Pacific Premier Bancorp, Inc. Announces First Quarter 2022 Financial Results and a Quarterly Cash Dividend of $0.33 Per Share

Rhea-AI Summary

Pacific Premier Bancorp (NASDAQ: PPBI) reported a first quarter 2022 net income of $66.9 million, or $0.70 per diluted share, down from $84.8 million in Q4 2021. The return on average assets was 1.28%, a decrease from 1.63% in the previous quarter. Total assets rose to $21.62 billion. The company achieved 12.3% annualized loan growth, funded by a 13.4% increase in deposits. The net interest margin was 3.41%, declining from 3.53%. Nonperforming assets rose to 0.26% of total assets, compared to 0.15% in Q4 2021.

Positive

• 12.3% annualized loan growth
• Deposits increased by 13.4% annualized
• Solid inflow of low-cost deposits

Negative

• Net income decreased from $84.8 million Q4 2021 to $66.9 million
• Return on average assets fell from 1.63% to 1.28%
• Net interest income down by $8.9 million or 5.2%

First Quarter 2022 Summary

• Net income of $66.9 million, or $0.70 per diluted share
• Return on average assets of 1.28%, return on average equity of 9.34%, and return on average tangible common equity of 14.66%⁽¹⁾
• Diversified loan growth of $438.6 million, or 12.3% annualized
• Deposit growth of $573.6 million, or 13.4% annualized
• Net interest margin of 3.41%, and core net interest margin of 3.33%⁽¹⁾
• Cost of deposits remained unchanged at 0.04%
• Noninterest-bearing deposits increased to 40.2% of total deposits
• Nonperforming assets to total assets of 0.26%, and classified assets to total assets of 0.57%

IRVINE, Calif.--(BUSINESS WIRE)-- Pacific Premier Bancorp, Inc. (NASDAQ: PPBI) (the “Company” or “Pacific Premier”), the holding company of Pacific Premier Bank (the “Bank”), reported net income of $66.9 million, or $0.70 per diluted share, for the first quarter of 2022, compared with net income of $84.8 million, or $0.89 per diluted share, for the fourth quarter of 2021, and net income of $68.7 million, or $0.72 per diluted share, for the first quarter of 2021.

For the quarter ended March 31, 2022, the Company’s return on average assets (“ROAA”) was 1.28%, return on average equity (“ROAE”) was 9.34%, and return on average tangible common equity (“ROATCE”)⁽¹⁾ was 14.66%, compared to 1.63%, 11.90%, and 18.66%, respectively, for the fourth quarter of 2021, and 1.37%, 9.99%, and 16.21%, respectively, for the first quarter of 2021. Total assets increased to $21.62 billion at March 31, 2022, compared to $21.09 billion at December 31, 2021, and $20.17 billion at March 31, 2021.

Steven R. Gardner, Chairman, President, and Chief Executive Officer of the Company, commented, “We delivered a high level of performance in the first quarter driven by strong loan and deposit production. The first quarter's results reflect the success of our technology-driven growth strategy that enhances our new business development efforts, provides a superior banking experience for clients, and optimizes efficiencies and collaboration throughout the organization.

“We generated $1.46 billion in new loan commitments during the first quarter with well-balanced contributions coming from all of our major areas of lending. We also saw positive trends with commercial lines of credit utilization rates increasing in the first quarter. The combination of our strong loan production, increases in line utilization, and slower prepayments resulted in 12.3% annualized loan growth, which we funded with solid inflows of low-cost deposits, which grew 13.4% annualized.

“As always, we continue to prioritize risk management and maintain appropriate levels of capital, liquidity, and reserves in order to effectively manage through the challenges that may arise in connection with higher interest rates, inflationary pressures, and geopolitical uncertainty. During the quarter, we took a number of actions to position the balance sheet for higher interest rates, including reducing the size and duration of the available-for-sale securities portfolio, increasing our liquidity position, and enhancing our asset sensitivity. The strength of the organization we have built and our proactive approach to risk management has enabled us to capitalize on opportunities that arise in stressed environments. We are well positioned to continue to execute our proven business model by effectively managing risk, while growing the franchise both organically and through accretive acquisitions.”

____________________

(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
(Dollars in thousands, except per share data)	March 31, 2022			December 31, 2021			March 31, 2021
Financial highlights (unaudited)
Net income	$	66,904		$	84,831		$	68,668
Diluted earnings per share		0.70			0.89			0.72
Common equity dividend per share paid		0.33			0.33			0.30
Return on average assets		1.28	%		1.63	%		1.37	%
Return on average equity		9.34			11.90			9.99
Return on average tangible common equity (1)		14.66			18.66			16.21
Pre-provision net revenue on average assets (1)		1.72			1.93			1.86
Net interest margin		3.41			3.53			3.55
Core net interest margin (1)		3.33			3.38			3.30
Cost of deposits		0.04			0.04			0.11
Efficiency ratio (1)		50.7			48.0			48.6
Noninterest expense (excluding merger-related expense) as a percent of average assets (1)		1.86	%		1.86	%		1.85	%
Total assets	$	21,622,296		$	21,094,429		$	20,173,298
Total deposits		17,689,223			17,115,589			16,740,007
Loan-to-deposit ratio		83.4	%		83.6	%		78.4	%
Non-maturity deposits as a percent of total deposits		94.2			93.8			91.8
Book value per share	$	29.31		$	30.58		$	28.56
Tangible book value per share (1)		19.12			20.29			18.19
Total capital ratio		14.37	%		14.62	%		16.26	%

(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 $161.8 million in the first quarter of 2022, a decrease of $8.9 million, or 5.2%, from the fourth quarter of 2021. The decrease in net interest income was primarily attributable to lower loan related-fees and lower accretion income as a result of slowing prepayment activity, two fewer days of interest, and lower average investment and loan yields, partially offset by an increase in average earning assets and a favorable remix towards higher yielding loans.

The net interest margin for the first quarter of 2022 was 3.41%, compared with 3.53% in the prior quarter. The core net interest margin⁽¹⁾, which excludes the impact of loan accretion income and other adjustments, decreased 5 basis points to 3.33%, compared to 3.38% in the prior quarter, reflecting lower loan prepayment fees and lower average investment and loan yields, partially offset by the favorable shift in average earning-asset mix.

Net interest income for the first quarter of 2022 increased $187,000, or 0.1%, compared to the first quarter of 2021. The increase was attributable to higher average loan and investment balances, lower cost of funds, primarily due to an improved deposit mix from an $894.6 million increase in average noninterest-bearing checking, and redemptions of higher-cost subordinated debentures, partially offset by lower average interest-earning asset yields.

____________________

(1)

Reconciliations of the non–GAAP measures are set forth at the end of this press release.

PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED AVERAGE BALANCES AND YIELD DATA (Unaudited)
	Three Months Ended
	March 31, 2022						December 31, 2021						March 31, 2021
(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	$	322,236	$	90	0.11	%	$	334,371	$	66	0.08	%	$	1,309,366	$	301	0.09	%
Investment securities		4,546,408		17,852	1.57			4,833,251		19,522	1.62			4,087,451		17,468	1.71
Loans receivable, net (1) (2)		14,371,588		150,604	4.25			14,005,836		157,418	4.46			13,093,609		155,225	4.81
Total interest-earning assets	$	19,240,232	$	168,546	3.55		$	19,173,458	$	177,006	3.66		$	18,490,426	$	172,994	3.79

Liabilities
Interest-bearing deposits	$	10,351,434	$	1,673	0.07		$	10,471,426	$	1,694	0.06		$	10,420,199	$	4,426	0.17
Borrowings		555,879		5,034	3.63			400,014		4,593	4.59			523,565		6,916	5.36
Total interest-bearing liabilities	$	10,907,313	$	6,707	0.25		$	10,871,440	$	6,287	0.23		$	10,943,764	$	11,342	0.42
Noninterest-bearing deposits	$	6,928,872					$	6,911,702					$	6,034,319
Net interest income			$	161,839					$	170,719					$	161,652
Net interest margin (3)					3.41						3.53						3.55
Cost of deposits (4)					0.04						0.04						0.11
Cost of funds (5)					0.15						0.14						0.27
Ratio of interest-earning assets to interest-bearing liabilities					176.40						176.37						168.96

(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 $5.9 million, $7.9 million, and $9.9 million, 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.

