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

Exhibit 99.1

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

Third Quarter 2024 Summary
 
•Net income of $36.0 million, or $0.37 per diluted share
•Return on average assets of 0.79%
•Pre-provision net revenue (“PPNR”)(1) to average assets of 1.06%, annualized
•Net interest margin of 3.16%
•Average cost of deposits of 1.84%, and spot cost of deposits of 1.80%
•Non-maturity deposits(1) to total deposits of 84.30%
•Non-interest bearing deposits totaled 32.0% of total deposits
•Total delinquency of 0.08% of loans held for investment
•Nonperforming assets to total assets of 0.22%
•Tangible book value per share(1) increased $0.23 from the prior quarter to $20.81
•Common equity tier 1 capital ratio of 16.83%, and total risk-based capital ratio of 20.05%
•Tangible common equity (“TCE”) ratio(1) increased to 11.83%

Irvine, Calif., October 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 $36.0 million, or $0.37 per diluted share, for the third quarter of 2024, compared with net income of $41.9 million, or $0.43 per diluted share, for the second quarter of 2024, and net income of $46.0 million, or $0.48 per diluted share, for the third quarter of 2023.
    
For the third quarter of 2024, the Company’s return on average assets (“ROAA”) was 0.79%, return on average equity (“ROAE”) was 4.91%, and return on average tangible common equity (“ROATCE”)(1) was 7.63%, compared to 0.90%, 5.76%, and 8.92%, respectively, for the second quarter of 2024, and 0.88%, 6.43%, and 10.08%, respectively, for the third quarter of 2023. Total assets were $17.91 billion at September 30, 2024, compared to $18.33 billion at June 30, 2024, and $20.28 billion at September 30, 2023.

Steven R. Gardner, Chairman, Chief Executive Officer, and President of the Company, commented, “We delivered solid results in the third quarter with net income of $36.0 million and diluted earnings per share of $0.37. Our relationship managers and their branch banking colleagues' consistent efforts to generate new business opportunities while deepening existing client relationships contributed to an increase in non-interest-bearing deposits, which comprised 32% of total deposits at quarter-end. We leveraged these positive core deposit trends to further reduce higher-cost wholesale funding sources by decreasing brokered deposits by $184 million and repaying a $200 million FHLB ("Federal Home Loan Bank") term advance.

“Third quarter asset quality remained strong, as total delinquencies decreased to 0.08% of loans and non-performing assets decreased to 0.22% of total assets. This performance positions us among the strongest in the industry in terms of asset quality.

“Beginning in the second half of 2022, we proactively prioritized capital accumulation over balance sheet growth in light of the ongoing macroeconomic uncertainty, while at the same time continuing to provide best-in-class service to our clients. As a result, our peer-leading capital ratios have created significant optionality for our organization to pursue organic and strategic growth opportunities that can enhance long-term franchise value.

“As the interest rate outlook has become more favorable, we are seeing incrementally better demand for new credit and have taken steps to bolster our loan production, as such, our loan pipeline has increased and we
(1) Reconciliations of the non–U.S. generally accepted accounting principles (“GAAP”) measures are set forth at the end of this press release.
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continue to build momentum heading into the fourth quarter. We are well-positioned to accelerate new originations in the coming quarters and we expect to stabilize the loan portfolio as we move into 2025. Looking ahead, we are focused on leveraging our collaborative platform to support our commercial banking teams and their business development activities by strategically adding bankers to prudently grow new loan and deposit relationships. I would like to thank our dedicated employees for their exceptional efforts and to all stakeholders for their ongoing support. Together, we are well-prepared to continue building on our successes and capitalize on future opportunities.”

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FINANCIAL HIGHLIGHTS
Three Months Ended
 September 30,June 30,September 30,
(Dollars in thousands, except per share data)202420242023
Financial highlights (unaudited)
Net income
$35,979 $41,905 $46,030 
Net interest income130,898 136,394 149,548 
Diluted earnings per share
0.37 0.43 0.48 
Common equity dividend per share paid0.33 0.33 0.33 
ROAA
0.79 %0.90 %0.88 %
ROAE
4.91 5.76 6.43 
ROATCE (1)
7.63 8.92 10.08 
Pre-provision net revenue to average assets (1)
1.06 1.23 1.27 
Net interest margin3.16 3.26 3.12 
Cost of deposits1.84 1.73 1.50 
Cost of non-maturity deposits (1)
1.27 1.17 0.89 
Efficiency ratio (1)
66.1 61.3 59.0 
Noninterest expense as a percent of average assets2.23 2.10 1.96 
Total assets$17,909,643 $18,332,325 $20,275,720 
Total deposits14,480,927 14,627,654 16,007,447 
Non-maturity deposits (1) as a percent of total deposits
84.3 %83.7 %82.8 %
Noninterest-bearing deposits as a percent of total deposits32.0 31.6 36.1 
Loan-to-deposit ratio83.1 85.4 82.9 
Nonperforming assets as a percent of total assets0.22 0.28 0.13 
Delinquency as a percentage of loans held for investment0.08 0.14 0.08 
Allowance for credit losses to loans held for investment (2)
1.51 1.47 1.42 
Book value per share$30.52 $30.32 $29.78 
Tangible book value per share (1)
20.81 20.58 19.89 
Tangible common equity ratio (1)
11.83 %11.41 %9.87 %
Common equity tier 1 capital ratio16.83 15.89 14.87 
Total capital ratio20.05 19.01 17.74 
______________________________
(1) Reconciliations of the non-GAAP measures are set forth at the end of this press release.
(2) At September 30, 2024, 24% of loans held for investment include a fair value net discount of $35.9 million, or 0.30% of loans held for investment. 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 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.

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INCOME STATEMENT HIGHLIGHTS

Net Interest Income and Net Interest Margin
 
Net interest income totaled $130.9 million in the third quarter of 2024, a decrease of $5.5 million, or 4.0%, from the second quarter of 2024. The decrease in net interest income was primarily attributable to lower average loan balances and a higher cost of funds as borrowers continued deploying excess cash reserves to pay down and pay off higher-yielding commercial loan balances.

The net interest margin for the third quarter of 2024 decreased 10 basis points to 3.16%, from 3.26% in the prior quarter. The decrease was primarily due to a higher cost of funds.

Net interest income for the third quarter of 2024 decreased $18.7 million, or 12.5%, compared to the third quarter of 2023. The decrease was attributable to lower average interest-earning asset balances and a higher cost of funds, partially offset by lower average interest-bearing liabilities balances and higher yields on average interest-earning assets, all the result of the prolonged higher interest rate environment in the past twelve months and the Company's strategy to prioritize capital accumulation.

PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED AVERAGE BALANCES AND YIELD DATA
(Unaudited)
 Three Months Ended
 September 30, 2024June 30, 2024September 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$1,098,455 $13,346 4.83 %$1,134,736 $13,666 4.84 %$1,695,508 $21,196 4.96 %
Investment securities3,145,214 28,871 3.67 2,964,909 26,841 3.62 3,828,766 25,834 2.70 
Loans receivable, net (1) (2)
12,247,435 163,409 5.31 12,724,545 167,547 5.30 13,475,194 177,032 5.21 
Total interest-earning assets$16,491,104 $205,626 4.96 $16,824,190 $208,054 4.97 $18,999,468 $224,062 4.68 
Liabilities
Interest-bearing deposits$9,972,001 $67,898 2.71 %$10,117,571 $64,229 2.55 %$10,542,884 $62,718 2.36 %
Borrowings442,403 6,830 6.12 532,251 7,431 5.59 1,131,656 11,796 4.15 
Total interest-bearing liabilities$10,414,404 $74,728 2.85 $10,649,822 $71,660 2.71 $11,674,540 $74,514 2.53 
Noninterest-bearing deposits$4,683,477 $4,824,002 $6,001,033 
Net interest income$130,898 $136,394 $149,548 
Net interest margin (3)
  3.16 %3.26 %3.12 %
Cost of deposits (4)
1.84 1.73 1.50 
Cost of funds (5)
1.97 1.86 1.67 
Cost of non-maturity deposits (6)
1.27 1.17 0.89 
Ratio of interest-earning assets to interest-bearing liabilities158.35 157.98 162.74 
_______________________________________
(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 $2.6 million, $2.3 million, and $2.2 million for the three months ended September 30, 2024, June 30, 2024, and September 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 third quarter of 2024, the Company recorded a $486,000 provision expense, compared to $1.3 million for the second quarter of 2024, and $3.9 million for the third quarter of 2023. The decrease in provision for credit losses compared to the second quarter of 2024 was largely attributable to the decrease in loan balances and changes in the loan composition, partially offset by increases associated with economic forecasts.
Three Months Ended
September 30,June 30,September 30,
(Dollars in thousands)202420242023
Provision for credit losses
Provision for loan losses$(249)$1,756 $2,517 
Provision for unfunded commitments760 (505)1,386 
Provision for held-to-maturity securities(25)14 15 
Total provision for credit losses$486 $1,265 $3,918 

Noninterest Income
 
Noninterest income for the third quarter of 2024 was $18.9 million, an increase of $645,000 from the second quarter of 2024. The increase was primarily due to a $748,000 increase in other income largely attributable to a $1.0 million decrease in Community Reinvestment Act ("CRA") investment loss.

Noninterest income for the third quarter of 2024 increased $316,000 compared to the third quarter of 2023. The increase was primarily due to a $756,000 increase in earnings on bank owned life insurance, partially offset by a $543,000 decrease in trust custodial account fees.
Three Months Ended
September 30,June 30,September 30,
(Dollars in thousands)202420242023
Noninterest income
Loan servicing income$525 $510 $533 
Service charges on deposit accounts2,711 2,710 2,673 
Other service fee income306 309 280 
Debit card interchange fee income876 925 924 
Earnings on bank owned life insurance4,335 4,218 3,579 
Net gain from sales of loans
47 65 45 
Trust custodial account fees
8,813 8,950 9,356 
Escrow and exchange fees673 702 938 
Other income (loss)
581 (167)223 
Total noninterest income
$18,867 $18,222 $18,551 

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Noninterest Expense
 
Noninterest expense totaled $101.6 million for the third quarter of 2024, an increase of $4.1 million compared to the second quarter of 2024. The increase was primarily due to a $3.9 million increase in legal and professional services, driven by the prior quarter's $4.0 million insurance claim receivable that decreased the expense during the period.

Noninterest expense for the third quarter of 2024 decreased by $540,000 compared to the third quarter of 2023. The decrease was primarily due to an $809,000 decrease in other expense, a $775,000 decrease in marketing expense, and a $668,000 decrease in compensation and benefits, partially offset by a $1.7 million increase in deposit expense due to higher deposit administration service fees and a $737,000 increase in legal and professional services.
Three Months Ended
September 30,June 30,September 30,
(Dollars in thousands)202420242023
Noninterest expense
Compensation and benefits$53,400 $53,140 $54,068 
Premises and occupancy10,899 10,480 11,382 
Data processing7,777 7,754 7,517 
Other real estate owned operations, net1 — (4)
FDIC insurance premiums1,922 1,873 2,324 
Legal and professional services4,980 1,078 4,243 
Marketing expense860 1,724 1,635 
Office expense1,046 1,077 1,079 
Loan expense734 840 476 
Deposit expense12,474 12,289 10,811 
Amortization of intangible assets2,762 2,763 3,055 
Other expense4,790 4,549 5,599 
Total noninterest expense$101,645 $97,567 $102,185 

Income Tax

For the third quarter of 2024, income tax expense totaled $11.7 million, resulting in an effective tax rate of 24.5%, compared with income tax expense of $13.9 million and an effective tax rate of 24.9% for the second quarter of 2024, and income tax expense of $16.0 million and an effective tax rate of 25.8% for the third quarter of 2023.

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BALANCE SHEET HIGHLIGHTS

Loans

Loans held for investment totaled $12.04 billion at September 30, 2024, a decrease of $454.9 million, or 3.6%, from June 30, 2024, and a decrease of $1.24 billion, or 9.3%, from September 30, 2023. The decrease from June 30, 2024 was primarily due to lower loan production and fundings, increased prepayments and maturities, as well as a decrease in credit line draws, reflecting borrowers continued preferences to utilize excess cash reserves to reduce outstanding debt.

New origination activity during the third quarter of 2024 decreased compared to the second quarter of 2024, and increased compared to the third quarter of 2023. New loan commitments totaled $104.1 million, and new loan fundings totaled $39.4 million, compared with $150.7 million in loan commitments and $58.6 million in new loan fundings for the second quarter of 2024, and $67.8 million in loan commitments and $25.6 million in new loan fundings for the third quarter of 2023.
 
