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| 8-K - 8-K - PACIFIC PREMIER BANCORP INC | a8k_ppbixip-2017xq2updated.htm |
Investor Presentation
Second Quarter 2017
Steve Gardner
Chairman, President & Chief Executive Officer
sgardner@ppbi.com - 949-864-8000
Exhibit 99.1
Filed by Pacific Premier Bancorp, Inc.
Pursuant to Rule 425 under the
Securities Act of 1933
Subject Company: Plaza Bancorp
SEC Registration Statement No.: 333-
2
Forward-Looking Statements and
Where to Find Additional Information
Forward Looking Statements
This investor presentation may contain forward-looking statements regarding Pacific Premier Bancorp, Inc. ("PPBI"), including its wholly owned subsidiary Pacific Premier Bank (“Pacific Premier”), Plaza
Bancorp (“Plaza"), including its wholly owned subsidiary Plaza Bank and the proposed acquisition. In addition, the statements contained in this presentation 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 PPBI including, without limitation, plans, strategies and goals, and
statements about the Company’s expectations regarding revenue and asset growth, financial performance, loan and deposit growth, yields and returns, shareholder value creation and the impact of
acquisitions, including the proposed acquisition of Plaza. 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 expected cost savings, synergies and other financial benefits from PPBI’s acquisition, including its proposed acquisition of Plaza, might not be realized within the expected time frames or at all;
governmental approval of the Plaza acquisition may not be obtained or adverse regulatory conditions may be imposed in connection with governmental approvals of the Plaza acquisition; conditions to the
closing of the acquisition may not be satisfied; the shareholders of Plaza may fail to approve the consummation of the acquisition; the strength of the United States economy in general and the strength of
the local economies in which PPBI conducts operations; the effects of, and changes in, trade, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal
Reserve System; inflation, interest rate, market and monetary fluctuations; the timely development of competitive new products and services and the acceptance of these products and services by new and
existing customers; the willingness of users to substitute competitors’ products and services for PPBI’s products and services; the impact of changes in financial services policies, laws and regulations
(including the Dodd-Frank Wall Street Reform and Consumer Protection Act) and of governmental efforts to restructure the U.S. financial regulatory system; technological changes; changes in the level of
the PPBI’s nonperforming assets and charge-offs; any oversupply of inventory and deterioration in values of California real estate, both residential and commercial; the effect of changes in accounting
policies and practices, as may be adopted from time-to-time by bank regulatory agencies, the Securities and Exchange Commission (“SEC”), the Public Company Accounting Oversight Board, the Financial
Accounting Standards Board or other accounting standards setters; possible other-than-temporary impairment of securities held by us; changes in consumer spending, borrowing and savings habits; the
effects of the PPBI’s lack of a diversified loan portfolio, including the risks of geographic and industry concentrations; ability to attract deposits and other sources of liquidity; 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; unanticipated regulatory or
judicial proceedings; and the PPBI’s 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 PPBI’s 2016 Annual Report on Form 10-K. Annualized, pro forma, projected and estimated numbers in this investor presentation are used for illustrative purposes only, are not
forecasts and may not reflect actual results.
PPBI and Plaza undertake 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.
Additional Information About the Merger
This investor presentation does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. In connection with the proposed acquisition
transaction, PPBI will file a registration statement on Form S-4 with the SEC that will include a consent solicitation statement of Plaza. PPBI also plans to file other relevant materials with the SEC. The
registration statement will contain a joint proxy statement/prospectus to be distributed to the shareholders of Plaza and PPBI in connection with their vote on the acquisition. SHAREHOLDERS OF PLAZA ARE
ENCOURAGED TO READ THE REGISTRATION STATEMENT AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING THE CONSENT SOLICITATION STATEMENT/PROSPECTUS THAT WILL BE
PART OF THE REGISTRATION STATEMENT, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED ACQUISITION. The final consent solicitation statement/prospectus will be mailed
to shareholders of Plaza. Investors and security holders will be able to obtain the documents, and any other documents PPBI has filed with the SEC, free of charge at the SEC's website, www.sec.gov. In
addition, documents filed with the SEC by PPBI will be available free of charge by (1) accessing PPBI’s website at www.ppbi.com under the “Investor Relations” link and then under the heading “SEC Filings”,
(2) writing PPBI at 17901 Von Karman Avenue, Suite 1200, Irvine, CA 92614, Attention: Investor Relations, or (3) writing Plaza at 18200 Von Karman Avenue Suite 500, Irvine , CA 92612, Attention: Corporate
Secretary.
