EX-99.1 2 ppbi_exx991xearnings-2024x.htm EX-99.1 Document

Exhibit 99.1

Pacific Premier Bancorp, Inc. Announces Second Quarter 2024 Financial Results and a Quarterly Cash Dividend of $0.33 Per Share

Second Quarter 2024 Summary
 
•Net income of $41.9 million, or $0.43 per diluted share
•Return on average assets of 0.90%
•Pre-provision net revenue (“PPNR”)(1) to average assets of 1.23%, annualized
•Net interest margin of 3.26%
•Cost of deposits of 1.73%, and cost of non-maturity deposits(1) of 1.17%
•Non-maturity deposits(1) to total deposits of 83.66%
•Non-interest bearing deposits totaled 31.6% of total deposits
•Total delinquency of 0.14% of loans held for investment
•Nonperforming assets to total assets of 0.28%
•Tangible book value per share(1) increased $0.25 from the prior quarter to $20.58
•Common equity tier 1 capital ratio of 15.89%, and total risk-based capital ratio of 19.01%
•Tangible common equity ratio (“TCE”)(1) increased to 11.41%

Irvine, Calif., July 24, 2024 -- Pacific Premier Bancorp, Inc. (NASDAQ: PPBI) (the “Company” or “Pacific Premier”), the holding company of Pacific Premier Bank (the “Bank”), reported net income of $41.9 million, or $0.43 per diluted share, for the second quarter of 2024, compared with net income of $47.0 million, or $0.49 per diluted share, for the first quarter of 2024, and net income of $57.6 million, or $0.60 per diluted share, for the second quarter of 2023.
    
For the second quarter of 2024, the Company’s return on average assets (“ROAA”) was 0.90%, return on average equity (“ROAE”) was 5.76%, and return on average tangible common equity (“ROATCE”)(1) was 8.92%, compared to 0.99%, 6.50%, and 10.05%, respectively, for the first quarter of 2024, and 1.09%, 8.11%, and 12.66%, respectively, for the second quarter of 2023. Total assets were $18.33 billion at June 30, 2024, compared to $18.81 billion at March 31, 2024, and $20.75 billion at June 30, 2023.

Steven R. Gardner, Chairman, Chief Executive Officer, and President of the Company, commented, “We delivered solid financial results for the second quarter, producing net income of $41.9 million, or $0.43 per share. Our results reflect our disciplined approach to balance sheet and risk management, as well as our ongoing focus on capital accumulation. Our quarter-end tangible common equity(1) and tier 1 common equity ratios increased to 11.41% and 15.89%, respectively, placing us near the top of our peers for both ratios.

“Second quarter asset quality trends remained solid. Our nonperforming loans decreased to $52.1 million, reflecting our proactive approach to credit risk management. Overall, credit performance was consistent with our expectations as our borrowers are on solid financial footing and borrower cash flows generally do not appear to have deteriorated in any material way. Similar to our capital ratios, our allowance for credit losses ranks among the top of our peers.

“On the business development front, second quarter loan production increased to $150.7 million, as our teams continue to work collaboratively to expand our client base and reinforce existing long-term relationships. Additionally, we saw clients use excess deposits to pay down and pay off loans coupled with seasonal factors associated with tax payments and distributions, as total deposits declined from the prior quarter. Our deposit mix remained favorable, as brokered deposits declined by $87.9 million and noninterest-bearing deposits comprised 31.6% of total deposits.

“We enter the second half of the year from a position of strength and expect stabilization in our loan and deposit balances as we move through the rest of the year. Our strong capital and liquidity levels provide us with
1

significant optionality and positions us well to take advantage of opportunities that may arise to drive future earnings growth as we continue to serve our small- and middle-market businesses and focus on building long-term franchise value. I want to thank all of our employees for their exceptional contributions this quarter and during the first half of 2024, as well as all of our stakeholders for their ongoing support.”

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FINANCIAL HIGHLIGHTS
Three Months Ended
 June 30,March 31,June 30,
(Dollars in thousands, except per share data)202420242023
Financial highlights (unaudited)
Net income
$41,905 $47,025 $57,636 
Net interest income136,394 145,127 160,092 
Diluted earnings per share
0.43 0.49 0.60 
Common equity dividend per share paid0.33 0.33 0.33 
ROAA
0.90 %0.99 %1.09 %
ROAE
5.76 6.50 8.11 
ROATCE (1)
8.92 10.05 12.66 
Pre-provision net revenue to average assets (1)
1.23 1.43 1.52 
Net interest margin3.26 3.39 3.33 
Cost of deposits1.73 1.59 1.27 
Cost of non-maturity deposits (1)
1.17 1.06 0.71 
Efficiency ratio (1)
61.3 60.2 54.1 
Noninterest expense as a percent of average assets2.10 2.16 1.91 
Total assets$18,332,325 $18,813,181 $20,747,883 
Total deposits14,627,654 15,187,828 16,539,875 
Non-maturity deposits (1) as a percent of total deposits
83.7 %84.4 %81.4 %
Noninterest-bearing deposits as a percent of total deposits31.6 32.9 35.6 
Loan-to-deposit ratio85.4 85.7 82.3 
Nonperforming assets as a percent of total assets0.28 0.34 0.08 
Delinquency as a percentage of loans held for investment0.14 0.09 0.23 
Allowance for credit losses to loans held for investment (2)
1.47 1.48 1.41 
Book value per share$30.32 $30.09 $29.71 
Tangible book value per share (1)
20.58 20.33 19.79 
Tangible common equity ratio (1)
11.41 %10.97 %9.59 %
Common equity tier 1 capital ratio15.89 15.02 14.34 
Total capital ratio19.01 18.23 17.24 
______________________________
(1) Reconciliations of the non-GAAP measures are set forth at the end of this press release.
(2) At June 30, 2024, 25% of loans held for investment include a fair value net discount of $38.6 million, or 0.31% of loans held for investment. At March 31, 2024, 25% of loans held for investment include a fair value net discount of $41.2 million, or 0.32% of loans held for investment. At June 30, 2023, 25% of loans held for investment include a fair value net discount of $48.4 million, or 0.35% of loans held for investment.

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INCOME STATEMENT HIGHLIGHTS

Net Interest Income and Net Interest Margin
 
Net interest income totaled $136.4 million in the second quarter of 2024, a decrease of $8.7 million, or 6.0%, from the first quarter of 2024. The decrease in net interest income was primarily attributable to lower average loan balances and higher cost of deposits.

The net interest margin for the second quarter of 2024 decreased 13 basis points to 3.26%, from 3.39% in the prior quarter. The decrease was primarily due to a higher cost of deposits.

Net interest income for the second quarter of 2024 decreased $23.7 million, or 14.8%, compared to the second quarter of 2023. The decrease was attributable to a higher cost of funds and lower average interest-earning asset balances, partially offset by lower average interest-bearing liabilities and higher yields on average interest-earning assets, all the result of the higher interest rate environment and the Company's balance sheet management strategies to prioritize capital accumulation.

PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED AVERAGE BALANCES AND YIELD DATA
(Unaudited)
 Three Months Ended
 June 30, 2024March 31, 2024June 30, 2023
(Dollars in thousands)Average BalanceInterest Income/ExpenseAverage
 Yield/
 Cost		Average BalanceInterest Income/ExpenseAverage
 Yield/
 Cost		Average BalanceInterest Income/ExpenseAverage Yield/ Cost
Assets
Cash and cash equivalents$1,134,736 $13,666 4.84 %$1,140,909 $13,638 4.81 %$1,433,137 $16,600 4.65 %
Investment securities2,964,909 26,841 3.62 2,948,170 26,818 3.64 3,926,568 25,936 2.64 
Loans receivable, net (1) (2)
12,724,545 167,547 5.30 13,149,038 172,975 5.29 13,927,145 182,852 5.27 
Total interest-earning assets$16,824,190 $208,054 4.97 $17,238,117 $213,431 4.98 $19,286,850 $225,388 4.69 
Liabilities
Interest-bearing deposits$10,117,571 $64,229 2.55 %$10,058,808 $59,506 2.38 %$10,797,708 $53,580 1.99 %
Borrowings532,251 7,431 5.59 850,811 8,798 4.15 1,131,465 11,716 4.15 
Total interest-bearing liabilities$10,649,822 $71,660 2.71 $10,909,619 $68,304 2.52 $11,929,173 $65,296 2.20 
Noninterest-bearing deposits$4,824,002 $4,996,939 $6,078,543 
Net interest income$136,394 $145,127 $160,092 
Net interest margin (3)
  3.26 %3.39 %3.33 %
Cost of deposits (4)
1.73 1.59 1.27 
Cost of funds (5)
1.86 1.73 1.45 
Cost of non-maturity deposits (6)
1.17 1.06 0.71 
Ratio of interest-earning assets to interest-bearing liabilities157.98 158.01 161.68 
_______________________________________
(1) Average balance includes loans held for sale and nonperforming loans and is net of deferred loan origination fees/costs, discounts/premiums, and the basis adjustment of certain loans included in fair value hedging relationships.
(2) Interest income includes net discount accretion of $2.3 million, $2.1 million, and $2.9 million for the three months ended June 30, 2024, March 31, 2024, and June 30, 2023, 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.
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Provision for Credit Losses

For the second quarter of 2024, the Company recorded a $1.3 million provision expense, compared to $3.9 million for the first quarter of 2024, and $1.5 million for the second quarter of 2023. The decrease in provision for credit losses compared to the first quarter of 2024 was largely attributable to the decrease in loan balances and changes in the loan composition, partially offset by increases associated with economic and market forecasts.
Three Months Ended
June 30,March 31,June 30,
(Dollars in thousands)202420242023
Provision for credit losses
Provision for loan losses$1,756 $6,288 $610 
Provision for unfunded commitments(505)(2,425)1,003 
Provision for held-to-maturity securities14 (11)(114)
Total provision for credit losses$1,265 $3,852 $1,499 

Noninterest Income
 
Noninterest income for the second quarter of 2024 was $18.2 million, a decrease of $7.6 million from the first quarter of 2024. The decrease was primarily due to the prior quarter's $5.1 million gain on debt extinguishment resulting from an early redemption of a $200.0 million Federal Home Loan Bank of San Francisco (“FHLB”) term advance, a $1.7 million decrease in trust custodial account fees largely driven by annual tax fees earned during the prior quarter, and a $1.3 million decrease in Community Reinvestment Act ("CRA") investment income.

Noninterest income for the second quarter of 2024 decreased $2.3 million compared to the second quarter of 2023. The decrease was primarily due to a $2.2 million decrease in other income.
Three Months Ended
June 30,March 31,June 30,
(Dollars in thousands)202420242023
Noninterest income
Loan servicing income$510 $529 $493 
Service charges on deposit accounts2,710 2,688 2,670 
Other service fee income309 336 315 
Debit card interchange fee income925 765 914 
Earnings on bank owned life insurance4,218 4,159 3,487 
Net gain from sales of loans
65 — 345 
Trust custodial account fees
8,950 10,642 9,360 
Escrow and exchange fees702 696 924 
Other (loss) income
(167)5,959 2,031 
Total noninterest income
$18,222 $25,774 $20,539 

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Noninterest Expense
 
Noninterest expense totaled $97.6 million for the second quarter of 2024, a decrease of $5.1 million compared to the first quarter of 2024. The decrease was primarily due to a $3.1 million decrease in legal and professional services, driven by a $4.0 million insurance claim receivable.

Noninterest expense for the second quarter of 2024 decreased by $3.1 million compared to the second quarter of 2023. The decrease was primarily due to a $3.6 million decrease in legal and professional services, driven by a $4.0 million insurance claim receivable, and a $1.1 million decrease in premises and occupancy expense, partially offset by a $3.1 million increase in deposit expense due to higher deposit earnings credit rates.
Three Months Ended
June 30,March 31,June 30,
(Dollars in thousands)202420242023
Noninterest expense
Compensation and benefits$53,140 $54,130 $53,424 
Premises and occupancy10,480 10,807 11,615 
Data processing7,754 7,511 7,488 
Other real estate owned operations, net— 46 8 
FDIC insurance premiums1,873 2,629 2,357 
Legal and professional services1,078 4,143 4,716 
Marketing expense1,724 1,558 1,879 
Office expense1,077 1,093 1,280 
Loan expense840 770 567 
Deposit expense12,289 12,665 9,194 
Amortization of intangible assets2,763 2,836 3,055 
Other expense4,549 4,445 5,061 
Total noninterest expense$97,567 $102,633 $100,644 


Income Tax

For the second quarter of 2024, income tax expense totaled $13.9 million, resulting in an effective tax rate of 24.9%, compared with income tax expense of $17.4 million and an effective tax rate of 27.0% for the first quarter of 2024, and income tax expense of $20.9 million and an effective tax rate of 26.6% for the second quarter of 2023.

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BALANCE SHEET HIGHLIGHTS

Loans

Loans held for investment totaled $12.49 billion at June 30, 2024, a decrease of $522.1 million, or 4.0%, from March 31, 2024, and a decrease of $1.12 billion, or 8.2%, from June 30, 2023. The decrease from March 31, 2024 was primarily due to increased prepayments and maturities, and a decrease in credit line draws, partially offset by higher loan production and fundings.

During the second quarter of 2024, new origination activity increased, yet borrower demand for commercial loans remained muted given the uncertain economic and interest rate outlook. New loan commitments totaled $150.7 million, and new loan fundings totaled $58.6 million, compared with $45.6 million in loan commitments and $14.0 million in new loan fundings for the first quarter of 2024, and $148.5 million in loan commitments and $71.6 million in new loan fundings for the second quarter of 2023.
 
At June 30, 2024, the total loan-to-deposit ratio was 85.4%, compared to 85.7% and 82.3% at March 31, 2024 and June 30, 2023, 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
June 30,March 31,June 30,
(Dollars in thousands)202420242023
Beginning gross loan balance before basis adjustment$13,044,395 $13,318,571 $14,223,036 
New commitments150,666 45,563 148,482 
Unfunded new commitments(92,017)(31,531)(76,928)
Net new fundings58,649 14,032 71,554 
Amortization/maturities/payoffs(447,170)(358,863)(582,948)
Net draws on existing lines of credit(100,302)109,860 36,393 
Loan sales(23,750)(32,676)(78,349)
Charge-offs(13,530)(6,529)(3,986)
Transferred to other real estate owned— — (104)
Net decrease
(526,103)(274,176)(557,440)
Ending gross loan balance before basis adjustment$12,518,292 $13,044,395 $13,665,596 
Basis adjustment associated with fair value hedge (1)
(28,201)(32,324)(53,130)
Ending gross loan balance $12,490,091 $13,012,071 $13,612,466 
______________________________
(1) Represents the basis adjustment associated with the application of hedge accounting on certain loans.


