.87%, and return on average tangible common equity (“ROATCE”)(1) was 13.89%, compared to 1.36%, 10.71%, and 16.99%, respectively, for the fourth quarter of 2022, and 1.28%, 9.34%, and 14.66%, respectively, for the first quarter of 2022. Total assets were $21.36 billion at March 31, 2023, compared to $21.69 billion at December 31, 2022, and $21.62 billion at March 31, 2022.
Steven R. Gardner, Chairman, Chief Executive Officer, and President of the Company, commented, “Over the years, we have maintained our commitment to growing a diversified commercial client base predicated on a long-term approach to relationship management. We have consistently operated the institution with a prudent approach to credit risk management along with maintaining ample levels of liquidity and an overall conservative view towards capital management. This longstanding discipline permeates our organization and has enabled us to deliver another quarter of solid profitability and returns in a challenging operating environment.
“The strategic actions we have taken over the past year to proactively address rising interest rates have placed us in a position of strength as we continue to guide our organization through the uncertain economic outlook. Successful execution of our strategy has allowed us to build our capital levels to some of the strongest among our peers, which in turn provides us with significant optionality and flexibility. By employing a disciplined approach to the business, we are well-positioned to meet the needs of our clients while maintaining our focus on generating new profitable customer relationships.
“I am grateful for the extraordinary effort our team put forth during a difficult quarter for the benefit of all of our stakeholders, including our clients, communities, employees, and our stockholders. As we look to the near- and medium-term, we are preparing for the possibility of further dislocations in the credit, funding, and capital markets. We will continue to leverage the strength of our balance sheet, liquidity, and capital positions to navigate these headwinds and will prudently take advantage of future opportunities to expand our business, while continuing to create long-term franchise value.”
_________________________
(1) Reconciliations of the non–U.S. generally accepted accounting principles (“GAAP”) measures are set forth at the end of this press release.
FINANCIAL HIGHLIGHTS
|
|
|
Three Months Ended |
||||||||||
|
|
|
March 31, |
|
December 31, |
|
March 31, |
||||||
|
(Dollars in thousands, except per share data) |
|
|
2023 |
|
|
|
2022 |
|
|
|
2022 |
|
|
Financial highlights (unaudited) |
|
|
|
|
|
|
||||||
|
Net income |
|
$ |
62,562 |
|
|
$ |
73,673 |
|
|
$ |
66,904 |
|
|
Net interest income |
|
|
168,610 |
|
|
|
181,396 |
|
|
|
161,839 |
|
|
Diluted earnings per share |
|
|
0.66 |
|
|
|
0.77 |
|
|
|
0.70 |
|
|
Common equity dividend per share paid |
|
|
0.33 |
|
|
|
0.33 |
|
|
|
0.33 |
|
|
Return on average assets |
|
|
1.15 |
% |
|
|
1.36 |
% |
|
|
1.28 |
% |
|
Return on average equity |
|
|
8.87 |
|
|
|
10.71 |
|
|
|
9.34 |
|
|
Return on average tangible common equity (1) |
|
|
13.89 |
|
|
|
16.99 |
|
|
|
14.66 |
|
|
Pre-provision net revenue to average assets (1) |
|
|
1.63 |
|
|
|
1.89 |
|
|
|
