Attached files
| file | filename |
|---|---|
| EX-99.1 - EXHIBIT 99.1 - PACIFIC PREMIER BANCORP INC | ex_991-prxpjconf.htm |
| 8-K - 8-K - PACIFIC PREMIER BANCORP INC | a8k_prxip-2017q3xpjconf.htm |
Investor Presentation
Third Quarter 2017
Steve Gardner
Chairman, President & Chief Executive Officer
sgardner@ppbi.com - 949-864-8000
Ron Nicolas
Senior Executive Vice President and Chief Financial Officer
rnicolas@ppbi.com - 949-864-8600
Exhibit 99.2
2
Forward-Looking Statements
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 Pacific Premier Bancorp, Inc. (the
“Company” or “Pacific Premier”) 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, shareholder value creation and the impact of the Plaza Bancorp (“Plaza”) acquisition and
other acquisitions. Such statements involve inherent risks and uncertainties, many of which are difficult to predict and are generally
beyond the control of the Company. There can be no assurance that future developments affecting the Company will be the same as
those anticipated by management. The Company cautions readers that a number of important factors could cause actual results to
differ materially from those expressed in, or implied or projected by, such forward-looking statements. These risks and uncertainties
include, but are not limited to, the following: the strength of the United States economy in general and the strength of the local
economies in which the Company 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 the Company’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; the
effect of acquisitions that the Company has made or may make, if any, including, without limitation, the failure to achieve the expected
revenue growth and/or expense savings from its acquisitions; changes in the level of the Company’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 Company’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 Company’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 the 2016 Annual Report on Form 10-K of Pacific Premier Bancorp, Inc. filed with the SEC and available at
the SEC’s Internet site (http://www.sec.gov).
The Company specifically disclaims any obligation to update any factors or to publicly announce the result of revisions to any of the
forward-looking statements included herein to reflect future events or developments.
3
33 Full-Service
Branch Locations**
Company Profile
Exchange / Listing NASDAQ: PPBI
Focus
Small & Mid-Market
Businesses
Total Assets $7.82 Billion**
Branch Network
* Market data as of 11/03/2017
** Pro forma with Plaza as of 9/30/2017
Pacific Premier Branch Footprint
Headquarters Irvine, CA
# of Research Analysts 7 Analysts
Market Cap $1.81 Billion*
Avg. Daily Volume 380,298 Shares*
Note: Pro forma with Plaza
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, closed on 11/1/2017 (84 days)
A balance of organic and acquisitive growth to create a California centric commercial
bank franchise with $7.82 billion in assets (pro forma)
5
Highlights – Q3 2017
Earnings Net income of $20.2 million, an increase of $6.1 million, or 43% over the prior quarter
Diluted earnings per share of $0.50
ROAA of 1.26%
ROATCE of 15.02%
Loans/
Asset Quality
New loans originations of $558 million, 6th consecutive quarterly increase
Net interest margin of 4.34%
Nonperforming assets as a percent of total assets of 0.01%
Delinquency as a % of loans held for investment of 0.07%
Deposits
Deposits totaled $5.0 billion, an increase of $71.7 million, or 1.4%, from prior quarter
Noninterest-bearing deposits represent 38% of total deposits
Non-maturity deposits represent 84% of total deposits
Cost of Deposits of 0.28%
Key Ratios
Steady operating leverage, with an efficiency ratio of 52.1%
Tangible book value per share increased to $14.35, an increase of 17.4% over the third quarter of 2016*
Tangible common equity ratio of 9.41%
Common equity tier 1 risk-based capital ratio of 10.59%
Acquisition Completed acquisition of Plaza Bancorp on November 1, 2017 (84 days), adding approximately $1.3 billion in assets
* Please refer to non-GAAP reconciliation
6
History of PPBI
• Total deposits compound annual growth rate of 37% since 2011
• Total loans compound annual growth rate of 40% since 2011
Total Assets – Acquired vs. Non-Acquired
February 2011
Acquired CNB
($192MM assets) in
FDIC-assisted deal
$961
$1,174
$1,714
$2,039