At September 30, 2024, the total loan-to-deposit ratio was 83.1%, compared to 85.4% and 82.9% at June 30, 2024 and September 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
September 30,June 30,September 30,
(Dollars in thousands)202420242023
Beginning gross loan balance before basis adjustment$12,518,292 $13,044,395 $13,665,596 
New commitments104,080 150,666 67,811 
Unfunded new commitments(64,706)(92,017)(42,185)
Net new fundings39,374 58,649 25,626 
Amortization/maturities/payoffs(449,367)(447,170)(370,044)
Net draws on existing lines of credit(50,982)(100,302)7,180 
Loan sales(3,628)(23,750)(1,206)
Charge-offs(2,439)(13,530)(7,561)
Net decrease
(467,042)(526,103)(346,005)
Ending gross loan balance before basis adjustment$12,051,250 $12,518,292 $13,319,591 
Basis adjustment associated with fair value hedge (1)
(16,153)(28,201)(48,830)
Ending gross loan balance $12,035,097 $12,490,091 $13,270,761 
______________________________
(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:

September 30,June 30,September 30,
(Dollars in thousands)202420242023
Investor loans secured by real estate
Commercial real estate (“CRE”) non-owner-occupied$2,202,268 $2,245,474 $2,514,056 
Multifamily5,388,847 5,473,606 5,719,210 
Construction and land445,146 453,799 444,576 
SBA secured by real estate (1)
32,228 33,245 37,754 
Total investor loans secured by real estate8,068,489 8,206,124 8,715,596 
Business loans secured by real estate (2)
CRE owner-occupied2,038,583 2,096,485 2,228,802 
Franchise real estate secured264,696 274,645 313,451 
SBA secured by real estate (3)
43,943 46,543 53,668 
Total business loans secured by real estate2,347,222 2,417,673 2,595,921 
Commercial loans (4)
Commercial and industrial (“C&I”)
1,316,517 1,554,735 1,588,771 
Franchise non-real estate secured237,702 257,516 335,053 
SBA non-real estate secured8,407 10,346 10,667 
Total commercial loans1,562,626 1,822,597 1,934,491 
Retail loans
Single family residential (5)
71,552 70,380 70,984 
Consumer1,361 1,378 1,958 
Total retail loans72,913 71,758 72,942 
Loans held for investment before basis adjustment (6)
12,051,250 12,518,152 13,318,950 
Basis adjustment associated with fair value hedge (7)
(16,153)(28,201)(48,830)
Loans held for investment12,035,097 12,489,951 13,270,120 
Allowance for credit losses for loans held for investment(181,248)(183,803)(188,098)
Loans held for investment, net$11,853,849 $12,306,148 $13,082,022 
Total unfunded loan commitments$1,377,190 $1,601,870 $2,110,565 
Loans held for sale, at lower of cost or fair value$— $140 $641 
______________________________
(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 $1.5 million, $1.4 million, and $451,000, and unaccreted fair value net purchase discounts of $35.9 million, $38.6 million, and $46.2 million as of September 30, 2024, June 30, 2024, and September 30, 2023, respectively.
(7) Represents the basis adjustment associated with the application of hedge accounting on certain loans.

The end-of-period weighted average interest rate on loans, excluding fees and discounts and impact from interest rate swaps designated as fair value hedges, at September 30, 2024 was 4.82%, compared to 4.88% at June 30, 2024, and 4.76% at September 30, 2023. The quarter-over-quarter decrease was a result of lower new loan fundings, customers paying down and paying off higher-rate loans. 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
September 30,June 30,September 30,
(Dollars in thousands)202420242023
Investor loans secured by real estate
CRE non-owner-occupied$5,200 $3,818 $2,900 
Multifamily8,730 6,026 3,687 
Construction and land1,494 16,820 17,400 
Total investor loans secured by real estate15,424 26,664 23,987 
Business loans secured by real estate (1)
CRE owner-occupied13,307 2,623 — 
SBA secured by real estate (2)
1,000 — — 
Total business loans secured by real estate14,307 2,623 — 
Commercial loans (2)
Commercial and industrial64,267 109,679 40,399 
SBA non-real estate secured— 1,281 406 
Total commercial loans64,267 110,960 40,805 
Retail loans
Single family residential (3)
8,945 7,698 3,019 
Consumer1,137 2,721 — 
Total retail loans10,082 10,419 3,019 
Total loan commitments$104,080 $150,666 $67,811 
______________________________
(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 was 8.43% in the third quarter of 2024, compared to 8.58% in the second quarter of 2024, and 8.01% in the third quarter of 2023.

Allowance for Credit Losses
 
At September 30, 2024, our allowance for credit losses (“ACL”) on loans held for investment was $181.2 million, a decrease of $2.6 million from June 30, 2024 and a decrease of $6.9 million from September 30, 2023. The decreases in the ACL from June 30, 2024 and September 30, 2023 primarily reflect loan charge-offs during the respective periods as well as changes in the size and composition of our loan portfolio.

During the third quarter of 2024, the Company incurred $2.3 million of net charge-offs, compared to $10.3 million during the second quarter of 2024, and $6.8 million during the third quarter of 2023.

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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 September 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$29,738 $— $— $(464)$29,274 
Multifamily57,298 — — 8,667 65,965 
Construction and land10,804 — — 180 10,984 
SBA secured by real estate (1)
2,142 — — 457 2,599 
Business loans secured by real estate (2)
CRE owner-occupied28,531 (1,152)— 580 27,959 
Franchise real estate secured6,794 — — (1,680)5,114 
SBA secured by real estate (3)
4,134 — — (490)3,644 
Commercial loans (4)
Commercial and industrial32,257 (1,239)2 (6,038)24,982 
Franchise non-real estate secured11,130 — 125 (1,357)9,898 
SBA non-real estate secured482 — 5 (139)348 
Retail loans
Single family residential (5)
399 — — (11)388 
Consumer loans94 (48)1 46 93 
Totals$183,803 $(2,439)$133 $(249)$181,248 
______________________________
(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 September 30, 2024 increased to 1.51%, compared to 1.47% at June 30, 2024, and 1.42% at September 30, 2023. The fair value net discount on loans acquired through acquisitions was $35.9 million, or 0.30% of total loans held for investment, as of September 30, 2024, compared to $38.6 million, or 0.31% of total loans held for investment, as of June 30, 2024, and $46.2 million, or 0.35% of total loans held for investment, as of September 30, 2023.

Asset Quality

Nonperforming assets totaled $39.1 million, or 0.22% of total assets, at September 30, 2024, compared with $52.1 million, or 0.28% of total assets, at June 30, 2024, and $25.9 million, or 0.13% of total assets, at September 30, 2023. Loan delinquencies were $9.9 million, or 0.08% of loans held for investment, at September 30, 2024, compared to $17.9 million, or 0.14% of loans held for investment, at June 30, 2024, and $10.9 million, or 0.08% of loans held for investment, at September 30, 2023.

