EX-99.1 2 ppbi_exx991xearnings-2022x.htm EX-99.1 Document

Exhibit 99.1

Pacific Premier Bancorp, Inc. Announces Fourth Quarter 2022 Financial Results and a Quarterly Cash Dividend of $0.33 Per Share
 
Fourth Quarter 2022 Summary
 
•Net income of $73.7 million, or $0.77 per diluted share
•Return on average assets of 1.36%, return on average equity of 10.71%, and return on average tangible common equity(1) of 16.99%
•Pre-provision net revenue (“PPNR”) to average assets(1) of 1.89%, annualized, increased from 1.85% in the prior quarter
•Efficiency ratio(1) of 47.4%, compared with 48.3% in the prior quarter
•Net interest margin of 3.61%, and core net interest margin(1) of 3.38%
•Cost of deposits of 0.58%, and cost of core deposits(1) of 0.31%
•Loan-to-deposit ratio of 84.6%, compared with 84.0% in the prior quarter
•Nonperforming assets to total assets of 0.14%, and net charge-offs to average loans of 0.03%
•Total risk-based capital ratio of 15.53% and common equity tier 1 capital ratio of 12.99%
•Tangible book value per share(1) increased $0.70, or 3.7%, to $19.38 compared to the prior quarter

Irvine, Calif., January 26, 2023 -- Pacific Premier Bancorp, Inc. (NASDAQ: PPBI) (the “Company” or “Pacific Premier”), the holding company of Pacific Premier Bank (the “Bank”), reported net income of $73.7 million, or $0.77 per diluted share, for the fourth quarter of 2022, compared with net income of $73.4 million, or $0.77 per diluted share, for the third quarter of 2022, and net income of $84.8 million, or $0.89 per diluted share, for the fourth quarter of 2021.

For the fourth quarter of 2022, the Company’s return on average assets (“ROAA”) was 1.36%, return on average equity (“ROAE”) was 10.71%, and return on average tangible common equity (“ROATCE”)(1) was 16.99%, compared to 1.35%, 10.57%, and 16.74%, respectively, for the third quarter of 2022 and 1.63%, 11.90%, and 18.66%, respectively, for the fourth quarter of 2021. Total assets as of December 31, 2022 were $21.69 billion, compared to $21.62 billion at September 30, 2022 and $21.09 billion at December 31, 2021.

Steven R. Gardner, Chairman, President, and Chief Executive Officer of the Company, commented, “Our fourth quarter results reflect the benefits of the actions we took over the past several quarters to proactively manage risk and position the balance sheet for higher interest rates. Despite a more challenging operating environment, we continued to deliver solid financial performance, including an increase in pre-provision net revenue(1) and higher returns compared to the prior quarter. Tangible book value per share(1) grew nearly 4% during the fourth quarter, and all of our capital ratios increased.

“We remain committed to our disciplined, consistent approach to new business development, which enabled us to add attractive full banking relationships with high quality commercial clients during the current quarter. With higher interest rates impacting demand for commercial real estate and multifamily loans, coupled with our conservative approach to new loan production, we saw a slight contraction in total loans during the fourth quarter. Our core commercial deposit base remained relatively stable, but the lower level of commercial real estate transactions continued to result in deposit outflows from our commercial escrow and exchange business. We replaced these outflows with additional time deposits of varying maturities, keeping our loan-to-deposit ratio in the mid-80% range.

“As we head into 2023, our strong liquidity and capital levels provide us with optionality as we navigate an uncertain economic environment. Starting in the fourth quarter of 2022, our teams began executing on new initiatives and marketing efforts to expand the products and services we are offering to existing clients and to
enhance new client acquisitions, which we expect will drive growth in future periods. As always, we will be here when our clients need us most, and we will maintain our commitment to delivering value to our shareholders, clients, employees, and the communities we serve.”
(1) Reconciliations of the non–U.S. generally accepted accounting principles (“GAAP”) measures are set forth at the end of this press release.
1

FINANCIAL HIGHLIGHTS
Three Months Ended
 December 31,September 30,December 31,
(Dollars in thousands, except per share data)202220222021
Financial Highlights
Net income$73,673 $73,363 $84,831 
Net interest income181,396 181,112 170,719 
Diluted earnings per share0.77 0.77 0.89 
Common equity dividend per share0.33 0.33 0.33 
Return on average assets1.36 %1.35 %1.63 %
Return on average equity10.71 10.57 11.90 
Return on average tangible common equity (1)
16.99 16.74 18.66 
Pre-provision net revenue on average assets (1)
1.89 1.85 1.93 
Net interest margin3.61 3.61 3.53 
Core net interest margin (1)
3.38 3.44 3.38 
Cost of deposits0.58 0.22 0.04 
Cost of core deposits (1)
0.31 0.11 0.03 
Efficiency ratio (1)
47.4 48.3 48.0 
Noninterest expense as a percent of average assets1.83 1.86 1.86 
Total assets$21,688,017 $21,619,201 $21,094,429 
Total deposits17,352,401 17,746,374 17,115,589 
Loans-to-deposit ratio84.6 %84.0 %83.6 %
Non-maturity deposits as a percent of total deposits85.6 89.5 93.8 
Book value per share$29.45 $28.79 $30.58 
Tangible book value per share (1)
19.38 18.68 20.29 
Total capital ratio15.53 %14.83 %14.62 %
_____________________________________________________________
(1) Reconciliations of the non-GAAP measures are set forth at the end of this press release.

2

INCOME STATEMENT HIGHLIGHTS

Net Interest Income and Net Interest Margin
 
Net interest income totaled $181.4 million in the fourth quarter of 2022, an increase of $284,000, or 0.2%, from the third quarter of 2022. The slight increase in net interest income was driven by higher yields on interest-earning assets, as well as a favorable interest impact from fair value hedges on fixed-rate loans, mostly offset by a higher cost of funds.

The net interest margin for the fourth quarter of 2022 was 3.61% and unchanged from the third quarter of 2022. The core net interest margin(6) decreased 6 basis points to 3.38%, compared to 3.44% in the prior quarter, predominantly driven by lower loan-related fees as well as a higher cost of funds offsetting the impact of higher yields on interest-earning assets.

Net interest income for the fourth quarter of 2022 increased $10.7 million, or 6.3%, compared to the fourth quarter of 2021. The increase was primarily attributable to higher yields on average interest-earning assets, partially offset by a higher cost of funds.

PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED AVERAGE BALANCES AND YIELD DATA
(Unaudited)
Three Months Ended
 December 31, 2022September 30, 2022December 31, 2021
(Dollars in thousands)Average BalanceInterestAverage
 Yield/
 Cost		Average BalanceInterestAverage
 Yield/
 Cost		Average BalanceInterestAverage Yield/ Cost
Assets
Cash and cash equivalents$1,015,197 $8,636 3.37 %$665,510 $2,754 1.64 %$334,371 $66 0.08 %
Investment securities4,130,042 24,688 2.39 4,277,444 22,067 2.06 4,833,251 19,522 1.62 
Loans receivable, net (1) (2)
14,799,417 184,457 4.94 14,986,682 174,204 4.61 14,005,836 157,418 4.46 
Total interest-earning assets$19,944,656 $217,781 4.33 $19,929,636 $199,025 3.96 $19,173,458 $177,006 3.66 
Liabilities
Interest-bearing deposits$11,021,383 $25,865 0.93 %$10,839,359 $9,873 0.36 %$10,471,426 $1,694 0.06 %
Borrowings1,157,258 10,520 3.62 966,981 8,040 3.31 400,014 4,593 4.59 
Total interest-bearing liabilities$12,178,641 $36,385 1.19 $11,806,340 $17,913 0.60 $10,871,440 $6,287 0.23 
Noninterest-bearing deposits$6,587,400 $6,893,463 $6,911,702 
Net interest income$181,396 $181,112 $170,719 
Net interest margin (3)
 3.61 % 3.61 % 3.53 %
Cost of deposits (4)
0.58 0.22 0.04 
Cost of funds (5)
0.77 0.38 0.14 
Cost of core deposits (6)
0.31 0.11 0.03 
Ratio of interest-earning assets to interest-bearing liabilities163.77 168.80 176.37 
______________________________
(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 $3.5 million, $4.6 million, and $7.9 million, for the three months ended December 31, 2022, September 30, 2022, and December 31, 2021, 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.
3

Provision for Credit Losses

For the fourth quarter of 2022, the Company recorded a $2.8 million provision expense, compared to a $1.1 million provision expense for the third quarter of 2022, and a $14.6 million provision recapture for the fourth quarter of 2021. The provision for credit losses for the fourth quarter of 2022 was impacted by changes to the overall size, composition, asset quality trends, and unfunded commitments of the loan portfolio.

The provision recapture for loans in the fourth quarter of 2021 was reflective of favorable changes in the macroeconomic forecasts related to the COVID-19 pandemic relative to prior periods.
Three Months Ended
December 31,September 30,December 31,
(Dollars in thousands)202220222021
Provision for Credit Losses
Provision for loan losses$3,899 $546 $(14,710)
Provision for unfunded commitments(1,013)549 51 
Provision for held-to-maturity securities(48)(18)11 
Total provision for credit losses$2,838 $1,077 $(14,648)


Noninterest Income
 
Noninterest income for the fourth quarter of 2022 was $20.5 million, an increase of $333,000 from the third quarter of 2022. During the fourth quarter of 2022, the Bank sold $3.6 million of Small Business Administration ("SBA") loans for a net gain of $151,000 and $6.4 million of other loans for no gain, compared with $9.6 million of SBA loans sold for a net gain of $434,000 and $15.0 million of other loans for a net gain of $23,000 in the third quarter of 2022.

Noninterest income for the fourth quarter of 2022 decreased $6.8 million, compared to the fourth quarter of 2021. The decrease was primarily due to a $3.6 million decrease in net gain from sales of investment securities, a $1.9 million decrease in trust custodial account fees resulting primarily from a decrease in the market value of assets under custody, a $1.2 million decrease in net gain from loan sales, and a $939,000 decrease in escrow and exchange fees attributable to lower transaction volumes, partially offset by an $851,000 increase in other income.

Three Months Ended
December 31,September 30,December 31,
(Dollars in thousands)202220222021
Noninterest income
Loan servicing income$346 $397 $505 
Service charges on deposit accounts2,689 2,704 2,590 
Other service fee income295 323 391 
Debit card interchange fee income1,048 808 769 
Earnings on bank owned life insurance3,359 3,339 3,521 
Net gain from sales of loans151 457 1,334 
Net (loss) gain from sales of investment securities— (393)3,585 
Trust custodial account fees9,722 9,951 11,611 
Escrow and exchange fees1,282 1,555 2,221 
Other income1,605 1,023 754 
Total noninterest income$20,497 $20,164 $27,281 
 

4

Noninterest Expense
 
Noninterest expense totaled $99.2 million for the fourth quarter of 2022, a decrease of $1.7 million compared to the third quarter of 2022, primarily due to a $2.0 million decrease in compensation and benefits.

Noninterest expense increased by $1.9 million compared to the fourth quarter of 2021 primarily due to a $2.9 million increase in deposit expense and a $1.1 million increase in data processing, partially offset by a $1.7 million decrease in compensation and benefits.
Three Months Ended
December 31,September 30,December 31,
(Dollars in thousands)202220222021
Noninterest expense
Compensation and benefits$54,347 $56,355 $56,076 
Premises and occupancy11,641 12,011 11,403 
Data processing6,991 7,058 5,881 
FDIC insurance premiums1,463 1,461 1,389 
Legal and professional services5,175 4,075 5,870 
Marketing expense1,985 1,912 1,821 
Office expense1,310 1,338 1,463 
Loan expense743 789 857 
Deposit expense6,770 4,846 3,836 
Amortization of intangible assets3,440 3,472 3,880 
Other expense5,317 7,549 4,776 
Total noninterest expense$99,182 $100,866 $97,252 

Income Tax
 
For the fourth quarter of 2022, our income tax expense totaled $26.2 million, resulting in an effective tax rate of 26.2%, compared to income tax expense of $26.0 million and an effective tax rate of 26.1% for the third quarter of 2022, and income tax expense of $30.6 million and an effective tax rate of 26.5% for the fourth quarter of 2021.

For full year 2022, our income tax expense totaled $100.6 million, resulting in an effective tax rate of 26.2%.

5

BALANCE SHEET HIGHLIGHTS

Loans

Loans held for investment totaled $14.7 billion at December 31, 2022, a decrease of $232.5 million, or 1.6%, from September 30, 2022, and an increase of $380.4 million, or 2.7%, from December 31, 2021. The decrease from September 30, 2022 was driven primarily by lower loan fundings, partially offset by lower loan prepayments and maturities. The increase from December 31, 2021 was due to loan fundings, partially offset by loan amortization, prepayments, and maturities.

During the fourth quarter of 2022, loan commitments totaled $239.8 million, and new loan fundings totaled $149.1 million, compared with $789.2 million in loan commitments and $450.7 million in new loan fundings for the third quarter of 2022, and $1.48 billion in loan commitments and $1.07 billion in new loan fundings for the fourth quarter of 2021.

At December 31, 2022, the total loan-to-deposit ratio was 84.6%, compared with 84.0% and 83.6%, at September 30, 2022 and December 31, 2021, 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
December 31,September 30,December 31,
(Dollars in thousands)202220222021
Beginning loan balance$14,979,098 $15,101,652 $13,990,961 
New commitments239,829 789,198 1,479,445 
Unfunded new commitments(90,758)(338,534)(408,963)
Net new fundings149,071 450,664 1,070,482 
Amortization/maturities/payoffs(481,120)(568,615)(935,064)
Net draws on existing lines of credit107,560 21,416 194,548 
Loan sales(9,471)(24,701)(13,427)
Charge-offs(4,271)(1,318)(734)
Net (decrease) increase(238,231)(122,554)315,805 
Ending gross loan balance before basis adjustment14,740,867 14,979,098 14,306,766 
Basis adjustment associated with fair value hedge (1)
(61,926)(68,124)— 
Ending gross loan balance$14,678,941 $14,910,974 $14,306,766 
______________________________
(1) Represents the basis adjustment associated with the application of hedge accounting on certain loans.

