Exhibit 99.1
Pacific Premier Bancorp, Inc. Announces First Quarter 2004 Results
COSTA MESA, Calif.--(BUSINESS WIRE)--April 14, 2004--Pacific
Premier Bancorp, Inc. (NASDAQ:PPBI) (the "Company"), the holding
company of Pacific Premier Bank, F.S.B. (the "Bank"), announced first
quarter earnings of $2.9 million, or $0.56 per basic share and $0.44
per diluted share, compared with a net loss of $258,000, or ($0.19)
per basic and diluted share from a year ago. Results for the quarter
included a one time gain of $1.6 million from the sale of one of three
residual interest components which comprise the Participation
Contract. Net income excluding the gain recognized on the
aforementioned sale of the residual interest was $1.3 million or $0.25
per basic share and $0.20 per diluted share for the quarter. All
diluted earnings per share amounts have been adjusted to reflect the
dilutive effect of all warrants and stock options outstanding. The
Company's return on average equity (ROAE) for the quarter ended March
31, 2004 was 30.80% compared to (9.07)% for the quarter ended March
31, 2003. Return on average assets (ROAA) for the quarter was 3.53%
compared to (0.43)% for the same period in the prior year. The
Company's basic and diluted book value per share increased to $7.69
and $6.46, respectively, at March 31, 2004, $0.59 and $0.47 higher
than December 31, 2003.
"Performance highlights for the quarter included net loan growth
of 19.3%, deposit growth of 13.7% and a 26.2% decline in nonperforming
assets," said Steven R. Gardner, President and Chief Executive
Officer. He further stated, "During the first quarter we completed
several key transactions including the issuance of $10 million in
trust preferred securities at very favorable terms, the sale of the
residual interest for $6.3 million, and the establishment of a new
$100 million credit facility. The Company has further solidified its
balance sheet which has provided us with the flexibility to continue
to accelerate asset and earnings growth in the coming quarters." Mr.
Gardner added, "Our retail banking group began offering home loans and
equity credit lines in April, which are being referred to a third
party originator, thus generating additional fee income while avoiding
the costs associated with the personnel needed to originate,
underwrite and fund these loans. Other products the group will be
adding in the next two quarters include internet banking, cash
management services, and commercial lending. Each of these products is
designed to facilitate our continued growth of core deposits from both
consumers and small businesses."
For the quarter ended March 31, 2004, net interest income
increased to $3.8 million from $2.1 million for the same period a year
earlier. The increase is in part attributable to an increase of $119.3
million in outstanding loan balances and the pay-off of the senior
secured note in the fourth quarter. The average net interest margin
for the quarter ended March 31, 2004 was 4.81% compared to 3.67% for
the same period a year ago. The increase in the margin is attributable
to a decrease in the average cost of funds of 144 basis points,
partially offset by a decrease in the average yield on loans of 105
basis points compared to the same period a year earlier. The discount
accretion from the Participation Contract included in interest income
for the first quarter of 2004 was $902,000, compared to $730,000 for
the same period a year earlier. The amount of discount accretion will
be substantially reduced in future periods due to the sale of the
1998-1 residual interest. The Bank's net interest margin, which does
not include the accretion income from the Participation Contract, was
3.74% for the three months ended March 31, 2004.
For the quarter ended March 31, 2004, the Company's provision for
loan losses totaled $57,000 compared with $639,000 for the same period
a year earlier. The decrease is primarily attributable to a reduction
of $740,000 in net charge-offs of for the quarter ended March 31, 2004
as compared to the same period in 2003 and the continuing improvement
in the Bank's overall asset quality.
For the quarter ended March 31, 2004, total noninterest income
increased to $2.0 million compared with $639,000 for the same period a
year earlier. The increase for the quarter was primarily the result of
the $1.6 million gain from the sale of the residual interest component
of the Participation Contract, which was partially offset by a
reduction in the gain on the sale of investments of $156,000.
Noninterest expense for the quarter ended March 31, 2004 was $2.8
million, a $458,000 increase compared to the same period in the prior
year. The increase in noninterest expense was primarily the result of
an increase in compensation and benefits of $455,000 due to additional
staff in the Bank's lending department, which were added during the
fourth quarter of 2003. At March 31, 2004, the Company had 72
full-time equivalent employees compared to 59 at March 31, 2003.
