Exhibit 99.1
Pacific Premier Bancorp, Inc. Announces
Strong Fourth Quarter and Year End 2003 Results
COSTA MESA, Calif.--(BUSINESS WIRE)--Jan. 29, 2004--Pacific
Premier Bancorp, Inc. (Nasdaq:PPBI) (the "Company"), the holding
company of Pacific Premier Bank, F.S.B. (the "Bank"), announced fourth
quarter earnings of $736,000, or $0.13 per diluted share, compared
with a net loss of $177,000, or ($0.13) per basic and diluted share
earned a year ago, reflecting an increase in net income of $913,000.
For the year ended December 31, 2003, the Company recorded net income
of $2.1 million or $0.61 per diluted share, compared to $2.9 million
or $1.16 per diluted share for the year ended December 31, 2002. The
$813,000 or 28% decline in net income during 2003 as compared to 2002
was primarily due to a $1.7 million or 74.5% decline in the Company's
income tax benefit over the respective periods. The Company increased
its deferred tax asset by $2.0 million in 2002 and by $600,000 in 2003
based on an estimate of the Company's future taxable income. Earnings
before taxes (which excludes the effects of the foregoing income tax
benefits) amounted to $1.5 million for 2003 as compared to $533,000 in
2002, reflecting an increase of $935,000 or 175.4%. During the fourth
quarter of 2003 the Company incurred a one time cost of $490,000 of
interest expense in connection with unamortized original issue
discount on the early retirement of its $12.0 million senior secured
note. All diluted earnings per share amounts have been adjusted to
reflect the dilutive effect of all warrants and stock options.
Highlights for the year included net loan growth of 56%,
transaction deposit growth of 43% and a 54% decline in nonperforming
assets. Steven R. Gardner, President and Chief Executive Officer
stated, "During the fourth quarter, we completed the turnaround phase
of our strategic plan through the closing of our highly successful
secondary stock offering. Our employees are fully implementing the
next phase of our plan, which is focused on accelerating the Bank's
growth. New loan originations in the fourth quarter increased by over
100% to $65.3 million from $32.4 million in the previous quarter. To
help fund our growth, our Retail Branch Banking group increased
deposits at an annualized rate of 22% during the fourth quarter and
the Federal Home Loan Bank increased our borrowing capacity from 15%
to 25% of Bank assets. Additionally, the Bank's asset quality
continued to improve, with charge-offs declining to $131,000 for the
quarter from $514,000 in the previous quarter."
For the year ended December 31, 2003, net interest income
decreased to $9.6 million from $10.0 million for the same period a
year earlier. The Company's net interest margin for the year ended
December 31, 2003 was 4.06% compared to 4.37% for the same period a
year ago. The decrease in the net interest margin is primarily a
result of a reduction in investment yield of 110 basis points and a
decrease in loan yield of 138 basis points, which was partially offset
by a 57 basis point decrease in the cost of interest-bearing
liabilities for the year ended December 31, 2003.
Net interest income was $3.0 million for the three months ended
December 31, 2003, a 41% increase over the same period a year earlier.
The Company's net interest margin for the three months ended December
31, 2003 and 2002 was 4.50% and 3.86%, respectively. The increase in
net interest margin is attributable to an increase in the accretion of
the discount on the Company's Participation Contract along with a 60
basis points decrease in the Company's cost of funds when compared to
the same period a year earlier. The discount accretion included in
interest income for the fourth quarter of 2003 was $1.2 million
compared to $772,000 for the same period a year earlier. The increase
in discount accretion reflects the improvement in the performance of
the residual assets underlying the Participation Contract.
During the fourth quarter, the Company used a portion of the
proceeds from its public offering to pay off its $12.0 million senior
secured note and $1.5 million of subordinated debentures that carried
coupon rates of 13.0% and 13.5%, respectively. The elimination of this
debt resulted in annual interest expense savings of $2.1 million. The
Bank's net interest margin, which does not include the accretion
income from the Participation Contract nor the interest expense
associated with the Company's retired debt, was 3.61% for the three
months ended December 31, 2003, as compared to 3.51% for the three
months ended December 31, 2002.
For the year ended December 31, 2003, the Company's provision for
loan losses totaled $655,000 compared with $1.1 million for the same
period a year earlier. The provision for loan losses amounted to a
benefit of $26,000 for the three months ended December 31, 2003,
compared with a provision of $154,000 for the same period a year
earlier. The decrease is attributable to both a decline in charge-offs
and a reduction in the amount of non-accrual loans for the year ended
December 31, 2003 as compared to the year ended December 31, 2002.
For the year ended December 31, 2003, total noninterest income
increased to $2.3 million compared with $1.9 million for the same
period a year earlier. The increase for 2003 was the result of
increases in other income and gain from loan sales, which was
partially offset by decreases in loan servicing income and lower gains
from sales of investment securities. Total noninterest income was
$369,000 for the three months ended December 31, 2003 compared with
$393,000 for the same period a year earlier.