6

The following table presents the composition of the loans held for investment as of the dates indicated:
 December 31,September 30,December 31,
(Dollars in thousands)202220222021
Investor loans secured by real estate
Commercial real estate (“CRE”) non-owner-occupied$2,660,321 $2,771,272 $2,771,137 
Multifamily6,112,026 6,199,581 5,891,934 
Construction and land399,034 373,194 277,640 
SBA secured by real estate (1)
42,135 42,998 46,917 
Total investor loans secured by real estate9,213,516 9,387,045 8,987,628 
Business loans secured by real estate (2)
CRE owner-occupied2,432,163 2,477,530 2,251,014 
Franchise real estate secured378,057 383,468 380,381 
SBA secured by real estate (3)
61,368 64,002 69,184 
Total business loans secured by real estate2,871,588 2,925,000 2,700,579 
Commercial loans (4)
Commercial and industrial2,160,948 2,164,623 2,103,112 
Franchise non-real estate secured404,791 409,773 392,576 
SBA non-real estate secured11,100 11,557 11,045 
Total commercial loans2,576,839 2,585,953 2,506,733 
Retail loans
Single family residential (5)
72,997 75,176 95,292 
Consumer3,284 3,761 5,665 
Total retail loans76,281 78,937 100,957 
Loans held for investment before basis adjustment (6)
14,738,224 14,976,935 14,295,897 
Basis adjustment associated with fair value hedge (7)
(61,926)(68,124)— 
Loans held for investment14,676,298 14,908,811 14,295,897 
Allowance for credit losses for loans held for investment(195,651)(195,549)(197,752)
Loans held for investment, net$14,480,647 $14,713,262 $14,098,145 
Total unfunded loan commitments2,489,203 2,823,555 2,507,911 
Loans held for sale, at lower of cost or fair value$2,643 $2,163 $10,869 
___________________________________________
(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 $54.8 million, $59.0 million, and $77.1 million as of December 31, 2022, September 30, 2022, and December 31, 2021, 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 December 31, 2022 was 4.61%, compared with 4.34% at September 30, 2022 and 3.95% at December 31, 2021. The quarter-over-quarter and year-over-year increases reflect higher rates on new loan originations and the repricing of floating rate loans as a result of the Federal Reserve Bank's interest rate increases since March 2022.


7

The following table presents the composition of loan commitments originated during the quarters indicated:
Three Months Ended
 December 31,September 30,December 31,
(Dollars in thousands)202220222021
Investor loans secured by real estate
CRE non-owner-occupied$34,258 $88,708 $94,740 
Multifamily28,285 151,269 552,600 
Construction and land31,175 123,557 94,343 
Total investor loans secured by real estate93,718 363,534 741,683 
Business loans secured by real estate (2)
CRE owner-occupied24,266 80,676 147,322 
Franchise real estate secured840 14,011 52,034 
SBA secured by real estate (3)
4,198 6,468 15,631 
Total business loans secured by real estate29,304 101,155 214,987 
Commercial loans (4)
Commercial and industrial96,566 288,857 469,018 
Franchise non-real estate secured14,130 22,413 43,219 
SBA non-real estate secured1,058 4,673 3,500 
Total commercial loans111,754 315,943 515,737 
Retail loans
Single family residential (5)
5,053 8,566 6,800 
Consumer— — 238 
Total retail loans5,053 8,566 7,038 
Total loan commitments$239,829 $789,198 $1,479,445 
______________________________
(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 6.34% in the fourth quarter of 2022, compared to 5.55% in the third quarter of 2022, and 3.55% in the fourth quarter of 2021.

Asset Quality and Allowance for Credit Losses
 
At December 31, 2022, our ACL on loans held for investment was $195.7 million, an increase of $102,000 from September 30, 2022, and a decrease of $2.1 million from December 31, 2021. During the fourth quarter of 2022, the Company incurred $3.8 million of net charge-offs, compared with $1.1 million of net charge-offs and $1.0 million of net recoveries during the third quarter of 2022 and the fourth quarter of 2021, respectively.


8

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 December 31, 2022
(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$37,104 $(3,632)$— $220 $33,692 
Multifamily56,086 — — 248 56,334 
Construction and land6,440 — — 674 7,114 
SBA secured by real estate (1)
2,955 — — (363)2,592 
Business loans secured by real estate (2)
CRE owner-occupied31,826 — 23 491 32,340 
Franchise real estate secured6,710 — — 309 7,019 
SBA secured by real estate (3)
4,785 — — (437)4,348 
Commercial loans (4)
Commercial and industrial35,498 (637)387 (79)35,169 
Franchise non-real estate secured13,194 — — 2,835 16,029 
SBA non-real estate secured440 — 7 (6)441 
Retail loans
Single family residential (5)
296 — 57 (1)352 
Consumer loans215 (2)— 8 221 
Totals$195,549 $(4,271)$474 $3,899 $195,651 
______________________________
(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 ACL to loans held for investment at December 31, 2022 was 1.33%, compared to 1.31% at September 30, 2022 and 1.38% at December 31, 2021. The fair value net discount on loans acquired through bank acquisitions was $54.8 million, or 0.37% of total loans held for investment, as of December 31, 2022, compared to $59.0 million, or 0.39% of total loans held for investment, as of September 30, 2022, and $77.1 million, or 0.54% of total loans held for investment, as of December 31, 2021.

Nonperforming assets totaled $30.9 million, or 0.14% of total assets, at December 31, 2022, compared with $60.5 million, or 0.28% of total assets, at September 30, 2022 and $31.3 million, or 0.15% of total assets, at December 31, 2021. Loan delinquencies were $43.3 million, or 0.30% of loans held for investment, at December 31, 2022, compared to $41.3 million, or 0.28% of loans held for investment, at September 30, 2022, and $19.5 million, or 0.14% of loans held for investment, at December 31, 2021.

Classified loans totaled $149.3 million, or 1.02% of loans held for investment, at December 31, 2022, compared with $110.1 million, or 0.74% of loans held for investment, at September 30, 2022, and $121.8 million, or 0.85% of loans held for investment, at December 31, 2021.


9

The following table presents the asset quality metrics of the loan portfolio as of the dates indicated:
 December 31,September 30,December 31,
(Dollars in thousands)202220222021
Asset Quality
Nonperforming loans$30,905 $60,464 $31,273 
Other real estate owned— — — 
Nonperforming assets$30,905 $60,464 $31,273 
Total classified assets (1)
$149,304 $110,143 $121,827 
Allowance for credit losses195,651 195,549 197,752 
Allowance for credit losses as a percent of total nonperforming loans633 %323 %632 %
Nonperforming loans as a percent of loans held for investment0.21 0.41 0.22 
Nonperforming assets as a percent of total assets0.14 0.28 0.15 
Classified loans to total loans held for investment1.02 0.74 0.85 
Classified assets to total assets0.69 0.51 0.58 
Net loan charge-offs (recoveries) for the quarter ended$3,797 $1,072 $(981)
Net loan charge-offs (recoveries) for the quarter to average total loans0.03 %0.01 %(0.01)%
Allowance for credit losses to loans held for investment (2)
1.33 1.31 1.38 
Delinquent Loans:   
30 - 59 days$20,538 $1,484 $1,395 
60 - 89 days185 6,535 — 
90+ days22,625 33,238 18,100 
Total delinquency$43,348 $41,257 $19,495 
Delinquency as a percent of loans held for investment0.30 %0.28 %0.14 %
______________________________
(1) Includes substandard loans and other real estate owned.
(2) At December 31, 2022, 26% of loans held for investment include a fair value net discount of $54.8 million, or 0.37% of loans held for investment. At September 30, 2022, 27% of loans held for investment include a fair value net discount of $59.0 million, or 0.39% 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.