$2,791
$4,040 $4,174
$6,440 $6,532
$7,820
$8.00
$10.50
$13.00
$15.50
$-
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
2011 2012 2013 2014 2015 2016 1Q'17 2Q'17 3Q'17 3Q'17 Pro forma
Non-Acquired Acquired TBV/Share
November 2017
Acquired PLZZ
($1.3B assets)
April 2012
Acquired PDNB
($103MM
assets) in FDIC-
assisted deal
March 2013 and June 2013
Acquired FAB ($424MM
assets) and SDTB ($211MM
assets)
January 2014
Acquired IFH
($80MM assets), a
specialty finance
company
January 2015
Acquired IDPK
($422MM assets)
January 2016
Acquired SCAF
($715MM assets)
Timely and efficient acquisitions have accelerated PPBI’s growth and performance
Total Assets TBV/Share*
April 2017
Acquired HEOP
($2.0B assets)
Note: All dollars in millions
* See non-GAAP financial measures
7
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 loans (“CRE”)
C&I and CRE business loans
Originated $191M Q3 2017 vs. $106M Q3 2016
31% of loan portfolio
Commercial Lines of Business
Business Banking SBA Lending
Franchise Lending
Income Property Lending
Small Business Administration (“SBA”) Loans
Nationwide origination capability
California Capital Access Program (“Cal CAP”) Loans
United State Department of Agriculture (“USDA”) Loans
Originated $49M Q3 2017 vs. $43M Q3 2016
Sell guaranteed portion – 75% of loan amount
Gross gain rates 8-12%
National lender for established and experienced owner
operators of Quick Serve Restaurants (“QSR”)
C&I and CRE based lending secured by equipment and
real estate
Originated $85M Q3 2017 vs. $48M Q3 2016
Average originated rate of 4.8% Q3 2017
13% of loan portfolio
Credit facilities and banking services for CRE investors in
SoCal
Structured CRE and bridge loan flexibility
Originated $47M Q3 2017 and $23M Q3 2016
23% 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 $87M Q3 2017 vs. $53M Q3 2016
Attractive risk adjusted yields
6% of loan portfolio
HOA Banking
Nationwide leader of customized cash management,
electronic banking services and credit facilities for:
Home Owner Association (“HOA”) Companies
HOA Management Companies
Predominately money market and demand deposits
8
Increasing Loan Volumes & Attractive Yields
$251
$299
$322
$385
$455
$492
$558
4.97% 4.93%
4.87%
4.80%
4.88%
4.99% 4.97%
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 3Q'17
Business Loans Real Estate Loans Other Loans Weighted Average Coupon
Note: All dollars in millions
9
Commercial Bank Transformation - Deposit Composition
Deposits – 12/31/2009 Deposits – 9/30/2017
Total Deposits: $618.7 Million
Cost of Deposits: 1.91%
Total Deposits: $5.0 Billion
Cost of Deposits: 0.28%
Noninterest-
Bearing Demand
5%
Interest-Bearing
Demand
4%
Money Market/
Savings
23%Certificates of
Deposit
68%
• 38% 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
Noninterest-
Bearing Demand
38%
Interest-
Bearing
Demand
6%
Money Market/
Savings
40%
Certificates of
Deposit
16%
10
Commercial Bank Transformation – Loan Composition
Loans – 12/31/2009 Loans – 9/30/2017
• Loan portfolio is high quality and well-diversified
• Business-related loans represent 47% of total loans at 9/30/17*
• Business loan commitments originated for YTD Q3’17 were $895 million, 59% of total commitments
Total Loans: $576.3 Million Total Loans: $5.1 Billion
* Business loans are defined as commercial and industrial, franchise, commercial owner occupied, Agriculture and SBA
CRE Non-Owner
Occupied
23%
CRE Owner
Occupied
16%
Multi-family
16%
Commercial and
industrial
15%
Franchise
12%
Construction &
Land
7%
One-to-four family
5%
Farm & Agric.
4%
SBA
2%
Commercial and
Industrial
5%
CRE Owner
Occupied
18%
CRE Non-Owner
Occupied
26%
Multi-Family
48%
1-4 Family
2%
Other
1%
11
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% at 9/30/2017
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 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 0.46
-
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
* California peer group consists of all insured California institutions, from SNL Financial.
12
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% 336%
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 3Q'17
13
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%
0.28%
0.00%
0.10%
0.20%
0.30%
0.40%
0.50%
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
2013 2014 2015 2016 1Q'17 2Q'17 3Q'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.