1.72 |
|
|
Net interest margin |
|
|
3.44 |
|
|
|
3.61 |
|
|
|
3.41 |
|
|
Cost of deposits |
|
|
0.94 |
|
|
|
0.58 |
|
|
|
0.04 |
|
|
Cost of core deposits (1) |
|
|
0.54 |
|
|
|
0.31 |
|
|
|
0.03 |
|
|
Efficiency ratio (1) |
|
|
51.7 |
|
|
|
47.4 |
|
|
|
50.7 |
|
|
Noninterest expense as a percent of average assets |
|
|
1.87 |
|
|
|
1.83 |
|
|
|
1.86 |
|
|
Total assets |
|
$ |
21,361,564 |
|
|
$ |
21,688,017 |
|
|
$ |
21,622,296 |
|
|
Total deposits |
|
|
17,207,810 |
|
|
|
17,352,401 |
|
|
|
17,689,223 |
|
|
Non-maturity deposits as a percent of total deposits |
|
|
82.6 |
% |
|
|
85.6 |
% |
|
|
94.2 |
% |
|
Noninterest-bearing deposits as a percent of total deposits |
|
|
36.1 |
|
|
|
36.3 |
|
|
|
40.2 |
|
|
Loan-to-deposit ratio |
|
|
82.4 |
|
|
|
84.6 |
|
|
|
83.4 |
|
|
Book value per share |
|
$ |
29.58 |
|
|
$ |
29.45 |
|
|
$ |
29.31 |
|
|
Tangible book value per share (1) |
|
|
19.61 |
|
|
|
19.38 |
|
|
|
19.12 |
|
|
Tangible common equity ratio |
|
|
9.20 |
% |
|
|
8.88 |
% |
|
|
8.79 |
% |
|
Total capital ratio |
|
|
16.33 |
|
|
|
15.53 |
|
|
|
14.37 |
|
|
(1) |
|
Reconciliations of the non-GAAP measures are set forth at the end of this press release. |
INCOME STATEMENT HIGHLIGHTS
Net Interest Income and Net Interest Margin
Net interest income totaled $168.6 million in the first quarter of 2023, a decrease of $12.8 million, or 7.0%, from the fourth quarter of 2022. The decrease in net interest income was primarily attributable to a higher cost of funds reflecting an increase in deposit pricing as a result of the higher interest rate environment, an increase in brokered certificates of deposit as part of our liquidity management strategy, and two fewer days of interest, partially offset by higher yields on average interest-earning assets.
The net interest margin for the first quarter of 2023 decreased 17 basis points to 3.44%, from 3.61% in the prior quarter. The lower net interest margin was due to higher cost of funds and lower loan prepayment fees, partially offset by higher yields on interest-earning assets.
Net interest income for the first quarter of 2023 increased $6.8 million, or 4.2%, compared to the first quarter of 2022. The increase was attributable to higher yields on average interest-earning assets, partially offset by a higher cost of funds, higher average interest-bearing liabilities, and lower loan-related fees and accretion income as a result of decreased prepayment activity.
|
PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES |
|||||||||||||||||||||||||||||||||
|
CONSOLIDATED AVERAGE BALANCES AND YIELD DATA |
|||||||||||||||||||||||||||||||||
|
(Unaudited) |
|||||||||||||||||||||||||||||||||
|
|
|
Three Months Ended |
|||||||||||||||||||||||||||||||
|
|
|
March 31, 2023 |
|
December 31, 2022 |
|
March 31, 2022 |
|||||||||||||||||||||||||||
|
(Dollars in thousands) |
|
Average Balance |
|
Interest Income/ Expense |
|
Average Yield/ Cost |
|
Average Balance |
|
Interest Income/ Expense |
|
Average Yield/ Cost |
|
Average Balance |
|
Interest Income/ Expense |
|
Average Yield/ Cost |
|||||||||||||||
|
Assets |
|
|
|||||||||||||||||||||||||||||||
|
Cash and cash equivalents |
|
$ |
1,335,611 |
|
$ |
13,594 |
|
4.13 |
% |
|
$ |
1,015,197 |
|
$ |
8,636 |
|
3.37 |
% |
|
$ |
322,236 |