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The following table presents the composition of the loans held for investment as of the dates indicated:

June 30,March 31,June 30,
(Dollars in thousands)202420242023
Investor loans secured by real estate
Commercial real estate (“CRE”) non-owner-occupied$2,245,474 $2,309,252 $2,571,246 
Multifamily5,473,606 5,558,966 5,788,030 
Construction and land453,799 486,734 428,287 
SBA secured by real estate (1)
33,245 35,206 38,876 
Total investor loans secured by real estate8,206,124 8,390,158 8,826,439 
Business loans secured by real estate (2)
CRE owner-occupied2,096,485 2,149,362 2,281,721 
Franchise real estate secured274,645 294,938 318,539 
SBA secured by real estate (3)
46,543 48,426 57,084 
Total business loans secured by real estate2,417,673 2,492,726 2,657,344 
Commercial loans (4)
Commercial and industrial (“C&I”)
1,554,735 1,774,487 1,744,763 
Franchise non-real estate secured257,516 301,895 351,944 
SBA non-real estate secured10,346 10,946 9,688 
Total commercial loans1,822,597 2,087,328 2,106,395 
Retail loans
Single family residential (5)
70,380 72,353 70,993 
Consumer1,378 1,830 2,241 
Total retail loans71,758 74,183 73,234 
Loans held for investment before basis adjustment (6)
12,518,152 13,044,395 13,663,412 
Basis adjustment associated with fair value hedge (7)
(28,201)(32,324)(53,130)
Loans held for investment12,489,951 13,012,071 13,610,282 
Allowance for credit losses for loans held for investment(183,803)(192,340)(192,333)
Loans held for investment, net$12,306,148 $12,819,731 $13,417,949 
Total unfunded loan commitments$1,601,870 $1,459,515 $2,202,647 
Loans held for sale, at lower of cost or fair value$140 $— $2,184 
______________________________
(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 net deferred origination costs of $1.4 million, $797,000, and $142,000, and unaccreted fair value net purchase discounts of $38.6 million, $41.2 million, and $48.4 million as of June 30, 2024, March 31, 2024, and June 30, 2023, 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 June 30, 2024 was 4.88%, compared to 4.91% at March 31, 2024, and 4.73% at June 30, 2023. The decrease was a result of customers paying down and paying off higher-rate loans compared to the prior quarter. The year-over-year increase reflects higher rates on new originations and the repricing of loans as a result of the increases in benchmark interest rates.

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

Three Months Ended
June 30,March 31,June 30,
(Dollars in thousands)202420242023
Investor loans secured by real estate
CRE non-owner-occupied$3,818 $850 $1,470 
Multifamily6,026 480 53,522 
Construction and land16,820 — 24,525 
Total investor loans secured by real estate26,664 1,330 79,517 
Business loans secured by real estate (1)
CRE owner-occupied2,623 6,745 3,062 
Total business loans secured by real estate2,623 6,745 3,062 
Commercial loans (2)
Commercial and industrial109,679 32,477 58,730 
Franchise non-real estate secured— — 1,853 
SBA non-real estate secured1,281 — 1,612 
Total commercial loans110,960 32,477 62,195 
Retail loans
Single family residential (3)
7,698 4,936 3,708 
Consumer2,721 75 — 
Total retail loans10,419 5,011 3,708 
Total loan commitments$150,666 $45,563 $148,482 
______________________________
(1) Loans to businesses that are collateralized by real estate where the operating cash flow of the business is the primary source of repayment.
(2) Loans to businesses where the operating cash flow of the business is the primary source of repayment.
(3) Single family residential includes home equity lines of credit, as well as second trust deeds.

The weighted average interest rate on new loan commitments of 8.58% in the second quarter of 2024 was relatively consistent with 8.62% in the first quarter of 2024, and increased from 6.72% in the second quarter of 2023.

Allowance for Credit Losses
 
At June 30, 2024, our allowance for credit losses (“ACL”) on loans held for investment was $183.8 million, a decrease of $8.5 million from March 31, 2024 and June 30, 2023. The decrease in the ACL from March 31, 2024 and June 30, 2023 reflects the relative changes in size and composition in our loans held for investment, partially offset by changes in economic and market forecasts.

During the second quarter of 2024, the Company incurred $10.3 million of net charge-offs, primarily related to the sale of substandard non-owner-occupied CRE and multifamily loans during the quarter.

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:

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Three Months Ended June 30, 2024
(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$30,781 $(4,196)$1,500 $1,653 $29,738 
Multifamily58,411 (7,372)— 6,259 57,298 
Construction and land8,171 — — 2,633 10,804 
SBA secured by real estate (1)
2,184 (153)86 25 2,142 
Business loans secured by real estate (2)
CRE owner-occupied28,760 — 121 (350)28,531 
Franchise real estate secured7,258 — — (464)6,794 
SBA secured by real estate (3)
4,288 — 1 (155)4,134 
Commercial loans (4)
Commercial and industrial37,107 (968)148 (4,030)32,257 
Franchise non-real estate secured14,320 — 1,375 (4,565)11,130 
SBA non-real estate secured495 (6)3 (10)482 
Retail loans
Single family residential (5)
442 — 3 (46)399 
Consumer loans123 (835)— 806 94 
Totals$192,340 $(13,530)$3,237 $1,756 $183,803 
______________________________
(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 June 30, 2024 was 1.47%, which was relatively consistent with 1.48% at March 31, 2024, and increased from 1.41% at June 30, 2023. The fair value net discount on loans acquired through acquisitions was $38.6 million, or 0.31% of total loans held for investment, as of June 30, 2024, compared to $41.2 million, or 0.32% of total loans held for investment, as of March 31, 2024, and $48.4 million, or 0.35% of total loans held for investment, as of June 30, 2023.

Asset Quality

Nonperforming assets totaled $52.1 million, or 0.28% of total assets, at June 30, 2024, compared with $64.1 million, or 0.34% of total assets, at March 31, 2024, and $17.4 million, or 0.08% of total assets, at June 30, 2023. Loan delinquencies were $17.9 million, or 0.14% of loans held for investment, at June 30, 2024, compared to $12.2 million, or 0.09% of loans held for investment, at March 31, 2024, and $31.0 million, or 0.23% of loans held for investment, at June 30, 2023.

Classified loans totaled $183.8 million, or 1.47% of loans held for investment, at June 30, 2024, compared with $204.7 million, or 1.57% of loans held for investment, at March 31, 2024, and $119.9 million, or 0.88% of loans held for investment, at June 30, 2023.


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The following table presents the asset quality metrics of the loan portfolio as of the dates indicated.