5.28% 5.18% 5.17% 5.13% 5.05%
4.94% 4.98%
0.00%
0.75%
1.50%
2.25%
3.00%
3.75%
4.50%
5.25%
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
2013 2014 2015 2016 1Q'17 2Q'17 3Q'17
Loans Portfolio Core Loan Yield
14
Revenue & Net Interest Margin
Annual Operating Revenue(1)
Note: All dollars in millions
(1) Operating revenue = net interest income + noninterest income.
(2) Core net interest margin excludes accretion.
*Annualized
$67
$87
$121
$173
$186
$288 $290
$0
$50
$100
$150
$200
$250
$300
2013 2014 2015 2016 1Q'17* 2Q'17* 3Q'17*
Core Net Interest Margin(2)
And delivered revenue growth of 48% as well as strong net interest margin of over 4%
3.93%
4.09%
4.06%
4.20%
4.27%
4.09%
4.14%
3.70%
3.80%
3.90%
4.00%
4.10%
4.20%
4.30%
2013 2014 2015 2016 1Q'17 2Q'17 3Q'17
15
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.
2.95%
2.87%
2.58% 2.55%
2.40%
2.30% 2.32%
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
2013 2014 2015 2016 1Q'17 2Q'17 3Q'17
64.7%
61.4%
55.9%
53.6% 52.3% 52.3% 52.1%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
2013 2014 2015 2016 1Q'17 2Q'17 3Q'17
16
Pre-Tax, Pre-Provision Income(1) Tangible Book Value per Share
$23.4
$33.5
$51.9
$78.5
$86.3
$134.9
$130.2
$0
$20
$40
$60
$80
$100
$120
$140
2013 2014 2015 2016 1Q'17* Q2'17* Q3'17*
$9.08
$10.12
$11.17
$12.51
$12.88
$13.83
$14.35
$7.00
$8.00
$9.00
$10.00
$11.00
$12.00
$13.00
$14.00
$15.00
2013 2014 2015 2016 1Q'17 2Q'17 3Q'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
17
(1) Pro forma capital ratios as of 9/30/2017
(2) 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 9/30/2017
Pacific
Premier Plaza Pro forma (1)
Well-
Capitalized
Requirement
Consolidated
Leverage Ratio 10.1% 9.5% 9.7% N/A
Common Equity Tier-1 Ratio 10.6% 10.6% 10.4% N/A
Tier-1 Ratio 10.9% 10.6% 10.7% N/A
Risk Based Capital Ratio 12.5% 14.0% 12.3% N/A
Tangible Common Equity ("TCE") Ratio (2) 9.4% 9.5% 9.3% N/A
Bank
Leverage Ratio 10.9% 10.8% 10.7% 5.0%
Common Equity Tier-1 Ratio 11.8% 12.0% 11.6% 6.5%
Tier-1 Ratio 11.8% 12.0% 11.6% 8.0%
Risk Based Capital Ratio 12.3% 13.2% 12.1% 10.0%
18
Superior Market Performance (PPBI)
Source: SNL Financial, market information as of 9/30/2017
Since September 2015, the Company’s stock price has significantly outperformed its
publicly traded bank peers (SNL Bank Index / NASDAQ Bank Index)
PPBI +86%
NASDAQ
Bank
SNL Bank +40%
+41%
-40.0%
-20.0%
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
120.0%
Sep-15 Nov-15 Jan-16 Mar-16 May-16 Jul-16 Sep-16 Nov-16 Jan-17 Mar-17 May-17 Jul-17 Sep-17
PPBI SNL Bank NASDAQ Bank
19
Strategically Focused – Financially Motivated
The Company’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
The Company’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 tangible book value through growth strategies and improving efficiencies
• Our goal is to create a fundamentally sound franchise with strong earnings and risk management
20
Company Snapshot - Plaza Bancorp
Exchange / Ticker OTC Pink: PLZZ
Company Headquarters Irvine, CA
Year Established 2005
Financial Highlights ($000s)
Total Assets 1,288,127$
Net Income (Last Twelve Months) 14,365$
Net Income (Q3 2017) 4,103$
Return on Average Assets (LTM) 1.19%
Return on Average Assets (Q3 2017) 1.31%
Net Interest Margin (Q3 2017) 5.01%