The Company's tax provision for the quarter ended March 31, 2004
was $12,000 which was comprised of $1.1 million of current income tax
that was offset by a $1.1 million reduction in the valuation allowance
for the deferred tax assets. The remaining valuation allowance balance
at March 31, 2004 was $4.4 million.
Total assets of the Company were $372.8 million as of March 31,
2004 compared to $309.4 million as of December 31, 2003. The $63.4
million or 20.5% increase in total assets is the result of increases
of $47.7 million in net loans, and $21.7 million in cash, which were
partially offset by decreases in investment securities and the
Participation Contract of $1.9 million and $4.4 million, respectively.
The increase in net loans was the result of $63.7 million in new
adjustable rate loans being funded during the quarter. The Bank's
pipeline was $65.8 million as of March 31, 2004, an increase of $13.1
million over the amount at December 31, 2003.
The allowance for loan losses increased slightly by $76,000 to
$2.1 million as of March 31, 2004 compared to December 31, 2003.
Although net loans increased by 19%, the allowance increased
moderately due to reductions in sub-prime loans and non-accrual loans
during the quarter of $813,000 and $636,000, respectively.
Additionally the Bank had $13,000 of net recoveries from previously
charged off loans and the unallocated reserve was reduced by $70,000
during the quarter. The allowance for loan losses as a percent of
non-accrual loans was 98% and 74% as of March 31, 2004 and December
31, 2003, respectively. Non-accrual loans and other real estate owned
were $2.1 million and $701,000, respectively, at March 31, 2004,
compared to $2.7 million and $979,000, respectively, as of December
31, 2003. The ratio of net nonperforming assets to total assets at
March 31, 2004 was 0.69%.
Total deposits were $251.7 million as of March 31, 2004, compared
to $221.4 million at December 31, 2003. The increase in deposits is
comprised of an increase of $29.1 million of certificates of deposits
and $1.1 million in transaction accounts. The cost of deposits as of
March 31, 2004 was 2.01%, a decrease of 13 basis points since December
31, 2003.
At March 31, 2004, total borrowings of the Company were comprised
of the Bank's $60.0 million of FHLB term borrowings, $8.4 million of
other borrowings and the Company's $10.3 million of trust preferred
securities. The total cost of the Company's borrowings at March 31,
2004 was 1.66% compared to 1.85% at December 31, 2003.
The Bank's tier 1 capital and total risk-based capital ratios at
March 31, 2004 were 8.86% and 13.71%, respectively. The Bank's capital
levels were positively impacted by the contribution of $5.0 million in
additional paid in capital contributed by the Company during the
quarter ended March 31, 2004. 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 $32.6 million at
March 31, 2004.
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 is community banking. The Bank currently operates
three full-service branches located in Orange and San Bernardino
Counties, in Southern California.
FORWARD-LOOKING COMMENTS
The statements contained herein 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: (1) changes in the performance of the financial
markets, (2) changes in the demand for and market acceptance of the
Company's products and services, (3) changes in general economic
conditions including interest rates, presence of competitors with
greater financial resources, and the impact of competitive projects
and pricing, (4) the effect of the Company's policies, (5) the
continued availability of adequate funding sources, (6) 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"), (7) 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 (8)
various legal, regulatory and litigation risks.
ANNUAL MEETING
The Board of Directors has established April 1, 2004, as the
record date for determining stockholders entitled to receive notice
of, to attend and to vote at, the Annual Meeting or any postponement
or adjournment thereof. Only record holders of Common Stock of the
Company at the close of business on such record date will be entitled
to vote at the Annual Meeting or any postponement or adjournment
thereof. The annual meeting will be held on Wednesday, May 26, 2004,
at 9:00 a.m., Pacific Time, at the corporate headquarters of the Bank
located at 1600 Sunflower Avenue, 2nd Floor, Costa Mesa, California,
92626.