|
$ |
90 |
|
0.11 |
% |
||||||
|
Investment securities |
|
|
4,165,681 |
|
|
|
26,791 |
|
|
2.57 |
|
|
|
4,130,042 |
|
|
|
24,688 |
|
|
2.39 |
|
|
|
4,546,408 |
|
|
|
17,852 |
|
|
1.57 |
|
|
Loans receivable, net (1) (2) |
|
|
14,394,775 |
|
|
|
180,958 |
|
|
5.10 |
|
|
|
14,799,417 |
|
|
|
184,457 |
|
|
4.94 |
|
|
|
14,371,588 |
|
|
|
150,604 |
|
|
4.25 |
|
|
Total interest-earning assets |
|
$ |
19,896,067 |
|
|
$ |
221,343 |
|
|
4.51 |
|
|
$ |
19,944,656 |
|
|
$ |
217,781 |
|
|
4.33 |
|
|
$ |
19,240,232 |
|
|
$ |
168,546 |
|
|
3.55 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Interest-bearing deposits |
|
$ |
11,104,624 |
|
|
$ |
40,234 |
|
|
1.47 |
% |
|
$ |
11,021,383 |
|
|
$ |
25,865 |
|
|
0.93 |
% |
|
$ |
10,351,434 |
|
|
$ |
1,673 |
|
|
0.07 |
% |
|
Borrowings |
|
|
1,319,114 |
|
|
|
12,499 |
|
|
3.83 |
|
|
|
1,157,258 |
|
|
|
10,520 |
|
|
3.62 |
|
|
|
555,879 |
|
|
|
5,034 |
|
|
3.63 |
|
|
Total interest-bearing liabilities |
|
$ |
12,423,738 |
|
|
$ |
52,733 |
|
|
1.72 |
|
|
$ |
12,178,641 |
|
|
$ |
36,385 |
|
|
1.19 |
|
|
$ |
10,907,313 |
|
|
$ |
6,707 |
|
|
0.25 |
|
|
Noninterest-bearing deposits |
|
$ |
6,219,818 |
|
|
|
|
|
|
$ |
6,587,400 |
|
|
|
|
|
|
$ |
6,928,872 |
|
|
|
|
|
|||||||||
|
Net interest income |
|
|
|
$ |
168,610 |
|
|
|
|
|
|
$ |
181,396 |
|
|
|
|
|
|
$ |
161,839 |
|
|
|
|||||||||
|
Net interest margin (3) |
|
|
|
|
|
3.44 |
% |
|
|
|
|
|
3.61 |
% |
|
|
|
|
|
3.41 |
% |
||||||||||||
|
Cost of deposits (4) |
|
|
|
|
|
0.94 |
|
|
|
|
|
|
0.58 |
|
|
|
|
|
|
0.04 |
|
||||||||||||
|
Cost of funds (5) |
|
|
|
|
|
1.15 |
|
|
|
|
|
|
0.77 |
|
|
|
|
|
|
0.15 |
|
||||||||||||
|
Cost of core deposits (6) |
|
|
|
|
|
0.54 |
|
|
|
|
|
|
0.31 |
|
|
|
|
|
|
0.03 |
|
||||||||||||
|
Ratio of interest-earning assets to interest-bearing liabilities |
|
160.15 |
|
|
|
|
|
|
163.77 |
|
|
|
|
|
|
176.40 |
|
||||||||||||||||
|
(1) |
|
Average balance includes loans held for sale and nonperforming loans and is net of deferred loan origination fees/costs, discounts/premiums, and the basis adjustment of certain loans included in fair value hedging relationships. |
|
(2) |
|
Interest income includes net discount accretion of $2.5 million, $3.5 million, and $5.9 million for the three months ended March 31, 2023, December 31, 2022, and March 31, 2022, respectively. |
|
(3) |
|
Represents annualized net interest income divided by average interest-earning assets. |
|
(4) |
|
Represents annualized interest expense on deposits divided by the sum of average interest-bearing deposits and noninterest-bearing deposits. |
|
(5) |
|
Represents annualized total interest expense divided by the sum of average total interest-bearing liabilities and noninterest-bearing deposits. |
|
(6) |
|
Reconciliations of the non-GAAP measures are set forth at the end of this press release. |
Provision for Credit Losses
For the first quarter of 2023, the Company recorded $3.0 million of provision expense, compared to $2.8 million for the fourth quarter of 2022, and $448,000 for the first quarter of 2022. The provision for credit losses was impacted by changes to the overall size, composition, asset quality trends, and unfunded commitments of the loan portfolio, as well as the impact of the weighted macroeconomic forecasts.