Efficiency Ratio (Q3 2017) 55.8%
Non-Maturity Deposits % of Total Deposits 77.8%
Non-Performing Assets / Total Assets 0.35%
Plaza Bancorp Acquisition – Closed 11/1/2017
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 164 total
employees
Loan mix includes 47.7% business loans, and 52.3% non-
owner occupied CRE
Deposit mix includes 28.0% non-interest bearing and 78%
non-maturity deposits
Net income of $4.1 million in Q3 2017, which increased
46.1% vs. Q3 2016
Source: SNL Financial, Plaza information as of 9/30/2017
21
Transaction Assumptions and Pro Forma Impact
Consideration Fixed exchange ratio of 0.200 for Plaza shareholders – 100% stock consideration, no caps or collars
The Company issued 6,049,447 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 at announcement(1)
Transaction value of $251.1 million, or $8.08 per share at closing(2)
Plaza stock options and warrants cashed out for in-the-money value
Valuation
Multiples
Price / EPS for Q2 2017 of 15.7x at announcement(1) and 17.4x at closing(2), on an annualized basis
Price / tangible book value per share of 187.1% based on 6/30/2017 equity at announcement(1) , 200.1% based on 9/30/2017 equity
at closing(2)
Premium to Plaza’s closing price of 12.2%(1)
Pro Forma Impact
to the Company
Immediately accretive to EPS in 2018 and 3.9% accretive in 2019(3)
Immediately accretive to tangible book value per share
Internal rate of return greater than 15%
Other
Assumptions
Closed on November 1, 2017
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 9.3%, leverage ratio 9.7% and total risk based capital ratio 12.3%(4)
(1) Based on PPBI stock price of $36.45 as of 8/8/2017
(2) Based on PPBI stock price of $40.40 as of 10/31/2017
(3) PPBI average EPS for 2017 and 2018 per SNL FactSet research. Excludes non-recurring
merger related expenses
(4) Pro forma capital ratios as of 9/30/2017
22
Construction
6.6%
1-4 Family
4.9%
Multi-Family
15.9%
NOO-CRE
21.9%
OO-CRE
16.1%
C&I
15.2%
Farm & Ag.
4.5%
Franchise
12.5%
SBA
2.1%
Consumer and
Other
0.1% Construction
0.5%
1-4 Family
8.5%
Multi-Family
2.6%
NOO-CRE
11.1%
OO-CRE
52.0%
C&I
18.2%
Consumer and
Other
7.0%
Construction
5.6%1-4 Family
5.5%
Multi-Family
13.6%
NOO-CRE
20.0%
OO-CRE
22.3%
C&I
15.7%
Farm & Ag.
3.7%
Franchise
10.3%
SBA
1.8%
Consumer and
Other
1.3%
Noninterest-
Bearing Demand
37.7%
Checking and
NOW
6.1%
Money Mkt. and
Savings
40.1%
Retail CDs
11.4%
Wholesale CDs
4.8%
Noninterest-
Bearing Demand
28.4%
Checking and
NOW
2.7%
Money Mkt. and
Savings
47.0%
Retail CDs
15.1%
Wholesale CDs
6.9%
Noninterest-
Bearing Demand
36.0%
Checking and
NOW
5.5%
Money Mkt. and
Savings
41.3%
Retail CDs
12.1%
Wholesale CDs
5.2%
Pro Forma Loans & Deposits
Pro Forma(1)PlazaThe Company
The Company Plaza Pro Forma(1)
Loan
Mix
$5.0B Deposits
0.28% Cost of Deposits
$1.1B Deposits
0.62% Cost of Deposits
$6.1B Deposits
0.36% Cost of Deposits
$5.1B Loans
5.22% Yield on Loans
$1.1B Loans
6.38% Yield on Loans
$6.1B Loans
5.42% Yield on Loans
Source: SNL Financial, the Company and Plaza information for the quarter ended 9/30/2017
(1) Pro forma does not include purchase accounting or merger related adjustments
Deposit
Mix
23
Company Name Ticker Exchange City
Total
Assets
Market
Cap.
Loans /
Deposits
Non-Int.