Classified loans totaled $120.5 million, or 1.00% of loans held for investment, at September 30, 2024, compared with $183.8 million, or 1.47% of loans held for investment, at June 30, 2024, and $149.3 million, or 1.12% of loans held for investment, at September 30, 2023.


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

 September 30,June 30,September 30,
(Dollars in thousands)202420242023
Asset quality
Nonperforming loans$39,084 $52,119 $25,458 
Other real estate owned— — 450 
Nonperforming assets$39,084 $52,119 $25,908 
Total classified assets (1)
$120,484 $183,833 $149,708 
Allowance for credit losses181,248 183,803 188,098 
Allowance for credit losses as a percent of total nonperforming loans464 %353 %739 %
Nonperforming loans as a percent of loans held for investment0.32 0.42 0.19 
Nonperforming assets as a percent of total assets0.22 0.28 0.13 
Classified loans to total loans held for investment1.00 1.47 1.12 
Classified assets to total assets0.67 1.00 0.74 
Net loan charge-offs for the quarter ended$2,306 $10,293 $6,752 
Net loan charge-offs for the quarter to average total loans0.02 %0.08 %0.05 %
Allowance for credit losses to loans held for investment (2)
1.51 1.47 1.42 
Delinquent loans (3)
  
30 - 59 days$2,008 $4,985 $2,967 
60 - 89 days715 3,289 475 
90+ days7,143 9,649 7,484 
Total delinquency$9,866 $17,923 $10,926 
Delinquency as a percentage of loans held for investment0.08 %0.14 %0.08 %
______________________________
(1) Includes substandard and doubtful loans, and other real estate owned.
(2) At September 30, 2024, 24% of loans held for investment include a fair value net discount of $35.9 million, or 0.30% of loans held for investment. 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 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.
(3) Nonaccrual loans are included in this aging analysis based on the loan's past due status.

Investment Securities

At September 30, 2024, AFS and held-to-maturity (“HTM”) investment securities were $1.32 billion and $1.71 billion, respectively, compared to $1.32 billion and $1.71 billion, respectively, at June 30, 2024, and $1.91 billion and $1.74 billion, respectively, at September 30, 2023.

In total, investment securities were $3.03 billion at September 30, 2024, a decrease of $70,000 from June 30, 2024, and a decrease of $622.3 million from September 30, 2023. The decrease in the third quarter of 2024 compared to the prior quarter was primarily the result of $123.6 million in principal payments, amortization and accretion, and redemptions, partially offset by $113.3 million in purchases, primarily AFS U.S. Treasury securities, as well as an improvement of $10.2 million in AFS investment securities mark-to-market unrealized loss.

The decrease in investment securities from September 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 $646.8 million in principal payments, amortization and accretion, and redemptions, partially offset by $1.27 billion in purchases of AFS and HTM investment securities and a decrease of $277.0 million in AFS securities mark-to-market unrealized loss.
11

Deposits

At September 30, 2024, total deposits were $14.48 billion, a decrease of $146.7 million, or 1.0%, from June 30, 2024, and a decrease of $1.53 billion, or 9.5%, from September 30, 2023. The decrease from the prior quarter was primarily driven by reductions of $184.2 million in brokered certificates of deposit, as well as $39.1 million in money market and savings, partially offset by an increase of $66.4 million in retail certificates of deposit and $23.0 million in noninterest-bearing checking.

The decrease from September 30, 2023 was attributable to decreases of $1.14 billion in noninterest-bearing checking, $927.2 million in brokered certificates of deposit, and $68.1 million in money market and savings, partially offset by an increase of $447.0 million in retail certificates of deposit and $164.9 million in interest-bearing checking.

At September 30, 2024, non-maturity deposits(1) totaled $12.21 billion, or 84.3% of total deposits, a decrease of $29.0 million, or 0.2%, from June 30, 2024, and a decrease of $1.05 billion, or 7.9%, from September 30, 2023.

The decrease from the third quarter of 2023 was attributable to clients utilizing their deposits to prepay or pay down loans, reduced funding needs, as well as redeploying funds into higher-yielding alternatives due to elevated benchmark interest rates.

At September 30, 2024, maturity deposits totaled $2.27 billion, a decrease of $117.8 million, or 4.9%, from June 30, 2024, and a decrease of $480.1 million, or 17.4%, from September 30, 2023. The decrease in the third quarter of 2024 compared to the prior quarter was primarily driven by the decrease of $184.2 million in brokered certificates of deposit, a direct result of the planned maturity and reduction of higher-costing brokered time deposits, partially offset by an increase of $66.4 million in retail certificates of deposit. The decrease from September 30, 2023 was primarily driven by decreases in brokered certificates of deposit, partially offset by increases of retail certificates of deposit.

The weighted average cost of total deposits for the third quarter of 2024 was 1.84%, compared to 1.73% for the second quarter of 2024, and 1.50% for the third quarter of 2023, both increases principally driven by higher pricing across deposit categories. The weighted average cost of non-maturity deposits(1) for the third quarter of 2024 was 1.27%, compared to 1.17% for the second quarter of 2024, and 0.89% for the third quarter of 2023.

At September 30, 2024, the end-of-period weighted average rate of total deposits was 1.80%, compared to 1.81% at June 30, 2024, and 1.52% at September 30, 2023. At September 30, 2024, the end-of-period weighted average rate of non-maturity deposits was 1.26%, compared to 1.25% at June 30, 2024, and 0.96% at September 30, 2023.

At September 30, 2024, the Company’s FDIC-insured deposits as a percentage of total deposits was 60%, and the insured and collateralized deposits comprised 66% of total deposits, relatively consistent with 61% and 67%, respectively, at June 30, 2024, and 62% and 66%, respectively, at September 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.

 September 30,June 30,September 30,
(Dollars in thousands)202420242023
Deposit accounts
Noninterest-bearing checking$4,639,077 $4,616,124 $5,782,305 
Interest-bearing:
Checking2,763,353 2,776,212 2,598,449 
Money market/savings4,805,516 4,844,585 4,873,582 
Total non-maturity deposits (1)
12,207,946 12,236,921 13,254,336 
Retail certificates of deposit1,972,962 1,906,552 1,525,919 
Wholesale/brokered certificates of deposit300,019 484,181 1,227,192 
Total maturity deposits2,272,981 2,390,733 2,753,111 
Total deposits$14,480,927 $14,627,654 $16,007,447 
Cost of deposits1.84 %1.73 %1.50 %
Cost of non-maturity deposits (1)
1.27 1.17 0.89 
Noninterest-bearing deposits as a percent of total deposits32.0 31.6 36.1 
Non-maturity deposits (1) as a percent of total deposits
84.3 83.7 82.8 
______________________________
(1) Reconciliations of the non-GAAP measures are set forth at the end of this press release.