 June 30,March 31,June 30,
(Dollars in thousands)202420242023
Asset quality
Nonperforming loans$52,119 $63,806 $17,151 
Other real estate owned— 248 270 
Nonperforming assets$52,119 $64,054 $17,421 
Total classified assets (1)
$183,833 $204,937 $120,216 
Allowance for credit losses183,803 192,340 192,333 
Allowance for credit losses as a percent of total nonperforming loans353 %301 %1,121 %
Nonperforming loans as a percent of loans held for investment0.42 0.49 0.13 
Nonperforming assets as a percent of total assets0.28 0.34 0.08 
Classified loans to total loans held for investment1.47 1.57 0.88 
Classified assets to total assets1.00 1.09 0.58 
Net loan charge-offs for the quarter ended$10,293 $6,419 $3,665 
Net loan charge-offs for the quarter to average total loans0.08 %0.05 %0.03 %
Allowance for credit losses to loans held for investment (2)
1.47 1.48 1.41 
Delinquent loans (3)
  
30 - 59 days$4,985 $1,983 $649 
60 - 89 days3,289 974 31 
90+ days9,649 9,221 30,271 
Total delinquency$17,923 $12,178 $30,951 
Delinquency as a percentage of loans held for investment0.14 %0.09 %0.23 %
______________________________
(1) Includes substandard and doubtful loans, and other real estate owned.
(2) At June 30, 2024, 25% of loans held for investment include a fair value net discount of $38.6 million, or 0.31% of loans held for investment. At March 31, 2024, 25% of loans held for investment include a fair value net discount of $41.2 million, or 0.32% of loans held for investment. At June 30, 2023, 25% of loans held for investment include a fair value net discount of $48.4 million, or 0.35% of loans held for investment.
(3) Nonaccrual loans are included in this aging analysis based on the loan's past due status.

Investment Securities

At June 30, 2024, available-for-sale (“AFS”) and held-to-maturity (“HTM”) investment securities were $1.32 billion and $1.71 billion, respectively, compared to $1.15 billion and $1.72 billion, respectively, at March 31, 2024, and $2.01 billion and $1.74 billion, respectively, at June 30, 2023.

In total, investment securities were $3.03 billion at June 30, 2024, an increase of $155.7 million from March 31, 2024, and a decrease of $719.2 million from June 30, 2023. The increase in the second quarter of 2024 compared to the prior quarter was primarily the result of $443.1 million in purchases of AFS U.S. Treasury securities and a decrease of $4.2 million in AFS investment securities mark-to-market unrealized loss, partially offset by $291.5 million in principal payments, amortization and accretion, and redemptions.

The decrease in investment securities from June 30, 2023 was the result of $1.52 billion in sales of AFS investment securities, primarily related to the investment securities portfolio repositioning during the fourth quarter of 2023, and $611.5 million in principal payments, amortization and accretion, and redemptions, partially offset by $1.17 billion in purchases of AFS and HTM investment securities and a decrease of $244.9 million in AFS securities mark-to-market unrealized loss.

11

Deposits

At June 30, 2024, total deposits were $14.63 billion, a decrease of $560.2 million, or 3.7%, from March 31, 2024, and a decrease of $1.91 billion, or 11.6%, from June 30, 2023. The decrease from the prior quarter was largely driven by reductions of $381.5 million in noninterest-bearing checking, $193.1 million in money market and savings, $87.9 million in brokered certificates of deposit, and $9.4 million in interest-bearing checking, partially offset by an increase of $111.7 million in retail certificates of deposit. The decrease from June 30, 2023 was attributable to decreases of $1.28 billion in noninterest-bearing checking and $1.23 billion in brokered certificates of deposit, partially offset by an increase of $540.5 million in retail certificates of deposit.

At June 30, 2024, non-maturity deposits(1) totaled $12.24 billion, or 83.7% of total deposits, a decrease of $584.0 million, or 4.6%, from March 31, 2024, and a decrease of $1.22 billion, or 9.1%, from June 30, 2023. The decrease from the prior quarters was attributable to clients utilizing their deposit balances to prepay or pay down loans, seasonal tax payments and distributions, as well as redeploying funds into higher yielding alternatives.

At June 30, 2024, maturity deposits totaled $2.39 billion, an increase of $23.8 million, or 1.0%, from March 31, 2024, and a decrease of $692.0 million, or 22.4%, from June 30, 2023. The increase in the second quarter of 2024 compared to the prior quarter was primarily driven by an increase of $111.7 million in retail certificates of deposit, partially offset by the reduction of $87.9 million in brokered certificates of deposit. The decrease from June 30, 2023 was primarily driven by decreases in brokered certificates of deposit.

The weighted average cost of total deposits for the second quarter of 2024 was 1.73%, compared to 1.59% for the first quarter of 2024, and 1.27% for the second quarter of 2023, both increases principally driven by higher pricing across deposit categories. The weighted average cost of non-maturity deposits(1) for the second quarter of 2024 was 1.17%, compared to 1.06% for the first quarter of 2024, and 0.71% for the second quarter of 2023.

At June 30, 2024, the end-of-period weighted average rate of total deposits was 1.81%, compared to 1.66% at March 31, 2024, and 1.40% at June 30, 2023. At June 30, 2024, the end-of-period weighted average rate of non-maturity deposits was 1.25%, compared to 1.12% at March 31, 2024, and 0.78% at June 30, 2023.

At June 30, 2024, the Company’s FDIC-insured deposits as a percentage of total deposits was 61%. Insured and collateralized deposits comprised 67% of total deposits at June 30, 2024, which was the same level at March 31, 2024 and June 30, 2023.


















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

The following table presents the composition of deposits as of the dates indicated.

 June 30,March 31,June 30,
(Dollars in thousands)202420242023
Deposit accounts
Noninterest-bearing checking$4,616,124 $4,997,636 $5,895,975 
Interest-bearing:
Checking2,776,212 2,785,626 2,759,855 
Money market/savings4,844,585 5,037,636 4,801,288 
Total non-maturity deposits (1)
12,236,921 12,820,898 13,457,118 
Retail certificates of deposit1,906,552 1,794,813 1,366,071 
Wholesale/brokered certificates of deposit484,181 572,117 1,716,686 
Total maturity deposits2,390,733 2,366,930 3,082,757 
Total deposits$14,627,654 $15,187,828 $16,539,875 
Cost of deposits1.73 %1.59 %1.27 %
Cost of non-maturity deposits (1)
1.17 1.06 0.71 
Noninterest-bearing deposits as a percent of total deposits31.6 32.9 35.6 
Non-maturity deposits (1) as a percent of total deposits
83.7 84.4 81.4 
______________________________
(1) Reconciliations of the non-GAAP measures are set forth at the end of this press release.


Borrowings

At June 30, 2024, total borrowings amounted to $532.2 million, remaining flat from March 31, 2024, and a decrease of $599.4 million from June 30, 2023. Total borrowings at June 30, 2024 were comprised of $200.0 million of FHLB term advances and $332.2 million of subordinated debt. The decrease in borrowings at June 30, 2024 as compared to June 30, 2023 was due to a decrease of $600.0 million in FHLB term advances.

As of June 30, 2024, our unused borrowing capacity was $8.65 billion, which consists of available lines of credit with FHLB and other correspondent banks, as well as access through the Federal Reserve Bank's discount window, which was not utilized during the second quarter of 2024.

Capital Ratios

At June 30, 2024, our common stockholders' equity was $2.92 billion, or 15.95% of total assets, compared with $2.90 billion, or 15.43%, at March 31, 2024, and $2.85 billion, or 13.73%, at June 30, 2023, with a book value per share of $30.32, compared with $30.09 at March 31, 2024, and $29.71 at June 30, 2023. At June 30, 2024, the ratio of tangible common equity to tangible assets(1) increased 44 and 182 basis points to 11.41%, compared with 10.97% at March 31, 2024, and 9.59% at June 30, 2023, respectively. Tangible book value per share(1) increased $0.25 and $0.79 to $20.58, compared with $20.33 at March 31, 2024, and $19.79 at June 30, 2023, respectively.








______________________________
(1) Reconciliations of the non-GAAP measures are set forth at the end of this press release.
13

The Company implemented the current expected credit losses (“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 June 30, 2024, 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.

