Exhibit 99.1
Pacific Premier Bancorp, Inc. Announces Third Quarter and Year-to-Date
2003 Results
COSTA MESA, Calif.--(BUSINESS WIRE)--Oct. 23, 2003--Pacific
Premier Bancorp, Inc., (Nasdaq:PPBI) (the "Company") the holding
company of Pacific Premier Bank, F.S.B. (the "Bank"), announced its
results of operations for the quarter and nine months ended September
30, 2003.
The Company recorded third quarter earnings before taxes of $527
thousand and net earnings of $724 thousand, or $.28 per diluted share,
compared to earnings before taxes of $86 thousand and net earnings of
$2.4 million, or $.95 per diluted share for the third quarter of 2002.
During the third quarter of 2002, the Company benefited from a
reduction in its allowance for deferred taxes of $2.0 million and a
refund of $327 thousand attributable to a change in the tax law
related to the alternative minimum tax amount paid for the 1998 tax
year.
The earnings before taxes and net income for the nine months ended
September 30, 2003 was $735 thousand and $1.3 million, respectively,
or $0.52 per diluted share. September 30, 2002 earnings before taxes
and net earnings were $710 thousand and $3.1 million, respectively, or
$1.25 per diluted share. All diluted earnings per share amounts have
been adjusted to reflect the dilutive effect of all warrants and stock
options.
Return on average assets (ROAA) for the nine months ended
September 30, 2003 was 0.73% compared to 1.66% for the same period in
2002. The Company's return on average equity (ROAE) for the nine
months ended September 30, 2003 was 15.50% compared to 46.88% for the
nine months ended September 30, 2002.
The Company's net interest income before provision for loan losses
was $6.6 million for the nine months ended September 30, 2003, $1.2
million less than the comparable period in 2002. The Company's net
interest margin for the same nine month periods was 3.88% and 4.54%,
respectively. The decrease is primarily due to a 74% reduction in
higher risk, high coupon loans secured by single-family properties
over the last 21 months that were replaced with higher quality, lower
yielding multi-family loans. This reduction was partially offset by a
decrease in the cost of funds by 56 basis points since December 31,
2002. The Participation Contract's discount accretion included in
interest income for the nine months ended September 30, 2003 was $2.4
million compared to $3.1 million for the same period a year ago. The
Company received $763 thousand in cash from the Participation Contract
in the quarter ended September 30, 2003, compared to $1.6 million
during the same period in 2002. The decreasing cashflows are
attributable to declining loan balances underlying the three
securitizations.
The provision for loan losses was $680 thousand for the nine
months ended September 30, 2003, compared to $979 thousand for the
same period in 2002. The decrease in provision is primarily due to a
reduction in the Bank's net non-performing assets of $4.0 million from
a year ago. The ratio of nonperforming assets to total assets at
September 30, 2003 was 1.42%. Charge-offs totaled $1.4 million for the
nine months ended September 30, 2003 compared to $1.7 million at
September 30, 2002.
Noninterest income increased $469 thousand to $1.9 million for the
nine months ended September 30, 2003, compared to the same period in
2002. The increase is primarily due to $329 thousand from the gain on
sale of $15.2 million of multi-family and commercial real estate
secured loans in 2003 compared to losses of $260 thousand from the
sale of $33.8 million of single-family loans during the same period of
2002.
Noninterest expenses were $7.1 million for the nine months ended
September 30, 2003, compared to $7.6 million in the nine months ended
September 30, 2002. The $500 thousand decrease consists primarily of
an improvement in the Bank's FDIC risk classification which lowered
the deposit insurance premiums by $248 thousand and a reduction in
rent expenses of $283 thousand due to the closing of two branch
offices in June of 2002 and the relocation of our Corporate office in
August of 2002. These decreases were partially offset by an increase
in compensation expense of $256 thousand primarily due to the Bank's
hiring of lending personnel associated with its planned increase in
income property loan originations.
At September 30, 2003, the Company had 63 full-time equivalent
employees.
During the third quarter of 2003, the Company benefited from a
reduction in its valuation allowance for deferred taxes of $200
thousand. The Company's allowance for deferred taxes is $9.0 million
at September 30, 2003.
Steven R. Gardner, President and Chief Executive Officer stated,
"We are very pleased where we ended the third quarter. Our loan
origination department has increased our net loans this year, on an
annualized basis, by 28% and ended the quarter with over $60 million
in their pipeline, the largest in our history since resuming our
lending activities in the second quarter of 2002. Our Loss Mitigation
department has lowered our non-accrual loans and real estate owned by
48% and 47%, respectively, since the beginning of the year. Our
branches have increased our deposits on an annualized basis by 13%,
with over 40% of the increase occurring during the third quarter." Mr.
Gardner further stated "We have come a long way over the last three
years in repositioning the Company and resolving the problems of the
past, and now, with the secondary offering completed, we are very
focused on growing the Company and increasing our profitability."
Total assets of the Company were $257.2 million as of September
30, 2003 compared to $238.3 million as of December 31, 2002. Net loans
increased by $34.2 million due primarily to originations of $87.6
million and purchases of $8.1 million of income property loans.