Provision for Credit Losses

For the first quarter of 2022, the Company recorded a $448,000 provision expense, compared to a $14.6 million provision recapture for the fourth quarter of 2021, and a $2.0 million provision expense for the first quarter of 2021. The provision expense for the first quarter of 2022 was reflective of higher loans held for investment as well as the impact of growing uncertainties in the macroeconomic environment.

	Three Months Ended
(Dollars in thousands)	March 31, 2022			December 31, 2021			March 31, 2021
Provision for credit losses
Provision for loan losses	$	211		$	(14,710	)	$	315
Provision for unfunded commitments		218			51			1,659
Provision for held-to-maturity securities		19			11			—
Total provision for credit losses	$	448		$	(14,648	)	$	1,974

Noninterest Income

Noninterest income for the first quarter of 2022 was $25.9 million, a decrease of $1.4 million from the fourth quarter of 2021. The decrease was primarily due to a $1.5 million decrease in net gain from sales of investment securities and a $560,000 decrease in escrow and exchange fees due to lower transaction volume, partially offset by an $814,000 increase in other income, which included $530,000 higher CRA investment income.

During the first quarter of 2022, the Bank sold $17.8 million of Small Business Administration (“SBA”) loans for a net gain of $1.5 million, compared to the sales of $13.3 million of SBA loans for a net gain of $1.3 million in the fourth quarter of 2021.

Additionally, during the first quarter of 2022, the Bank sold $658.5 million of investment securities for a net gain of $2.1 million, compared to the sales of $267.1 million of investment securities for a net gain of $3.6 million in the fourth quarter of 2021.

Noninterest income for the first quarter of 2022 increased $2.2 million, or 9.1%, compared to the first quarter of 2021. The increase was primarily due to a $4.4 million increase in Trust custodial account fees.

	Three Months Ended
(Dollars in thousands)	March 31, 2022			December 31, 2021			March 31, 2021
Noninterest income
Loan servicing income	$	419		$	505		$	458
Service charges on deposit accounts		2,615			2,590			2,032
Other service fee income		367			391			473
Debit card interchange fee income		836			769			787
Earnings on bank owned life insurance		3,221			3,521			2,233
Net gain from sales of loans		1,494			1,334			361
Net gain from sales of investment securities		2,134			3,585			4,046
Trust custodial account fees		11,579			11,611			7,222
Escrow and exchange fees		1,661			2,221			1,526
Other income		1,568			754			4,602
Total noninterest income	$	25,894		$	27,281		$	23,740

Noninterest Expense

Noninterest expense totaled $97.6 million for the first quarter of 2022, an increase of $396,000 compared to the fourth quarter of 2021, primarily driven by a $990,000 increase in other expense and a $905,000 increase in compensation and benefits.

Noninterest expense increased by $5.2 million compared to the first quarter of 2021. The increase was primarily due to a $4.4 million increase in compensation and benefits.

	Three Months Ended
(Dollars in thousands)	March 31, 2022			December 31, 2021			March 31, 2021
Noninterest expense
Compensation and benefits	$	56,981	)	$	56,076	)	$	52,548	)
Premises and occupancy		11,952			11,403			11,980
Data processing		5,996			5,881			5,828
FDIC insurance premiums		1,396			1,389			1,181
Legal and professional services		4,068			5,870			3,935
Marketing expense		1,809			1,821			1,598
Office expense		1,203			1,463			1,829
Loan expense		1,134			857			1,115
Deposit expense		3,751			3,836			3,859
Merger-related expense		—			—			5
Amortization of intangible assets		3,592			3,880			4,143
Other expense		5,766			4,776			4,468
Total noninterest expense	$	97,648		$	97,252		$	92,489

Income Tax

For the first quarter of 2022, our income tax expense totaled $22.7 million, resulting in an effective tax rate of 25.4%, compared with income tax expense of $30.6 million and an effective tax rate of 26.5% for the fourth quarter of 2021, and income tax expense of $22.3 million and an effective tax rate of 24.5% for the first quarter of 2021. Our estimated effective tax rate for the full year is expected to be in the range of 26% to 27%.

BALANCE SHEET HIGHLIGHTS

Loans

Loans held for investment totaled $14.73 billion at March 31, 2022, an increase of $437.9 million, or 3.1%, from December 31, 2021, and an increase of $1.62 billion, or 12.3%, from March 31, 2021. The increase from December 31, 2021 was primarily driven by loan fundings, higher commercial line utilization rates, and lower levels of prepayments and maturities. Commercial line utilization rates increased to an average of 39.5% for the first quarter of 2022, compared to an average of 35.2% for the fourth quarter of 2021 and 34.1% for the first quarter of 2021.

During the first quarter of 2022, loan commitments totaled $1.46 billion and new loan fundings totaled $1.06 billion, compared with $1.48 billion in loan commitments and $1.07 billion in new loan fundings for the fourth quarter of 2021, and $1.15 billion in loan commitments and $746.3 million in new loan fundings for the first quarter of 2021. The year-over-year increase in new loan fundings was primarily due to expansion in our multifamily, commercial real estate owner-occupied, and commercial and industrial (“C&I”) loan segments.

At March 31, 2022, the total loan-to-deposit ratio was 83.4%, compared with 83.6% and 78.4% at December 31, 2021 and March 31, 2021, respectively.

The following table presents the primary loan roll-forward activities for total loans, including both loans held for investment and loans held for sale, during the quarters indicated:

	Three Months Ended
(Dollars in thousands)	March 31, 2022			December 31, 2021			March 31, 2021
Beginning loan balance	$	14,306,766		$	13,990,961		$	13,237,034
New commitments		1,461,992			1,479,445			1,153,345
Unfunded new commitments		(399,235	)		(408,963	)		(407,047	)
Net new fundings		1,062,757			1,070,482			746,298
Amortization/maturities/payoffs		(786,700	)		(935,064	)		(773,170	)
Net draws on existing lines of credit		182,868			194,548			(82,472	)
Loan sales		(17,991	)		(13,427	)		(1,035	)
Charge-offs		(2,299	)		(734	)		(1,952	)
Net increase (decrease)		438,635			315,805			(112,331	)
Ending loan balance	$	14,745,401		$	14,306,766		$	13,124,703

The following table presents the composition of the loan portfolio as of the dates indicated:

(Dollars in thousands)	March 31, 2022			December 31, 2021			March 31, 2021
Investor loans secured by real estate
Commercial real estate (“CRE”) non-owner-occupied	$	2,774,650		$	2,771,137		$	2,729,785
Multifamily		6,041,085			5,891,934			5,309,592
Construction and land		303,811			277,640			316,458
SBA secured by real estate (1)		42,642			46,917			56,381
Total investor loans secured by real estate		9,162,188			8,987,628			8,412,216
Business loans secured by real estate (2)
CRE owner-occupied		2,391,984			2,251,014			2,029,984
Franchise real estate secured		384,267			380,381			340,805
SBA secured by real estate (3)		68,466			69,184			73,967
Total business loans secured by real estate		2,844,717			2,700,579			2,444,756
Commercial loans (4)
Commercial and industrial		2,242,632			2,103,112			1,656,098
Franchise non-real estate secured		388,322			392,576			399,041
SBA non-real estate secured		10,761			11,045			14,908
Total commercial loans		2,641,715			2,506,733			2,070,047
Retail loans
Single family residential (5)		79,978			95,292			184,049
Consumer		5,157			5,665			6,324
Total retail loans		85,135			100,957			190,373
Gross loans held for investment (6)		14,733,755			14,295,897			13,117,392
Allowance for credit losses for loans held for investment		(197,517	)		(197,752	)		(266,999	)
Loans held for investment, net	$	14,536,238		$	14,098,145		$	12,850,393
Total unfunded loan commitments	$	2,940,370		$	2,507,911		$	2,243,650
Loans held for sale, at lower of cost or fair value	$	11,646		$	10,869		$	7,311

(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 $71.2 million, $77.1 million, and $103.9 million as of March 31, 2022, December 31, 2021, and March 31, 2021, respectively.

The total end-of-period weighted average interest rate on loans, excluding fees and discounts, at March 31, 2022 was 3.92%, compared to 3.95% at December 31, 2021, and 4.21% at March 31, 2021. The quarter-over- quarter and year-over-year decreases reflect the continued impact from lower levels of prepayments of higher rate loans and lower rates on new originations.