Borrowings

At September 30, 2024, total borrowings amounted to $272.3 million, a decrease of $259.8 million from June 30, 2024, and a decrease of $859.4 million from September 30, 2023. Total borrowings at September 30, 2024 were comprised of $272.3 million of subordinated debt. The decrease in borrowings at September 30, 2024 as compared to June 30, 2024 was due to the early redemption of a $200.0 million FHLB term advance and the maturity of $60.0 million in subordinated debentures during the quarter. The decrease in borrowings at September 30, 2024 as compared to September 30, 2023 was due to a decrease of $800.0 million in FHLB term advances and the maturity of $60.0 million in subordinated debentures.

As of September 30, 2024, our unused borrowing capacity was $8.83 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 third quarter of 2024.

Capital Ratios

At September 30, 2024, our common stockholders' equity was $2.94 billion, or 16.44% of total assets, compared with $2.92 billion, or 15.95%, at June 30, 2024, and $2.86 billion, or 14.08%, at September 30, 2023. At September 30, 2024, the ratio of tangible common equity to tangible assets(1) increased 42 and 196 basis points to 11.83%, compared with 11.41% at June 30, 2024, and 9.87% at September 30, 2023, respectively. Tangible book value per share(1) increased $0.23 and $0.92 to $20.81, compared with $20.58 at June 30, 2024, and $19.89 at September 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 September 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.

September 30,June 30,September 30,
Capital ratios202420242023
Pacific Premier Bancorp, Inc. Consolidated   
Tangible common equity ratio (1)
11.83 %11.41 %9.87 %
Tier 1 leverage ratio12.19 11.87 11.13 
Common equity tier 1 capital ratio16.83 15.89 14.87 
Tier 1 capital ratio16.83 15.89 14.87 
Total capital ratio20.05 19.01 17.74 
Pacific Premier Bank
Tier 1 leverage ratio13.45 %13.42 %12.42 %
Common equity tier 1 capital ratio18.56 17.97 16.59 
Tier 1 capital ratio18.56 17.97 16.59 
Total capital ratio19.81 19.22 17.66 
Share data   
Book value per share$30.52 $30.32 $29.78 
Tangible book value per share (1)
20.81 20.58 19.89 
Common equity dividends declared per share0.33 0.33 0.33 
Closing stock price (2)
25.16 22.97 21.76 
Shares issued and outstanding96,462,767 96,434,047 95,900,847 
Market capitalization (2)(3)
$2,427,003 $2,215,090 $2,086,802 
______________________________
(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 October 22, 2024, the Company's Board of Directors declared a $0.33 per share dividend, payable on November 12, 2024 to stockholders of record as of November 4, 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 third 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 October 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 October 31, 2024, at (877) 344-7529, replay code 5273136.

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 $18 billion of assets under custody and 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)
 September 30,June 30,March 31,December 31,September 30,
(Dollars in thousands)20242024202420232023
ASSETS
Cash and cash equivalents$982,249 $899,817 $1,028,818 $936,473 $1,400,276 
Interest-bearing time deposits with financial institutions1,246 996 995 995 1,242 
Investment securities held-to-maturity, at amortized cost, net of allowance for credit losses 1,713,575 1,710,141 1,720,481 1,729,541 1,737,866 
Investment securities available-for-sale, at fair value1,316,546 1,320,050 1,154,021 1,140,071 1,914,599 
FHLB, FRB, and other stock97,336 97,037 97,063 99,225 105,505 
Loans held for sale, at lower of amortized cost or fair value— 140 — — 641 
Loans held for investment12,035,097 12,489,951 13,012,071 13,289,020 13,270,120 
Allowance for credit losses(181,248)(183,803)(192,340)(192,471)(188,098)
Loans held for investment, net11,853,849 12,306,148 12,819,731 13,096,549 13,082,022 
Accrued interest receivable64,803 69,629 67,642 68,516 68,131 
Other real estate owned— — 248 248 450 
Premises and equipment, net49,807 52,137 54,789 56,676 59,396 
Deferred income taxes, net104,564 108,607 111,390 113,580 192,208 
Bank owned life insurance481,309 477,694 474,404 471,178 468,191 
Intangible assets34,924 37,686 40,449 43,285 46,307 
Goodwill901,312 901,312 901,312 901,312 901,312 
Other assets308,123 350,931 341,838 368,996 297,574 
Total assets$17,909,643 $18,332,325 $18,813,181 $19,026,645 $20,275,720 
LIABILITIES  
Deposit accounts:  
Noninterest-bearing checking$4,639,077 $4,616,124 $4,997,636 $4,932,817 $5,782,305 
Interest-bearing:
Checking2,763,353 2,776,212 2,785,626 2,899,621 2,598,449 
Money market/savings4,805,516 4,844,585 5,037,636 4,868,442 4,873,582 
Retail certificates of deposit1,972,962 1,906,552 1,794,813 1,684,560 1,525,919 
Wholesale/brokered certificates of deposit300,019 484,181 572,117 610,186 1,227,192 
Total interest-bearing9,841,850 10,011,530 10,190,192 10,062,809 10,225,142 
Total deposits14,480,927 14,627,654 15,187,828 14,995,626 16,007,447 
FHLB advances and other borrowings— 200,000 200,000 600,000 800,000 
Subordinated debentures272,320 332,160 332,001 331,842 331,682 
Accrued expenses and other liabilities212,459 248,747 190,551 216,596 281,057 
Total liabilities14,965,706 15,408,561 15,910,380 16,144,064 17,420,186 
STOCKHOLDERS’ EQUITY     
Common stock942 941 941 938 937 
Additional paid-in capital2,389,767 2,383,615 2,378,171 2,377,131 2,371,941 
Retained earnings633,350 629,341 619,405 604,137 771,285 
Accumulated other comprehensive loss(80,122)(90,133)(95,716)(99,625)(288,629)
Total stockholders' equity2,943,937 2,923,764 2,902,801 2,882,581 2,855,534 
Total liabilities and stockholders' equity$17,909,643 $18,332,325 $18,813,181 $19,026,645 $20,275,720 