June 30,March 31,June 30,
Capital ratios202420242023
Pacific Premier Bancorp, Inc. Consolidated   
Tangible common equity ratio (1)
11.41 %10.97 %9.59 %
Tier 1 leverage ratio11.87 11.48 10.90 
Common equity tier 1 capital ratio15.89 15.02 14.34 
Tier 1 capital ratio15.89 15.02 14.34 
Total capital ratio19.01 18.23 17.24 
Pacific Premier Bank
Tier 1 leverage ratio13.42 %12.97 %12.15 %
Common equity tier 1 capital ratio17.97 16.96 15.99 
Tier 1 capital ratio17.97 16.96 15.99 
Total capital ratio19.22 18.21 17.05 
Share data   
Book value per share$30.32 $30.09 $29.71 
Tangible book value per share (1)
20.58 20.33 19.79 
Common equity dividends declared per share0.33 0.33 0.33 
Closing stock price (2)
22.97 24.00 20.68 
Shares issued and outstanding96,434,047 96,459,966 95,906,217 
Market capitalization (2)(3)
$2,215,090 $2,315,039 $1,983,341 
______________________________
(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 July 22, 2024, the Company's Board of Directors declared a $0.33 per share dividend, payable on August 12, 2024 to stockholders of record as of August 5, 2024. 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 second quarter of 2024, the Company did not repurchase any shares of common stock.



14

Conference Call and Webcast

The Company will host a conference call at 9:00 a.m. PT / 12:00 p.m. ET on July 24, 2024 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 to the Pacific Premier Bancorp, Inc. call. Additionally, a telephone replay will be made available through July 31, 2024, at (877) 344-7529, replay code 4208818.

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 approximately $18 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 $17 billion of assets under custody and over 32,000 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, liquidity, 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 ("U.S.") economy in general and the strength of the local economies in which we conduct operations; adverse developments in the banking industry and the potential impact of such developments on customer confidence, liquidity, and regulatory responses to these developments; 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; interest rate, liquidity, economic, market, credit, operational, and inflation risks associated with our business, including the speed and predictability of changes in these risks; our ability to attract and retain deposits and access to other sources of liquidity, particularly in a rising or high interest rate environment, and the quality and composition of our deposits; business and economic conditions generally and in the financial services industry, nationally and within our current and future geographic markets, including the tight labor market, ineffective management of the U.S. Federal budget or debt, or turbulence or uncertainty in domestic or foreign
15

financial markets; 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; compliance risks, including any increased costs of monitoring, testing, and maintaining compliance with complex laws and regulations; the effectiveness of our risk management framework and quantitative models; 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; possible credit-related impairments of securities held by us; changes in the level of our nonperforming assets and charge-offs; 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, including any special assessments; changes in consumer spending, borrowing, and savings habits; the effects of concentrations in our loan portfolio, including commercial real estate and 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, Israel and Hamas, and overall tension in the Middle East, and trade tensions, all of which could impact business and economic conditions in the United States and abroad; public health crises and pandemics 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 2023 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 and Director of Investor Relations
(949) 243-1082
16

PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Unaudited)
 June 30,March 31,December 31,September 30,June 30,
(Dollars in thousands)20242024202320232023
ASSETS
Cash and cash equivalents$899,817 $1,028,818 $936,473 $1,400,276 $1,463,677 
Interest-bearing time deposits with financial institutions996 995 995 1,242 1,487 
Investment securities held-to-maturity, at amortized cost, net of allowance for credit losses 1,710,141 1,720,481 1,729,541 1,737,866 1,737,604 
Investment securities available-for-sale, at fair value1,320,050 1,154,021 1,140,071 1,914,599 2,011,791 
FHLB, FRB, and other stock97,037 97,063 99,225 105,505 105,369 
Loans held for sale, at lower of amortized cost or fair value140 — — 641 2,184 
Loans held for investment12,489,951 13,012,071 13,289,020 13,270,120 13,610,282 
Allowance for credit losses(183,803)(192,340)(192,471)(188,098)(192,333)
Loans held for investment, net12,306,148 12,819,731 13,096,549 13,082,022 13,417,949 
Accrued interest receivable69,629 67,642 68,516 68,131 70,093 
Other real estate owned— 248 248 450 270 
Premises and equipment, net52,137 54,789 56,676 59,396 61,527 
Deferred income taxes, net108,607 111,390 113,580 192,208 184,857 
Bank owned life insurance477,694 474,404 471,178 468,191 465,288 
Intangible assets37,686 40,449 43,285 46,307 49,362 
Goodwill901,312 901,312 901,312 901,312 901,312 
Other assets350,931 341,838 368,996 297,574 275,113 
Total assets$18,332,325 $18,813,181 $19,026,645 $20,275,720 $20,747,883 
LIABILITIES  
Deposit accounts:  
Noninterest-bearing checking$4,616,124 $4,997,636 $4,932,817 $5,782,305 $5,895,975 
Interest-bearing:
Checking2,776,212 2,785,626 2,899,621 2,598,449 2,759,855 
Money market/savings4,844,585 5,037,636 4,868,442 4,873,582 4,801,288 
Retail certificates of deposit1,906,552 1,794,813 1,684,560 1,525,919 1,366,071 
Wholesale/brokered certificates of deposit484,181 572,117 610,186 1,227,192 1,716,686 
Total interest-bearing10,011,530 10,190,192 10,062,809 10,225,142 10,643,900 
Total deposits14,627,654 15,187,828 14,995,626 16,007,447 16,539,875 
FHLB advances and other borrowings200,000 200,000 600,000 800,000 800,000 
Subordinated debentures332,160 332,001 331,842 331,682 331,523 
Accrued expenses and other liabilities248,747 190,551 216,596 281,057 227,351 
Total liabilities15,408,561 15,910,380 16,144,064 17,420,186 17,898,749 
STOCKHOLDERS’ EQUITY     
Common stock941 941 938 937 937 
Additional paid-in capital2,383,615 2,378,171 2,377,131 2,371,941 2,366,639 
Retained earnings629,341 619,405 604,137 771,285 757,025 
Accumulated other comprehensive loss(90,133)(95,716)(99,625)(288,629)(275,467)
Total stockholders' equity2,923,764 2,902,801 2,882,581 2,855,534 2,849,134 
Total liabilities and stockholders' equity$18,332,325 $18,813,181 $19,026,645 $20,275,720 $20,747,883 