Noninterest expense for the year ended December 31, 2003 was $9.8
million, reflecting a $382,000 decrease compared to the prior year.
The reduction was primarily the result of decreases in premises and
occupancy expense, data processing expense, and FDIC insurance
premiums, of $485,000, $171,000, and $319,000, respectively, which was
partially offset by an increase in compensation and benefits of
$593,000. The increase in compensation is due to the hiring of
additional staff in the Bank's lending department. Noninterest expense
for the quarter ended December 31, 2003 was $2.7 million, compared to
$2.5 million for the quarter ended December 31, 2002.
At December 31, 2003, the Company had 70 full-time equivalent
employees compared to 57 at December 31, 2002. The increase is
primarily due to the Bank's hiring of lending personnel to support its
planned increase in loan originations, particularly multi-family and
commercial real estate loans.
Total assets of the Company amounted to $309.4 million as of
December 31, 2003 compared to $238.3 million as of December 31, 2002.
The 30% increase in total assets is the result of an increase of $89.4
million in net loans, which was partially offset by decreases in
investment securities and foreclosed real estate of $16.0 million and
$1.4 million, respectively. The increase in net loans was the result
of $161.8 million in new income property loan originations and
purchases, which was partially offset by loan sales of $15.9 million.
Due to the strong loan closings in December the Bank's pipeline was
reduced to $52.7 million at year end.
The allowance for loan losses totaled $2.0 million as of December
31, 2003 and $2.8 million as of December 31, 2002. The decrease is
attributable to reductions during the year of sub-prime loans and
total delinquent loans of $5.1 million and $4.4 million, respectively.
The amount of such loans was $7.0 million and $3.3 million,
respectively, at year end. The allowance for loan losses as a percent
of total non-accrual loans was 73% and 54% as of December 31, 2003 and
December 31, 2002, respectively. Non-accrual loans totaled $2.7
million at December 31, 2003 and $5.2 million as of December 31, 2002,
reflecting a decrease of $2.5 million or 48%. The ratio of
nonperforming assets to total assets at December 31, 2003 was 1.12%,
as compared to 3.12% at December 31, 2002, a 64% decrease.
Total deposits were $221.4 million as of December 31, 2003,
compared to $191.2 million at December 31, 2002. Transaction accounts
increased $21.4 million or 42.7% since December 31, 2002 and amounted
to $71.4 million at December 31, 2003. The cost of deposits as of
December 31, 2003 was 2.14%, a decrease of 63 basis points since
December 31, 2002. At December 31, 2003, total borrowings of the
Company are comprised entirely of the Bank's $48.6 million of FHLB
advances with an average coupon rate of 1.85%. There were $20.0
million of FHLB borrowings as of December 31, 2002 with an average
coupon rate of 3.31%.
The Bank's tier 1 capital and total risk-based capital ratios at
December 31, 2003 were 8.94% and 13.22%, 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 $26.9 million at December 31, 2003.
The Company also announced today the addition of Michael L.
McKennon as an independent director to the Board of the Company and
Bank effective February 25, 2004.
Mr. McKennon is a founding partner in the Irvine, California
accounting firm of McKennon Wilson & Morgan LLP. Mr. McKennon is
responsible for the firm's audit practice and is a Certified Public
Accountant. Mr. McKennon was previously employed by the accounting
firm of PricewaterhouseCoopers LLP and has over 20 years' experience
in private and public accounting, auditing and consulting for real
estate development, mortgage banking, manufacturing and software
clients.
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.
This press release may include forward-looking statements (related
to the Company's plans, beliefs and goals), which involve certain
risks and uncertainties that could cause actual results to differ
materially from those in the forward-looking statements. Such risks
and uncertainties include, but are not limited to, the following
factors: competitive pressure in the banking industry; changes in the
interest rate environment; the health of the economy, either
nationally or regionally; the deterioration of credit quality, which
would cause an increase in the provision for possible loan losses;
changes in the regulatory environment; changes in business conditions,
particularly in California real estate; volatility of rate sensitive
deposits; asset/liability matching risks and liquidity risks; and
changes in the securities markets. The Company undertakes no
obligation to revise or publicly release any revision to these
forward-looking statements.