17

PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
 Three Months EndedNine Months Ended
 September 30,June 30,September 30,September 30,September 30,
(Dollars in thousands, except per share data)20242024202320242023
INTEREST INCOME   
Loans$163,409 $167,547 $177,032 $503,931 $540,842 
Investment securities and other interest-earning assets42,217 40,507 47,030 123,180 129,951 
Total interest income205,626 208,054 224,062 627,111 670,793 
INTEREST EXPENSE  
Deposits67,898 64,229 62,718 191,633 156,532 
FHLB advances and other borrowings1,511 2,330 7,235 8,078 22,328 
Subordinated debentures5,319 5,101 4,561 14,981 13,683 
Total interest expense74,728 71,660 74,514 214,692 192,543 
Net interest income before provision for credit losses130,898 136,394 149,548 412,419 478,250 
Provision for credit losses486 1,265 3,918 5,603 8,433 
Net interest income after provision for credit losses130,412 135,129 145,630 406,816 469,817 
NONINTEREST INCOME  
Loan servicing income525 510 533 1,564 1,599 
Service charges on deposit accounts2,711 2,710 2,673 8,109 7,972 
Other service fee income306 309 280 951 891 
Debit card interchange fee income876 925 924 2,566 2,641 
Earnings on bank owned life insurance4,335 4,218 3,579 12,712 10,440 
Net gain from sales of loans
47 65 45 112 419 
Net gain from sales of investment securities
— — — — 138 
Trust custodial account fees
8,813 8,950 9,356 28,405 29,741 
Escrow and exchange fees673 702 938 2,071 2,920 
Other income (loss)
581 (167)223 6,373 3,515 
Total noninterest income
18,867 18,222 18,551 62,863 60,276 
NONINTEREST EXPENSE  
Compensation and benefits53,400 53,140 54,068 160,670 161,785 
Premises and occupancy10,899 10,480 11,382 32,186 34,739 
Data processing7,777 7,754 7,517 23,042 22,270 
Other real estate owned operations, net1 — (4)47 112 
FDIC insurance premiums1,922 1,873 2,324 6,424 7,106 
Legal and professional services4,980 1,078 4,243 10,201 14,460 
Marketing expense860 1,724 1,635 4,142 5,352 
Office expense1,046 1,077 1,079 3,216 3,591 
Loan expense734 840 476 2,344 1,689 
Deposit expense12,474 12,289 10,811 37,428 28,441 
Amortization of intangible assets2,762 2,763 3,055 8,361 9,281 
Other expense4,790 4,549 5,599 13,784 15,355 
Total noninterest expense101,645 97,567 102,185 301,845 304,181 
Net income before income taxes
47,634 55,784 61,996 167,834 225,912 
Income tax expense
11,655 13,879 15,966 42,925 59,684 
Net income
$35,979 $41,905 $46,030 $124,909 $166,228 
EARNINGS PER SHARE
  
Basic$0.37 $0.43 $0.48 $1.30 $1.74 
Diluted$0.37 $0.43 $0.48 $1.30 $1.74 
WEIGHTED AVERAGE SHARES OUTSTANDING  
Basic94,650,096 94,628,201 94,189,844 94,543,243 94,072,463 
Diluted94,775,927 94,716,205 94,283,008 94,652,583 94,214,846 
18

SELECTED FINANCIAL DATA

PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED AVERAGE BALANCES AND YIELD DATA
(Unaudited)
 