The directors, executive officers and certain other members of management and employees of Plaza may be deemed to be participants in the solicitation of consents in favor of the acquisition from the
shareholders of Plaza. Additional information regarding the interests of those participants and other persons who may be deemed participants in the transaction may be obtained by reading the consent
solicitation statement/prospectus regarding the proposed acquisition when it becomes available. Free copies of this document may be obtained as described in the preceding paragraph.
3
33 Full-Service
Branch Locations**
Company Profile
Exchange / Listing NASDAQ: PPBI
Focus
Small & Mid-Market
Businesses
Total Assets $7.7 Billion**
Branch Network
* Market data as of 8/10/2017
** Pro forma as of 6/30/2017
Pacific Premier Branch Footprint
Headquarters Irvine, CA
# of Research Analysts 7 Analysts
Market Cap $1.42 Billion*
Avg. Daily Volume 233,053 Shares*
Note: Pro forma with Plaza
PPBI Branch
Plaza Branch
4
Strategic Transformation
2008 - 2012
Organic growth driven by dynamic sales culture
Geographic expansion through highly accretive FDIC-assisted acquisitions
Canyon National Bank (“CNB”) - $192 million in assets, closed on 2/11/2011 (FDIC-Assisted)
Palm Desert National Bank (“PDNB”) - $103 million in assets, closed on 4/27/2012 (FDIC-Assisted)
2017 and Beyond
Focus on producing EPS growth from scale, efficiency and balance sheet leverage
Target ROAA and ROATCE of 1.25% and 15%, respectively
Continue disciplined organic and acquisitive growth increasing scarcity value
2013 - 2017
Build out of commercial banking platform through acquisitions
First Associations Bank (“FAB”) - $424 million in assets, closed on 3/15/2013 (151 days)
San Diego Trust Bank (“SDTB”) - $211 million in assets, closed on 6/25/2013 (111 days)
Infinity Franchise Holdings (“IFH”) - $80 million in assets, closed on 1/30/2014 (73 days)
Independence Bank (“IDPK”) - $422 million in assets, closed on 1/26/2015 (96 days)
Security California Bancorp (“SCAF”) - $715 million in assets, closed 1/31/2016 (123 days)
Heritage Oaks Bancorp (“HEOP”) – $2 billion in assets, closed on 4/1/2017 (109 days)
Plaza Bancorp (“PLZZ”) - $1.3 billion in assets, announced on 8/9/2017
A balance of organic and acquisitive growth to create a California centric commercial
bank franchise with $7.7 billion in assets (proforma)
5
$961
$1,174
$1,714 $1,745
$1,922 $2,034 $2,039
$2,753 $2,637 $2,714 $2,790
$3,562 $3,598 $3,755
$4,036 $4,174
$6,441
$7,707
$-
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
$9,000
2011 2012 2013 Q1 '14 Q2 '14 Q3 '14 Q4 '14 Q1 '15 Q2 '15 Q3 '15 Q4 '15 Q1 '16 Q2 '16 Q3 '16 Q4 '16 Q1 '17 Q2 '17 Q2 '17
Pro
FormaNon-Acquired Acquired
History of PPBI
Total Assets – Acquired vs. Non-Acquired
February 2011
Acquired Canyon
National Bank
($192MM assets) in
FDIC-assisted deal
January 2016
Acquired SCAF
($715MM assets)
Timely and efficient acquisitions have accelerated PPBI’s growth and performance
April 2017
Acquired HEOP
($2.0B assets)
Total assets compound annual growth rate of 46% since 2011
Source: SNL Financial, as of 6/30/2017
Note: Pro forma does not include purchase accounting or merger related adjustments
August 2017
Announced
acquisition of Plaza
($1.3B assets)March 2013 and June 2013
Acquired First Associations
Bank ($424MM assets) and
San Diego Trust Bank
($211MM assets)
April 2012
Acquired Palm
Desert National
Bank ($103MM
assets) in FDIC-
assisted deal
January 2014
Acquired Infinity
Franchise Holdings
($80MM assets), a
specialty finance
company
January 2015
Acquired
Independence Bank
($422MM assets)
6
Small and middle market business banking focus
Full suite of business banking services, including: cash
management, payroll and merchant card services
Customized commercial and industrial (“C&I”) and
commercial real estate (“CRE”) loans
C&I and CRE business loans (30% of loan portfolio)