Investment Securities

At December 31, 2022, available-for-sale ("AFS") and held-to-maturity ("HTM") investment securities were $2.60 billion and $1.39 billion, respectively, compared to $2.66 billion and $1.39 billion, respectively, at September 30, 2022, and $4.27 billion and $381.7 million, respectively, at December 31, 2021. In total, investment securities were $3.99 billion at December 31, 2022, a decrease of $57.5 million from $4.05 billion at September 30, 2022 and a decrease of $666.4 million from $4.66 billion at December 31, 2021. The decrease in the fourth quarter of 2022 compared to the prior quarter was primarily the result of principal payments, amortization, and redemptions of $85.1 million, partially offset by a mark-to-market fair value loss reduction of $20.6 million. The Company did not purchase or sell any securities during the fourth quarter of 2022.

The decrease in investment securities from December 31, 2021 was primarily the result of $934.7 million in sales, $426.2 million in principal payments, discounts from the AFS securities transferred from HTM, amortization, and redemptions, and a $299.0 million decrease in mark-to-market fair value adjustments as a result of higher interest rates, partially offset by $986.6 million in purchases.

10

Deposits

At December 31, 2022, deposits totaled $17.35 billion, a decrease of $394.0 million, or 2.2%, from September 30, 2022, and an increase of $236.8 million, or 1.38%, from December 31, 2021.

At December 31, 2022, core deposits(1) totaled $14.85 billion, or 85.6% of total deposits, a decrease of $1.03 billion, or 6.5%, from September 30, 2022, and a decrease of $1.20 billion, or 7.5%, from December 31, 2021. The linked-quarter decrease was partially driven by a $396.7 million decrease in the Bank's commercial escrow and exchange business, as well as declines in commercial and consumer deposit accounts.

At December 31, 2022, non-core deposits totaled $2.50 billion, an increase of $631.7 million, or 33.8%, from September 30, 2022, and an increase of $1.44 billion, or 135.3%, from December 31, 2021. The increase in the fourth quarter of 2022 compared to the prior quarter was primarily due to the addition of $417.7 million in brokered certificates of deposit and an increase of $214.0 million in retail certificates of deposit. The increase from December 31, 2021 was primarily driven by an increase in brokered certificates of deposit.

The weighted average cost of deposits for the fourth quarter of 2022 was 0.58%, compared with 0.22% for the third quarter of 2022 and 0.04% for the fourth quarter of 2021. The increase in the weighted average cost of deposits for the fourth quarter of 2022 compared to the third quarter of 2022 was principally driven by higher pricing across all deposit categories, and higher average retail and brokered certificates of deposit. The weighted average cost of core deposits(2) for the fourth quarter of 2022 was 0.31%, compared to 0.11% for the third quarter of 2022, and 0.03% for the fourth quarter of 2021.

At December 31, 2022, the end-of-period weighted average rate of total deposits was 0.79%, compared to 0.37% at September 30, 2022 and 0.04% at December 31, 2021. At December 31, 2022, the end-of-period weighted average rate of core deposits was 0.43%, compared to 0.20% at September 30, 2022 and 0.03% at December 31, 2021.

 December 31,September 30,December 31,
(Dollars in thousands)202220222021
Deposit Accounts
Noninterest-bearing checking$6,306,825 $6,775,465 $6,757,259 
Interest-bearing:
Checking3,119,850 3,605,498 3,493,331 
Money market/savings5,422,577 5,493,958 5,801,173 
Total core deposits (1)
14,849,252 15,874,921 16,051,763 
Brokered money market30 30 5,553 
Retail certificates of deposit1,086,423 872,421 1,058,273 
Wholesale/brokered certificates of deposit1,416,696 999,002 — 
Total non-core deposits2,503,149 1,871,453 1,063,826 
Total deposits$17,352,401 $17,746,374 $17,115,589 
Cost of deposits0.58 %0.22 %0.04 %
Cost of core deposits (2)
0.31 0.11 0.03 
Noninterest-bearing deposits as a percent of total deposits36.3 38.2 39.5 
Non-maturity deposits as a percent of total deposits85.6 89.5 93.8 
Core deposits as a percent of total deposits 85.6 89.5 93.8 
______________________________
(1) Core deposits are total deposits excluding all certificates of deposits and all brokered deposits.
(2) Reconciliations of the non-GAAP measures are set forth at the end of this press release.
11

Borrowings

At December 31, 2022, total borrowings amounted to $1.33 billion, an increase of $400.2 million from September 30, 2022 and an increase of $442.6 million from December 31, 2021. Total borrowings at December 31, 2022 included $1.00 billion of Federal Home Loan Bank of San Francisco (“FHLB”) term advances and $331.2 million of subordinated debt. The increase in borrowings at December 31, 2022 as compared to September 30, 2022 was primarily due to an increase of $400.0 million in FHLB term advances to manage interest rate risk and liquidity. The increase in borrowings at December 31, 2022 as compared to December 31, 2021 was primarily due to an increase of $450.0 million in FHLB term advances for the same purpose.

Capital Ratios
 
At December 31, 2022, our common stockholder's equity was $2.80 billion, or 12.90% of total assets, compared with $2.74 billion, or 12.65% of total assets, at September 30, 2022, and $2.89 billion, or 13.68% of total assets, at December 31, 2021, with a book value per share of $29.45, compared with $28.79 at September 30, 2022 and $30.58 at December 31, 2021. At December 31, 2022, the ratio of tangible common equity to total assets(1) was 8.88%, compared with 8.59% at September 30, 2022 and 9.52% at December 31, 2021, and tangible book value per share(1) was $19.38, compared with $18.68 at September 30, 2022 and $20.29 at December 31, 2021. The increase in tangible book value per share at December 31, 2022 from the prior quarter was primarily driven by net income and other comprehensive income on our AFS securities portfolio during the quarter, partially offset by the dividends paid. The decrease in tangible book value per share at December 31, 2022 from December 31, 2021 was primarily driven by the other comprehensive loss from the impact of higher interest rates on our AFS securities portfolio and dividends paid, partially offset by net income in 2022.

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. In the first quarter of 2022, the Company began phasing into regulatory capital the cumulative adjustments at the end of the second year of the transition period at 25% per year. At December 31, 2022, the Company and Bank were 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.





































_____________________________________________________________
(1) Reconciliations of the non-GAAP measures are set forth at the end of this press release.
12

The following table presents capital ratios and share data as of the dates indicated:
 December 31,September 30,December 31,
Capital Ratios202220222021
Pacific Premier Bancorp, Inc. Consolidated
Tier 1 leverage ratio10.29 %10.12 %10.08 %
Common equity tier 1 risk-based capital ratio12.99 12.36 12.11 
Tier 1 risk-based capital ratio12.99 12.36 12.11 
Total risk-based capital ratio15.53 14.83 14.62 
Tangible common equity ratio (1)
8.88 8.59 9.52 
Pacific Premier Bank
Tier 1 leverage ratio11.80 %11.64 %11.62 %
Common equity tier 1 risk-based capital ratio14.89 14.23 13.96 
Tier 1 risk-based capital ratio14.89 14.23 13.96 
Total risk-based capital ratio15.74 15.05 14.70 
Share Data   
Book value per share$29.45 $28.79 $30.58 
Tangible book value per share (1)
19.38 18.68 20.29 
Common equity dividends declared per share0.33 0.33 0.33 
Closing stock price (2)
31.56 30.96 40.03 
Shares issued and outstanding95,021,760 95,016,767 94,389,543 
Market Capitalization (2)(3)
$2,998,887 $2,941,719 $3,778,413 
______________________________
(1) A reconciliation of the non-GAAP measures of tangible common equity and tangible book value per share to the GAAP measures of common stockholders' equity and book value per share is set forth below.
(2) As of the last trading day prior to period end.
(3) Dollars in thousands.