|
|
|
Three Months Ended |
||||||||||
|
|
|
March 31, |
|
December 31, |
|
March 31, |
||||||
|
(Dollars in thousands) |
|
|
2023 |
|
|
|
2022 |
|
|
|
2022 |
|
|
Provision for credit losses |
|
|
|
|
|
|
||||||
|
Provision for loan losses |
|
$ |
3,021 |
|
|
$ |
3,899 |
|
|
$ |
211 |
|
|
Provision for unfunded commitments |
|
|
(189 |
) |
|
|
(1,013 |
) |
|
|
218 |
|
|
Provision for held-to-maturity securities |
|
|
184 |
|
|
|
(48 |
) |
|
|
19 |
|
|
Total provision for credit losses |
|
$ |
3,016 |
|
|
$ |
2,838 |
|
|
$ |
448 |
|
Noninterest Income
Noninterest income for the first quarter of 2023 was $21.2 million, an increase of $689,000 from the fourth quarter of 2022. The increase was primarily due to a $1.3 million increase in trust custodial account fees driven by seasonal, annual tax fees earned during the first quarter, partially offset by a $344,000 decrease in other income, and a $224,000 decrease in escrow and exchange fees. Additionally, the Bank sold $304.2 million of investment securities for a net gain of $138,000 during the first quarter of 2023.
Noninterest income for the first quarter of 2023 decreased $4.7 million, compared to the first quarter of 2022. The decrease was primarily due to a $2.0 million decrease in net gain from sales of investment securities, a $1.5 million decrease in net gain from loan sales, a $603,000 decrease in escrow and exchange fees attributable to the lower transaction activity in the commercial real estate market, and a $554,000 decrease in trust custodial account fees.
|
|
|
Three Months Ended |
||||||||||
|
|
|
March 31, |
|
December 31, |
|
March 31, |
||||||
|
(Dollars in thousands) |
|
|
2023 |
|
|
|
2022 |
|
|
|
2022 |
|
|
Noninterest income |
|
|
|
|
|
|
||||||
|
Loan servicing income |
|
$ |
573 |
|
$ |
346 |
|
$ |
419 |
|||
|
Service charges on deposit accounts |
|
|
2,629 |
|
|
|
2,689 |
|
|
|
2,615 |
|
|
Other service fee income |
|
|
296 |
|
|
|
295 |
|
|
|
367 |
|
|
Debit card interchange fee income |
|
|
803 |
|
|
|
1,048 |
|
|
|
836 |
|
|
Earnings on bank owned life insurance |
|
|
3,374 |
|
|
|
3,359 |
|
|
|
3,221 |
|
|
Net gain from sales of loans |
|
|
29 |
|
|
|
151 |
|
|
|
1,494 |
|
|
Net gain from sales of investment securities |
|
|
138 |
|
|
|
— |
|
|
|
2,134 |
|
|
Trust custodial account fees |
|
|
11,025 |
|
|
|
9,722 |
|
|
|
11,579 |
|
|
Escrow and exchange fees |
|
|
1,058 |
|
|
|
1,282 |
|
|
|
1,661 |
|
|
Other income |
|
|
1,261 |
|
|
|
1,605 |
|
|
|
1,568 |
|
|
Total noninterest income |
|
$ |
21,186 |
|
|
$ |
20,497 |
|
|
$ |
25,894 |
|
Noninterest Expense
Noninterest expense totaled $101.4 million for the first quarter of 2023, an increase of $2.2 million compared to the fourth quarter of 2022, primarily due to a $1.7 million increase in deposit expense driven by higher deposit earnings credit rates, as well as a $962,000 increase in FDIC insurance premiums, partially offset by a $622,000 decrease in other expense.
Noninterest expense increased by $3.7 million compared to the first quarter of 2022. The increase was primarily due to a $4.7 million increase in deposit expense driven by higher deposit earnings credit rates, a $1.4 million increase in legal and professional services, a $1.3 million increase in data processing, and a $1.0 million increase in FDIC insurance premiums, partially offset by a $2.7 million decrease in compensation and benefits from decreased staffing levels as well as a $1.1 million decrease in other expense.