Originated $148M Q2 2017 vs. $94M Q2 2016
Commercial Lines of Business
Business Banking SBA Lending
Franchise Lending
Income Property Lending
Nationwide origination capability
Small Business Administration (“SBA”) Loans
California Capital Access Program (“Cal CAP”) Loans
United State Department of Agriculture (“USDA”) Loans
Originated $35M Q2 2017 vs. $36M Q2 2016
Sell guaranteed portion – 75%
Gross gain rates 8-12%
National lender for established and experienced owner
operators of Quick Serve Restaurants
C&I and CRE based lending secured by equipment and
real estate
Originated $92M Q2 2017 vs. $47M Q2 2016
Average originated rate of 4.9% Q2 2017
Credit facilities and banking services for commercial real
estate investors in SoCal
Structured CRE and bridge loan flexibility
Originated $85M Q2 2017 and $27M Q2 2016
22% of loan portfolio
Construction Lending
Construction loans for developers and owner users on
properties predominantly in coastal SoCal
New team assembled in first half of 2013
Originated $74M Q2 2017 vs. $74M Q2 2016
7% of loan portfolio
Attractive risk adjusted yields
HOA Banking
Nationwide leader of customized cash management,
electronic banking services and credit facilities for:
Home Owner Association (“HOA”) Companies
HOA Management Companies
Predominately MMAs and demand deposits
7
Increasing Loan Volumes & Attractive Yields
$251
$299
$322
$385
$455
$492
4.97% 4.93%
4.87%
4.80%
4.88%
4.99%
3.00%
3.50%
4.00%
4.50%
5.00%
-
100
200
300
400
500
600
1Q'16 2Q'16 3Q'16 4Q'16 1Q'17 2Q'17
Business Loans Real Estate Loans Other Loans Weighted Average Coupon
Note: All dollars in millions
8
Commercial Bank Transformation - Deposit Composition
Deposits – 12/31/2009 Deposits – 6/30/2017
Total Deposits: $618.7 Million
Cost of Deposits: 1.91%
Total Deposits: $4.9 Billion
Cost of Deposits: 0.25%
Noninterest-
Bearing Demand
5%
Interest-Bearing
Demand
4%
Money Market/
Savings
23%Certificates of
Deposit
68%
Noninterest-
Bearing
Demand
37%
Interest-
Bearing
Demand
7%
Money market/
Savings
40%
Certificates of
Deposit
16%
• 37% of deposit balances are noninterest-bearing deposits
• 84% of deposits are non-maturity deposits
• 91% of deposits are core deposits*
* Core deposits are all transaction accounts and non-brokered CD accounts below $250,000
9
Commercial and
Industrial
5%
CRE Owner
Occupied
18%
CRE Non-Owner
Occupied
26%
Multi-Family
48%
1-4 Family
2%
Other
1%
Commercial Bank Transformation – Loan Composition
Loans – 12/31/2009 Loans – 6/30/2017
• Loan portfolio is high quality and well-diversified
• Business-related loans represent 44% of total loans at 6/30/17*
• Business loan commitments originated for 1H’17 were $568 million, 60% of total commitments
Total Loans: $576.3 Million Total Loans: $4.9 Billion
* Business loans are defined as commercial and industrial, franchise, commercial owner occupied and SBA
CRE Non-Owner
Occupied
22%
Multi-Family
15%
Commercial and
Industrial
15%
CRE Owner
Occupied
15%
Franchise
12%
Construction &
Land
7%
1-4 Family
7%
Farmland &
Agricultural
5%
SBA
2%
10
Conservative Credit Culture
Nonperforming Assets to Total Assets (%)
The Company has a history of effective credit risk management and outperforming peers
• Tactical loan sales utilized strategically to manage various risks
• Nonperforming assets to total assets of 0.01%
1.04
1.70
1.58 1.66
1.36
0.48 0.58
0.40
3.26
1.62
1.31
0.76
0.55
1.67
1.08
0.38 0.33
0.21 0.15 0.20 0.20 0.14 0.12 0.12 0.21 0.19 0.18 0.18 0.17
0.13 0.17 0.04 0.02
0.01
2.93
3.62
3.96
4.11
4.26 4.30 4.24
4.39
4.23 4.29
4.06 4.04
3.77
3.48 3.39
3.21
2.96
1.56
1.24
1.10 1.18 1.05
0.91
0.80 0.74 0.69 0.59 0.58
0.74
0.53 0.48 0.50 0.49
-
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
4.50
5.00
PPB Peers *
CNB
Acquisition
2/11/11
PDNB
Acquisition
4/27/12
* Peer group consists of all insured commercial banks in California with assets between $1 and $10 billion, from SNL Financial.