17

PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
 Three Months EndedSix Months Ended
 June 30,March 31,June 30,June 30,June 30,
(Dollars in thousands, except per share data)20242024202320242023
INTEREST INCOME   
Loans$167,547 $172,975 $182,852 $340,522 $363,810 
Investment securities and other interest-earning assets40,507 40,456 42,536 80,963 82,921 
Total interest income208,054 213,431 225,388 421,485 446,731 
INTEREST EXPENSE  
Deposits64,229 59,506 53,580 123,735 93,814 
FHLB advances and other borrowings2,330 4,237 7,155 6,567 15,093 
Subordinated debentures5,101 4,561 4,561 9,662 9,122 
Total interest expense71,660 68,304 65,296 139,964 118,029 
Net interest income before provision for credit losses136,394 145,127 160,092 281,521 328,702 
Provision for credit losses1,265 3,852 1,499 5,117 4,515 
Net interest income after provision for credit losses135,129 141,275 158,593 276,404 324,187 
NONINTEREST INCOME  
Loan servicing income510 529 493 1,039 1,066 
Service charges on deposit accounts2,710 2,688 2,670 5,398 5,299 
Other service fee income309 336 315 645 611 
Debit card interchange fee income925 765 914 1,690 1,717 
Earnings on bank owned life insurance4,218 4,159 3,487 8,377 6,861 
Net gain from sales of loans
65 — 345 65 374 
Net gain from sales of investment securities
— — — — 138 
Trust custodial account fees
8,950 10,642 9,360 19,592 20,385 
Escrow and exchange fees702 696 924 1,398 1,982 
Other (loss) income
(167)5,959 2,031 5,792 3,292 
Total noninterest income
18,222 25,774 20,539 43,996 41,725 
NONINTEREST EXPENSE  
Compensation and benefits53,140 54,130 53,424 107,270 107,717 
Premises and occupancy10,480 10,807 11,615 21,287 23,357 
Data processing7,754 7,511 7,488 15,265 14,753 
Other real estate owned operations, net— 46 8 46 116 
FDIC insurance premiums1,873 2,629 2,357 4,502 4,782 
Legal and professional services1,078 4,143 4,716 5,221 10,217 
Marketing expense1,724 1,558 1,879 3,282 3,717 
Office expense1,077 1,093 1,280 2,170 2,512 
Loan expense840 770 567 1,610 1,213 
Deposit expense12,289 12,665 9,194 24,954 17,630 
Amortization of intangible assets2,763 2,836 3,055 5,599 6,226 
Other expense4,549 4,445 5,061 8,994 9,756 
Total noninterest expense97,567 102,633 100,644 200,200 201,996 
Net income before income taxes
55,784 64,416 78,488 120,200 163,916 
Income tax expense
13,879 17,391 20,852 31,270 43,718 
Net income
$41,905 $47,025 $57,636 $88,930 $120,198 
EARNINGS (LOSS) PER SHARE  
Basic$0.43 $0.49 $0.60 $0.92 $1.26 
Diluted$0.43 $0.49 $0.60 $0.92 $1.26 
WEIGHTED AVERAGE SHARES OUTSTANDING  
Basic94,628,201 94,350,259 94,166,083 94,489,230 94,012,799 
Diluted94,716,205 94,477,355 94,215,967 94,597,559 94,192,341 
18

SELECTED FINANCIAL DATA

PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED AVERAGE BALANCES AND YIELD DATA
(Unaudited)
 
 Three Months Ended
 June 30, 2024March 31, 2024June 30, 2023
(Dollars in thousands)Average BalanceInterest Income/ExpenseAverage Yield/CostAverage BalanceInterest Income/ExpenseAverage Yield/CostAverage BalanceInterest Income/ExpenseAverage Yield/Cost
Assets
Interest-earning assets:         
Cash and cash equivalents$1,134,736 $13,666 4.84 %$1,140,909 $13,638 4.81 %$1,433,137 $16,600 4.65 %
Investment securities2,964,909 26,841 3.62 2,948,170 26,818 3.64 3,926,568 25,936 2.64 
Loans receivable, net (1)(2)
12,724,545 167,547 5.30 13,149,038 172,975 5.29 13,927,145 182,852 5.27 
Total interest-earning assets16,824,190 208,054 4.97 17,238,117 213,431 4.98 19,286,850 225,388 4.69 
Noninterest-earning assets1,771,493 1,796,279 1,771,156 
Total assets$18,595,683 $19,034,396 $21,058,006 
Liabilities and equity
Interest-bearing deposits:
Interest checking$2,747,972 $10,177 1.49 %$2,838,332 $9,903 1.40 %$2,746,578 $8,659 1.26 %
Money market4,724,572 26,207 2.23 4,636,141 23,632 2.05 4,644,623 15,644 1.35 
Savings271,812 224 0.33 287,735 227 0.32 352,377 102 0.12 
Retail certificates of deposit1,830,516 21,115 4.64 1,727,728 19,075 4.44 1,286,160 10,306 3.21 
Wholesale/brokered certificates of deposit542,699 6,506 4.82 568,872 6,669 4.72 1,767,970 18,869 4.28 
Total interest-bearing deposits10,117,571 64,229 2.55 10,058,808 59,506 2.38 10,797,708 53,580 1.99 
FHLB advances and other borrowings200,154 2,330 4.68 518,879 4,237 3.28 800,016 7,155 3.59 
Subordinated debentures332,097 5,101 6.14 331,932 4,561 5.50 331,449 4,561 5.50 
Total borrowings532,251 7,431 5.59 850,811 8,798 4.15 1,131,465 11,716 4.15 
Total interest-bearing liabilities10,649,822 71,660 2.71 10,909,619 68,304 2.52 11,929,173 65,296 2.20 
Noninterest-bearing deposits4,824,002 4,996,939 6,078,543 
Other liabilities213,844 231,889 206,929 
Total liabilities15,687,668 16,138,447 18,214,645 
Stockholders' equity2,908,015 2,895,949 2,843,361 
Total liabilities and equity$18,595,683 $19,034,396 $21,058,006 
Net interest income$136,394 $145,127 $160,092 
Net interest margin (3)
3.26 %3.39 %3.33 %
Cost of deposits (4)
1.73 1.59 1.27 
Cost of funds (5)
1.86 1.73 1.45 
Cost of non-maturity deposits (6)
1.17 1.06 0.71 
Ratio of interest-earning assets to interest-bearing liabilities157.98 158.01 161.68 
______________________________
(1) Average balance includes loans held for sale and nonperforming loans and is net of deferred loan origination fees/costs, discounts/premiums, and the basis adjustment of certain loans included in fair value hedging relationships.
(2) Interest income includes net discount accretion of $2.3 million, $2.1 million, and $2.9 million for the three months ended June 30, 2024, March 31, 2024, and June 30, 2023, 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.
19

PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES
LOAN PORTFOLIO COMPOSITION
(Unaudited)
June 30,March 31,December 31,September 30,June 30,
(Dollars in thousands)20242024202320232023
Investor loans secured by real estate
CRE non-owner-occupied$2,245,474 $2,309,252 $2,421,772 $2,514,056 $2,571,246 
Multifamily5,473,606 5,558,966 5,645,310 5,719,210 5,788,030 
Construction and land453,799 486,734 472,544 444,576 428,287 
SBA secured by real estate (1)
33,245 35,206 36,400 37,754 38,876 
Total investor loans secured by real estate8,206,124 8,390,158 8,576,026 8,715,596 8,826,439 
Business loans secured by real estate (2)
CRE owner-occupied2,096,485 2,149,362 2,191,334 2,228,802 2,281,721 
Franchise real estate secured274,645 294,938 304,514 313,451 318,539 
SBA secured by real estate (3)
46,543 48,426 50,741 53,668 57,084 
Total business loans secured by real estate2,417,673 2,492,726 2,546,589 2,595,921 2,657,344 
Commercial loans (4)
Commercial and industrial1,554,735 1,774,487 1,790,608 1,588,771 1,744,763 
Franchise non-real estate secured257,516 301,895 319,721 335,053 351,944 
SBA non-real estate secured10,346 10,946 10,926 10,667 9,688 
Total commercial loans1,822,597 2,087,328 2,121,255 1,934,491 2,106,395 
Retail loans
Single family residential (5)
70,380 72,353 72,752 70,984 70,993 
Consumer1,378 1,830 1,949 1,958 2,241 
Total retail loans71,758 74,183 74,701 72,942 73,234 
Loans held for investment before basis adjustment (6)
12,518,152 13,044,395 13,318,571 13,318,950 13,663,412 
Basis adjustment associated with fair value hedge (7)
(28,201)(32,324)(29,551)(48,830)(53,130)
Loans held for investment12,489,951 13,012,071 13,289,020 13,270,120 13,610,282 
Allowance for credit losses for loans held for investment(183,803)(192,340)(192,471)(188,098)(192,333)
Loans held for investment, net$12,306,148 $12,819,731 $13,096,549 $13,082,022 $13,417,949 
Loans held for sale, at lower of cost or fair value$140 $— $— $641 $2,184 
______________________________
(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 net deferred origination costs (fees) of $1.4 million, $797,000, $(74,000), $451,000, and $142,000, and unaccreted fair value net purchase discounts of $38.6 million, $41.2 million, $43.3 million, $46.2 million, and $48.4 million as of June 30, 2024, March 31, 2024, December 31, 2023, September 30, 2023, and June 30, 2023, respectively.
(7) Represents the basis adjustment associated with the application of hedge accounting on certain loans.