 Three Months Ended
 September 30, 2024June 30, 2024September 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$1,098,455 $13,346 4.83 %$1,134,736 $13,666 4.84 %$1,695,508 $21,196 4.96 %
Investment securities3,145,214 28,871 3.67 2,964,909 26,841 3.62 3,828,766 25,834 2.70 
Loans receivable, net (1)(2)
12,247,435 163,409 5.31 12,724,545 167,547 5.30 13,475,194 177,032 5.21 
Total interest-earning assets16,491,104 205,626 4.96 16,824,190 208,054 4.97 18,999,468 224,062 4.68 
Noninterest-earning assets1,751,309 1,771,493 1,806,319 
Total assets$18,242,413 $18,595,683 $20,805,787 
Liabilities and equity
Interest-bearing deposits:
Interest checking$2,707,440 $10,848 1.59 %$2,747,972 $10,177 1.49 %$2,649,203 $10,849 1.62 %
Money market4,607,486 28,118 2.43 4,724,572 26,207 2.23 4,512,740 19,182 1.69 
Savings263,570 246 0.37 271,812 224 0.33 329,684 115 0.14 
Retail certificates of deposit1,944,685 23,202 4.75 1,830,516 21,115 4.64 1,439,531 13,398 3.69 
Wholesale/brokered certificates of deposit448,820 5,484 4.86 542,699 6,506 4.82 1,611,726 19,174 4.72 
Total interest-bearing deposits9,972,001 67,898 2.71 10,117,571 64,229 2.55 10,542,884 62,718 2.36 
FHLB advances and other borrowings128,413 1,511 4.68 200,154 2,330 4.68 800,049 7,235 3.59 
Subordinated debentures313,990 5,319 6.70 332,097 5,101 6.14 331,607 4,561 5.50 
Total borrowings442,403 6,830 6.12 532,251 7,431 5.59 1,131,656 11,796 4.15 
Total interest-bearing liabilities10,414,404 74,728 2.85 10,649,822 71,660 2.71 11,674,540 74,514 2.53 
Noninterest-bearing deposits4,683,477 4,824,002 6,001,033 
Other liabilities215,372 213,844 268,249 
Total liabilities15,313,253 15,687,668 17,943,822 
Stockholders' equity2,929,160 2,908,015 2,861,965 
Total liabilities and equity$18,242,413 $18,595,683 $20,805,787 
Net interest income$130,898 $136,394 $149,548 
Net interest margin (3)
3.16 %3.26 %3.12 %
Cost of deposits (4)
1.84 1.73 1.50 
Cost of funds (5)
1.97 1.86 1.67 
Cost of non-maturity deposits (6)
1.27 1.17 0.89 
Ratio of interest-earning assets to interest-bearing liabilities158.35 157.98 162.74 
______________________________
(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 $2.6 million, $2.3 million, and $2.2 million for the three months ended September 30, 2024, June 30, 2024, and September 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)
September 30,June 30,March 31,December 31,September 30,
(Dollars in thousands)20242024202420232023
Investor loans secured by real estate
CRE non-owner-occupied$2,202,268 $2,245,474 $2,309,252 $2,421,772 $2,514,056 
Multifamily5,388,847 5,473,606 5,558,966 5,645,310 5,719,210 
Construction and land445,146 453,799 486,734 472,544 444,576 
SBA secured by real estate (1)
32,228 33,245 35,206 36,400 37,754 
Total investor loans secured by real estate8,068,489 8,206,124 8,390,158 8,576,026 8,715,596 
Business loans secured by real estate (2)
CRE owner-occupied2,038,583 2,096,485 2,149,362 2,191,334 2,228,802 
Franchise real estate secured264,696 274,645 294,938 304,514 313,451 
SBA secured by real estate (3)
43,943 46,543 48,426 50,741 53,668 
Total business loans secured by real estate2,347,222 2,417,673 2,492,726 2,546,589 2,595,921 
Commercial loans (4)
Commercial and industrial1,316,517 1,554,735 1,774,487 1,790,608 1,588,771 
Franchise non-real estate secured237,702 257,516 301,895 319,721 335,053 
SBA non-real estate secured8,407 10,346 10,946 10,926 10,667 
Total commercial loans1,562,626 1,822,597 2,087,328 2,121,255 1,934,491 
Retail loans
Single family residential (5)
71,552 70,380 72,353 72,752 70,984 
Consumer1,361 1,378 1,830 1,949 1,958 
Total retail loans72,913 71,758 74,183 74,701 72,942 
Loans held for investment before basis adjustment (6)
12,051,250 12,518,152 13,044,395 13,318,571 13,318,950 
Basis adjustment associated with fair value hedge (7)
(16,153)(28,201)(32,324)(29,551)(48,830)
Loans held for investment12,035,097 12,489,951 13,012,071 13,289,020 13,270,120 
Allowance for credit losses for loans held for investment(181,248)(183,803)(192,340)(192,471)(188,098)
Loans held for investment, net$11,853,849 $12,306,148 $12,819,731 $13,096,549 $13,082,022 
Loans held for sale, at lower of cost or fair value$— $140 $— $— $641 
______________________________
(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 $1.5 million, $1.4 million, $797,000, $(74,000), and $451,000, and unaccreted fair value net purchase discounts of $35.9 million, $38.6 million, $41.2 million, $43.3 million, and $46.2 million as of September 30, 2024, June 30, 2024, March 31, 2024, December 31, 2023, and September 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)
 September 30,June 30,March 31,December 31,September 30,
(Dollars in thousands)20242024202420232023
Asset quality
Nonperforming loans$39,084 $52,119 $63,806 $24,817 $25,458 
Other real estate owned— — 248 248 450 
Nonperforming assets$39,084 $52,119 $64,054 $25,065 $25,908 
Total classified assets (1)
$120,484 $183,833 $204,937 $142,210 $149,708 
Allowance for credit losses181,248 183,803 192,340 192,471 188,098 
Allowance for credit losses as a percent of total nonperforming loans464 %353 %301 %776 %739 %
Nonperforming loans as a percent of loans held for investment0.32 0.42 0.49 0.19 0.19 
Nonperforming assets as a percent of total assets0.22 0.28 0.34 0.13 0.13 
Classified loans to total loans held for investment1.00 1.47 1.57 1.07 1.12 
Classified assets to total assets0.67 1.00 1.09 0.75 0.74 
Net loan charge-offs for the quarter ended$2,306 $10,293 $6,419 $3,902 $6,752 
Net loan charge-offs for the quarter to average total loans 0.02 %0.08 %0.05 %0.03 %0.05 %
Allowance for credit losses to loans held for investment (2)
1.51 1.47 1.48 1.45 1.42 
Delinquent loans (3)
   
30 - 59 days$2,008 $4,985 $1,983 $2,484 $2,967 
60 - 89 days715 3,289 974 1,294 475 
90+ days7,143 9,649 9,221 6,276 7,484 
Total delinquency$9,866 $17,923 $12,178 $10,054 $10,926 
Delinquency as a percent of loans held for investment0.08 %0.14 %0.09 %0.08 %0.08 %
______________________________
(1) Includes substandard and doubtful loans, and other real estate owned.
(2) At September 30, 2024, 24% of loans held for investment include a fair value net discount of $35.9 million, or 0.30% of loans held for investment. 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.
(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
September 30, 2024
Investor loans secured by real estate
CRE non-owner-occupied$19,042 $— $— $— $19,042 $19,042 
SBA secured by real estate (2)
1,725 559 — — 1,725 610 
Total investor loans secured by real estate20,767 559 — — 20,767 19,652 
Business loans secured by real estate (3)
CRE owner-occupied4,574 — — — 4,574 4,574 
Total business loans secured by real estate4,574 — — — 4,574 4,574 
Commercial loans (4)
Commercial and industrial2,274 193 10,938 — 13,212 13,019 
SBA not secured by real estate531 — — — 531 531 
Total commercial loans2,805 193 10,938 — 13,743 13,550 
Totals nonaccrual loans$28,146 $752 $10,938 $— $39,084 $37,776 
______________________________
(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
September 30, 2024
Investor loans secured by real estate
CRE non-owner-occupied$2,201,885 $— $— $383 $2,202,268 
Multifamily5,388,847 — — — 5,388,847 
Construction and land445,146 — — — 445,146 
SBA secured by real estate (1)
30,926 1,115 — 187 32,228 
Total investor loans secured by real estate8,066,804 1,115 — 570 8,068,489 
Business loans secured by real estate (2)
CRE owner-occupied2,034,009 — — 4,574 2,038,583 
Franchise real estate secured264,696 — — — 264,696 
SBA secured by real estate (3)
43,943 — — — 43,943 
Total business loans secured by real estate2,342,648 — — 4,574 2,347,222 
Commercial loans (4)
Commercial and industrial1,313,441 893 715 1,468 1,316,517 
Franchise non-real estate secured237,702 — — — 237,702 
SBA not secured by real estate7,876 — — 531 8,407 
Total commercial loans1,559,019 893 715 1,999 1,562,626 
Retail loans
Single family residential (5)
71,552 — — — 71,552 
Consumer loans1,361 — — — 1,361 
Total retail loans72,913 — — — 72,913 
Loans held for investment before basis adjustment (6)
$12,041,384 $2,008 $715 $7,143 $12,051,250 
______________________________
(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 $16.2 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
September 30, 2024
Investor loans secured by real estate    
CRE non-owner-occupied$2,163,159 $2,471 $36,638 $— $2,202,268 
Multifamily5,354,137 34,710 — — 5,388,847 
Construction and land445,146 — — — 445,146 
SBA secured by real estate (1)
24,901 1,125 6,202 — 32,228 
Total investor loans secured by real estate7,987,343 38,306 42,840 — 8,068,489 
Business loans secured by real estate (2)
CRE owner-occupied1,986,919 18,089 33,575 — 2,038,583 
Franchise real estate secured261,626 1,560 1,510 — 264,696 
SBA secured by real estate (3)
40,773 — 3,170 — 43,943 
Total business loans secured by real estate2,289,318 19,649 38,255 — 2,347,222 
Commercial loans (4)
   
