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Investor Presentation
Investor Presentation
Fourth Quarter 2010
Fourth Quarter 2010
Steven R. Gardner
Steven R. Gardner
President & CEO
President & CEO
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This presentation contains forward-looking statements regarding events or future financial performance
of the Company, including statements with respect to our objectives and strategies, and the results of
our operations and our business. These statements are based on management's current expectations and
beliefs concerning future developments and their potential effects on the Company. There can be no
assurance that future developments affecting the Company will be the same as those anticipated by
management. Actual results may differ from those projected in the forward-looking statements. We
caution readers of this presentation not to place undue reliance on these forward-looking statements as
a number of risks could cause future results to differ materially from these statements. These risks
include, but are not limited to, the following: changes in the performance of the financial markets;
changes in the demand for and market acceptance of the Company's products and services; changes in
general economic conditions including interest rates, presence of competitors with greater financial
resources, and the impact of competitive projects and pricing; the effect of the Company's policies; the
continued availability of adequate funding sources; and various legal, regulatory and litigation risks; as
well as those additional risks identified in risks factors discussed in the reports filed by the Company
with the SEC, which are available on its website at www.sec.gov. The Company does not undertake
any obligation to update any forward-looking statements for any reason, even if new information
becomes available or other events occur in the future.
of the Company, including statements with respect to our objectives and strategies, and the results of
our operations and our business. These statements are based on management's current expectations and
beliefs concerning future developments and their potential effects on the Company. There can be no
assurance that future developments affecting the Company will be the same as those anticipated by
management. Actual results may differ from those projected in the forward-looking statements. We
caution readers of this presentation not to place undue reliance on these forward-looking statements as
a number of risks could cause future results to differ materially from these statements. These risks
include, but are not limited to, the following: changes in the performance of the financial markets;
changes in the demand for and market acceptance of the Company's products and services; changes in
general economic conditions including interest rates, presence of competitors with greater financial
resources, and the impact of competitive projects and pricing; the effect of the Company's policies; the
continued availability of adequate funding sources; and various legal, regulatory and litigation risks; as
well as those additional risks identified in risks factors discussed in the reports filed by the Company
with the SEC, which are available on its website at www.sec.gov. The Company does not undertake
any obligation to update any forward-looking statements for any reason, even if new information
becomes available or other events occur in the future.
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• In 1983, Pacific Premier Bank (the
“Bank”) was founded and later expanded
into subprime lending
“Bank”) was founded and later expanded
into subprime lending
• By 1999, growing losses prompted the
Bank to refocus its strategy
Bank to refocus its strategy
• In 2000, the current management team
took over and developed a three phase
strategic plan to transform the Bank from
a nationwide subprime lender into a
traditional Community Bank
took over and developed a three phase
strategic plan to transform the Bank from
a nationwide subprime lender into a
traditional Community Bank
Phase 1 - Recapitalize Pacific Premier
• Issued $12 million note and warrants
• Lowered the risk profile of the Bank
Phase 2 - Return to Profitability
• Grew the balance sheet
• Raised $27 million via secondary offering
• Retired $12 million note
• Sustained profitability
Phase 3 - Commercial Bank Model
• Recruited experienced bankers
• Expand market footprint
• Offer new products and services
• Diversify loan and deposit portfolios
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Headquarters: | Costa Mesa, California |
Regional Focus: | Southern California |
Business Focus: | Small and middle market businesses |
Total Assets: | $821.3 million |
Net Loans: | $543.3 million |
Total Deposits: | $656.8 million |
Branches: | 6 locations |
At September 30, 2010
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(dollars in thousands, except per share data) | |||||
Balance Sheets | QTD 9/30/10 | QTD 6/30/10 | QTD 3/31/10 | YTD 12/31/09 | YTD 12/31/08 |
Total assets | $ 821,320 | $ 797,242 | $ 767,644 | $ 807,323 | $ 739,956 |
Net loans | 543,284 | 543,023 | 537,882 | 566,584 | 623,138 |
Total deposits | 656,791 | 632,043 | 612,901 | 618,734 | 457,128 |
Total borrowings | 76,810 | 76,810 | 76,810 | 101,810 | 220,210 |
Statements of Operations | |||||
Net interest income | $ 7,402 | $ 6,842 | $ 6,660 | $ 23,185 | $ 21,118 |
Provision for loan losses | 397 | 639 | 1,056 | 7,735 | 2,241 |
Net income (loss) | 1,845 | 337 | 456 | (460) | 708 |
Net income (loss) per shared (diluted) | $ 0.17 | $ 0.03 | $ 0.04 | $ (0.08) | $ 0.11 |
Bank Capital Ratios | |||||
Tier 1 leverage | 10.15 | 10.30 | 10.01 | 9.72 | 8.71 |
Tier 1 risk based | 14.01 | 13.88 | 13.96 | 13.30 | 10.71 |
Total risk based | 15.26 | 15.13 | 15.21 | 14.55 | 11.68 |
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At September 30, 2010
(in millions)
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Book Value at September 30, 2010
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At September 30, 2010
(in millions)
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• Core deposit growth - small/middle market businesses
• Relationship banking via high service levels
• Conservative Credit Structure
• Strong capital position - expansion opportunities
Develop the Bank into one of Southern California’s
top performing commercial banks
top performing commercial banks
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Texas ratio defined as NPAs / tangible equity plus loan loss reserves; Circle
radius represents 100 miles
radius represents 100 miles
SoCal Stressed Institutions
Possible failures as of December 31, 2009 within 100 miles of Costa Mesa, California | ||
Texas Ratio | # of Institutions | |
Near term | 100% + | 5 |
Longer term | 50% to 100% | 11 |
Possible near and longer term failures
Texas Ratio > 100%
Texas Ratio b/t 50-100%
dollars in billions
Total Assets………………………………
7.5
$
Total Deposits……………………………..