20

PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES
ASSET QUALITY INFORMATION
(Unaudited)
 June 30,March 31,December 31,September 30,June 30,
(Dollars in thousands)20242024202320232023
Asset quality
Nonperforming loans$52,119 $63,806 $24,817 $25,458 $17,151 
Other real estate owned— 248 248 450 270 
Nonperforming assets$52,119 $64,054 $25,065 $25,908 $17,421 
Total classified assets (1)
$183,833 $204,937 $142,210 $149,708 $120,216 
Allowance for credit losses183,803 192,340 192,471 188,098 192,333 
Allowance for credit losses as a percent of total nonperforming loans353 %301 %776 %739 %1,121 %
Nonperforming loans as a percent of loans held for investment0.42 0.49 0.19 0.19 0.13 
Nonperforming assets as a percent of total assets0.28 0.34 0.13 0.13 0.08 
Classified loans to total loans held for investment1.47 1.57 1.07 1.12 0.88 
Classified assets to total assets1.00 1.09 0.75 0.74 0.58 
Net loan charge-offs for the quarter ended$10,293 $6,419 $3,902 $6,752 $3,665 
Net loan charge-offs for the quarter to average total loans 0.08 %0.05 %0.03 %0.05 %0.03 %
Allowance for credit losses to loans held for investment (2)
1.47 1.48 1.45 1.42 1.41 
Delinquent loans (3)
   
30 - 59 days$4,985 $1,983 $2,484 $2,967 $649 
60 - 89 days3,289 974 1,294 475 31 
90+ days9,649 9,221 6,276 7,484 30,271 
Total delinquency$17,923 $12,178 $10,054 $10,926 $30,951 
Delinquency as a percent of loans held for investment0.14 %0.09 %0.08 %0.08 %0.23 %
______________________________
(1) Includes substandard and doubtful loans, and other real estate owned.
(2) At June 30, 2024, 25% of loans held for investment include a fair value net discount of $38.6 million, or 0.31% of loans held for investment. At March 31, 2024, 25% of loans held for investment include a fair value net discount of $41.2 million, or 0.32% of loans held for investment. At December 31, 2023, 24% of loans held for investment include a fair value net discount of $43.3 million, or 0.33% of loans held for investment. At September 30, 2023, 24% of loans held for investment include a fair value net discount of $46.2 million, or 0.35% of loans held for investment. At June 30, 2023, 25% of loans held for investment include a fair value net discount of $48.4 million, or 0.35% of loans held for investment.
(3) Nonaccrual loans are included in this aging analysis based on the loan's past due status.

21

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
June 30, 2024
Investor loans secured by real estate
CRE non-owner-occupied$19,381 $— $— $— $19,381 $19,381 
SBA secured by real estate (2)
934 — — — 934 934 
Total investor loans secured by real estate20,315 — — — 20,315 20,315 
Business loans secured by real estate (3)
CRE owner-occupied8,439 — — — 8,439 8,439 
Franchise real estate secured— — 292 37 292 — 
Total business loans secured by real estate8,439 — 292 37 8,731 8,439 
Commercial loans (4)
Commercial and industrial9,252 — 11,727 — 20,979 20,979 
Franchise non-real estate secured— — 1,559 200 1,559 — 
SBA not secured by real estate535 — — — 535 535 
Total commercial loans9,787 — 13,286 200 23,073 21,514 
Totals nonaccrual loans$38,541 $— $13,578 $237 $52,119 $50,268 
______________________________
(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) Loans to businesses where the operating cash flow of the business is the primary source of repayment.

22

PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES
PAST DUE STATUS
(Unaudited)
Days Past Due (7)
(Dollars in thousands)Current30-5960-8990+Total
June 30, 2024
Investor loans secured by real estate
CRE non-owner-occupied$2,244,424 $— $— $1,050 $2,245,474 
Multifamily5,473,606 — — — 5,473,606 
Construction and land453,799 — — — 453,799 
SBA secured by real estate (1)
32,748 — — 497 33,245 
Total investor loans secured by real estate8,204,577 — — 1,547 8,206,124 
Business loans secured by real estate (2)
CRE owner-occupied2,088,046 3,852 — 4,587 2,096,485 
Franchise real estate secured274,353 — — 292 274,645 
SBA secured by real estate (3)
46,543 — — — 46,543 
Total business loans secured by real estate2,408,942 3,852 — 4,879 2,417,673 
Commercial loans (4)
Commercial and industrial1,552,024 1,133 449 1,129 1,554,735 
Franchise non-real estate secured253,117 — 2,840 1,559 257,516 
SBA not secured by real estate9,811 — — 535 10,346 
Total commercial loans1,814,952 1,133 3,289 3,223 1,822,597 
Retail loans
Single family residential (5)
70,380 — — — 70,380 
Consumer loans1,378 — — — 1,378 
Total retail loans71,758 — — — 71,758 
Loans held for investment before basis adjustment (6)
$12,500,229 $4,985 $3,289 $9,649 $12,518,152 
______________________________
(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 $28.2 million to the carrying amount of certain loans included in fair value hedging relationships.
(7) Nonaccrual loans are included in this aging analysis based on the loan's past due status.



23

PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES
CREDIT RISK GRADES
(Unaudited)
 
(Dollars in thousands)PassSpecial
Mention		Substandard
Doubtful
Total Gross
Loans
June 30, 2024
Investor loans secured by real estate    
CRE non-owner-occupied$2,204,871 $3,585 $37,018 $— $2,245,474 
Multifamily5,455,303 18,303 — — 5,473,606 
Construction and land453,375 424 — — 453,799 
SBA secured by real estate (1)
25,026 1,130 7,089 — 33,245 
Total investor loans secured by real estate8,138,575 23,442 44,107 — 8,206,124 
Business loans secured by real estate (2)
CRE owner-occupied2,014,813 32,938 48,734 — 2,096,485 
Franchise real estate secured271,264 1,579 1,802 — 274,645 
SBA secured by real estate (3)
42,673 82 3,788 — 46,543 
Total business loans secured by real estate2,328,750 34,599 54,324 — 2,417,673 
Commercial loans (4)
   
Commercial and industrial1,456,169 29,183 65,708 3,675 1,554,735 
Franchise non-real estate secured241,664 602 15,250 — 257,516 
SBA not secured by real estate9,577 — 769 — 10,346 
Total commercial loans1,707,410 29,785 81,727 3,675 1,822,597 
Retail loans
Single family residential (5)
70,380 — — — 70,380 
Consumer loans1,378 — — — 1,378 
Total retail loans71,758 — — — 71,758 
Loans held for investment before basis adjustment (6)
$12,246,493 $87,826 $180,158 $3,675 $12,518,152 
______________________________
(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 $28.2 million to the carrying amount of certain loans included in fair value hedging relationships.