11
CRE to Capital Concentration
• CRE concentrations are well managed across the organization
• Our growth across our key businesses has diversified our loan portfolio
Managed Growth
CRE as a Percent of Total Capital
627%
499%
415%
372%
310%
349%
316%
336%
362% 352%
365% 376%
378%
340%
0%
100%
200%
300%
400%
500%
600%
700%
2008 2009 2010 2011 2012 2013 2014 2015 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17 2Q'17
12
Strong Loan Yields - Declining Cost of Deposits
Portfolio Core Loan Yields Cost of Total Deposits
0.33%
0.36%
0.32%
0.28% 0.27%
0.25%
0.00%
0.10%
0.20%
0.30%
0.40%
0.50%
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$4,000
$4,500
$5,000
2013 2014 2015 2016 1Q'17 2Q'17
Total Deposits Cost of Deposits
Our specialty lines of business have optimized our net interest margin through diversification
and disciplined pricing as well as accelerating organic loan and deposit growth
Note: All dollars in millions
Note: Core loan yields exclude accretion, prepayments and other one-time items.
5.26% 5.15% 5.10%
5.04% 4.96% 4.89%
0.00%
0.75%
1.50%
2.25%
3.00%
3.75%
4.50%
5.25%
6.00%
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$4,000
$4,500
$5,000
2013 2014 2015 2016 1Q'17 2Q'17
Loans Portfolio Core Loan Yield
• HEOP’s loan yield at acquisition was 4.44% • HEOP’s cost of deposits at acquisition was 0.25%
13
Revenue & Net Interest Margin
Annual Operating Revenue
Note: All dollars in millions
Note: Operating revenue = net interest income + noninterest income.
*Annualized
$67
$87
$121
$173
$186
$288
$0.0
$50.0
$100.0
$150.0
$200.0
$250.0
$300.0
2013 2014 2015 2016 1Q'17* 2Q'17*
Core Net Interest Margin
And delivered revenue growth of 57% as well as strong net interest margin of over 4%
3.93%
4.09%
4.06%
4.20%
4.27%
4.09%
3.70%
3.80%
3.90%
4.00%
4.10%
4.20%
4.30%
2013 2014 2015 2016 1Q'17 2Q'17
• HEOP’s core NIM at acquisition was 3.32%
14
Noninterest Expense & Efficiency
Adjusted Noninterest Expense / Avg. Assets Efficiency Ratio
In addition to leveraging technology to drive growth, the Company has continually
improved its operational processes to achieve greater operating leverage and
economies of scale
Note: Efficiency Ratio represents the ratio of noninterest expense less other real estate owned operations, core deposit intangible amortization and merger related expense to the sum of net
interest income before provision for loan losses and total noninterest income less gains/(loss) on sale of securities, and other-than-temporary impairment recovery (loss) on investment securities.
Adjusted noninterest expense excludes other real estate owned operations, core deposit intangible amortization and merger related costs.
64.7%
61.4%
55.9%
53.6% 52.3% 52.3%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
2013 2014 2015 2016 1Q'17 2Q'17
2.95% 2.87%
2.58% 2.55%
2.40%
2.30%
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
2013 2014 2015 2016 1Q'17 2Q'17
15
Pre-Tax, Pre-Provision Income(1) Tangible Book Value per Share
$23.4
$33.5
$51.9
$78.5
$86.3
$134.9
$0
$20
$40
$60
$80
$100
$120
$140
2013 2014 2015 2016 1Q'17* Q2'17*
$9.08
$10.12
$11.17
$12.51
$12.88
$13.83
$7.00
$8.00
$9.00
$10.00
$11.00
$12.00
$13.00
$14.00
2013 2014 2015 2016 1Q'17 2Q'17
Strong operating income has consistently resulted in shareholder value creation
Operating Income and Tangible Book Value
Note: All dollars in millions, except per share data
Note: Tangible book values are based on basic shares outstanding.