The following table presents the composition of loan commitments originated during the quarters indicated:

	Three Months Ended
(Dollars in thousands)	March 31, 2022			December 31, 2021			March 31, 2021
Investor loans secured by real estate
CRE non-owner-occupied	$	153,845		$	94,740		$	128,408
Multifamily		454,652			552,600			407,156
Construction and land		213,206			94,343			94,124
SBA secured by real estate (1)		7,775			—			—
Total investor loans secured by real estate		829,478			741,683			629,688
Business loans secured by real estate (2)
CRE owner-occupied		246,405			147,322			110,353
Franchise real estate secured		21,060			52,034			24,429
SBA secured by real estate (3)		9,378			15,631			4,101
Total business loans secured by real estate		276,843			214,987			138,883
Commercial loans (4)
Commercial and industrial		317,728			469,018			352,530
Franchise non-real estate secured		28,090			43,219			17,647
SBA non-real estate secured		3,543			3,500			686
Total commercial loans		349,361			515,737			370,863
Retail loans
Single family residential (5)		6,310			6,800			13,353
Consumer		—			238			558
Total retail loans		6,310			7,038			13,911
Total loan commitments	$	1,461,992		$	1,479,445		$	1,153,345

(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 was 3.55% in the first quarter of 2022, compared to 3.55% in the fourth quarter of 2021, and 3.63% in the first quarter of 2021.

Asset Quality and Allowance for Credit Losses

At March 31, 2022, our allowance for credit losses (“ACL”) on loans held for investment was $197.5 million, a decrease of $235,000 from December 31, 2021, and a decrease of $69.5 million from March 31, 2021. The ACL as of March 31, 2022 was reflective of higher loans held for investment as well as the impact of growing uncertainties in the macroeconomic environment. The decrease in ACL from March 31, 2021 was primarily due to favorable changes in the macroeconomic forecasts employed in the Company's current expected credit losses (“CECL”) model related to the COVID-19 pandemic.

During the first quarter of 2022, the Company incurred $446,000 of net charge-offs, compared to $1.0 million of net recoveries during the fourth quarter of 2021 and $1.3 million of net charge-offs during the first quarter of 2021.

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, 2022
	Beginning									Provision for			Ending
	ACL									Credit			ACL
(Dollars in thousands)	Balance			Charge-offs			Recoveries			Losses			Balance
Investor loans secured by real estate
CRE non-owner-occupied	$	37,380		$	—		$	—		$	(1,406	)	$	35,974
Multifamily		55,209			—			—			(884	)		54,325
Construction and land		5,211			—			—			8			5,219
SBA secured by real estate (1)		3,201			(70	)		—			(81	)		3,050
Business loans secured by real estate (2)
CRE owner-occupied		29,575			—			10			2,306			31,891
Franchise real estate secured		7,985			—			—			(8	)		7,977
SBA secured by real estate (3)		4,866			—			—			329			5,195
Commercial loans (4)
Commercial and industrial		38,136			(2,179	)		1,841			800			38,598
Franchise non-real estate secured		15,084			—			—			(780	)		14,304
SBA non-real estate secured		565			(50	)		2			(27	)		490
Retail loans
Single family residential (5)		255			—			—			(22	)		233
Consumer loans		285			—			—			(24	)		261
Totals	$	197,752		$	(2,299	)	$	1,853		$	211		$	197,517

(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 ratio of allowance for credit losses to loans held for investment at March 31, 2022 was 1.34%, compared to 1.38% at December 31, 2021 and 2.04% at March 31, 2021. The fair value net discount on loans acquired through total bank acquisitions was $71.2 million, or 0.48% of total loans held for investment, as of March 31, 2022, compared to $77.1 million, or 0.54% of total loans held for investment, as of December 31, 2021, and $103.9 million, or 0.79% of total loans held for investment, as of March 31, 2021.

Nonperforming assets totaled $55.3 million, or 0.26% of total assets, at March 31, 2022, compared with $31.3 million, or 0.15% of total assets, at December 31, 2021, and $38.9 million, or 0.19% of total assets, at March 31, 2021. Total loan delinquencies were $43.7 million, or 0.30% of loans held for investment, at March 31, 2022, compared to $19.5 million, or 0.14% of loans held for investment, at December 31, 2021, and $22.6 million, or 0.17% of loans held for investment, at March 31, 2021. The quarter-over-quarter and year-over-year increase in

nonperforming assets and loan delinquencies was primarily due to the addition of a single C&I relationship totaling $25.3 million at March 31, 2022.

Classified loans totaled $122.5 million, or 0.83% of loans held for investment, at March 31, 2022, compared with $121.8 million, or 0.85% of loans held for investment, at December 31, 2021, and $134.7 million, or 1.03% of loans held for investment, at March 31, 2021.

Interest typically is not accrued on loans 90 days or more past due or when, in the opinion of management, there is reasonable doubt as to the timely collection of principal or interest. At March 31, 2022, there was a CRE owner-occupied loan of $1.8 million in default for more than 90 days and still accruing interest, pending a legal proceeding with repayment reasonably expected. There were $16.9 million of troubled debt restructured loans at March 31, 2022, compared with $17.3 million at December 31, 2021, and no troubled debt restructured loans at March 31, 2021.

(Dollars in thousands)	March 31, 2022			December 31, 2021			March 31, 2021
Asset quality
Nonperforming loans	$	55,309		$	31,273		$	38,909
Other real estate owned		—			—			—
Nonperforming assets	$	55,309		$	31,273		$	38,909
Total classified assets (1)	$	122,528		$	121,827		$	134,667
Allowance for credit losses		197,517			197,752			266,999
Allowance for credit losses as a percent of total nonperforming loans		357	%		632	%		686	%
Nonperforming loans as a percent of loans held for investment		0.38			0.22			0.30
Nonperforming assets as a percent of total assets		0.26			0.15			0.19
Classified loans to total loans held for investment		0.83			0.85			1.03
Classified assets to total assets		0.57			0.58			0.67
Net loan charge-offs (recoveries) for the quarter ended	$	446		$	(981	)	$	1,334
Net loan charge-offs (recoveries) for the quarter to average total loans		—	%		(0.01	)%		0.01	%
Allowance for credit losses to loans held for investment (2)		1.34			1.38			2.04
Delinquent loans
30 - 59 days	$	25,332		$	1,395		$	13,116
60 - 89 days		74			—			61
90+ days		18,245			18,100			9,410
Total delinquency	$	43,651		$	19,495		$	22,587
Delinquency as a percentage of loans held for investment		0.30	%		0.14	%		0.17	%

(1)		Includes substandard loans and other real estate owned.
(2)		At March 31, 2022, 32% of loans held for investment include a fair value net discount of $71.2 million, or 0.48% of loans held for investment. At December 31, 2021, 36% of loans held for investment include a fair value net discount of $77.1 million, or 0.54% of loans held for investment. At March 31, 2021, 51% of loans held for investment include a fair value net discount of $103.9 million, or 0.79% of loans held for investment.

Investment Securities

At March 31, 2022, available-for-sale (“AFS”) and held-to-maturity (“HTM”) investment securities were $3.22 billion and $996.4 million, respectively, compared to $4.27 billion and $381.7 million, respectively, at December 31, 2021. During the first quarter of 2022, the Company reassessed classification of certain investments with longer duration and transferred a total of $386.8 million of municipal bonds and $255.0 million of mortgage-backed securities, both of which the Company intends and has the ability to hold to maturity, from AFS to HTM at fair value.

In total, investment securities were $4.22 billion at March 31, 2022, a decrease of $437.1 million from December 31, 2021, and an increase of $339.2 million from March 31, 2021. The decrease in the first quarter of 2022 compared to the prior quarter was primarily the result of $658.5 million in investment securities sales, $109.3 million in principal payments, discounts from the AFS securities transferred to HTM, amortizations, and redemptions, as well as a $168.1 million decrease in mark-to-market fair value adjustment, partially offset by $498.9 million in investment securities purchases.

The increase in investment securities from March 31, 2021 was primarily the result of $2.40 billion in purchases, partially offset by $1.37 billion in sales, $542.9 million in principal payments, amortization, and redemptions, and a $151.5 million decrease in mark-to-market fair value adjustment.