PACIFIC PREMIER BANCORP AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
UNAUDITED (In thousands)
December 31, December 31,
ASSETS 2003 2002
Cash and due from banks $2,440 $3,590
Investment Securities Available for Sale 39,845 56,303
Investment Securities Held to Maturity 2,430 1,940
Loans held for sale 804 1,866
Loans held for investment, net of
allowance for loan losses of
$1,984 in 2003 and $2,835 in 2002,
respectively 246,796 156,365
Accrued interest receivable 1,122 1,140
Foreclosed real estate 979 2,427
Premises and equipment 5,330 5,411
Deferred income taxes 2,950 2,350
Participation Contract 5,977 4,869
Other assets 695 2,017
TOTAL ASSETS $309,368 $238,278
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Deposit accounts $221,447 $191,170
Other borrowings 48,600 20,000
Notes Payable - 11,440
Subordinated debentures - 1,500
Accrued expenses and other liabilities 1,989 2,545
Total liabilities 272,036 226,655
STOCKHOLDERS' EQUITY:
Common stock, $.01 par value 53 13
Additional paid-in capital 67,546 43,328
Accumulated deficit (30,021) (32,086)
Accumulated adjustments to stockholders'
equity (246) 368
Total stockholders' equity 37,332 11,623
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $309,368 $238,278
PACIFIC PREMIER BANCORP AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENT
UNAUDITED (In thousands, except per share data)
Three Months Ended Twelve Months Ended
December 31, December 31, December 31, December 31,
INTEREST INCOME: 2003 2002 2003 2002
Loans $3,383 $2,807 $12,366 $12,345
Other interest-
earning assets 1,521 1,396 4,882 6,527
Total interest
income 4,904 4,203 17,248 18,872
INTEREST EXPENSE:
Interest-bearing
deposits 1,182 1,381 4,954 6,314
Other borrowings 168 167 541 535
Notes payable 553 485 1,992 1,851
Subordinated
debentures 12 53 170 210
Total interest
expense 1,915 2,086 7,657 8,910
NET INTEREST INCOME 2,989 2,117 9,591 9,962
PROVISION FOR LOAN
LOSSES (26) 154 655 1,133
NET INTEREST INCOME
AFTER PROVISION
FOR LOAN LOSSES 3,015 1,963 8,936 8,829
NONINTEREST INCOME:
Loan servicing fee
income 44 115 503 761
Bank and other fee
income 173 110 505 531
Net gain (loss) on
loan sales (1) - 328 (261)
Net gain from
investment
securities (16) 88 127 424
Other income 169 80 852 414
Total noninterest
income 369 393 2,315 1,869
NONINTEREST EXPENSE:
Compensation and
benefits 1,488 1,151 5,041 4,448
Premises and
occupancy 346 402 1,405 1,890
Data processing 74 97 370 541
Net loss (gain) on
foreclosed real
estate 40 108 116 86
Other expense 703 774 2,851 3,200
Total noninterest
expense 2,651 2,532 9,783 10,165
NET INCOME FROM
OPERATIONS 733 (176) 1,468 533
(BENEFIT) PROVISION
FOR INCOME TAXES (3) 1 (597) (2,345)
NET INCOME FROM
OPERATIONS $736 ($177) $2,065 $2,878
Basic Average
Shares Outstanding 5,255,072 1,333,572 2,161,314 1,333,572
Basic Earnings per
Share $0.14 ($0.13) $0.96 $2.16
Diluted Average
Shares Outstanding 5,884,706 2,551,581 3,399,376 2,476,648
Diluted Earnings
per Share $0.13 N/A $0.61 $1.16
PACIFIC PREMIER BANCORP AND SUBSIDIARIES
Statistical Information
UNAUDITED (In thousands)
As of As of As of
Dec 31, Sep 30, Dec 31,
2003 2003 2002
Asset Quality:
Non-accrual loans $2,730 $2,715 $5,205
Nonperforming assets $3,453 $3,661 $7,429
Real estate owned $979 $1,281 $2,427
Net Charge offs for the quarter ended $131 $514 $974
Allowance for loan losses $1,984 $2,141 $2,835
Charge offs to average loans, annualized 0.25% 1.11% 2.77%
Non-accrual loans to total loans 1.09% 1.40% 3.23%
Non-accrual loans to total assets 0.88% 1.06% 2.18%
Allowance for credit losses to total
loans 0.79% 1.10% 1.76%
Allowance for credit losses to non-
accrual loans 72.67% 78.86% 54.47%
Average Balance Sheet: for the Quarter ended
Total assets $279,734 $251,477 $238,372
Loans $211,065 $185,669 $140,829
Deposits $214,796 $206,743 $191,469
Borrowings $28,432 $18,060 $20,044
Notes payable & Subordinated notes $2,269 $13,025 $12,922
Share Data:
Basic Book Value $7.10 $9.23 $8.72
Diluted Book Value $5.98 $5.26 $4.60
Closing Stock Price $11.09 $7.09 $5.31
12 12
months months
ended ended
Dec. 31, Dec. 31,
2003 2002
Profitability and Productivity:
Return on average assets 0.82% 1.18%
Return on average equity 12.43% 30.70%
Net interest margin 4.06% 4.37%
Non-interest expense to total assets 3.16% 4.27%
Efficiency ratio 81.19% 85.19%
Pacific Premier Bank Capital Ratios:
Tier 1 Capital Ratio 8.94% 7.03%
Total Risk-based Capital Ratio 13.22% 12.54%
CONTACT: Pacific Premier Bancorp, Inc.
Steven R. Gardner, 714-431-4000
John Shindler, 714-431-4000