Investment securities decreased by $13.3 million for the nine months
ended September 30, 2003. The proceeds from the sale of investment
securities, along with the increase in deposits, were used to fund new
originations.
Asset quality at the Bank continued to improve during the nine
months ended September 30, 2003. Non-accrual loans totaled $2.7
million at September 30, 2003 compared to $5.2 million at December 31,
2002. Real estate owned declined to $1.3 million at September 30, 2003
from $2.4 million at December 31, 2002. The ratio of nonperforming
assets to total assets has substantially improved from 3.12% to 1.42%
for the periods ending December 31, 2002 September 30, 2003,
respectively.
The allowance for loan losses, including both general and specific
reserves, totaled $2.1 million as of September 30, 2003 and $2.8
million as of December 31, 2002. The allowance for loan losses as a
percent of non-accrual loans was 78.9% and 54.5% as of September 30,
2003 and December 31, 2002, respectively. Included in the reserves was
an unallocated amount of $756 thousand as of September 30, 2003
compared to zero at December 31, 2002.
Total deposits increased by $18.9 million to $210.1 million at
September 30, 2003, compared to $191.2 million at December 31, 2002.
Transaction accounts increased $14.3 million, or 28.1% since December
31, 2002 and total $65.4 million at September 30, 2003. The cost of
deposits as of September 30, 2003 was 2.28%, a decrease of 49 basis
points since December 31, 2002.
Total borrowings were $32.7 million as of September 30, 2003 with
an average cost of 6.81%. Borrowings are comprised of the Company's
Senior Secured note of $11.5 million net of original issue discount
with a current coupon of 13.0%, Subordinated debt of $1.5 million with
a current coupon of 13.5% and the Bank's $19.7 million of FHLB
Advances with an average coupon rate of 2.56%. As previously
announced, the Company paid off both the Senior Secured Note and
Subordinated Debt utilizing the proceeds from its secondary public
offering which closed on October 17, 2003. With the retirement of the
Senior Secured note and Subordinated debt the Company expects to save
$2.1 million annually in interest expense. There were $32.9 million of
borrowings as of December 31, 2002.
The Bank's tier 1 capital and total risk-based capital ratios at
September 30, 2003 were 6.73% and 10.83%, respectively. The minimum
ratios for well-capitalized banks are 5.00% and 10.00% for tier 1
capital and risk-based capital, respectively. The Bank's total equity
capital was $16.7 million at September 30, 2003. As previously
announced, the Company contributed $5.0 million in additional capital
to the Bank on October 17, 2003 from the proceeds of the secondary
offering to support future growth.
The Company is a savings and loan holding company that owns 100%
of the capital stock of the Bank, the Company's principal operating
subsidiary. The Bank is a federally chartered stock savings bank whose
primary business includes branch banking, income property and
construction lending. The Bank currently operates three full-service
branches located in Orange and San Bernardino Counties, in Southern
California.
FORWARD-LOOKING COMMENTS
The statements contained in this press release 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. 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. These forward-looking statements involve
risks and uncertainties. These include, but are not limited to, the
following risks:
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 products and pricing;
The effect of the Company's policies;
The continued availability of adequate funding sources;
Differences in actual prepayment rates and credit losses as
compared to prepayment rates and credit losses assumed by the Company
for purposes of its valuation of mortgage derivative securities (the
"Participation Contract");
The effect of changes in market interest rates on the spread
between the coupon rate and the pass through rate and on the discount
rate assumed by the Company in its valuation of its Participation
Contract;
And various legal, regulatory and litigation risks.