Refer to non-GAAP reconciliation
(1) Excludes merger-related expenses
*Annualized
16
(1) Please refer to non-GAAP reconciliation
The consolidated Company and the Bank will remain well capitalized with strong
earnings capacity to sustain growth strategy and well-capitalized levels
Pro Forma Capital Ratios – As of 6/30/2017
Pacific
Premier Plaza Pro forma
Well-
Capitalized
Requirement
Consolidated
Leverage Ratio 9.9% 9.7% 9.7% N/A
Common Equity Tier-1 Ratio 10.7% 10.2% 10.4% N/A
Tier-1 Ratio 11.1% 10.2% 10.7% N/A
Risk Based Capital Ratio 12.7% 13.6% 12.4% N/A
Tangible Common Equity Ratio (1) 9.2% 9.4% 9.0% N/A
Bank
Leverage Ratio 10.5% 11.0% 10.4% 5.0%
Common Equity Tier-1 Ratio 11.9% 11.5% 11.6% 6.5%
Tier-1 Ratio 11.9% 11.5% 11.6% 8.0%
Risk Based Capital Ratio 12.4% 12.7% 12.0% 10.0%
17
Superior Market Performance (PPBI)
Source: SNL Financial, market information as of 6/30/2017
Since June 2015, PPBI’s stock price has significantly outperformed its publicly traded bank
peers (SNL Bank Index / NASDAQ Bank Index)
PPBI +118%
NASDAQ
Bank
SNL Bank +23%
+30%
-40.0%
-20.0%
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
120.0%
140.0%
160.0%
Jun-15 Aug-15 Oct-15 Dec-15 Feb-16 Apr-16 Jun-16 Aug-16 Oct-16 Dec-16 Feb-17 Apr-17 Jun-17
PPBI SNL Bank NASDAQ Bank
18
Strategically Focused – Financially Motivated
PPBI’s management team operates the bank with the understanding we are growing toward $10.0 billion
• Our business model is always evolving, transforming and improving
• Continue to build a quality banking franchise and leverage our core competencies
• Investments in and the strengthening of the entire team is an on-going process
Continue to Evolve and Strive for Superior Performance
Operational Integrity Leads to Strong Internal Controls and Risk Management
PPBI’s operating environment and culture have been built over the years to be scalable
• Disciplined credit underwriting culture remains a fundamental underpinning
• BSA/AML – automated Rule Based Risk Rating and statistical analytics covering entire client base
• CRA – enhanced program to exceed community group requirements and large bank exam standards
Keen Focus on Creating Maximum Shareholder Value
Management consistently communicates and executes on its strategic plan
• Our Board regularly evaluates capital management, strategic direction and the alternatives to maximize shareholder value
• Focused on increasing earnings and building TBV through growth strategies and improving efficiencies
• Our goal is to create a fundamentally sound franchise with strong earnings and risk management
19
Plaza Bancorp Acquisition – Announced 8/9/2017
Company Highlights
Commercial banking franchise focused on the business
communities of Southern California and Las Vegas
7 branches, including 4 in Los Angeles County, 1 in Orange
County, 1 in San Diego and 1 in Las Vegas, with 175 total
employees (FTE)
Loan mix includes 28.8% owner occupied CRE, 25.1% SBA
loans, 16.0% C&I, and 11.3% non-owner occupied CRE
Deposit mix includes 26.7% non-interest bearing and
76.9% non-maturity deposits
Net income of $3.5 million in Q2 2017, which increased
19.6% vs. Q2 2016
Net income of $13.1 million over the last twelve months
Company Snapshot - Plaza Bancorp
Exchange / Ticker OTC Pink: PLZZ
Company Headquarters Irvine, CA
Year Established 2005
Financial Highlights ($000s)
Total Assets 1,265,925$
Net Income (Last Twelve Months) 13,071$
Net Income (Q2 2017) 3,534$
Return on Average Assets (LTM) 1.11%
Return on Average Assets (Q2 2017) 1.19%
Net Interest Margin (Q2 2017) 4.83%
Efficiency Ratio (Q2 2017) 57.1%
Non-Maturity Deposits % of Total Deposits 76.9%
Non-Performing Assets / Total Assets 0.39%
Source: SNL Financial, Plaza information as of 6/30/2017
20
Transaction Assumptions and Pro Forma Impact