|
|
|
Three Months Ended |
||||||||||
|
|
|
March 31, |
|
December 31, |
|
March 31, |
||||||
|
(Dollars in thousands) |
|
|
2023 |
|
|
|
2022 |
|
|
|
2022 |
|
|
Noninterest expense |
|
|
|
|
|
|
||||||
|
Compensation and benefits |
|
$ |
54,293 |
|
$ |
54,347 |
|
$ |
56,981 |
|||
|
Premises and occupancy |
|
|
11,742 |
|
|
|
11,641 |
|
|
|
11,952 |
|
|
Data processing |
|
|
7,265 |
|
|
|
6,991 |
|
|
|
5,996 |
|
|
Other real estate owned operations, net |
|
|
108 |
|
|
|
— |
|
|
|
— |
|
|
FDIC insurance premiums |
|
|
2,425 |
|
|
|
1,463 |
|
|
|
1,396 |
|
|
Legal and professional services |
|
|
5,501 |
|
|
|
5,175 |
|
|
|
4,068 |
|
|
Marketing expense |
|
|
1,838 |
|
|
|
1,985 |
|
|
|
1,809 |
|
|
Office expense |
|
|
1,232 |
|
|
|
1,310 |
|
|
|
1,203 |
|
|
Loan expense |
|
|
646 |
|
|
|
743 |
|
|
|
1,134 |
|
|
Deposit expense |
|
|
8,436 |
|
|
|
6,770 |
|
|
|
3,751 |
|
|
Amortization of intangible assets |
|
|
3,171 |
|
|
|
3,440 |
|
|
|
3,592 |
|
|
Other expense |
|
|
4,695 |
|
|
|
5,317 |
|
|
|
5,766 |
|
|
Total noninterest expense |
|
$ |
101,352 |
|
|
$ |
99,182 |
|
|
$ |
97,648 |
|
Income Tax
For the first quarter of 2023, income tax expense totaled $22.9 million, resulting in an effective tax rate of 26.8%, compared with income tax expense of $26.2 million and an effective tax rate of 26.2% for the fourth quarter of 2022, and income tax expense of $22.7 million and an effective tax rate of 25.4% for the first quarter of 2022.
BALANCE SHEET HIGHLIGHTS
Loans
Loans held for investment totaled $14.17 billion at March 31, 2023, a decrease of $504.5 million, or 3.4%, from December 31, 2022, and a decrease of $562.0 million, or 3.8%, from March 31, 2022. The decrease from December 31, 2022 was a result of lower loan originations due to our disciplined approach around credit risk management and loan pricing along with lower loan demand. The decrease from March 31, 2022 was primarily driven by lower loan fundings as well as loan prepayments and maturities.
During the first quarter of 2023, new loan commitments totaled $116.8 million, and loan fundings totaled $66.9 million, compared with $239.8 million in loan commitments and $149.1 million in new loan fundings for the fourth quarter of 2022, and $1.46 billion in loan commitments and $1.06 billion in new loan fundings for the first quarter of 2022. Loan commitments decreased compared to prior quarters as we strategically maintained a disciplined approach to credit risk management and loan pricing.
At March 31, 2023, the total loan-to-deposit ratio was 82.4%, compared with 84.6% and 83.4% at December 31, 2022 and March 31, 2022, respectively.