Deposits

At March 31, 2022, deposits totaled $17.69 billion, an increase of $573.6 million, or 3.4%, from December 31, 2021, and an increase of $949.2 million, or 5.7%, from March 31, 2021. At March 31, 2022, non-maturity deposits totaled $16.66 billion, or 94.2% of total deposits, an increase of $600.9 million, or 3.7%, from December 31, 2021, and an increase of $1.29 billion, or 8.4%, from March 31, 2021. During the first quarter of 2022, deposit increases included $349.3 million in noninterest-bearing checking deposits, $185.7 million in interest- bearing checking deposits, and $65.9 million in money market and savings deposits, partially offset by a planned decrease of $27.3 million in retail certificates of deposits, as compared to the fourth quarter of 2021. The increase in deposits from March 31, 2021 was primarily driven by an increase in business checking deposits, partially offset by decreases in certificates of deposit and money market/savings deposits.

The weighted average cost of deposits for the first quarter of 2022 remained unchanged at 0.04%, compared to the fourth quarter of 2021, and decreased from 0.11% for the first quarter of 2021.

The end of period weighted average rate of deposits at March 31, 2022 was 0.04%.

(Dollars in thousands)	March 31, 2022			December 31, 2021			March 31, 2021
Deposit accounts
Noninterest-bearing checking	$	7,106,548		$	6,757,259		$	6,302,703
Interest-bearing:
Checking		3,679,067			3,493,331			3,155,071
Money market/savings		5,872,597			5,806,726			5,911,417
Retail certificates of deposit		1,031,011			1,058,273			1,353,431
Wholesale/brokered certificates of deposit		—			—			17,385
Total interest-bearing		10,582,675			10,358,330			10,437,304
Total deposits	$	17,689,223		$	17,115,589		$	16,740,007
Cost of deposits		0.04	%		0.04	%		0.11	%
Noninterest-bearing deposits as a percent of total deposits		40.2			39.5			37.7
Non-maturity deposits as a percent of total deposits		94.2			93.8			91.8
Core deposits as a percent of total deposits (1)		97.3			97.1			96.2

(1)

Core deposits are all transaction accounts and non-brokered certificates of deposit less than $250,000.

Borrowings

At March 31, 2022, total borrowings amounted to $930.7 million, an increase of $42.2 million from December 31, 2021, and an increase of $419.1 million from March 31, 2021. Total borrowings at March 31, 2022 were comprised of $600.0 million of Federal Home Loan Bank of San Francisco (“FHLB”) advances and $330.7 million of subordinated debt. The increase in borrowings at March 31, 2022 as compared to December 31, 2021 was primarily due to an increase of $600.0 million in FHLB term advances, offset by repayment of $550.0 million in FHLB overnight advances and $8.0 million in other short-term borrowings. The increase in borrowings at

March 31, 2022 as compared to March 31, 2021 was primarily due to an increase of $590.0 million in FHLB advances, partially offset by redemptions of $160.0 million in subordinated notes and $10.4 million junior subordinated debt securities. At March 31, 2022, total borrowings represented 4.3% of total assets, compared to 4.2% and 2.5% as of December 31, 2021 and March 31, 2021, respectively.

Capital Ratios

At March 31, 2022, our common stockholder's equity was $2.78 billion, or 12.87% of total assets, compared with $2.89 billion, or 13.68%, at December 31, 2021, and $2.70 billion, or 13.40%, at March 31, 2021, with a book value per share of $29.31, compared with $30.58 at December 31, 2021, and $28.56 at March 31, 2021. At March 31, 2022, our ratio of tangible common equity to tangible assets⁽¹⁾ was 8.79%, compared with 9.52% at December 31, 2021, and 8.97% at March 31, 2021, and our tangible book value per share⁽¹⁾ was $19.12, compared with $20.29 at December 31, 2021, and $18.19 at March 31, 2021. The decreases in the ratio of tangible common equity to tangible assets and tangible book value per share at March 31, 2022 from the prior quarter were primarily driven by the other comprehensive loss from the impact of higher interest rates on our AFS securities portfolio.

____________________

(1)

Reconciliations of the non–GAAP measures are set forth at the end of this press release.

The Company implemented the CECL model on January 1, 2020 and elected to phase in the full effect of CECL on regulatory capital over the five-year transition period. Beginning the first quarter of March 31, 2022, the Company phases into regulatory capital the cumulative adjustments at the end of the second year of the transition period at 25% per year. At March 31, 2022, the Company and Bank are in compliance with the capital conservation buffer requirement and exceeded the minimum Common Equity Tier 1, Tier 1, and total capital ratios, inclusive of the fully phased-in capital conservation buffer, of 7.0%, 8.5% and 10.5%, respectively, and the Bank qualified as “well-capitalized” for purposes of the federal bank regulatory prompt corrective action regulations.

Capital ratios	March 31, 2022			December 31, 2021			March 31, 2021
Pacific Premier Bancorp, Inc. Consolidated
Tier 1 leverage ratio		10.10	%		10.08	%		9.66	%
Common equity tier 1 capital ratio		11.80			12.11			12.05
Tier 1 capital ratio		11.80			12.11			12.05
Total capital ratio		14.37			14.62			16.26
Tangible common equity ratio (1)		8.79			9.52			8.97
Pacific Premier Bank
Tier 1 leverage ratio		11.66	%		11.62	%		11.13	%
Common equity tier 1 capital ratio		13.61			13.96			13.90
Tier 1 capital ratio		13.61			13.96			13.90
Total capital ratio		14.47			14.70			15.92
Share data
Book value per share	$	29.31		$	30.58		$	28.56
Tangible book value per share (1)		19.12			20.29			18.19
Common equity dividends declared per share		0.33			0.33			0.30
Closing stock price (2)		35.35			40.03			43.44
Shares issued and outstanding		94,945,849			94,389,543			94,644,415
Market capitalization (2)(3)	$	3,356,336		$	3,778,413		$	4,111,353

(1)		Reconciliations of the non-GAAP measures are set forth at the end of this press release.
(2)		As of the last trading day prior to period end.
(3)		Dollars in thousands.

Dividend and Stock Repurchase Program

On April 22, 2022, the Company's Board of Directors declared a $0.33 per share dividend, payable on May 13, 2022 to stockholders of record as of May 6, 2022. In January 2021, the Company’s Board of Directors approved a stock repurchase program, which authorized the repurchase of up to 4,725,000 shares of its common stock. During the first quarter of 2022, the Company did not repurchase any shares of common stock.

Conference Call and Webcast

The Company will host a conference call at 9:00 a.m. PT / 12:00 p.m. ET on April 26, 2022 to discuss its financial results. Analysts and investors may participate in the question-and-answer session. A live webcast will be available on the Webcasts page of the Company's investor relations website. An archived version of the webcast will be available in the same location shortly after the live call has ended. The conference call can be accessed by telephone at (866) 290-5977 and asking to be joined to the Pacific Premier Bancorp conference call. Additionally, a telephone replay will be made available through May 3, 2022, at (877) 344-7529, conference ID 5702244.

About Pacific Premier Bancorp, Inc.

Pacific Premier Bancorp, Inc. (Nasdaq: PPBI) is the parent company of Pacific Premier Bank, a California- based commercial bank focused on serving small, middle-market, and corporate businesses throughout the western United States in major metropolitan markets in California, Washington, Oregon, Arizona, and Nevada. Founded in 1983, Pacific Premier Bank has grown to become one of the largest banks headquartered in the western region of the United States, with over $21 billion in total assets. Pacific Premier Bank provides banking products and services, including deposit accounts, digital banking, and treasury management services, to businesses, professionals, entrepreneurs, real estate investors, and nonprofit organizations. Pacific Premier Bank also offers a wide array of loan products, such as commercial business loans, lines of credit, SBA loans, commercial real estate loans, agribusiness loans, franchise lending, home equity lines of credit, and construction loans. Pacific Premier Bank offers commercial escrow services and facilitates 1031 Exchange transactions through its Commerce Escrow division. Pacific Premier Bank offers clients IRA custodial services through its Pacific Premier Trust division, which has approximately $18 billion of assets under custody and over 42,000 client accounts comprised of self- directed investors, financial institutions, capital syndicators, and financial advisors. Additionally, Pacific Premier Bank provides nationwide customized banking solutions to Homeowners’ Associations and Property Management companies. Pacific Premier Bank is an Equal Housing Lender and Member FDIC. For additional information about Pacific Premier Bancorp, Inc. and Pacific Premier Bank, visit our website: www.ppbi.com.