PACIFIC PREMIER BANCORP AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
UNAUDITED (In thousands)
September 30, December 31,
ASSETS 2003 2002
- -------------------------------------------- -----------------------
Cash and due from banks $ 2,249 $ 3,590
Investment Securities Available for Sale 43,309 56,303
Investment Securities Held to Maturity 1,640 1,940
Loans held for sale 939 1,866
Loans held for investment, net of allowance
for loan losses of $2,141 in 2003 and
$2,835 in 2002, respectively 191,478 156,365
Accrued interest receivable 1,010 1,140
Foreclosed real estate 1,281 2,427
Premises and equipment 5,368 5,411
Deferred income taxes 2,950 2,350
Participation Contract 5,462 4,869
Other assets 1,534 2,017
-------- --------
TOTAL ASSETS $257,220 $238,278
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
- --------------------------------------------
LIABILITIES:
Deposit accounts $210,110 $191,170
Other borrowings 19,650 20,000
Notes Payable 11,545 11,440
Subordinated debentures 1,500 1,500
Accrued expenses and other liabilities 2,110 2,545
-------- --------
Total liabilities 244,915 226,655
-------- --------
STOCKHOLDERS' EQUITY:
Common stock, $.01 par value 13 13
Additional paid-in capital 43,328 43,328
Accumulated deficit (30,757) (32,086)
Accumulated adjustments to stockholders' equity (279) 368
-------- --------
Total stockholders' equity 12,305 11,623
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $257,220 $238,278
========= =========
PACIFIC PREMIER BANCORP AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENT
UNAUDITED (In thousands, except per share data)
Three Months Ended Nine Months Ended
--------------------------------------------
September September September September
30, 30, 30, 30,
INTEREST INCOME: 2003 2002 2003 2002
- -------------------------- ---------- ---------- ---------- ----------
Loans $ 3,032 $ 2,658 $ 8,983 $ 9,538
Other interest-earning
assets 1,141 1,787 3,362 5,131
---------- ---------- ---------- ----------
Total interest income 4,173 4,445 12,345 14,669
---------- ---------- ---------- ----------
INTEREST EXPENSE:
- --------------------------
Interest-bearing deposits 1,230 1,525 3,771 4,933
Other borrowings 119 167 373 368
Notes payable 484 485 1,440 1,366
Subordinated debentures 53 53 158 157
---------- ---------- ---------- ----------
Total interest expense 1,886 2,230 5,742 6,824
---------- ---------- ---------- ----------
NET INTEREST INCOME 2,287 2,215 6,603 7,845
---------- ---------- ---------- ----------
PROVISION FOR LOAN LOSSES (1) 788 680 979
---------- ---------- ---------- ----------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 2,288 1,427 5,923 6,866
---------- ---------- ---------- ----------
NONINTEREST INCOME:
- --------------------------
Loan servicing fee income 86 181 459 646
Bank and other fee income 124 131 332 420
Net gain (loss) on loan
sales 122 (17) 329 (260)
Net gain from investment
securities - 351 143 336
Other income 243 142 683 334
---------- ---------- ---------- ----------
Total noninterest income 575 788 1,946 1,476
---------- ---------- ---------- ----------
NONINTEREST EXPENSE:
- --------------------------
Compensation and benefits 1,275 1,064 3,553 3,297
Premises and occupancy 352 477 1,060 1,488
Data processing 99 157 296 444
Net loss (gain) on
foreclosed real estate 25 (166) 76 (22)
Other expense 585 597 2,149 2,425
---------- ---------- ---------- ----------
Total noninterest expense 2,336 2,129 7,134 7,632
---------- ---------- ---------- ----------
NET INCOME FROM
OPERATIONS 527 86 735 710
(BENEFIT) PROVISION FOR
INCOME TAXES (197) (2,328) (594) (2,345)
---------- ---------- ---------- ----------
NET INCOME FROM OPERATIONS$ 724 $ 2,414 $ 1,329 $ 3,055
========== ========== ========== ==========
Basic Average Shares
Outstanding 1,333,572 1,333,572 1,333,572 1,333,572
Basic Earnings per Share $ 0.54 $ 1.81 $ 1.00 $ 2.29
Diluted Average Shares
Outstanding 2,581,635 2,530,638 2,561,829 2,451,396
Diluted Earnings per Share$ 0.28 $ 0.95 $ 0.52 $ 1.25
PACIFIC PREMIER BANCORP AND SUBSIDIARIES
Statistical Information
UNAUDITED (In thousands)
As of As of As of
Sep 30, Dec 31, Sep 30,
2003 2002 2002
---------------------------
Asset Quality:
- -------------------------------------
Non-accrual loans $ 2,715 $ 5,205 $ 6,760
Real estate owned $ 1,281 $ 2,427 $ 1,739
Net Charge offs for the quarter ended $ 514 $ 974 $ 593
Allowance for loan losses $ 2,141 $ 2,835 $ 3,655
Charge offs to average loans, annualized 1.11% 2.77% 1.80%
Non-accrual loans to total loans 1.40% 3.23% 4.88%
Non-accrual loans to total assets 1.06% 2.18% 2.81%
Allowance for credit losses to total loans 1.10% 1.76% 2.64%
Allowance for credit losses to non-accrual
loans 78.86% 54.47% 54.07%
Average Balance Sheet: for the Quarter
ended
- -------------------------------------
Total assets $251,477 $238,372 $241,300
Loans $185,669 $140,829 $131,856
Deposits $206,743 $191,469 $196,202
Borrowings $ 18,060 $ 20,044 $ 20,000
Notes payable & Subordinated notes $ 13,025 $ 12,922 $ 12,887
Share Data:
- -------------------------------------
Basic Book Value $ 9.23 $ 8.72 $ 8.63
Diluted Book Value $ 5.26 $ 4.60 $ 4.55
Closing Stock Price $ 7.09 $ 5.31 $ 5.45
9 months 9 months
ended ended
Sep 30, Sep 30,
2003 2002
------------------
Profitability and Productivity:
- -------------------------------------
Return on average assets 0.73% 1.66%
Return on average equity 15.50% 46.88%
Net interest margin 3.88% 4.54%
Non-interest expense to total assets 3.70% 4.23%
Efficiency ratio 82.56% 82.12%
Pacific Premier Bank Capital Ratios:
- ------------------------------------------
Tier 1 Capital Ratio 6.73% 6.62%
Total Risk-based Capital Ratio 10.83% 13.57%
CONTACT: Pacific Premier Bancorp, Inc.
Steven R. Gardner or John Shindler, 714-431-4000