Consideration Fixed exchange ratio of 0.200 for Plaza shareholders – 100% stock consideration, no caps or collars
PPBI issues 6,035,119 shares of common stock
Pro forma ownership of 86.9% for PPBI and 13.1% for Plaza
Transaction value of $226.3 million, or $7.29 per share(1)
Plaza stock options and warrants will be cashed out for in-the-money value of $6.3 million(1)
Valuation
Multiples
Price / earnings of 15.7x for EPS in Q2 2017, annualized
Price / tangible book value per share of 187.1%
Premium to Plaza’s closing price of 12.2%
Pro Forma Impact
to PPBI
Immediately accretive to EPS in 2018 and 3.9% accretive in 2019(2)
Immediately accretive to tangible book value per share and tangible book value payback period of 0 years
Internal rate of return greater than 15%
Board of Directors
Carpenter Fund Manager GP, LLC, which currently owns approximately 86% of the outstanding shares of Plaza, may designate one
individual to serve on the Boards of PPBI and Pacific Premier Bank, so long as it owns at least 9.9% of the combined company
Other
Assumptions
Closing expected in late Q4 2017 or early Q1 2018
Estimated cost savings of approximately 35.0% of Plaza’s non-interest expense (phased-in 75% in 2018 and 100% in 2019)
No revenue synergies assumed for modeling purposes
Pre-tax one-time merger related expenses of approximately $14.4 million at closing
Expectation for run-off of Plaza’s higher cost deposits after closing (approximately 10% run-off in 2018)
Capital Ratios Pro forma TCE ratio of 9.0%, leverage ratio 9.7% and total risk based capital ratio 12.4%
(1) Based on PPBI stock price of $36.45 as of 8/8/2017
(2) PPBI average EPS for 2017 and 2018 per SNL FactSet research. EPS accretion excludes
non-recurring merger related expenses
21
Noninterest-
Bearing Demand
36.6%
Checking and
NOW
6.5%
Money Mkt. and
Savings
40.6%
Retail CDs
11.6%
Wholesale CDs
4.7%
Noninterest-
Bearing Demand
26.7%
Checking and
NOW
3.0%
Money Mkt. and
Savings
47.2%
Retail CDs
15.6%
Wholesale CDs
7.5%
Noninterest-
Bearing Demand
34.8%
Checking and
NOW
5.9%
Money Mkt. and
Savings
41.7%
Retail CDs
12.3%
Wholesale CDs
5.2%
Construction
6.6%
1-4 Family
6.6%
Multi-Family
15.3%
NOO-CRE
22.5%
OO-CRE
15.0%
C&I
15.1%
Farm & Ag.
4.8%
Franchise
11.6%
SBA
2.2%
Consumer and
Other
0.2% Construction
0.7%
1-4 Family
8.8%
Multi-Family
2.5%
NOO-CRE
11.3%
OO-CRE
28.8%
C&I
16.0%
SBA
25.1%
Consumer and
Other
6.9%
Construction
5.5%1-4 Family
7.0%
Multi-Family
13.0%
NOO-CRE
20.5%
OO-CRE
17.5%
C&I
15.2%
Farm & Ag.
4.0%
Franchise
9.5%
SBA
6.3%
Consumer and
Other
1.4%
Pro Forma Loans & Deposits
Pro Forma(1)PlazaPPBI
PPBI Plaza Pro Forma(1)
Loan
Mix
$4.9B Deposits
0.25% Cost of Deposits
$1.1B Deposits
0.59% Cost of Deposits
$6.0B Deposits
0.31% Cost of Deposits
$4.9B Loans
5.29% Yield on Loans
$1.1B Loans
5.99% Yield on Loans
$5.9B Loans
5.42% Yield on Loans
Source: SNL Financial, PPBI and Plaza information for the quarter ended 6/30/2017
(1) Pro forma does not include purchase accounting or merger related adjustments
Deposit
Mix
22
Scarcity Value and Organizational Scale
(1) Includes the following counties: Orange, Los Angeles, San Bernardino, Riverside and San Diego
Source: SNL Financial for most recent quarter. Market data as of 8/8/2017
Note: All dollars in millions
Note: Does not include impact from acquisitions pending as of or completed after the most recent quarter
Combined PPBI and Plaza would become the 5th largest bank headquartered in Southern California(1)
List below includes banks headquartered in Southern California and total assets of $1.0 billion or greater. Excludes pending merger
targets and ethnic-focused banking institutions. Sorted by total assets
Company Name Ticker Exchange City
Total
Assets
Market
Cap.
Loans /
Deposits
Non-Int.