Dividend and Stock Repurchase Program
 
On January 24, 2023, the Company's Board of Directors declared a $0.33 per share dividend, payable on February 10, 2023 to stockholders of record on February 3, 2023. In January 2021, the Company’s Board of Directors approved a stock repurchase program, which authorized the repurchase up to 4,725,000 shares of its common stock. During the fourth 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 January 26, 2023 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. Participants should ask to be joined into the Pacific Premier Bancorp, Inc. call. Additionally, a telephone replay will be made available through February 2, 2023 at (877) 344-7529, access code 4933909.

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, 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 approximately $22 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 over $17 billion of assets under custody and approximately 39,000 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. These 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; our ability to attract and retain deposits and access to other sources of liquidity; 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; possible impairment charges to goodwill, including any impairment that may result from increased volatility in our stock price; 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; the impact of governmental efforts to restructure the U.S. financial regulatory system; the impact of recent or future changes in the FDIC insurance assessment rate or the rules and regulations related to the calculation of the FDIC insurance assessment amount; 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; the possibility that we may reduce or discontinue the payments of dividends on our common stock; the possibility that we may discontinue, reduce or otherwise limit the level of repurchases of our common stock we may make from time to time pursuant to our stock repurchase 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 crises 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.

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
13

PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Unaudited)
 December 31,September 30,June 30,March 31,December 31,
(Dollars in thousands)20222022202220222021
ASSETS
Cash and cash equivalents$1,101,249 $739,211 $972,798 $809,259 $304,703 
Interest-bearing time deposits with financial institutions1,734 1,733 2,216 2,216 2,216 
Investments held-to-maturity, at amortized cost, net of allowance for credit losses1,388,103 1,385,502 1,390,682 996,382 381,674 
Investment securities available for sale, at fair value2,601,013 2,661,079 2,679,070 3,222,095 4,273,864 
FHLB, FRB, and other stock119,918 118,778 118,636 116,973 117,538 
Loans held for sale, at lower of cost or fair value2,643 2,163 2,957 11,646 10,869 
Loans held for investment14,676,298 14,908,811 15,047,608 14,733,755 14,295,897 
Allowance for credit losses(195,651)(195,549)(196,075)(197,517)(197,752)
Loans held for investment, net14,480,647 14,713,262 14,851,533 14,536,238 14,098,145 
Accrued interest receivable73,784 66,192 66,898 60,922 65,728 
Premises and equipment64,543 65,651 68,435 70,453 71,908 
Deferred income taxes, net183,602 190,948 163,767 133,938 87,344 
Bank owned life insurance460,010 457,301 454,593 451,968 449,353 
Intangible assets55,588 59,028 62,500 65,978 69,571 
Goodwill901,312 901,312 901,312 901,312 901,312 
Other assets253,871 257,041 258,522 242,916 260,204 
Total assets$21,688,017 $21,619,201 $21,993,919 $21,622,296 $21,094,429 
LIABILITIES 
Deposit accounts: 
Noninterest-bearing checking$6,306,825 $6,775,465 $6,934,318 $7,106,548 $6,757,259 
Interest-bearing:
Checking3,119,850 3,605,498 4,149,432 3,679,067 3,493,331 
Money market/savings5,422,607 5,493,988 5,545,230 5,872,597 5,806,726 
Retail certificates of deposit1,086,423 872,421 855,966 1,031,011 1,058,273 
Wholesale/brokered certificates of deposit1,416,696 999,002 599,667 — — 
Total interest-bearing11,045,576 10,970,909 11,150,295 10,582,675 10,358,330 
Total deposits17,352,401 17,746,374 18,084,613 17,689,223 17,115,589 
FHLB advances and other borrowings1,000,000 600,000 600,000 600,000 558,000 
Subordinated debentures331,204 331,045 330,886 330,726 330,567 
Accrued expenses and other liabilities206,023 206,386 223,201 219,329 203,962 
Total liabilities18,889,628 18,883,805 19,238,700 18,839,278 18,208,118 
STOCKHOLDERS’ EQUITY 
Common stock933 933 933 933 929 
Additional paid-in capital2,362,663 2,357,731 2,353,361 2,348,727 2,351,294 
Retained earnings700,040 657,845 615,943 577,591 541,950 
Accumulated other comprehensive loss(265,247)(281,113)(215,018)(144,233)(7,862)
Total stockholders' equity2,798,389 2,735,396 2,755,219 2,783,018 2,886,311 
Total liabilities and stockholders' equity$21,688,017 $21,619,201 $21,993,919 $21,622,296 $21,094,429 
14

PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
 Three Months EndedYear Ended
 December 31,September 30,December 31,December 31,December 31,
(Dollars in thousands, except per share data)20222022202120222021
INTEREST INCOME   
Loans$184,457 $174,204 $157,418 $673,720 $622,033 
Investment securities and other interest-earning assets33,324 24,821 19,588 94,858 74,706 
Total interest income217,781 199,025 177,006 768,578 696,739 
INTEREST EXPENSE  
Deposits25,865 9,873 1,694 40,093 11,817 
FHLB advances and other borrowings5,960 3,480 33 13,131 99 
Subordinated debentures4,560 4,560 4,560 18,242 22,449 
Total interest expense36,385 17,913 6,287 71,466 34,365 
Net interest income before provision for credit losses181,396 181,112 170,719 697,112 662,374 
Provision for credit losses2,838 1,077 (14,648)4,832 (70,876)
Net interest income after provision for credit losses178,558 180,035 185,367 692,280 733,250 
NONINTEREST INCOME  
Loan servicing income346 397 505 1,664 2,121 
Service charges on deposit accounts2,689 2,704 2,590 10,698 9,219 
Other service fee income295 323 391 1,351 1,566 
Debit card interchange fee income1,048 808 769 3,628 3,489 
Earnings on bank owned life insurance3,359 3,339 3,521 13,159 11,299 
Net gain from sales of loans151 457 1,334 3,238 4,428 
Net (loss) gain from sales of investment securities— (393)3,585 1,710 16,906 
Trust custodial account fees9,722 9,951 11,611 41,606 38,176 
Escrow and exchange fees1,282 1,555 2,221 6,325 7,286 
Other income1,605 1,023 754 5,369 13,360 
Total noninterest income20,497 20,164 27,281 88,748 107,850 
NONINTEREST EXPENSE  
Compensation and benefits54,347 56,355 56,076 225,245 215,690 
Premises and occupancy11,641 12,011 11,403 47,433 48,234 
Data processing6,991 7,058 5,881 26,649 23,770 
FDIC insurance premiums1,463 1,461 1,389 5,772 5,274 
Legal and professional services5,175 4,075 5,870 17,947 18,554 
Marketing expense1,985 1,912 1,821 7,632 6,917 
Office expense1,310 1,338 1,463 5,103 5,957 
Loan expense743 789 857 3,810 4,469 
Deposit expense6,770 4,846 3,836 19,448 15,654 
Merger-related expense— — — — 5 
Amortization of intangible assets3,440 3,472 3,880 13,983 15,936 
Other expense5,317 7,549 4,776 23,648 19,817 
Total noninterest expense99,182 100,866 97,252 396,670 380,277 
Net income before income taxes99,873 99,333 115,396 384,358 460,823 
Income tax26,200 25,970 30,565 100,615 120,934 
Net income$73,673 $73,363 $84,831 $283,743 $339,889 
EARNINGS PER SHARE  
Basic$0.78 $0.77 $0.90 $2.99 $3.60 
Diluted0.77 0.77 0.89 2.98 3.58 
WEIGHTED AVERAGE SHARES OUTSTANDING  
Basic93,810,46893,793,50293,415,30493,718,293 93,532,109 
Diluted94,176,63394,120,63793,906,49194,091,461 94,012,137 
15

