Subsequent Events

3 Months Ended

Mar. 31, 2020

Quarterly Cash Dividend and Stock Repurchase Program

On April 24, 2020, the Corporation’s Board of Directors declared a cash dividend of $0.25 per share, payable on May 15, 2020 to shareholders of record on May 8, 2020.

The Company has suspended its stock repurchase program indefinitely.

Pacific Premier Bancorp, Inc. and Opus Bank

On January 31, 2020, the Corporation and the Bank entered into a definitive agreement with Opus, pursuant to which the Company will acquire Opus in an all-stock transaction valued at approximately $1.0 billion, or $26.82 per share, based on a closing price for the Corporation’s common stock of $29.80 as of January 31, 2020. Based on the $18.84 closing price for the Corporation’s common stock as of March 31, 2020, the value of the transaction is approximately $653.3 million, or $16.96 per share. Upon consummation of the acquisition, holders of Opus common stock will have the right receive 0.90 shares of the Corporation’s common stock for each share of Opus stock. We expect to issue approximately 34.7 million shares of our common stock in the Opus acquisition.

The Corporation has received the required regulatory approvals from the Board of Governors of the Federal Reserve System and the California Department of Business Oversight for Opus to be merged into the Bank, and for the Bank to exercise trust powers. On May 5, 2020, the Corporation’s and Opus’s shareholders completed approvals required for the acquisition. The transaction is expected to be effective as of June 1, 2020, subject to the satisfaction of customary closing conditions. For additional details, see “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Pending Acquisition of Opus.”

Impacts of the COVID-19 Pandemic

The COVID-19 pandemic was declared a Public Health Emergency of International Concern by the World Health Organization on January 30, 2020. The ongoing COVID-19 pandemic global and national health emergency has caused significant disruption in the United States and international economies and financial markets. The operations and business results of the Company could be materially adversely affected. The extent to which the COVID-19 pandemic impacts our business, asset valuations, results of operations and financial condition, as well as our regulatory capital and liquidity ratios, will depend on future developments, which are highly uncertain and cannot be predicted, including the scope and duration of the COVID-19 pandemic and actions taken by governmental authorities and other third parties in response to the COVID-19 pandemic. Material adverse impacts may include all or a combination of valuation impairments on our intangible assets, investments, loans, loan servicing rights and deferred tax assets.

Subsequent to March 31, 2020, the Company continued its efforts to support our customers affected by the COVID-19 pandemic and monitor the Bank’s loan portfolio to identify potential at-risk segments and line of credit draws for deviations from normal activity, including but not limited to the following:


•	Participating in the Small Business Administration’s Paycheck Protection Program (“PPP”) that enabled the Company’s clients to utilize this valuable resource to help meet the costs associated with payroll, mortgage interest, rent and utilities. Through May 6, 2020, our team has executed over 3,700 PPP loans for approximately $1.12 billion through the program.

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Implemented a temporary loan modification program for borrowers affected by the COVID-19 pandemic, including payment deferrals, fee waivers and extensions of repayment terms. As of May 6, 2020, we have approved payment deferrals on 80 loans with a total recorded balance of $174.8 million pursuant to the COVID-19 modification program.