The following table presents the primary loan roll-forward activities for total gross loans, including both loans held for investment and loans held for sale, during the quarters indicated:
|
|
Three Months Ended |
||||||||||
|
|
March 31, |
|
December 31, |
|
March 31, |
||||||
|
(Dollars in thousands) |
|
2023 |
|
|
|
2022 |
|
|
|
2022 |
|
|
Beginning gross loan balance before basis adjustment |
$ |
14,740,867 |
|
|
$ |
14,979,098 |
|
|
$ |
14,306,766 |
|
|
New commitments |
|
116,835 |
|
|
|
239,829 |
|
|
|
1,461,992 |
|
|
Unfunded new commitments |
|
(49,891 |
) |
|
|
(90,758 |
) |
|
|
(399,235 |
) |
|
Net new fundings |
|
66,944 |
|
|
|
149,071 |
|
|
|
1,062,757 |
|
|
Purchased loans |
|
— |
|
|
|
— |
|
|
|
— |
|
|
Amortization/maturities/payoffs |
|
(519,986 |
) |
|
|
(481,120 |
) |
|
|
(786,700 |
) |
|
Net draws on existing lines of credit |
|
(53,436 |
) |
|
|
107,560 |
|
|
|
182,868 |
|
|
Loan sales |
|
(803 |
) |
|
|
(9,471 |
) |
|
|
(17,991 |
) |
|
Charge-offs |
|
(3,664 |
) |
|
|
(4,271 |
) |
|
|
(2,299 |
) |
|
Transferred to other real estate owned |
|
(6,886 |
) |
|
|
— |
|
|
|
— |
|
|
Net (decrease) increase |
|
(517,831 |
) |
|
|
(238,231 |
) |
|
|
438,635 |
|
|
Ending gross loan balance before basis adjustment |
$ |
14,223,036 |
|
|
$ |
14,740,867 |
|
|
$ |
14,745,401 |
|
|
Basis adjustment associated with fair value hedge (1) |
|
(50,005 |
) |
|
|
(61,926 |
) |
|
|
— |
|
|
Ending gross loan balance |
$ |
14,173,031 |
|
|
$ |
14,678,941 |
|
|
$ |
14,745,401 |
|
|
(1) |
|
Represents the basis adjustment associated with the application of hedge accounting on certain loans. |
The following table presents the composition of the loans held for investment as of the dates indicated:
|
|
|
March 31, |
|
December 31, |
|
March 31, |
||||||
|
(Dollars in thousands) |
|
|
2023 |
|
|
|
2022 |
|
|
|
2022 |
|
|
Investor loans secured by real estate |
|
|
|
|
|
|
||||||
|
CRE non-owner-occupied |
|
$ |
2,590,824 |
|
|
$ |
2,660,321 |
|
|
$ |
2,774,650 |
|
|
Multifamily |
|
|
5,955,239 |
|
|
|
6,112,026 |
|
|
|
6,041,085 |
|
|
Construction and land |
|
|
420,079 |
|
|
|
399,034 |
|
|
|
303,811 |
|
|
SBA secured by real estate (1) |
|
|
40,669 |
|
|
|
42,135 |
|
|
|
42,642 |
|
|
Total investor loans secured by real estate |
|
|
9,006,811 |
|
|
|
9,213,516 |
|
|
|
9,162,188 |
|
|
Business loans secured by real estate (2) |
|
|
|
|
|
|
||||||
|
CRE owner-occupied |
|
|
2,342,175 |
|
|
|
2,432,163 |
|
|
|
2,391,984 |
|
|
Franchise real estate secured |
|
|
371,902 |
|
|
|
378,057 |
|
|
|
384,267 |
|
|
SBA secured by real estate (3) |
|
|
60,527 |
|
|
|
61,368 |
|
|
|
68,466 |
|
|
Total business loans secured by real estate |
|
|
2,774,604 |
|
|
|
2,871,588 |
|
|
|
2,844,717 |
|
|
Commercial loans (4) |
|
|
|
|
|
|
||||||
|
Commercial and industrial |
|
|
1,967,128 |
|
|
|
2,160,948 |
|
|
|
2,242,632 |
|
|
Franchise non-real estate secured |
|
|
388,722 |
|
|
|
404,791 |
|
|
|
388,322 |
|
|
SBA non-real estate secured |
|
|
10,437 |
|
|
|
11,100 |
|
|
|
10,761 |
|
|
Total commercial loans |
|
|
2,366,287 |
|
|
|
2,576,839 |
|
|
|
2,641,715 |
|
|
Retail loans |
|
|
|
|
|
|
||||||
|
Single family residential (5) |
|
|
70,913 |
|
|
|
72,997 |
|
|
|
79,978 |
|
|
Consumer |
|
|
3,174 |
|
|
|
3,284 |
|
|
|
5,157 |
|
|
Total retail loans |
|
|
74,087 |
|
|
|
76,281 |
|
|
|
85,135 |
|
|