SELECTED FINANCIAL DATA

PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED AVERAGE BALANCES AND YIELD DATA
(Unaudited)
Three Months Ended
 December 31, 2022September 30, 2022December 31, 2021
(Dollars in thousands)Average BalanceInterestAverage
 Yield/
 Cost		Average BalanceInterestAverage
 Yield/
 Cost		Average BalanceInterestAverage Yield/ Cost
Assets
Interest-earning assets:         
Cash and cash equivalents$1,015,197 $8,636 3.37 %$665,510 $2,754 1.64 %$334,371 $66 0.08 %
Investment securities4,130,042 24,688 2.39 4,277,444 22,067 2.06 4,833,251 19,522 1.62 
Loans receivable, net (1) (2)
14,799,417 184,457 4.94 14,986,682 174,204 4.61 14,005,836 157,418 4.46 
Total interest-earning assets19,944,656 217,781 4.33 19,929,636 199,025 3.96 19,173,458 177,006 3.66 
Noninterest-earning assets1,784,277 1,757,800 1,693,547 
Total assets$21,728,933 $21,687,436 $20,867,005 
Liabilities and Equity
Interest-bearing deposits:
Interest checking$3,320,146 $3,752 0.45 %$3,812,448 $1,658 0.17 %$3,501,323 $225 0.03 %
Money market4,998,726 7,897 0.63 5,053,890 2,940 0.23 5,467,559 925 0.07 
Savings443,016 310 0.28 434,591 28 0.03 418,218 27 0.03 
Retail certificates of deposit975,958 3,941 1.60 835,645 1,420 0.67 1,084,326 517 0.19 
Wholesale/brokered certificates of deposit1,283,537 9,965 3.08 702,785 3,827 2.16 — — — 
Total interest-bearing deposits11,021,383 25,865 0.93 10,839,359 9,873 0.36 10,471,426 1,694 0.06 
FHLB advances and other borrowings826,125 5,960 2.86 636,006 3,480 2.17 69,538 33 0.19 
Subordinated debentures331,133 4,560 5.51 330,975 4,560 5.51 330,476 4,560 5.52 
Total borrowings1,157,258 10,520 3.62 966,981 8,040 3.31 400,014 4,593 4.59 
Total interest-bearing liabilities12,178,641 36,385 1.19 11,806,340 17,913 0.60 10,871,440 6,287 0.23 
Noninterest-bearing deposits6,587,400 6,893,463 6,911,702 
Other liabilities211,731 212,509 232,863 
Total liabilities18,977,772 18,912,312 18,016,005 
Stockholders' equity2,751,161 2,775,124 2,851,000 
Total liabilities and equity$21,728,933 $21,687,436 $20,867,005 
Net interest income$181,396 $181,112 $170,719 
Net interest margin (3)
  3.61 %  3.61 %3.53 %
Cost of deposits (4)
0.58 0.22 0.04 
Cost of funds (5)
0.77 0.38 0.14 
Cost of core deposits (6)
0.31 0.11 0.03 
Ratio of interest-earning assets to interest-bearing liabilities163.77   168.80 176.37 
16

 For the Year Ended December 31,
 20222021
(Dollars in thousands)Average
Balance		InterestAverage
Yield/Cost		Average
Balance		InterestAverage
Yield/Cost
Assets      
Interest-earning assets:      
Cash and cash equivalents$678,270 $12,691 1.87 %$904,159 $877 0.10 %
Investment securities4,301,005 82,167 1.91 4,495,956 73,829 1.64 
Loans receivable, net (1)(2)
14,767,554 673,720 4.56 13,497,119 622,033 4.61 
Total interest-earning assets19,746,829 768,578 3.89 18,897,234 696,739 3.69 
Noninterest-earning assets1,766,599   1,595,168   
Total assets$21,513,428   $20,492,402   
Liabilities and Equity      
Interest-bearing deposits:      
Interest checking$3,681,244 $6,351 0.17 %$3,276,638 $1,270 0.04 %
Money market5,155,785 12,735 0.25 5,507,469 6,824 0.12 
Savings433,156 391 0.09 393,332 251 0.06 
Retail certificates of deposit944,963 6,498 0.69 1,248,956 3,332 0.27 
Wholesale/brokered certificates of deposit520,652 14,118 2.71 29,645 140 0.47 
Total interest-bearing deposits10,735,800 40,093 0.37 10,456,040 11,817 0.11 
FHLB advances and other borrowings574,320 13,131 2.29 24,947 99 0.40 
Subordinated debentures330,885 18,242 5.51 410,067 22,449 5.47 
Total borrowings905,205 31,373 3.47 435,014 22,548 5.18 
Total interest-bearing liabilities11,641,005 71,466 0.61 10,891,054 34,365 0.32 
Noninterest-bearing deposits6,859,141   6,527,259   
Other liabilities224,739   275,496   
Total liabilities18,724,885   17,693,809   
Stockholders’ equity2,788,543   2,798,593   
Total liabilities and equity$21,513,428   $20,492,402   
Net interest income $697,112   $662,374  
Net interest rate spread  3.28 %  3.37 %
Net interest margin (3)
  3.53   3.51 
Cost of deposits (4)
0.23 0.07 
Cost of funds (5)
0.39 0.20 
Cost of core deposits (6)
0.12 0.05 
Ratio of interest-earning assets to interest-bearing liabilities 169.63   173.51 
______________________________    
(1) Average balance includes loans held for sale and nonperforming loans and is net of deferred loan origination fees/costs and discounts/premiums, and the basis adjustments of certain loans included in fair value hedging relationships.
(2) Interest income includes net discount accretion of $3.5 million, $4.6 million, and $7.9 million, for the three months ended December 31, 2022, September 30, 2022, and December 31, 2021, respectively, and $21.7 million and $36.7 million, respectively, for the years ended December 31, 2022 and December 31, 2021, respectively.
(3) Represents 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.
17

PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES
LOAN PORTFOLIO COMPOSITION
(Unaudited)
 December 31,September 30,June 30,March 31,December 31,
(Dollars in thousands)20222022202220222021
Investor loans secured by real estate
CRE non-owner-occupied$2,660,321 $2,771,272 $2,788,715 $2,774,650 $2,771,137 
Multifamily6,112,026 6,199,581 6,188,086 6,041,085 5,891,934 
Construction and land399,034 373,194 331,734 303,811 277,640 
SBA secured by real estate (1)
42,135 42,998 44,199 42,642 46,917 
Total investor loans secured by real estate9,213,516 9,387,045 9,352,734 9,162,188 8,987,628 
Business loans secured by real estate (2)
CRE owner-occupied2,432,163 2,477,530 2,486,747 2,391,984 2,251,014 
Franchise real estate secured378,057 383,468 387,683 384,267 380,381 
SBA secured by real estate (3)
61,368 64,002 67,191 68,466 69,184 
Total business loans secured by real estate2,871,588 2,925,000 2,941,621 2,844,717 2,700,579 
Commercial loans (4)
Commercial and industrial2,160,948 2,164,623 2,295,421 2,242,632 2,103,112 
Franchise non-real estate secured404,791 409,773 415,830 388,322 392,576 
SBA non-real estate secured11,100 11,557 11,008 10,761 11,045 
Total commercial loans2,576,839 2,585,953 2,722,259 2,641,715 2,506,733 
Retail loans
Single family residential (5)
72,997 75,176 77,951 79,978 95,292 
Consumer3,284 3,761 4,130 5,157 5,665 
Total retail loans76,281 78,937 82,081 85,135 100,957 
Loans held for investment before basis adjustment (6)
14,738,224 14,976,935 15,098,695 14,733,755 14,295,897 
Basis adjustment associated with fair value hedge (7)
(61,926)(68,124)(51,087)— — 
Loans held for investment14,676,298 14,908,811 15,047,608 14,733,755 14,295,897 
Allowance for credit losses for loans held for investment(195,651)(195,549)(196,075)(197,517)(197,752)
Loans held for investment, net$14,480,647 $14,713,262 $14,851,533 $14,536,238 $14,098,145 
Loans held for sale, at lower of cost or fair value$2,643 $2,163 $2,957 $11,646 $10,869 
______________________________
(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 $54.8 million, $59.0 million, $63.6 million, $71.2 million, and $77.1 million as of December 31, 2022, September 30, 2022, June 30, 2022, March 31, 2022, and December 31, 2021 respectively.
(7) Represents the basis adjustment associated with the application of hedge accounting on certain loans.