Bearing
Non-
Maturity
PacWest Bancorp PACW NASDAQ Beverly Hills 22,243$ 6,228$ 93.5% 41.2% 87.3%
Banc of California, Inc. BANC NYSE Santa Ana 10,280$ 1,069$ 84.1% 14.5% 77.8%
BofI Holding, Inc. BOFI NASDAQ San Diego 8,582$ 1,713$ 105.2% 13.4% 88.4%
CVB Financial Corp. CVBF NASDAQ Ontario 8,304$ 2,639$ 71.8% 59.2% 94.0%
Pro Forma PPBI + Plaza PPBI NASDAQ Irvine 7,820$ 1,802$ 99.5% 36.0% 82.7%
Farmers & Merchants Bank of Long Beach FMBL OTCQB Long Beach 7,483$ 1,019$ 65.7% 40.9% 86.2%
Opus Bank OPB NASDAQ Irvine 7,311$ 940$ 83.4% 14.0% 93.3%
Pacific Premier Bancorp, Inc. PPBI NASDAQ Irvine 6,532$ - 99.8% 37.7% 83.8%
First Foundation Inc. FFWM NASDAQ Irvine 4,051$ 669$ 99.6% 33.5% 73.0%
Community Bank CYHT OTC Pink Pasadena 3,741$ 545$ 93.6% 41.4% 80.9%
Grandpoint Capital, Inc. GPNC OTC Pink Los Angeles 3,203$ 580$ 94.7% 40.9% 88.1%
American Business Bank AMBZ OTC Pink Los Angeles 1,753$ 300$ 55.5% 50.3% 97.1%
Plaza Bancorp PLZZ OTC Pink Irvine 1,288$ - 98.1% 28.0% 77.8%
Silvergate Bank - - La Jolla 1,217$ - 88.0% 38.1% 88.2%
Pacific Mercantile Bancorp PMBC NASDAQ Costa Mesa 1,205$ 219$ 98.9% 30.4% 68.9%
Provident Financial Holdings, Inc. PROV NASDAQ Riverside 1,194$ 149$ 98.8% 8.9% 72.1%
H Bancorp LLC - - Irvine 1,067$ - 109.6% 41.0% 92.3%
Malaga Financial Corporation MLGF OTC Pink Palos Verdes Estates 1,033$ 181$ 123.3% 15.4% 65.4%
Median 3,741$ 669$ 94.7% 37.7% 86.2%
Deposit Mix
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 11/2/2017
Note: All dollars in millions
Note: Does not include impact from acquisitions pending as of or completed after the most recent quarter
On a combined basis with Plaza, the Company is 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
24
• 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
Pacific Premier Outlook
Building Long-term Franchise Value
25
Appendix material
26
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
September 30, December 31, March 31, June 30, September 30,
2016 2016 2017 2017 2017
Summary Balance Sheet
Total Assets $3,754,831 $4,036,311 $4,174,428 $6,440,631 $6,532,334
Loans Held for Investment 3,090,839 3,241,613 3,385,697 4,858,611 5,009,317
Total Deposits 3,059,752 3,145,581 3,297,073 4,946,431 5,018,153
Loans Held for Investment / Total Deposits 101.0% 103.1% 102.7% 98.2% 99.8%
Summary Income Statement
Total Revenue $44,977 $46,622 $46,386 $72,097 $72,512
Total Noninterest Expense 25,860 25,377 29,747 48,496 39,612
Provision for Loan Losses 4,013 2,054 2,502 1,904 2,049
Net Income 9,227 11,953 9,521 14,176 20,232
Diluted EPS $0.33 $0.43 $0.34 $0.35 $0.50
Performance Ratios
Return on Average Assets 1.00% 1.24% 0.94% 0.89% 1.26%
Return on Average Tangible Common Equity 11.35% 14.17% 11.03% 11.33% 15.02%
Return on Adjusted Average Tangible Common Equity 11.35% 14.72% 14.76% 16.21% 15.25%
Efficiency Ratio 57.0% 50.9% 52.3% 52.3% 52.1%
Net Interest Margin 4.41% 4.59% 4.39% 4.40% 4.34%
Asset Quality
Delinquent Loans to Loans Held for Investment 0.18% 0.03% 0.01% 0.06% 0.07%
Allowance for Loan Losses to Loans Held for Investment 0.71% 0.66% 0.68% 0.52% 0.54%