Commercial and industrial1,275,854 12,393 25,385 2,885 1,316,517 
Franchise non-real estate secured226,738 557 10,407 — 237,702 
SBA not secured by real estate7,695 — 712 — 8,407 
Total commercial loans1,510,287 12,950 36,504 2,885 1,562,626 
Retail loans
Single family residential (5)
71,552 — — — 71,552 
Consumer loans1,361 — — — 1,361 
Total retail loans72,913 — — — 72,913 
Loans held for investment before basis adjustment (6)
$11,859,861 $70,905 $117,599 $2,885 $12,051,250 
______________________________
(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 $16.2 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
 September 30,June 30,September 30,
(Dollars in thousands)202420242023
Net income
$35,979 $41,905 $46,030 
Add: FDIC special assessment(68)(161)— 
Less: tax adjustment (1)
(19)(45)— 
Adjusted net income for average assets$35,930 $41,789 $46,030 
Average assets$18,242,413 $18,595,683 $20,805,787 
ROAA (annualized)
0.79 %0.90 %0.88 %
Adjusted ROAA (annualized)
0.79 %0.90 %0.88 %
______________________________
(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
 September 30,June 30,September 30,
(Dollars in thousands)202420242023
Net income
$35,979 $41,905 $46,030 
Plus: amortization of intangible assets expense2,762 2,763 3,055 
Less: tax adjustment (1)
781 781 868 
Net income for average tangible common equity
$37,960 $43,887 $48,217 
Add: FDIC special assessment(68)(161)— 
Less: tax adjustment (1)
(19)(45)— 
Adjusted net income for average tangible common equity$37,911 $43,771 $48,217 
Average stockholders' equity$2,929,160 $2,908,015 $2,861,965 
Less: average intangible assets36,570 39,338 48,150 
Less: average goodwill901,312 901,312 901,312 
Adjusted average tangible common equity$1,991,278 $1,967,365 $1,912,503 
ROAE (annualized)4.91 %5.76 %6.43 %
Adjusted ROAE (annualized)4.91 %5.75 %6.43 %
ROATCE (annualized)7.63 %8.92 %10.08 %
Adjusted ROATCE (annualized)7.62 %8.90 %10.08 %
_____________________________________
(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
September 30,June 30,September 30,
(Dollars in thousands)202420242023
Interest income$205,626 $208,054 $224,062 
Interest expense74,728 71,660 74,514 
Net interest income130,898 136,394 149,548 
Noninterest income
18,867 18,222 18,551 
Revenue
149,765 154,616 168,099 
Noninterest expense101,645 97,567 102,185 
Pre-provision net revenue
48,120 57,049 65,914 
Add: FDIC special assessment(68)(161)— 
Adjusted pre-provision net revenue$48,052 $56,888 $65,914 
Pre-provision net revenue (annualized)
$192,480 $228,196 $263,656 
Adjusted pre-provision net revenue (annualized)$192,208 $227,552 $263,656 
Average assets$18,242,413 $18,595,683 $20,805,787 
Pre-provision net revenue to average assets
0.26 %0.31 %0.32 %
Pre-provision net revenue to average assets (annualized)
1.06 %1.23 %1.27 %
Adjusted pre-provision net revenue on average assets0.26 %0.31 %0.32 %
Adjusted pre-provision net revenue on average assets (annualized)1.05 %1.22 %1.27 %


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
September 30,June 30,September 30,
(Dollars in thousands)202420242023
Total noninterest expense$101,645 $97,567 $102,185 
Less: amortization of intangible assets2,762 2,763 3,055 
Less: other real estate owned operations, net1 — (4)
Adjusted noninterest expense98,882 94,804 99,134 
Less: FDIC special assessment(68)(161)— 
Adjusted noninterest expense excluding FDIC special assessment$98,950 $94,965 $99,134 
Net interest income before provision for credit losses$130,898 $136,394 $149,548 
Add: total noninterest income
18,867 18,222 18,551 
Less: net loss from other real estate owned
— (28)— 
Less: net gain from debt extinguishment203 — — 
Adjusted revenue
$149,562 $154,644 $168,099 
Efficiency ratio66.1 %61.3 %59.0 %
Adjusted efficiency ratio excluding FDIC special assessment66.2 %61.4 %59.0 %


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.
 September 30,June 30,March 31,December 31,September 30,
(Dollars in thousands, except per share data)20242024202420232023
Total stockholders' equity$2,943,937 $2,923,764 $2,902,801 $2,882,581 $2,855,534 
Less: intangible assets936,236 938,998 941,761 944,597 947,619 
Tangible common equity$2,007,701 $1,984,766 $1,961,040 $1,937,984 $1,907,915 
Total assets$17,909,643 $18,332,325 $18,813,181 $19,026,645 $20,275,720 
Less: intangible assets936,236 938,998 941,761 944,597 947,619 
Tangible assets$16,973,407 $17,393,327 $17,871,420 $18,082,048 $19,328,101 
Tangible common equity ratio11.83 %11.41 %10.97 %10.72 %9.87 %
Common shares issued and outstanding96,462,76796,434,04796,459,96695,860,09295,900,847
Book value per share$30.52 $30.32 $30.09 $30.07 $29.78 
Less: intangible book value per share9.71 9.74 9.76 9.85 9.88 
Tangible book value per share$20.81 $20.58 $20.33 $20.22 $19.89 

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
September 30,June 30,September 30,
(Dollars in thousands)202420242023
Total deposits interest expense$67,898 $64,229 $62,718 
Less: certificates of deposit interest expense23,202 21,115 13,398 
Less: brokered certificates of deposit interest expense5,484 6,506 19,174 
Non-maturity deposit expense$39,212 $36,608 $30,146 
Total average deposits$14,655,478 $14,941,573 $16,543,917 
Less: average certificates of deposit1,944,685 1,830,516 1,439,531 
Less: average brokered certificates of deposit448,820 542,699 1,611,726 
Average non-maturity deposits$12,261,973 $12,568,358 $13,492,660 
Cost of non-maturity deposits1.27 %1.17 %0.89 %
29