24

GAAP TO NON-GAAP RECONCILIATIONS

PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES
(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 assets excluding the FDIC special assessment is a non-GAAP financial measure derived from GAAP based amounts. We calculate this figure by excluding the FDIC special assessment and the related tax impact from net income. Management believes that the exclusion of such nonrecurring items from this financial measure provides useful information to gain an understanding of the operating results of our core business and a better comparison of financial performance.
 Three Months Ended
 June 30,March 31,June 30,
(Dollars in thousands)202420242023
Net income
$41,905 $47,025 $57,636 
Add: FDIC special assessment(161)523 — 
Less: tax adjustment (1)
(45)148 — 
Adjusted net income for average assets$41,789 $47,400 $57,636 
Average assets$18,595,683 $19,034,396 $21,058,006 
ROAA (annualized)
0.90 %0.99 %1.09 %
Adjusted ROAA (annualized)
0.90 %1.00 %1.09 %
______________________________
(1) Adjusted by statutory tax rate
25

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. The adjusted net income, adjusted return on average equity, and adjusted return on average tangible common equity further exclude the nonrecurring items to provide a better comparison to the financial results of prior periods.
 Three Months Ended
 June 30,March 31,June 30,
(Dollars in thousands)202420242023
Net income
$41,905 $47,025 $57,636 
Plus: amortization of intangible assets expense2,763 2,836 3,055 
Less: tax adjustment (1)
781 801 868 
Net income for average tangible common equity
$43,887 $49,060 $59,823 
Add: FDIC special assessment(161)523 — 
Less: tax adjustment (1)
(45)148 — 
Adjusted net income for average tangible common equity$43,771 $49,435 $59,823 
Average stockholders' equity$2,908,015 $2,895,949 $2,843,361 
Less: average intangible assets39,338 42,134 51,180 
Less: average goodwill901,312 901,312 901,312 
Adjusted average tangible common equity$1,967,365 $1,952,503 $1,890,869 
ROAE (annualized)5.76 %6.50 %8.11 %
Adjusted ROAE (annualized)5.75 %6.55 %8.11 %
ROATCE (annualized)8.92 %10.05 %12.66 %
Adjusted ROATCE (annualized)8.90 %10.13 %12.66 %
_____________________________________
(1) Adjusted by statutory tax rate.



26

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 and provision for credit losses from net income. The adjusted pre-provision net income further excludes the FDIC special assessment to provide a better comparison of financial performance. 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
June 30,March 31,June 30,
(Dollars in thousands)202420242023
Interest income$208,054 $213,431 $225,388 
Interest expense71,660 68,304 65,296 
Net interest income136,394 145,127 160,092 
Noninterest income
18,222 25,774 20,539 
Revenue
154,616 170,901 180,631 
Noninterest expense97,567 102,633 100,644 
Pre-provision net revenue
57,049 68,268 79,987 
Add: FDIC special assessment(161)523 — 
Adjusted pre-provision net revenue$56,888 $68,791 $79,987 
Pre-provision net revenue (annualized)
$228,196 $273,072 $319,948 
Adjusted pre-provision net revenue (annualized)$227,552 $275,164 $319,948 
Average assets$18,595,683 $19,034,396 $21,058,006 
Pre-provision net revenue to average assets
0.31 %0.36 %0.38 %
Pre-provision net revenue to average assets (annualized)
1.23 %1.43 %1.52 %
Adjusted pre-provision net revenue on average assets0.31 %0.36 %0.38 %
Adjusted pre-provision net revenue on average assets (annualized)1.22 %1.45 %1.52 %


27

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 other real estate owned operations, where applicable, to the sum of net interest income before provision for credit losses and total noninterest income less (loss) gain from other real estate owned and gain from debt extinguishment. The adjusted efficiency ratio further excludes the FDIC special assessment to provide a better comparison to the financial results of prior periods. 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
June 30,March 31,June 30,
(Dollars in thousands)202420242023
Total noninterest expense$97,567 $102,633 $100,644 
Less: amortization of intangible assets2,763 2,836 3,055 
Less: other real estate owned operations, net— 46 8 
Adjusted noninterest expense94,804 99,751 97,581 
Less: FDIC special assessment(161)523 — 
Adjusted noninterest expense excluding FDIC special assessment$94,965 $99,228 $97,581 
Net interest income before provision for credit losses$136,394 $145,127 $160,092 
Add: total noninterest income
18,222 25,774 20,539 
Less: net (loss) gain from other real estate owned
(28)— 106 
Less: net gain from debt extinguishment— 5,067 — 
Adjusted revenue
$154,644 $165,834 $180,525 
Efficiency ratio61.3 %60.2 %54.1 %
Adjusted efficiency ratio excluding FDIC special assessment61.4 %59.8 %54.1 %


28

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.
 June 30,March 31,December 31,September 30,June 30,
(Dollars in thousands, except per share data)20242024202320232023
Total stockholders' equity$2,923,764 $2,902,801 $2,882,581 $2,855,534 $2,849,134 
Less: intangible assets938,998 941,761 944,597 947,619 950,674 
Tangible common equity$1,984,766 $1,961,040 $1,937,984 $1,907,915 $1,898,460 
Total assets$18,332,325 $18,813,181 $19,026,645 $20,275,720 $20,747,883 
Less: intangible assets938,998 941,761 944,597 947,619 950,674 
Tangible assets$17,393,327 $17,871,420 $18,082,048 $19,328,101 $19,797,209 
Tangible common equity ratio11.41 %10.97 %10.72 %9.87 %9.59 %
Common shares issued and outstanding96,434,04796,459,96695,860,09295,900,84795,906,217
Book value per share$30.32 $30.09 $30.07 $29.78 $29.71 
Less: intangible book value per share9.74 9.76 9.85 9.88 9.91 
Tangible book value per share$20.58 $20.33 $20.22 $19.89 $19.79 

Cost of non-maturity deposits is a non-GAAP financial measure derived from GAAP-based amounts. Cost of non-maturity deposits is calculated as the ratio of non-maturity deposit interest expense to average non-maturity deposits. We calculate non-maturity deposit interest expense by excluding interest expense for all certificates of deposit from total deposit expense, and we calculate average non-maturity deposits by excluding all certificates of deposit from total deposits. Management believes cost of non-maturity deposits is a useful measure to assess the Company's deposit base, including its potential volatility.
Three Months Ended
June 30,March 31,June 30,
(Dollars in thousands)202420242023
Total deposits interest expense$64,229 $59,506 $53,580 
Less: certificates of deposit interest expense21,115 19,075 10,306 
Less: brokered certificates of deposit interest expense6,506 6,669 18,869 
Non-maturity deposit expense$36,608 $33,762 $24,405 
Total average deposits$14,941,573 $15,055,747 $16,876,251 
Less: average certificates of deposit1,830,516 1,727,728 1,286,160 
Less: average brokered certificates of deposit542,699 568,872 1,767,970 
Average non-maturity deposits$12,568,358 $12,759,147 $13,822,121 
Cost of non-maturity deposits1.17 %1.06 %0.71 %
29