PACIFIC PREMIER BANCORP AND SUBSIDIARY
CONSOLIDATED BALANCE SHEET
UNAUDITED (In thousands)
March 31, Dec. 31,
ASSETS 2004 2003
Cash and due from banks $24,179 $2,440
Investment securities available for sale 37,090 39,845
Investment securities held to maturity 3,292 2,430
Loans held for sale 706 804
Loans held for investment, net of allowance for
loan losses of $2,060 in 2004 and $1,984 in 2003
respectively 294,589 246,796
Accrued interest receivable 1,388 1,122
Foreclosed real estate 701 979
Premises and equipment 5,228 5,330
Deferred income taxes 3,000 2,950
Participation Contract 1,626 5,977
Other assets 1,019 695
Total assets $372,818 $309,368
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Deposit accounts $251,743 $221,447
Other borrowings 68,400 48,600
Subordinated debentures 10,310 -
Accrued expenses and other liabilities 1,931 1,989
Total liabilities 332,384 272,036
STOCKHOLDERS' EQUITY:
Common stock, $.01 par value 53 53
Additional paid-in capital 67,546 67,546
Accumulated deficit (27,095) (30,021)
Accumulated adjustments to stockholders' equity (70) (246)
Total stockholders' equity 40,434 37,332
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $372,818 $309,368
PACIFIC PREMIER BANCORP AND SUBSIDIARY
CONSOLIDATED INCOME STATEMENT
UNAUDITED (In thousands, except per share data)
Three Months Ended
March 31, March 31,
INTEREST INCOME: 2004 2003
Loans $4,053 $2,892
Other interest-earning assets 1,212 1,137
Total interest income 5,265 4,029
INTEREST EXPENSE:
Interest-bearing deposits 1,218 1,291
Other borrowings 232 154
Notes payable - 476
Subordinated debentures 8 53
Total interest expense 1,458 1,974
NET INTEREST INCOME 3,807 2,055
PROVISION FOR LOAN LOSSES 57 639
NET INTEREST INCOME AFTER PROVISION FOR LOAN
LOSSES 3,750 1,416
NONINTEREST INCOME:
Loan servicing fee income 144 164
Bank and other fee income 141 101
Net gain from investment securities 1,573 143
Other income 101 231
Total noninterest income 1,959 639
NONINTEREST EXPENSE:
Compensation and benefits 1,622 1,167
Premises and occupancy 363 347
Data processing 79 99
Net loss on foreclosed real estate 18 94
Other expense 689 606
Total noninterest expense 2,771 2,313
NET INCOME (LOSS) FROM OPERATIONS 2,938 (258)
PROVISION FOR INCOME TAXES 12 -
NET INCOME (LOSS) FROM OPERATIONS $2,926 ($258)
Basic Average Shares Outstanding 5,255,072 1,333,572
Basic Earnings per Share $0.56 ($0.19)
Diluted Average Shares Outstanding 6,575,431 2,542,416
Diluted Earnings per Share $0.44 ($0.19)
PACIFIC PREMIER BANCORP AND SUBSIDIARY
Statistical Information
UNAUDITED (In thousands)
As of As of As of
March 31, March 31, Dec. 31,
2004 2003 2003
Asset Quality:
Non-accrual loans $2,094 $4,889 $2,730
Nonperforming assets $2,834 $ - $3,453
Real estate owned $ 701 $1,298 $ 979
Net charge-offs for the quarter ended $ (13) $ 727 $ 131
Allowance for loan losses $2,060 $2,747 $1,984
Charge-offs to average loans, annualized -0.02% 1.78% 0.25%
Non-accrual loans to total loans 0.70% 2.73% 1.09%
Non-accrual loans to total assets 0.56% 2.10% 0.88%
Allowance for credit losses to total loans 0.69% 1.53% 0.79%
Allowance for credit losses to non-
accrual loans 98.38% 56.19% 72.67%
Average Balance Sheet: for the Quarter ended
Total assets $331,118 $241,873 $279,734
Loans $268,740 $163,377 $211,065
Deposits $236,005 $196,242 $214,796
Borrowings $ 54,007 $ 19,631 $ 28,432
Notes payable & Subordinated notes $ 773 $ 12,957 $ 2,269
Share Data:
Basic Book Value $ 7.69 $8.23 $ 7.10
Diluted Book Value $ 6.46 $4.25 $ 5.98
Closing Stock Price $13.45 $6.00 $11.09
3 months 3 months 12 months
ended ended ended
March 31, March 31, Dec. 31,
2004 2003 2003
Profitability and Productivity:
Return on average assets 3.53% (0.43%) 0.82%
Return on average equity 30.80% (9.07%) 12.43%
Net interest margin 4.81% 3.67% 4.06%
Non-interest expense to total assets 2.97% 3.98% 3.16%
Efficiency ratio 47.75% 85.86% 81.19%
Pacific Premier Bank Capital Ratios:
Tier 1 Capital Ratio 8.86% 6.98% 8.94%
Total Risk-based Capital Ratio 13.71% 10.87% 13.22%
CONTACT: Pacific Premier Bancorp, Inc.
Steven R. Gardner or John Shindler, 714-431-4000