Loans held for investment before basis adjustment (6) |
|
|
14,221,789 |
|
|
|
14,738,224 |
|
|
|
14,733,755 |
|
|
Basis adjustment associated with fair value hedge (7) |
|
|
(50,005 |
) |
|
|
(61,926 |
) |
|
|
— |
|
|
Loans held for investment |
|
|
14,171,784 |
|
|
|
14,676,298 |
|
|
|
14,733,755 |
|
|
Allowance for credit losses for loans held for investment |
|
|
(195,388 |
) |
|
|
(195,651 |
) |
|
|
(197,517 |
) |
|
Loans held for investment, net |
|
$ |
13,976,396 |
|
|
$ |
14,480,647 |
|
|
$ |
14,536,238 |
|
|
|
|
|
|
|
|
|
||||||
|
Total unfunded loan commitments |
|
$ |
2,413,169 |
|
|
$ |
2,489,203 |
|
|
$ |
2,940,370 |
|
|
Loans held for sale, at lower of cost or fair value |
|
$ |
1,247 |
|
|
$ |
2,643 |
|
|
$ |
11,646 |
|
|
(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 $52.2 million, $54.8 million, and $71.2 million as of March 31, 2023, December 31, 2022, and March 31, 2022, respectively. |
|
(7) |
|
Represents the basis adjustment associated with the application of hedge accounting on certain loans. |
The total end-of-period weighted average interest rate on loans, excluding fees and discounts, at March 31, 2023 was 4.68%, compared to 4.61% at December 31, 2022, and 3.92% at March 31, 2022. The quarter-over-quarter and year-over-year increases reflect higher rates on new originations and the repricing of loans as a result of the increases in benchmark interest rates.
The following table presents the composition of loan commitments originated during the quarters indicated:
|
|
|
Three Months Ended |
||||||||||
|
|
|
March 31, |
|
December 31, |
|
March 31, |
||||||
|
(Dollars in thousands) |
|
|
2023 |
|
|
|
2022 |
|
|
|
2022 |
|
|
Investor loans secured by real estate |
|
|
|
|
|
|
||||||
|
CRE non-owner-occupied |
|
$ |
1,200 |
) |
|
$ |
34,258 |
) |
|
$ |
153,845 |
) |
|
Multifamily |
|
|
4,464 |
|
|
|
28,285 |
|
|
|
454,652 |
|
|
Construction and land |
|
|
— |
|
|
|
31,175 |
|
|
|
213,206 |
|
|
SBA secured by real estate (1) |
|
|
— |
|
|
|
— |
|
|
|
7,775 |
|
|
Total investor loans secured by real estate |
|
|
5,664 |
|
|
|
93,718 |
|
|
|
829,478 |
|
|
Business loans secured by real estate (2) |
|
|
|
|
|
|
||||||
|
CRE owner-occupied |
|
|
6,562 |
|
|
|
24,266 |
|
|
|
246,405 |
|
|
Franchise real estate secured |
|
|
3,217 |
|
|
|
840 |
|
|
|
21,060 |
|
|
SBA secured by real estate (3) |
|
|
497 |
|
|
|
4,198 |
|
|
|
9,378 |
|
|
Total business loans secured by real estate |
|
|
10,276 |
|
|
|
29,304 |
|
|
|
276,843 |
|
|
Commercial loans (4) |
|
|
|
|
|
|
||||||
|
Commercial and industrial |
|
|
93,150 |
|
|
|
96,566 |
|
|
|
317,728 |
|
|
Franchise non-real estate secured |
|
|
1,666 |
|
|
|
14,130 |
|
|
|
28,090 |
|
|
SBA non-real estate secured |
|
|
720 |
|
|
|
1,058 |
|
|
|
3,543 |
|
|
Total commercial loans |
|
|
95,536 |
|
|
|
111,754 |
|
|
|
349,361 |
|
|
Retail loans |
|
|
|
|
|
|
||||||
|
Single family residential (5) |
|
|
5,359 |
|
|
|
5,053 |
|
|
|
6,310 |
|
|
Total retail loans |
|
|
5,359 |
|
|
|
5,053 |
|
|
|
6,310 |
|
|
Total loan commitments |
|
$ |
116,835 |
|
|
$ |
239,829 |
|
|
$ |
1,461,992 |
|
|
(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. |
The weighted average interest rate on new loan commitments increased to 7.43% in the first quarter of 2023, compared to 6.34% in the fourth quarter of 2022, and 3.55% in the first quarter of 2022.