FORWARD-LOOKING STATEMENTS

The statements contained herein that are not historical facts are forward-looking statements based on management’s current expectations and beliefs concerning future developments and their potential effects on the Company including, without limitation, plans, strategies and goals, and statements about the Company’s expectations regarding revenue and asset growth, financial performance and profitability, loan and deposit growth, yields and returns, loan diversification and credit management, stockholder value creation, tax rates, and the impact of acquisitions we have made or may make.

Such statements involve inherent risks and uncertainties, many of which are difficult to predict and are generally beyond the control of the Company. There can be no assurance that future developments affecting the Company will be the same as those anticipated by management. The Company cautions readers that a number of important factors could cause actual results to differ materially from those expressed in, or implied or projected by, such forward-looking statements. Given the ongoing and dynamic nature of the COVID-19 pandemic, the ultimate extent of the impacts on our business, financial position, results of operations, liquidity, and prospects remain uncertain. Continued deterioration in general business and economic conditions, including further increases in unemployment rates, or turbulence in domestic or global financial markets could adversely affect our revenues and the values of our assets and liabilities, reduce the availability of funding, lead to a tightening of credit, and further increase stock price volatility, which could result in impairment to our goodwill in future periods. In addition, changes to statutes, regulations, or regulatory policies or practices as a result of, or in response to the COVID-19 pandemic, could affect us in substantial and unpredictable ways, including the potential adverse impact of loan modifications and payment deferrals implemented consistent with recent regulatory guidance. Other risks and uncertainties include, but are not limited to, the following: the strength of the United States economy in general and the strength of the local economies in which we conduct operations; the effects of, and changes in, trade, monetary, and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System; inflation/deflation, interest rate, market, and monetary fluctuations; the effect of acquisitions we have made or may make, including, without limitation, the failure to achieve the expected revenue growth and/or expense savings from such acquisitions, and/or the failure to effectively integrate an acquisition target into our operations; the timely development of competitive new products and services and the acceptance of these products and services by new and existing customers; the impact of changes in financial services policies, laws, and regulations, including those concerning taxes, banking, securities, and insurance, and the application thereof by regulatory bodies; the effectiveness of our risk management framework and quantitative models; changes in the level of our nonperforming assets and charge-offs; the transition away from USD LIBOR and related uncertainty as well as the risk and costs related to our adoption of SOFR; the effect of changes in accounting policies and practices or accounting standards, as may be adopted from time-to-time by bank regulatory agencies, the U.S. Securities and Exchange Commission (“SEC”), the Public Company Accounting Oversight Board, the Financial Accounting Standards Board or other accounting standards setters, including ASU 2016-13 (Topic 326), “Measurement of Credit Losses on Financial Instruments,” commonly referenced as the CECL model, which has changed how we estimate credit losses and may further increase the required level of our allowance for credit losses in future periods; possible credit related impairments of securities held by us; possible impairment charges to goodwill; the impact of governmental efforts to restructure the U.S. financial regulatory system; changes in consumer spending, borrowing, and savings habits; the effects of our lack of a diversified loan portfolio, including the risks of geographic and industry concentrations; our ability to attract deposits and other sources of liquidity; the possibility that we may reduce or discontinue the payments of dividends on our common stock; the possibility that we may discontinue our stock repurchase program or reduce or otherwise limit the level of repurchases of our common stock we may make from time to time pursuant to such program; changes in the financial performance and/or condition of our borrowers; changes in the competitive environment among financial and bank holding companies and other financial service providers; geopolitical conditions, including acts or threats of terrorism, actions taken by the United States or other governments in response to acts or threats of terrorism, and/or military conflicts, including the war between Russia and Ukraine, which could impact business and economic conditions in the United States and abroad; public health crisis and pandemics, including the COVID-19 pandemic, and their effects on the economic and business environments in which we operate, including on our credit quality and business operations, as well as the impact on general economic and financial market conditions; cybersecurity threats and the cost of defending against them; climate change, including the enhanced regulatory, compliance, credit and reputational risks and costs; natural disasters, earthquakes, fires, and severe weather; unanticipated regulatory or legal proceedings; and our ability to manage the risks involved in the foregoing. Additional factors that could cause actual results to differ materially from those expressed in the forward-looking statements are discussed in the Company's 2021 Annual Report on Form 10-K filed with the SEC and available at the SEC’s Internet site (http://www.sec.gov).

The Company undertakes no obligation to revise or publicly release any revision or update to these forward- looking statements to reflect events or circumstances that occur after the date on which such statements were made.

PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Unaudited)
(Dollars in thousands)	March 31, 2022			December 31, 2021			September 30, 2021			June 30, 2021			March 31, 2021
ASSETS
Cash and cash equivalents	$	809,259		$	304,703		$	322,320		$	631,888		$	1,554,668
Interest-bearing time deposits with financial institutions		2,216			2,216			2,708			2,708			2,708
Investments held-to-maturity, at amortized cost, net of allowance for credit losses		996,382			381,674			170,576			18,933			21,931
Investment securities available-for-sale, at fair value		3,222,095			4,273,864			4,709,815			4,487,447			3,857,337
FHLB, FRB, and other stock, at cost		116,973			117,538			118,399			117,738			117,843
Loans held for sale, at lower of amortized cost or fair value		11,646			10,869			8,100			4,714			7,311
Loans held for investment		14,733,755			14,295,897			13,982,861			13,594,598			13,117,392
Allowance for credit losses		(197,517	)		(197,752	)		(211,481	)		(232,774	)		(266,999	)
Loans held for investment, net		14,536,238			14,098,145			13,771,380			13,361,824			12,850,393
Accrued interest receivable		60,922			65,728			63,228			67,529			65,098
Premises and equipment		70,453			71,908			72,850			73,821			76,329
Deferred income taxes, net		133,938			87,344			83,432			81,741			104,450
Bank owned life insurance		451,968			449,353			447,135			444,645			292,932
Intangible assets		65,978			69,571			73,451			77,363			81,364
Goodwill		901,312			901,312			901,312			901,312			900,204
Other assets		242,916			260,204			260,505			257,823			240,730
Total assets	$	21,622,296		$	21,094,429		$	21,005,211		$	20,529,486		$	20,173,298
LIABILITIES
Deposit accounts:
Noninterest-bearing checking	$	7,106,548		$	6,757,259		$	6,841,495		$	6,768,384		$	6,302,703
Interest-bearing:
Checking		3,679,067			3,493,331			3,477,902			3,103,343			3,155,071
Money market/savings		5,872,597			5,806,726			6,037,532			5,883,672			5,911,417
Retail certificates of deposit		1,031,011			1,058,273			1,113,070			1,259,698			1,353,431
Wholesale/brokered certificates of deposit		—			—			—			—			17,385
Total interest-bearing		10,582,675			10,358,330			10,628,504			10,246,713			10,437,304
Total deposits		17,689,223			17,115,589			17,469,999			17,015,097			16,740,007
FHLB advances and other borrowings		600,000			558,000			150,000			—			10,000
Subordinated debentures		330,726			330,567			330,408			476,622			501,611
Accrued expenses and other liabilities		219,329			203,962			216,688			224,348			218,582
Total liabilities		18,839,278			18,208,118			18,167,095			17,716,067			17,470,200
STOCKHOLDERS’ EQUITY
Common stock		933			929			929			931			931
Additional paid-in capital		2,348,727			2,351,294			2,347,626			2,352,112			2,348,445
Retained earnings		577,591			541,950			488,385			433,852			368,911
Accumulated other comprehensive (loss) income		(144,233	)		(7,862	)		1,176			26,524			(15,189	)
Total stockholders' equity		2,783,018			2,886,311			2,838,116			2,813,419			2,703,098
Total liabilities and stockholders' equity	$	21,622,296		$	21,094,429		$	21,005,211		$	20,529,486		$	20,173,298

PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
	Three Months Ended
	March 31,			December 31,			March 31,
(Dollars in thousands, except per share data)	2022			2021			2021
INTEREST INCOME
Loans	$	150,604		$	157,418		$	155,225
Investment securities and other interest-earning assets		17,942			19,588			17,769
Total interest income		168,546			177,006			172,994
INTEREST EXPENSE
Deposits		1,673			1,694			4,426
FHLB advances and other borrowings		474			33			65
Subordinated debentures		4,560			4,560			6,851
Total interest expense		6,707			6,287			11,342
Net interest income before provision for credit losses		161,839			170,719			161,652
Provision for credit losses		448			(14,648	)		1,974
Net interest income after provision for credit losses		161,391			185,367			159,678
NONINTEREST INCOME
Loan servicing income		419			505			458
Service charges on deposit accounts		2,615			2,590			2,032
Other service fee income		367			391			473
Debit card interchange fee income		836			769			787
Earnings on bank owned life insurance		3,221			3,521			2,233
Net gain from sales of loans		1,494			1,334			361
Net gain from sales of investment securities		2,134			3,585			4,046
Trust custodial account fees		11,579			11,611			7,222
Escrow and exchange fees		1,661			2,221			1,526
Other income		1,568			754			4,602
Total noninterest income		25,894			27,281			23,740
NONINTEREST EXPENSE
Compensation and benefits		56,981			56,076			52,548
Premises and occupancy		11,952			11,403			11,980
Data processing		5,996			5,881			5,828
FDIC insurance premiums		1,396			1,389			1,181
Legal and professional services		4,068			5,870			3,935
Marketing expense		1,809			1,821			1,598
Office expense		1,203			1,463			1,829
Loan expense		1,134			857			1,115
Deposit expense		3,751			3,836			3,859
Merger-related expense		—			—			5
Amortization of intangible assets		3,592			3,880			4,143
Other expense		5,766			4,776			4,468
Total noninterest expense		97,648			97,252			92,489
Net income before income taxes		89,637			115,396			90,929
Income tax		22,733			30,565			22,261
Net income	$	66,904		$	84,831		$	68,668
EARNINGS PER SHARE
Basic	$	0.71		$	0.90		$	0.73
Diluted	$	0.70		$	0.89		$	0.72
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic		93,499,695			93,415,304			93,529,147
Diluted		93,946,074			93,906,491			94,093,644

SELECTED FINANCIAL DATA

PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED AVERAGE BALANCES AND YIELD DATA (Unaudited)
	Three Months Ended
	March 31, 2022								December 31, 2021								March 31, 2021
(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
Interest-earning assets:
Cash and cash equivalents	$	322,236	)	$	90	)	0.11	%	$	334,371	)	$	66	)	0.08	%	$	1,309,366	)	$	301	)	0.09	%
Investment securities		4,546,408			17,852		1.57			4,833,251			19,522		1.62			4,087,451			17,468		1.71
Loans receivable, net (1)(2)		14,371,588			150,604		4.25			14,005,836			157,418		4.46			13,093,609			155,225		4.81
Total interest-earning assets		19,240,232			168,546		3.55			19,173,458			177,006		3.66			18,490,426			172,994		3.79
Noninterest-earning assets		1,716,559								1,693,547								1,503,834
Total assets	$	20,956,791							$	20,867,005							$	19,994,260
Liabilities and equity
Interest-bearing deposits:
Interest checking	$	3,537,824		$	229		0.03	%	$	3,501,323		$	225		0.03	%	$	3,060,055		$	419		0.06	%
Money market		5,343,973			888		0.07			5,467,559			925		0.07			5,447,909			2,588		0.19
Savings		422,186			26		0.02			418,218			27		0.03			368,288			82		0.09
Retail certificates of deposit		1,047,451			530		0.21			1,084,326			517		0.19			1,425,093			1,201		0.34
Wholesale/brokered certificates of deposit		—			—		—			—			—		—			118,854			136		0.46
Total interest-bearing deposits		10,351,434			1,673		0.07			10,471,426			1,694		0.06			10,420,199			4,426		0.17
FHLB advances and other borrowings		225,250			474		0.85			69,538			33		0.19			22,012			65		1.20
Subordinated debentures		330,629			4,560		5.52			330,476			4,560		5.52			501,553			6,851		5.46
Total borrowings		555,879			5,034		3.63			400,014			4,593		4.59			523,565			6,916		5.36
Total interest-bearing liabilities		10,907,313			6,707		0.25			10,871,440			6,287		0.23			10,943,764			11,342		0.42
Noninterest-bearing deposits		6,928,872								6,911,702								6,034,319
Other liabilities		256,219								232,863								266,536
Total liabilities		18,092,404								18,016,005								17,244,619
Stockholders' equity		2,864,387								2,851,000								2,749,641
Total liabilities and equity	$	20,956,791							$	20,867,005							$	19,994,260
Net interest income				$	161,839							$	170,719							$	161,652
Net interest margin (3)							3.41	%							3.53	%							3.55	%
Cost of deposits (4)							0.04								0.04								0.11
Cost of funds (5)							0.15								0.14								0.27
Ratio of interest-earning assets to interest-bearing liabilities							176.40								176.37								168.96

(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 $5.9 million, $7.9 million, and $9.9 million, 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.

PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES LOAN PORTFOLIO COMPOSITION (Unaudited)
	March 31,			December 31,			September			June 30,			March 31,
(Dollars in thousands)	2022			2021			2021			2021			2021
Investor loans secured by real estate
CRE non-owner-occupied	$	2,774,650		$	2,771,137		$	2,823,065		$	2,810,233		$	2,729,785
Multifamily		6,041,085			5,891,934			5,705,666			5,539,464			5,309,592
Construction and land		303,811			277,640			292,815			297,728			316,458
SBA secured by real estate (1)		42,642			46,917			49,446			53,003			56,381
Total investor loans secured by real estate		9,162,188			8,987,628			8,870,992			8,700,428			8,412,216
Business loans secured by real estate (2)
CRE owner-occupied		2,391,984			2,251,014			2,242,164			2,089,300			2,029,984
Franchise real estate secured		384,267			380,381			354,481			358,120			340,805
SBA secured by real estate (3)		68,466			69,184			69,937			72,923			73,967
Total business loans secured by real estate		2,844,717			2,700,579			2,666,582			2,520,343			2,444,756
Commercial loans (4)
Commercial and industrial		2,242,632			2,103,112			1,888,870			1,795,144			1,656,098
Franchise non-real estate secured		388,322			392,576			392,950			401,315			399,041
SBA non-real estate secured		10,761			11,045			12,732			13,900			14,908
Total commercial loans		2,641,715			2,506,733			2,294,552			2,210,359			2,070,047
Retail loans
Single family residential (5)		79,978			95,292			144,309			157,228			184,049
Consumer		5,157			5,665			6,426			6,240			6,324
Total retail loans		85,135			100,957			150,735			163,468			190,373
Gross loans held for investment (6)		14,733,755			14,295,897			13,982,861			13,594,598			13,117,392
Allowance for credit losses for loans held for investment		(197,517	)		(197,752	)		(211,481	)		(232,774	)		(266,999	)
Loans held for investment, net	$	14,536,238		$	14,098,145		$	13,771,380		$	13,361,824		$	12,850,393
Loans held for sale, at lower of cost or fair value	$	11,646		$	10,869		$	8,100		$	4,714		$	7,311

(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 $71.2 million, $77.1 million, $85.0 million, $94.4 million, and $103.9 million as of March 31, 2022, December 31, 2021, September 30, 2021, June 30, 2021, and March 31, 2021, respectively.

PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES ASSET QUALITY INFORMATION (Unaudited)
(Dollars in thousands)	March 31, 2022			December 31, 2021			September 30, 2021			June 30, 2021			March 31, 2021
Asset quality
Nonperforming loans	$	55,309		$	31,273		$	35,090		$	34,387		$	38,909
Other real estate owned		—			—			—			—			—
Nonperforming assets	$	55,309		$	31,273		$	35,090		$	34,387		$	38,909
Total classified assets (1)	$	122,528		$	121,827		$	124,506		$	131,350		$	134,667
Allowance for credit losses		197,517			197,752			211,481			232,774			266,999
Allowance for credit losses as a percent of total nonperforming loans		357	%		632	%		603	%		677	%		686	%
Nonperforming loans as a percent of loans held for investment		0.38			0.22			0.25			0.25			0.30
Nonperforming assets as a percent of total assets		0.26			0.15			0.17			0.17			0.19
Classified loans to total loans held for investment		0.83			0.85			0.89			0.97			1.03
Classified assets to total assets		0.57			0.58			0.59			0.64			0.67
Net loan charge-offs (recoveries) for the quarter ended	$	446		$	(981	)	$	1,750		$	1,094		$	1,334
Net loan charge-offs (recoveries) for the quarter to average total loans		—	%		(0.01	)%		0.01	%		0.01	%		0.01	%
Allowance for credit losses to loans held for investment (2)		1.34			1.38			1.51			1.71			2.04
Loans modified under the CARES Act	$	—		$	—		$	—		$	819		$	—
Loans modified under the CARES Act as a percent of loans held for investment		—	%		—	%		—	%		0.01	%		—	%
Delinquent loans
30 - 59 days	$	25,332		$	1,395		$	728		$	207		$	13,116
60 - 89 days		74			—			936			83			61
90+ days		18,245			18,100			18,514			19,045			9,410
Total delinquency	$	43,651		$	19,495		$	20,178		$	19,335		$	22,587
Delinquency as a percent of loans held for investment		0.30	%		0.14	%		0.14	%		0.14	%		0.17	%

(1)		Includes substandard loans and other real estate owned.
(2)		At March 31, 2022, 32% of loans held for investment include a fair value net discount of $71.2 million, or 0.48% of loans held for investment. At December 31, 2021, 36% of loans held for investment include a fair value net discount of $77.1 million, or 0.54% of loans held for investment. At September 30, 2021, 40% of loans held for investment include a fair value net discount of $85.0 million, or 0.60% of loans held for investment. At June 30, 2021, 45% of loans held for investment include a fair value net discount of $94.4 million, or 0.69% of loans held for investment. At March 31, 2021, 51% of loans held for investment include a fair value net discount of $103.9 million, or 0.79% of loans held for investment.

PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES NONACCRUAL LOANS (1) (Unaudited)
(Dollars in thousands)	Collateral Dependent Loans			ACL			Non- Collateral Dependent Loans			ACL			Total Nonaccrual Loans			Nonaccrual Loans With No ACL
March 31, 2022
Investor loans secured by real estate
CRE non-owner-occupied	$	10,243		$	1,152		$	—		$	—		$	10,243		$	2,627
SBA secured by real estate (2)		573			—			—			—			573			573
Total investor loans secured by real estate		10,816			1,152			—			—			10,816			3,200
Business loans secured by real estate (3)
CRE owner-occupied		4,901			—			—			—			4,901			4,901
SBA secured by real estate (4)		575			—			—			—			575			575
Total business loans secured by real estate		5,476			—			—			—			5,476			5,476
Commercial loans (5)
Commercial and industrial		26,588			—			—			—			26,588			26,588
Franchise non-real estate secured		—			—			11,779			—			11,779			11,779
SBA not secured by real estate		642			—			—			—			642			642
Total commercial loans		27,230			—			11,779			—			39,009			39,009
Retail loans
Single family residential (6)		8			—			—			—			8			8
Total retail loans		8			—			—			—			8			8
Totals nonaccrual loans	$	43,530		$	1,152		$	11,779		$	—		$	55,309		$	47,693

(1)		The ACL for nonaccrual loans is determined based on a discounted cash flow methodology unless the loan is considered collateral dependent. The ACL for collateral dependent loans is determined based on the estimated fair value of the underlying collateral.
(2)		SBA loans that are collateralized by hotel/motel real property.
(3)		Loans to businesses that are collateralized by real estate where the operating cash flow of the business is the primary source of repayment.
(4)		SBA loans that are collateralized by real property other than hotel/motel real property.
(5)		Loans to businesses where the operating cash flow of the business is the primary source of repayment.
(6)		Single family residential includes home equity lines of credit, as well as second trust deeds.

PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES PAST DUE STATUS (Unaudited)
				Days Past Due
(Dollars in thousands)	Current			30-59			60-89			90+			Total
March 31, 2022
Investor loans secured by real estate
CRE non-owner-occupied	$	2,762,632		$	—		$	—		$	12,018		$	2,774,650
Multifamily		6,041,085			—			—			—			6,041,085
Construction and land		303,811			—			—			—			303,811
SBA secured by real estate (1)		42,642			—			—			—			42,642
Total investor loans secured by real estate		9,150,170			—			—			12,018			9,162,188
Business loans secured by real estate (2)
CRE owner-occupied		2,387,083			—			—			4,901			2,391,984
Franchise real estate secured		384,267			—			—			—			384,267
SBA secured by real estate (3)		68,025			—			—			441			68,466
Total business loans secured by real estate		2,839,375			—			—			5,342			2,844,717
Commercial loans (4)
Commercial and industrial		2,216,983			25,332			74			243			2,242,632
Franchise non-real estate secured		388,322			—			—			—			388,322
SBA not secured by real estate		10,119			—			—			642			10,761
Total commercial loans		2,615,424			25,332			74			885			2,641,715
Retail loans
Single family residential (5)		79,978			—			—			—			79,978
Consumer loans		5,157			—			—			—			5,157
Total retail loans		85,135			—			—			—			85,135
Total loans	$	14,690,104		$	25,332		$	74		$	18,245		$	14,733,755

(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.

PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES CREDIT RISK GRADES (Unaudited)
(Dollars in thousands)	Pass			Special Mention			Substandard			Total Gross Loans
March 31, 2022
Investor loans secured by real estate
CRE non-owner-occupied	$	2,735,537		$	9,878		$	29,235		$	2,774,650
Multifamily		6,040,325			—			760			6,041,085
Construction and land		303,811			—			—			303,811
SBA secured by real estate (1)		33,789			—			8,853			42,642
Total investor loans secured by real estate		9,113,462			9,878			38,848			9,162,188
Business loans secured by real estate (2)
CRE owner-occupied		2,368,845			764			22,375			2,391,984
Franchise real estate secured		384,267			—			—			384,267
SBA secured by real estate (3)		59,998			—			8,468			68,466
Total business loans secured by real estate		2,813,110			764			30,843			2,844,717
Commercial loans (4)
Commercial and industrial		2,209,517			1,011			32,104			2,242,632
Franchise non-real estate secured		369,292			—			19,030			388,322
SBA not secured by real estate		9,042			66			1,653			10,761
Total commercial loans		2,587,851			1,077			52,787			2,641,715
Retail loans
Single family residential (5)		79,932			—			46			79,978
Consumer loans		5,153			—			4			5,157
Total retail loans		85,085			—			50			85,135
Total loans	$	14,599,508		$	11,719		$	122,528		$	14,733,755

(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.

PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES
GAAP to Non-GAAP RECONCILIATIONS
(Unaudited)

The Company uses certain non-GAAP financial measures to provide meaningful supplemental information regarding the Company’s operational performance and to enhance investors’ overall understanding of such financial performance.

However, these non-GAAP financial measures are supplemental and are not a substitute for an analysis based on GAAP measures. As other companies may use different calculations for these adjusted measures, this presentation may not be comparable to other similarly titled adjusted measures reported by other companies.

For periods presented below, return on average tangible common equity is a non-GAAP financial measure derived from GAAP based amounts. We calculate this figure by excluding amortization of intangible assets expense from net income and excluding the average intangible assets and average goodwill from the average stockholders' equity during the periods indicated. Management believes that the exclusion of such items from this financial measure provides useful information to gain an understanding of the operating results of our core business.

	Three Months Ended
	March 31,			December 31,			March 31,
(Dollars in thousands)	2022			2021			2021
Net income	$	66,904		$	84,831		$	68,668
Plus: amortization of intangible assets expense		3,592			3,880			4,143
Less: amortization of intangible assets expense tax adjustment (1)		1,025			1,107			1,185
Net income for average tangible common equity		69,471			87,604			71,626
Plus: merger-related expense		—			—			5
Less: merger-related expense tax adjustment (1)		—			—			1
Net income for average tangible common equity excluding merger-related expense	$	69,471		$	87,604		$	71,630
Average stockholders' equity	$	2,864,387		$	2,851,000		$	2,749,641
Less: average intangible assets		68,157			71,897			83,946
Less: average goodwill		901,312			901,312			898,587
Average tangible common equity	$	1,894,918		$	1,877,791		$	1,767,108
Return on average equity (annualized)		9.34	%		11.90	%		9.99	%
Return on average tangible common equity (annualized)		14.66	%		18.66	%		16.21	%
Return on average tangible common equity excluding merger- related expense (annualized)		14.66	%		18.66	%		16.21	%

(1)

Adjusted by statutory tax rate

For periods presented below, return on average assets excluding merger-related expense is a non-GAAP financial measure derived from GAAP based amounts. We calculate this figure by excluding merger-related expense and the related tax impact from net income. Management believes that the exclusion of such items from this financial measure provides useful information to gain an understanding of the operating results of our core business.