6.5
Total Core Deposits………………………
4.7
Total Loans……………………………….
6.2
Total Branches……………………………
92
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Texas ratio defined as NPAs + 90 days PD / tangible common equity plus
loan loss reserves; Circle radius represents 100 miles
loan loss reserves; Circle radius represents 100 miles
SoCal Stressed Institutions
Possible failures as of September 30, 2010 within 100 miles of Costa Mesa, California (1) | ||
Texas Ratio | # of Institutions | |
Near term | 100% + | 11 |
Longer term | 50% to 100% | 27 |
Possible near and longer term failures
Texas Ratio > 100%
Texas Ratio b/t 50-100%
(1) If September 30, 2010 data not available, data as of June 30, 2010
(2) Source: SNL Financial
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• Overall Underwriting Philosophy:
• Global cash flow focused
• Loans:
• Business - owner occupied CRE and C&I
• Investor owned CRE approach
• No CRE TDR, no construction, no AD&C loans, no condo conversion
• Personal guarantees, cross collateral and cross guarantees
• Portfolio Management
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Average Loan Size | Average Rate | Seasoning (months) | LTV | DCR | |
Real estate loans: | |||||
Multi-family | $ 1,047,000 | 6.18% | 62 | 69% | 1.19 |
Non O/O CRE | $ 1,175,000 | 6.71% | 53 | 59% | 1.27 |
Business loans: | |||||
O/O CRE | $ 717,000 | 6.52% | 95 | 50% | ---- |
C & I | $ 485,000 | 6.48% | 29 | ---- | ---- |
SBA | $ 134,000 | 5.92% | 32 | ---- | ---- |
At September 30, 2010
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9/30/10 | 6/30/10 | 3/31/10 | 12/31/09 | 12/31/08 | |
Balance | $251.2 | $258.0 | $265.0 | $278.7 | $287.6 |
Average balance | $1.047 | $1.036 | $1.043 | $1.053 | $1.053 |
Rate | 6.18% | 6.17% | 6.18% | 6.20% | 6.30% |
LTV | 69% | 69% | 68% | 67% | 65% |
DCR | 1.19 | 1.22 | 1.22 | 1.20 | 1.47 |
(dollars in millions)
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9/30/10 | 6/30/10 | 3/31/10 | 12/31/09 | 12/31/08 | |
Balance | $130.4 | $136.1 | $140.0 | $149.6 | $163.4 |
Average balance | $1.175 | $1.204 | $1.217 | $1.216 | $1.202 |
Rate | 6.71% | 6.82% | 6.88% | 6.85% | 7.04% |
LTV | 59% | 59% | 59% | 59% | 57% |
DCR | 1.27 | 1.23 | 1.28 | 1.42 | 1.54 |
(dollars in millions)
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Delinquency to Total Loans
California peer group consists of all insured California institutions in the FFIEC database
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California peer group consists of all insured California institutions in the FFIEC database
Nonperforming Assets to Total Assets
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Pacific Premier Bank | California Peer Group (1) | |
9/30/10 | 6/31/10 | |
Net interest income / Average interest-earning assets | 3.86 | 4.18 |
Return on assets (annualized) | 0.91 | (0.38) |
Return on equity (annualized) | 9.62 | (9.07) |
Net loans to deposits | 82.72 | 92.93 |
Nonaccrual loans/Total loans | 0.55 | 3.57 |
(1) California peer group consists of all insured California institutions in the FFIEC database.
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Pacific Premier Bank | California Peer Group (1) | |
9/30/10 | 6/30/10 | |
Tier 1 leverage capital | 10.15 | 11.68 |
Tier 1 risk-based capital | 14.01 | 16.05 |
Total risk-based capital | 15.26 | 17.26 |
Tangible equity capital | 9.56 | 10.06 |
Fully diluted book value (2) | $ 7.20 | N/A |
Price / Tangible book value (2)(3) | 0.57X | 0.84X |
(1) California peer group consists of all insured California institutions in the FFIEC database.
(2) Fully diluted book value and price/tangible book value for PPBI.
(3) P/TBV from SNL.
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• Bank transition gaining momentum
• Outperform peers due to: Credit Culture
• Target rich environment for acquisitions
• Undervalued stock relative to peers
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Questions?
Questions?