Nonperforming Assets to Total Assets 0.17% 0.04% 0.02% 0.01% 0.01%
Net Loan Charge-offs to Average Total Loans 0.04% 0.08% 0.02% - % - %
Allowance for Loan Losses as a % of Nonperforming 381% 1866% 4498% 6343% 5270%
Classified Assets to Total Risk-Based Capital 5.05% 3.00% 2.54% 5.00% 6.24%
Capital Ratios
Tangible Common Equity/ Tangible Assets * 9.28% 8.86% 8.85% 9.18% 9.41%
Tangible Book Value Per Share * $12.22 $12.51 $12.88 $13.83 $14.35
Common Equity Tier 1 Risk-based Capital Ratio 10.36% 10.12% 9.84% 10.71% 10.59%
Tier 1 Risk-based Ratio 10.66% 10.41% 10.11% 11.08% 10.94%
Risk-based Capital Ratio 13.14% 12.72% 12.34% 12.69% 12.51%
`
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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, December 31, December 31, June 30, September 30, December 31, March 31, June 30, September 30,
2011 2012 2013 2014 2015 2016 2016 2016 2017 2017 2017
Total stockholders' equity 86,777$ 134,517$ 175,226$ 199,592$ 298,980$ 440,630$ 449,965$ 459,740$ 471,025$ 959,731$ 981,660$
Less: Intangible assets (2,069) (2,626) (24,056) (28,564) (58,002) (112,439) (111,915) (111,941) (111,432) (405,869) (405,222)
Tangible common equity 84,708$ 131,891$ 151,170$ 171,028$ 240,978$ 328,191$ 338,050$ 347,799$ 359,593$ 553,862$ 576,438$
Total assets 961,128$ 1,173,792$ 1,714,187$ 2,037,731$ 2,789,599$ 3,597,666$ 3,754,831$ 4,036,311$ 4,174,428$ 6,440,631$ 6,532,334$
Less: Intangible assets (2,069) (2,626) (24,056) (28,564) (58,002) (112,439) (111,915) (111,670) (111,432) (405,869) (405,222)
Tangible assets 959,059$ 1,171,166$ 1,690,131$ 2,009,167$ 2,731,597$ 3,485,227$ 3,642,916$ 3,924,641$ 4,062,996$ 6,034,762$ 6,127,112$
Common Equity ratio 9.03% 11.46% 10.22% 9.79% 10.72% 12.25% 11.98% 11.39% 11.28% 14.90% 15.03%
Less: Intangible equity ratio (0.20%) (0.20%) (1.28%) (1.28%) (1.90%) (2.83%) (2.70%) (2.53%) (2.43%) (5.72%) (5.62%)
Tangible common equity ratio 8.83% 11.26% 8.94% 8.51% 8.82% 9.42% 9.28% 8.86% 8.85% 9.18% 9.41%
Basic shares outstanding 10,337,626 13,661,648 16,656,279 16,903,884 21,570,746 27,650,533 27,656,533 27,798,283 27,908,816 40,047,682 40,162,026
Book value per share 8.39$ 9.85$ 10.52$ 11.81$ 13.86$ 15.94$ 16.27$ 16.54$ 16.88$ 23.96$ 24.44$
Less: Intangible book value per share (0.20) (0.20) (1.44) (1.69) (2.69) (4.07) (4.05) (4.03) (4.00) (10.13) (10.09)
Tangible book value per share 8.19$ 9.65$ 9.08$ 10.12$ 11.17$ 11.87$ 12.22$ 12.51$ 12.88$ 13.83$ 14.35$
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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
Annualized
For the Years Ended Three Months Ended
December 31, December 31, December 31, December 31, March 31, June 30, September 30,
2013 2014 2015 2016 2017 2017 2017
Net income $ 8,993 $ 16,616 $ 25,515 $ 40,103 $ 38,084 $ 56,704 $ 80,928
Add: Income tax 5,587 10,719 15,209 25,215 18,464 30,084 42,476
Add: Provision for loan losses 1,860 4,684 6,425 8,776 10,008 7,616 8,196
Add: Merger-related expense 6,926 1,490 4,799 4,388 19,784 40,468 2,012
Pre-tax, pre-provision income
(excluding merger-related expense) $ 23,366 $ 33,509 $ 51,948 $ 78,482 $ 86,340 $ 134,872 $ 133,612