	Three Months Ended
(Dollars in thousands)	March 31, 2022			December 31, 2021			March 31, 2021
Net income	$	66,904		$	84,831		$	68,668
Plus: merger-related expense		—			—			5
Less: merger-related expense tax adjustment (1)		—			—			1
Net income for average assets excluding merger-related expense	$	66,904		$	84,831		$	68,672
Average assets	$	20,956,791		$	20,867,005		$	19,994,260
Return on average assets (annualized)		1.28	%		1.63	%		1.37	%
Return on average assets excluding merger-related expense (annualized)		1.28	%		1.63	%		1.37	%

(1)

Adjusted by statutory tax rate

Pre-provision net revenue is a non-GAAP financial measure derived from GAAP-based amounts. We calculate the pre- provision net revenue by excluding income tax, provision for credit losses, and merger-related expenses from net income. Management believes that the exclusion of such items from this financial measure provides useful information to gain an understanding of the operating results of our core business and a better comparison to the financial results of prior periods.

	Three Months Ended
(Dollars in thousands)	March 31, 2022			December 31, 2021			March 31, 2021
Interest income	$	168,546		$	177,006		$	172,994
Interest expense		6,707			6,287			11,342
Net interest income		161,839			170,719			161,652
Noninterest income		25,894			27,281			23,740
Revenue		187,733			198,000			185,392
Noninterest expense		97,648			97,252			92,489
Add: merger-related expense		—			—			5
Pre-provision net revenue		90,085			100,748			92,908
Pre-provision net revenue (annualized)	$	360,340		$	402,992		$	371,632
Average assets	$	20,956,791		$	20,867,005		$	19,994,260
Pre-provision net revenue on average assets		0.43	%		0.48	%		0.46	%
Pre-provision net revenue on average assets (annualized)		1.72	%		1.93	%		1.86	%

Noninterest expense (excluding merger-related expense) as a percent of average assets is a non-GAAP financial measure derived from GAAP-based amounts. We calculate the noninterest expense (excluding merger-related expense) as a percent of average assets by excluding merger-related expenses from the noninterest expense and dividing by average assets. Management believes that the exclusion of such items from this financial measure provides useful information to gain an understanding of the operating results of our core business and a better comparison to the financial results of prior periods.

	Three Months Ended
(Dollars in thousands)	March 31, 2022			December 31, 2021			March 31, 2021
Noninterest expense	$	97,648		$	97,252		$	92,489
Less: merger-related expense		—			—			5
Noninterest expense excluding merger-related expense	$	97,648		$	97,252		$	92,484
Average assets	$	20,956,791		$	20,867,005		$	19,994,260
Noninterest expense as a percent of average assets (annualized)		1,86	%		1.86	%		1.85	%
Noninterest expense excluding merger-related expense as a percent of average assets (annualized)		1.86	%		1.86	%		1.85	%

Tangible book value per share and tangible common equity to tangible assets (the “tangible common equity ratio”) are non- GAAP financial measures derived from GAAP based amounts. We calculate tangible book value per share by dividing tangible common equity by common shares outstanding, as compared to book value per share, which we calculate by dividing common stockholders' equity by shares outstanding. We calculate the tangible common equity ratio by excluding the balance of intangible assets from common stockholders' equity and dividing by tangible assets. We believe that this information is consistent with the treatment by bank regulatory agencies, which excludes intangible assets from the calculation of risk-based capital ratios. Accordingly, we believe that these non-GAAP financial measures provide information that is important to investors and that is useful in understanding our capital position and ratios.

(Dollars in thousands, except per share data)	March 31, 2022			December 31, 2021			September 30, 2021			June 30, 2021			March 31, 2021
Total stockholders' equity	$	2,783,018		$	2,886,311		$	2,838,116		$	2,813,419		$	2,703,098
Less: intangible assets		967,290			970,883			974,763			978,675			981,568
Tangible common equity	$	1,815,728		$	1,915,428		$	1,863,353		$	1,834,744		$	1,721,530
Total assets	$	21,622,296		$	21,094,429		$	21,005,211		$	20,529,486		$	20,173,298
Less: intangible assets		967,290			970,883			974,763			978,675			981,568
Tangible assets	$	20,655,006		$	20,123,546		$	20,030,448		$	19,550,811		$	19,191,730
Tangible common equity ratio		8.79	%		9.52	%		9.30	%		9.38	%		8.97	%
Common shares issued and outstanding		94,945,849			94,389,543			94,354,211			94,656,575			94,644,415
Book value per share	$	29.31		$	30.58		$	30.08		$	29.72		$	28.56
Less: intangible book value per share		10.19			10.29			10.33			10.34			10.37
Tangible book value per share	$	19.12		$	20.29		$	19.75		$	19.38		$	18.19

Core net interest income and core net interest margin are non-GAAP financial measures derived from GAAP based amounts. We calculate core net interest income by excluding scheduled accretion income, accelerated accretion income, premium amortization on CDs, nonrecurring nonaccrual interest paid, and gain (loss) on interest rate contract in fair value hedging relationships from net interest income. The core net interest margin is calculated as the ratio of core net interest income to average interest-earning assets. Management believes that the exclusion of such items from this financial measure provides useful information to gain an understanding of the operating results of our core business.

	Three Months Ended
(Dollars in thousands)	March 31, 2022			December 31, 2021			March 31, 2021
Net interest income	$	161,839		$	170,719		$	161,652
Less: scheduled accretion income		2,857			3,097			3,878
Less: accelerated accretion income		3,083			4,770			5,988
Less: premium amortization on CD		96			183			1,751
Less: nonrecurring nonaccrual interest paid		(356	)		349			(603	)
Less: loss on fair value hedging relationships	$	(1,667	)	$	(819	)	$	—
Core net interest income	$	157,826		$	163,139		$	150,638
Net interest margin		3.41	%		3.53	%		3.55	%
Core net interest margin		3.33	%		3.38	%		3.30	%

Efficiency ratio is a non-GAAP financial measure derived from GAAP-based amounts. This figure represents the ratio of noninterest expense, less amortization of intangible assets and merger-related expense, to the sum of net interest income before provision for credit losses and total noninterest income, less gain (loss) on sale of securities, other income - security recoveries, and gain (loss) from debt extinguishment. Management believes that the exclusion of such items from this financial measure provides useful information to gain an understanding of the operating results of our core business.

	Three Months Ended
(Dollars in thousands)	March 31, 2022			December 31, 2021			March 31, 2021
Total noninterest expense	$	97,648		$	97,252		$	92,489
Less: amortization of intangible assets		3,592			3,880			4,143
Less: merger-related expense		—			—			5
Noninterest expense, adjusted	$	94,056		$	93,372		$	88,341
Net interest income before provision for credit losses	$	161,839		$	170,719		$	161,652
Add: total noninterest income		25,894			27,281			23,740
Less: net gain from investment securities		2,134			3,585			4,046
Less: other income - security recoveries		—			1			2
Less: net loss from debt extinguishment		—			—			(503	)
Revenue, adjusted	$	185,599		$	194,414		$	181,847
Efficiency ratio		50.7	%		48.0	%		48.6	%

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20220426005553/en/

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

Matthew J. Lazzaro

Senior Vice President, Director of Investor Relations

(949) 243-1082

Source: Pacific Premier Bancorp, Inc.

FAQ

What were Pacific Premier Bancorp's earnings for Q1 2022?

Pacific Premier Bancorp reported a net income of $66.9 million for Q1 2022, or $0.70 per diluted share.

How did the loan growth for PPBI perform in Q1 2022?

The company achieved a loan growth of 12.3% annualized during Q1 2022.

What is the current net interest margin for Pacific Premier Bancorp?

The net interest margin for Q1 2022 stood at 3.41%, down from 3.53% in the previous quarter.

How did deposits change for PPBI in the first quarter of 2022?

Deposits increased by $573.6 million, or 13.4% annualized, in Q1 2022.

What is the status of nonperforming assets for PPBI?

As of March 31, 2022, nonperforming assets accounted for 0.26% of total assets.