18

PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES
ASSET QUALITY INFORMATION
(Unaudited)
 December 31,September 30,June 30,March 31,December 31,
(Dollars in thousands)20222022202220222021
Asset Quality
Nonperforming loans$30,905 $60,464 $44,445 $55,309 $31,273 
Other real estate owned— — — — — 
Nonperforming assets$30,905 $60,464 $44,445 $55,309 $31,273 
Total classified assets (1)
$149,304 $110,143 $106,153 $122,528 $121,827 
Allowance for credit losses195,651 195,549 196,075 197,517 197,752 
Allowance for credit losses as a percent of total nonperforming loans633 %323 %441 %357 %632 %
Nonperforming loans as a percent of loans held for investment0.21 0.41 0.30 0.38 0.22 
Nonperforming assets as a percent of total assets0.14 0.28 0.20 0.26 0.15 
Classified loans to total loans held for investment1.02 0.74 0.71 0.83 0.85 
Classified assets to total assets0.69 0.51 0.48 0.57 0.58 
Net loan charge-offs (recoveries) for the quarter ended$3,797 $1,072 $5,245 $446 $(981)
Net loan charge-offs (recoveries) for the quarter to average total loans0.03 %0.01 %0.04 %— %(0.01)%
Allowance for credit losses to loans held for investment (2)
1.33 1.31 1.30 1.34 1.38 
Delinquent Loans:     
30 - 59 days$20,538 $1,484 $6,915 $25,332 $1,395 
60 - 89 days185 6,535 — 74 — 
90+ days22,625 33,238 29,360 18,245 18,100 
Total delinquency$43,348 $41,257 $36,275 $43,651 $19,495 
Delinquency as a percent of loans held for investment0.30 %0.28 %0.24 %0.30 %0.14 %
______________________________
(1) Includes substandard loans and other real estate owned.
(2) At December 31, 2022, 26% of loans held for investment include a fair value net discount of $54.8 million, or 0.37% of loans held for investment. At September 30, 2022, 27% of loans held for investment include a fair value net discount of $59.0 million, or 0.39% of loans held for investment. At June 30, 2022, 29% of loans held for investment include a fair value net discount of $63.6 million, or 0.42% of loans held for investment. At March 31, 2022, 32% of loans held for investment include a fair value net discount $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.

19

PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES
NONACCRUAL LOANS (1)
(Unaudited)
(Dollars in thousands)Collateral Dependent LoansACLNon-Collateral Dependent LoansACLTotal Nonaccrual LoansNonaccrual Loans With No ACL
December 31, 2022
Investor loans secured by real estate
CRE non-owner-occupied$4,429 $— $— $— $4,429 $4,429 
Multifamily8,780 — — — 8,780 8,780 
SBA secured by real estate (2)
533 — — — 533 533 
Total investor loans secured by real estate13,742 — — — 13,742 13,742 
Business loans secured by real estate (3)
CRE owner-occupied11,475 1,742 — — 11,475 9,733 
SBA secured by real estate (4)
1,191 — — — 1,191 1,191 
Total business loans secured by real estate12,666 1,742 — — 12,666 10,924 
Commercial loans (5)
Commercial and industrial3,908 — — — 3,908 3,908 
SBA not secured by real estate589 — — — 589 589 
Total commercial loans4,497 — — — 4,497 4,497 
Totals nonaccrual loans$30,905 $1,742 $— $— $30,905 $29,163 
______________________________
(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.
20

PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES
PAST DUE STATUS
(Unaudited)
Days Past Due
(Dollars in thousands)Current30-5960-8990+Total
December 31, 2022
Investor loans secured by real estate
CRE non-owner-occupied$2,655,892 $— $— $4,429 $2,660,321 
Multifamily6,103,246 2,723 — 6,057 6,112,026 
Construction and land399,034 — — — 399,034 
SBA secured by real estate (1)
42,135 — — — 42,135 
Total investor loans secured by real estate9,200,307 2,723 — 10,486 9,213,516 
Business loans secured by real estate (2)
CRE owner-occupied2,424,174 1,434 — 6,555 2,432,163 
Franchise real estate secured370,984 7,073 — — 378,057 
SBA secured by real estate (3)
60,177 — 104 1,087 61,368 
Total business loans secured by real estate2,855,335 8,507 104 7,642 2,871,588 
Commercial loans (4)
Commercial and industrial2,152,302 4,657 81 3,908 2,160,948 
Franchise non-real estate secured401,199 3,592 — — 404,791 
SBA not secured by real estate10,511 — — 589 11,100 
Total commercial loans2,564,012 8,249 81 4,497 2,576,839 
Retail loans
Single family residential (5)
71,940 1,057 — — 72,997 
Consumer loans3,282 2 — — 3,284 
Total retail loans75,222 1,059 — — 76,281 
Loans held for investment before basis adjustment (6)
$14,694,876 $20,538 $185 $22,625 $14,738,224 
______________________________
(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) Excludes the basis adjustment of $61.9 million to the carrying amount of certain loans included in fair value hedging relationships.

21

PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES
CREDIT RISK GRADES
(Unaudited)
(Dollars in thousands)PassSpecial
Mention		SubstandardTotal Gross
Loans
December 31, 2022
Investor loans secured by real estate
CRE non-owner-occupied$2,647,607 $7,487 $5,227 $2,660,321 
Multifamily6,089,836 12,667 9,523 6,112,026 
Construction and land399,034 — — 399,034 
SBA secured by real estate (1)
33,161 — 8,974 42,135 
Total investor loans secured by real estate9,169,638 20,154 23,724 9,213,516 
Business loans secured by real estate (2)
CRE owner-occupied2,363,719 2,351 66,093 2,432,163 
Franchise real estate secured352,645 18,036 7,376 378,057 
SBA secured by real estate (3)
55,865 118 5,385 61,368 
Total business loans secured by real estate2,772,229 20,505 78,854 2,871,588 
Commercial loans (4)
Commercial and industrial2,093,726 31,273 35,949 2,160,948 
Franchise non-real estate secured368,013 27,583 9,195 404,791 
SBA not secured by real estate9,550 — 1,550 11,100 
Total commercial loans2,471,289 58,856 46,694 2,576,839 
Retail loans
Single family residential (5)
72,992 — 5 72,997 
Consumer loans3,257 — 27 3,284 
Total retail loans76,249 — 32 76,281 
Loans held for investment before basis adjustment (6)
$14,489,405 $99,515 $149,304 $14,738,224 
______________________________
(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) Excludes the basis adjustment of $61.9 million to the carrying amount of certain loans included in fair value hedging relationships.
22