Bearing
Non-
Maturity
PacWest Bancorp PACW NASDAQ Beverly Hills 22,247$ 5,809$ 92.1% 39.7% 86.2%
Banc of California, Inc. BANC NYSE Santa Ana 10,366$ 1,007$ 74.0% 14.1% 80.1%
BofI Holding, Inc. BOFI NASDAQ San Diego 8,502$ 1,758$ 107.5% 12.3% 88.3%
CVB Financial Corp. CVBF NASDAQ Ontario 8,418$ 2,376$ 70.0% 58.7% 94.0%
Pro Forma PPBI + Plaza PPBI NASDAQ Irvine 7,707$ 1,680$ 98.1% 34.8% 82.5%
Opus Bank OPB NASDAQ Irvine 7,676$ 886$ 82.4% 14.8% 92.9%
Farmers & Merchants Bank of Long Beach FMBL OTCQB Long Beach 6,908$ 1,008$ 69.5% 39.8% 84.2%
Pacific Premier Bancorp, Inc. PPBI NASDAQ Irvine 6,441$ 1,460$ 98.2% 36.6% 83.7%
First Foundation Inc. FFWM NASDAQ Irvine 3,903$ 600$ 99.5% 29.7% 72.8%
Community Bank CYHT OTC Pink Pasadena 3,749$ 517$ 96.5% 41.3% 78.8%
Grandpoint Capital, Inc. GPNC OTC Pink Los Angeles 3,252$ 595$ 99.1% 36.1% 85.6%
American Business Bank AMBZ OTC Pink Los Angeles 1,778$ 290$ 55.5% 52.0% 97.3%
Plaza Bancorp PLZZ OTC Pink Irvine 1,266$ 196$ 98.4% 26.7% 76.9%
Pacific Mercantile Bancorp PMBC NASDAQ Costa Mesa 1,212$ 183$ 98.0% 32.2% 72.7%
Silvergate Bank - - La Jolla 1,205$ - 87.7% 46.5% 80.1%
Provident Financial Holdings, Inc. PROV NASDAQ Riverside 1,201$ 147$ 98.5% 8.4% 71.1%
H Bancorp LLC - - Irvine 1,097$ - 110.3% 41.3% 92.6%
Malaga Financial Corporation MLGF OTC Pink Palos Verdes Estates 1,020$ 173$ 122.7% 14.9% 65.6%
Median 3,749$ 600$ 98.0% 36.1% 83.7%
Deposit Mix
23
• Proven track record of executing on acquisitions and organic growth
• Well positioned to evaluate attractive acquisition opportunities
• Continue to drive economies of scale and operating leverage
• Positioned to deliver continued growth and strong profitability
• Ability to integrate business lines that generate higher risk adjusted returns
• Create scarcity value among banks in Southern California
PPBI Outlook
Building Long-term Franchise Value
24
Appendix material
25
Consolidated Financial Highlights
(1) Represents the ratio of noninterest expense less OREO operations, core deposit intangible amortization and merger related expense to the sum of net interest
income before provision for loan losses and total noninterest income less gains/(loss) on sale of securities.
(2) Nonperforming assets excludes nonperforming investment securities.
(3) Classified assets includes substandard loans, doubtful, substandard investment securities, and OREO.
* Please refer to non-GAAP reconciliation
Note: All dollars in thousands, except per share data
June 30, September 30, December 31, March 31, June 30,
2016 2016 2016 2017 2017
Summary Balance Sheet
Total Assets $3,597,666 $3,754,831 $4,036,311 $4,174,428 $6,440,631
Loans Held for Investment 2,920,619 3,090,839 3,241,613 3,385,697 4,858,611
Total Deposits 2,931,001 3,059,752 3,145,581 3,297,073 4,946,431
Loans Held for Investment / Total Deposits 99.6% 101.0% 103.1% 102.7% 98.2%
Summary Income Statement
Total Revenue $42,011 $44,977 $46,622 $46,386 $72,097
Total Non-Interest Expense 23,695 25,860 25,377 29,747 48,496
Provision for Loan Losses 1,589 4,013 2,054 2,502 1,904
Net Income 10,369 9,227 11,953 9,521 14,176
Diluted EPS $0.37 $0.33 $0.43 $0.34 $0.35
Performance Ratios
Return on Average Assets 1.16% 1.00% 1.24% 0.94% 0.89%
Return on Average Tangible Common Equity 13.30% 11.35% 14.17% 11.03% 11.33%
Return on Adjusted Average Tangible Common Equity 13.68% 11.35% 14.72% 14.76% 16.21%
Efficiency Ratio 54.4% 57.0% 50.9% 52.3% 52.3%
Net Interest Margin 4.48% 4.41% 4.59% 4.39% 4.40
Asset Quality
Delinquent Loans to Loans Held for Investment 0.19% 0.18% 0.03% 0.01% 0.06%
Allowance for Loan Losses to Loans Held for Investment 0.65% 0.71% 0.66% 0.68% 0.52%
Nonperforming Assets to Total Assets 0.13% 0.17% 0.04% 0.02% 0.01%
Net Loan Charge-offs to Average Total Loans 0.04% 0.04% 0.08% 0.02% - %
Allowance for Loan Losses as a % of Nonperforming 467% 381% 1866% 4498% 6343%
Classified Assets to Total Risk-Based Capital 6.07% 5.05% 3.00% 2.54% 4.98%
Capital Ratios
Tangible Common Equity/ Tangible Assets * 9.42% 9.28% 8.86% 8.85% 9.18%
Tangible Book Value Per Share * $11.87 $12.22 $12.51 $12.88 $13.83
Common Equity Tier 1 Risk-based Capital Ratio 10.53% 10.36% 10.12% 9.84% 10.71%
Tier 1 Risk-based Ratio 10.84% 10.66% 10.41% 10.11% 11.09%
Risk-based Capital Ratio 13.37% 13.14% 12.72% 12.34% 12.70%
`
26
Non-GAAP Financial Measures
Tangible common equity to tangible assets (the "tangible common equity ratio") and tangible book value per share are a non-GAAP financial measures derived from GAAP-based
amounts. We calculate the tangible common equity ratio by excluding the balance of intangible assets from common stockholders' equity and dividing by tangible assets. We
calculate tangible book value per share by dividing tangible common equity by common shares outstanding, as compared to book value per common share, which we calculate by
dividing common stockholders’ equity by common shares outstanding. We believe that this information is consistent with the treatment by bank regulatory agencies, which exclude
intangible assets from the calculation of risk-based capital ratios. Accordingly, we believe that these non-GAAP financial measures provide information that is important to investors
and that is useful in understanding our capital position and ratios. However, these non-GAAP financial measures are supplemental and are not a substitute for an analysis based on
GAAP measures. As other companies may use different calculations for these measures, this presentation may not be comparable to other similarly titled measures reported by
other companies. A reconciliation of the non-GAAP measure of tangible common equity ratio to the GAAP measure of common equity ratio and tangible book value per share to the
GAAP measure of book value per share are set forth below.