Asset Quality and Allowance for Credit Losses
At March 31, 2023, our allowance for credit losses (“ACL”) on loans held for investment was $195.4 million, a decrease of $263,000 from December 31, 2022, and a decrease of $2.1 million from March 31, 2022. The decline in ACL from December 31, 2022 and March 31, 2022 was reflective primarily of lower loans held for investment.
During the first quarter of 2023, the Company incurred $3.3 million of net charge-offs, compared to $3.8 million during the fourth quarter of 2022, and $446,000 of net charge-offs during the first quarter of 2022, respectively.
The following table provides the allocation of the ACL for loans held for investment as well as the activity in the ACL attributed to various segments in the loan portfolio as of and for the period indicated:
|
|
Three Months Ended March 31, 2023 |
||||||||||||||||||
|
(Dollars in thousands) |
Beginning ACL Balance |
|
Charge-offs |
|
Recoveries |
|
Provision for Credit Losses |
|
Ending ACL Balance |
||||||||||
|
Investor loans secured by real estate |
|
|
|
|
|
|
|
|
|
||||||||||
|
CRE non-owner-occupied |
$ |
33,692 |
|
$ |
(66 |
) |
|
$ |
15 |
|
$ |
(1,926 |
) |
|
$ |
31,715 |
|||
|
Multifamily |
|
56,334 |
|
|
|
(217 |
) |
|
|
— |
|
|
|
1,670 |
|
|
|
57,787 |
|
|
Construction and land |
|
7,114 |
|
|
|
— |
|
|
|
— |
|
|
|
558 |
|
|
|
7,672 |
|
|
SBA secured by real estate (1) |
|
2,592 |
|
|
|
— |
|
|
|
— |
|
|
|
(301 |
) |
|
|
2,291 |
|
|
Business loans secured by real estate (2) |
|
|
|
|
|
|
|
|
|
||||||||||
|
CRE owner-occupied |
|
32,340 |
|
|
|
(2,163 |
) |
|
|
12 |
|
|
|
(855 |
) |
|
|
29,334 |
|
|
Franchise real estate secured |
|
7,019 |
|
|
|
— |
|
|
|
— |
|
|
|
771 |
|
|
|
7,790 |
|
|
SBA secured by real estate (3) |
|
4,348 |
|
|
|
— |
|
|
|
— |
|
|
|
67 |
|
|
|
4,415 |
|
|
Commercial loans (4) |
|
|
|
|
|
|
|
|
|
||||||||||
|
Commercial and industrial |
|
35,169 |
|
|
|
(1,123 |
) |
|
|
211 |
|
|
|
3,402 |
|
|
|
37,659 |
|
|
Franchise non-real estate secured |
|
16,029 |
|
|
|
— |
|
|
|
100 |
|
|
|
(408 |
) |
|
|
15,721 |
|
|
SBA non-real estate secured |
|
441 |
|
|
|
— |
|
|
|
6 |
|
|
|
(46 |
) |
|
|
401 |
|
|
Retail loans |
|
|
|
|
|
|
|
|
|
||||||||||
|
Single family residential (5) |
|
352 |
|
|
|
(90 |
) |
|
|
1 |
|
|
|
129 |
|
|
|
392 |
|
|
Consumer loans |
|
221 |
|
|
|
(5 |
) |
|
|
35 |
|
|
|
(40 |
) |
|
|
211 |
|
|
Totals |
$ |
195,651 |
|
|
$ |
(3,664 |
) |
|
$ |
380 |
|
|
$ |
3,021 |
|
|
$ |
195,388 |
|
|
(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, Chief Executive Officer, and President
(949) 864-8000
Ronald J. Nicolas, Jr.
Senior Executive Vice President and Chief Financial Officer
(949) 864-8000
Matthew J. Lazzaro
Senior Vice President, Director of Investor Relations
(949) 243-1082