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 and merger-related expense, where applicable, 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 EndedYear Ended
 December 31,September 30,December 31,December 31,December 31,
(Dollars in thousands)20222022202120222021
Net income$73,673 $73,363 $84,831 $283,743 $339,889 
Plus: amortization of intangible assets expense3,440 3,472 3,880 13,983 15,936 
Less: amortization of intangible assets expense tax adjustment (1)
978 991 1,107 3,987 4,556 
Net income for average tangible common equity76,135 75,844 87,604 293,739 351,269 
Plus: merger-related expense— — — — 5 
Less: merger-related expense tax adjustment (1)
— — — — 1 
Net income for average tangible common equity excluding merger-related expense$76,135 $75,844 $87,604 $293,739 $351,273 
Average stockholders' equity$2,751,161 $2,775,124 $2,851,000 $2,788,543 $2,798,593 
Less: average intangible assets57,624 61,101 71,897 62,833 77,817 
Less: average goodwill901,312 901,312 901,312 901,312 900,458 
Average tangible common equity$1,792,225 $1,812,711 $1,877,791 $1,824,398 $1,820,318 
Return on average equity (annualized)10.71 %10.57 %11.90 %10.18 %12.14 %
Return on average tangible common equity (annualized)16.99 %16.74 %18.66 %16.10 %19.30 %
Return on average tangible common equity excluding merger-related expense16.99 %16.74 %18.66 %16.10 %19.30 %
______________________________
(1) Adjusted by statutory tax rate

23

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 expense, where applicable, from the 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 EndedYear Ended
December 31,September 30,December 31,December 31,December 31,
(Dollars in thousands)20222022202120222021
Interest income$217,781 $199,025 $177,006 $768,578 $696,739 
Interest expense36,385 17,913 6,287 71,466 34,365 
Net interest income181,396 181,112 170,719 697,112 662,374 
Noninterest income20,497 20,164 27,281 88,748 107,850 
Revenue201,893 201,276 198,000 785,860 770,224 
Noninterest expense99,182 100,866 97,252 396,670 380,277 
Plus: merger-related expense— — — — 5 
Pre-provision net revenue102,711 100,410 100,748 389,190 389,952 
Pre-provision net revenue (annualized)$410,844 $401,640 $402,992 $389,190 $389,952 
Average assets$21,728,933 $21,687,436 $20,867,005 $21,513,428 $20,492,402 
Pre-provision net revenue on average assets0.47 %0.46 %0.48 %1.81 %1.90 %
Pre-provision net revenue on average assets (annualized)1.89 %1.85 %1.93 %1.81 %1.90 %

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.
 December 31,September 30,June 30,March 31,December 31,
(Dollars in thousands, except per share data)20222022202220222021
Total stockholders' equity$2,798,389 $2,735,396 $2,755,219 $2,783,018 $2,886,311 
Less: intangible assets956,900 960,340 963,812 967,290 970,883 
Tangible common equity$1,841,489 $1,775,056 $1,791,407 $1,815,728 $1,915,428 
Total assets$21,688,017 $21,619,201 $21,993,919 $21,622,296 $21,094,429 
Less: intangible assets956,900 960,340 963,812 967,290 970,883 
Tangible assets$20,731,117 $20,658,861 $21,030,107 $20,655,006 $20,123,546 
Tangible common equity ratio8.88 %8.59 %8.52 %8.79 %9.52 %
Common shares issued and outstanding95,021,76095,016,76794,976,60594,945,84994,389,543
Book value per share$29.45 $28.79 $29.01 $29.31 $30.58 
Less: intangible book value per share10.07 10.11 10.15 10.19 10.29 
Tangible book value per share$19.38 $18.68 $18.86 $19.12 $20.29 
24

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 adjustments, 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 EndedYear Ended
December 31,September 30,December 31,December 31,December 31,
(Dollars in thousands)20222022202120222021
Net interest income$181,396 $181,112 $170,719 $697,112 $662,374 
Less: scheduled accretion income2,179 2,377 3,097 10,039 13,874 
Less: accelerated accretion income1,358 2,269 4,770 11,628 22,792 
Less: premium amortization on CD30 39 183 225 3,266 
Less: nonrecurring nonaccrual interest adjustments(111)(848)349 (1,267)(544)
Less: gain (loss) on fair value hedging relationships8,004 4,240 (819)10,705 (914)
Core net interest income169,936 173,035 163,139 665,782 623,900 
Average interest-earning assets$19,944,656 $19,929,636 $19,173,458 $19,746,829 $18,897,234 
Net interest margin3.61 %3.61 %3.53 %3.53 %3.51 %
Core net interest margin3.38 %3.44 %3.38 %3.37 %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, where applicable, to the sum of net interest income before provision for credit losses and total noninterest income, less gain (loss) from investment securities and other income - security recoveries, and net 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 EndedYear Ended
December 31,September 30,December 31,December 31,December 31,
(Dollars in thousands)20222022202120222021
Total noninterest expense$99,182 $100,866 $97,252 $396,670 $380,277 
Less: amortization of intangible assets3,440 3,472 3,880 13,983 15,936 
Less: merger-related expense— — — — 5 
Noninterest expense, adjusted$95,742 $97,394 $93,372 $382,687 $364,336 
Net interest income before provision for credit losses$181,396 $181,112 $170,719 $697,112 $662,374 
Add: total noninterest income20,497 20,164 27,281 88,748 107,850 
Less: net (loss) gain from investment securities— (393)3,585 1,710 16,906 
Less: other income - security recoveries— — 1 — 10 
Less: net loss from debt extinguishment— — — — (180)
Revenue, adjusted$201,893 $201,669 $194,414 $784,150 $753,488 
Efficiency ratio47.4 %48.3 %48.0 %48.8 %48.4 %
25

Cost of core deposits is a non-GAAP financial measure derived from GAAP-based amounts. Cost of core deposits is calculated as the ratio of core deposit interest expense to average core deposits. We calculate core deposit interest expense by excluding interest expense for certificates of deposit and brokered deposits from total deposit expense, and we calculate average core deposits by excluding certificates of deposit and brokered deposits from total deposits. Management believes cost of core deposits is a useful measure to assess the Company's deposit base, including its potential volatility.
Three Months EndedYear Ended
December 31,September 30,December 31,December 31,December 31,
(Dollars in thousands)20222022202120222021
Total deposits interest expense$25,865 $9,873 $1,694 $40,093 $11,817 
Less: certificates of deposit interest expense3,941 1,420 517 6,498 3,332 
Less: brokered deposits interest expense9,965 3,827 1 14,120 149 
Core deposits expense$11,959 $4,626 $1,176 $19,475 $8,336 
Total average deposits$17,608,783 $17,732,822 $17,383,128 $17,594,941 $16,983,299 
Less: average certificates of deposit975,958 835,645 1,084,326 944,963 1,248,956 
Less: average brokered deposits1,283,567 703,848 5,552 523,530 35,194 
Average core deposits$15,349,258 $16,193,329 $16,293,250 $16,126,448 $15,699,149 
Cost of core deposits0.31 %0.11 %0.03 %0.12 %0.05 %
26