Note: All dollars in thousands, except per share data
December 31, December 31, December 31, June 30, September 30, December 31, March 31, June 30,
2013 2014 2015 2016 2016 2016 2017 2017
Total stockholders' equity 175,226$ 199,592$ 298,980$ 440,630$ 449,965$ 459,740$ 471,025$ 959,731$
Less: Intangible assets (24,056) (28,564) (58,002) (112,439) (111,915) (111,941) (111,432) (405,869)
Tangible common equity 151,170$ 171,028$ 240,978$ 328,191$ 338,050$ 347,799$ 359,593$ 553,862$
Total assets 1,714,187$ 2,038,897$ 2,790,646$ 3,597,666$ 3,754,831$ 4,036,311$ 4,174,428$ 6,440,631$
Less: Intangible assets (24,056) (28,564) (58,002) (112,439) (111,915) (111,670) (111,432) (405,869)
Tangible assets 1,690,131$ 2,010,333$ 2,732,644$ 3,485,227$ 3,642,916$ 3,924,641$ 4,062,996$ 6,034,762$
Common Equity ratio 10.22% 9.79% 10.71% 12.25% 11.98% 11.39% 11.28% 14.90%
Less: Intangible equity ratio (1.28%) (1.28%) (1.89%) (2.83%) (2.70%) (2.53%) (2.43%) (5.72%)
Tangible common equity ratio 8.94% 8.51% 8.82% 9.42% 9.28% 8.86% 8.85% 9.18%
Basic shares outstanding 16,656,279 16,903,884 21,570,746 27,650,533 27,656,533 27,798,283 27,908,816 40,048,758
Book value per share 10.52$ 11.81$ 13.86$ 15.94$ 16.27$ 16.54$ 16.88$ 23.96$
Less: Intangible book value per share (1.44) (1.69) (2.69) (4.07) (4.05) (4.03) (4.00) (10.13)
Tangible book value per share 9.08$ 10.12$ 11.17$ 11.87$ 12.22$ 12.51$ 12.88$ 13.83$
27
Non-GAAP Financial Measures-Continued
Pre-tax, pre-provision income, excluding merger-related expense, is a non-GAAP financial measure derived from GAAP-based amounts. We calculate it by excluding income taxes,
the provision for loan losses and merger-related expenses. We believe that this non-GAAP financial measure provides information that is important to investors. However, this non-
GAAP financial measure is a supplement and is not a substitute for an analysis based on GAAP measures. As other companies may use different calculations for this measure, this
presentation may not be comparable to other similarly titled measures reported by other companies. A reconciliation of pre-tax, pre-provision income, excluding merger-related
expenses is set forth below.
Note: All dollars in thousands
December 31, December 31, December 31, December 31, March 31, June 30,
2013 2014 2015 2016 2017 2017
Net income 8,993$ 16,616$ 25,515$ 40,103$ 38,084$ 56,704$
Add: Income tax 5,587 10,719 15,209 25,215 18,464 30,084
Add: Provision for loan losses 1,860 4,684 6,425 8,776 10,008 7,616
Add: Merger-related expense 6,926 1,490 4,799 4,388 19,784 40,468
Pre-tax, pre-provision income
(excluding merger-related expense) 23,366$ 33,509$ 51,948$ 78,482$ 86,340$ 134,872$
Three Months EndedFor the Years Ended
Annualized