Exhibit 99.1
Pacific Premier Bancorp, Inc. Announces Second Quarter
and Year-to-Date 2004 Results
COSTA MESA, Calif.--(BUSINESS WIRE)--July 15, 2004--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 six months ended June 30,
2004. The Company recorded second quarter net income of $1.4 million,
or $0.21 per diluted share, compared to net income of $864,000, or
$0.34 per diluted share for the second quarter of 2003. The net income
for the six months ended June 30, 2004 was $4.3 million, or $0.65 per
diluted share, compared to net income of $606,000, or $0.24 per
diluted share for the six months ended June 30, 2003. All diluted
earnings per share amounts have been adjusted to reflect warrants and
stock options outstanding. The Company's basic and diluted book value
per share increased to $7.88 and $6.68, respectively, at June 30,
2004, $0.78 and $0.70 higher than at December 31, 2003.
Return on average assets (ROAA) for the six months ended June 30,
2004 was 2.31%, compared to 0.51% for the same period in 2003. The
Company's return on average equity (ROAE) for the six months ended
June 30, 2004 was 19.58% compared to 10.77% for the six months ended
June 30, 2003.
Steven R. Gardner, the Company's President and Chief Executive
Officer, stated, "During the second quarter, we continued to execute
on our strategic plan to accelerate growth and to transition the Bank
to a community banking platform. Our assets and net loans increased by
13.6% and 18.7%, respectively, during the quarter driven by strong
originations of adjustable-rate income property loans totaling $73.9
million. Additionally, we contracted with our core service provider
for on-line banking and cash management products to be in place by the
end of the third quarter." Mr. Gardner further stated, "The Company is
positioned for continued growth as our loan pipeline increased to
$88.7 million at June 30, 2004, which is 35% higher than the end of
the first quarter."
For the three and six months ended June 30, 2004, net interest
income increased to $4.0 million and $7.8 million, respectively, from
$2.3 million and $4.3 million for the same periods a year earlier. The
increase is predominately attributable to an increase in loans
outstanding of $171.4 million over the prior year periods and an
overall reduction in interest expense. The Company's average net
interest margin for the quarter and six months ended June 30, 2004 was
4.10% and 4.37%, respectively, compared to 4.15% and 3.91% for the
same periods a year ago. The increase in the net interest margin for
the six months ended June 30, 2004, compared to the prior year period
was primarily attributable to a decrease in the average cost of funds
of 145 basis points, which was partially offset by an increase in the
outstanding balance of adjustable-rate income property loans which has
led to a decrease in the average yield on loans of 122 basis points.
The discount accretion from the Participation Contract included in
interest income for the three and six months ended June 30, 2004 was
$654,000 and $1.6 million, respectively, compared to $826,000 and $1.6
million for the same periods a year earlier. The amount of discount
accretion was reduced in the second quarter of 2004 due to the sale of
the 1998-1 residual interest component of the Participation Contract
in the first quarter of 2004. The Bank's net interest margin, which
does not include the accretion income from the Participation Contract,
was 3.49% and 3.56% for the three and six months ended June 30, 2004,
compared to 3.69% and 3.54% for the same periods a year earlier.
The provision for loan losses was $208,000 and $264,000 for the
three and six months ended June 30, 2004, compared to $42,000 and
$681,000 for the same periods in 2003. The decrease in the provision
for the six months ended June 30, 2004 is primarily due to a reduction
in net charge-offs from $860,000 for the six months ended June 30,
2003 to $54,000 for the same period of 2004.
Noninterest income was $524,000 and $2.5 million for the three and
six months ended June 30, 2004, compared to $731,000 and $1.4 million
for the same periods ended June 30, 2003. The increase in noninterest
income over the six month periods is primarily due to a $1.6 million
gain on sale of the 1998-1 residual interest component of the
Participation Contract in March 2004.
Noninterest expenses were $2.7 million and $5.5 million for the
three and six months ended June 30, 2004, respectively, compared to
$2.5 million and $4.8 million for the same periods ended June 30,
2003. The $247,000 and $706,000 increases were primarily due to
increases in compensation attributed to the Bank's hiring of
additional lending personnel.
At June 30, 2004, the Company had 77 full-time equivalent
employees.
The Company's income tax provision for the three and six months
ended June 30, 2004 was $194,000 and $206,000, respectively. For the
same periods a year earlier, the Company had a tax benefit of $398,000
and $398,000, respectively. The Company benefited from a reduction in
its valuation allowance for deferred taxes in the three and six months
ended June 30, 2004 and for the three months ended June 30, 2003 of
$472,000, $1.1 million, and $400,000, respectively. The Company's
valuation allowance for deferred taxes was $3.8 million at June 30,
2004.
Total assets of the Company were $423.7 million as of June 30,
2004, compared to $309.4 million as of December 31, 2003. The $114.3
million or 36.9% increase in total assets was the result of increases
of $102.9 million in net loans and $11.6 million in cash, which were
partially offset by a decrease in the Participation Contract of $4.4
million. The increase in net loans was the result of $137.6 million in
new adjustable-rate loans being funded during the first two quarters
of 2004 with $73.9 million funded in the second quarter. The Bank's
loan pipeline was $88.7 million as of June 30, 2004, an increase of
$22.9 million over the amount at March 31, 2004.
The allowance for loan losses increased by $211,000 to $2.2
million as of June 30, 2004, compared to December 31, 2003. The
allowance for loan losses as a percent of non-accrual loans was 96%
and 73% as of June 30, 2004 and December 31, 2003, respectively.
Non-accrual loans and other real estate owned were $2.3 million and
$531,000, respectively, at June 30, 2004, down from $2.7 million and
$979,000, respectively, as of December 31, 2003. The ratio of net
nonperforming assets to total assets at June 30, 2004 was 0.68%.
Total deposits increased by $47.5 million to $268.9 million at
June 30, 2004, compared to $221.4 million at December 31, 2003. The
increase in deposits was comprised of an increase of $45.5 million of
certificates of deposit and $2.0 million in transaction accounts. The
cost of deposits as of June 30, 2004 was 2.01%, reflecting a decrease
of 13 basis points since December 31, 2003.
At June 30, 2004, total borrowings of the Company were comprised
of the Bank's $91.5 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 June 30,
2004 was 1.95%, compared to 1.85% at December 31, 2003. The Company's
total cost of funds for the six months ended June 30, 2004 was 1.97%,
compared to 3.42% for the six months ended June 30, 2003.
The Bank's tier 1 capital and total risk-based capital ratios at
June 30, 2004 were 9.10% and 13.61%, respectively. The minimum ratios
for well-capitalized banks are 5% and 10% for tier 1 capital and
risk-based capital, respectively. The Bank's total equity capital was
$38.0 million at June 30, 2004.
The Company is a savings and loan holding company that owns 100%
of the capital stock of the Bank, the Company's 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 in Southern California located in the cities of
San Bernardino, Seal Beach and Huntington Beach.
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.
PACIFIC PREMIER BANCORP AND SUBSIDIARY
CONSOLIDATED BALANCE SHEET
UNAUDITED (In thousands)
June 30, December
31,
ASSETS 2004 2003
Cash and due from banks $14,057 $2,440
Investment securities available for sale 41,500 39,845
Investment securities held to maturity 4,328 2,430
Loans held for sale 645 804
Loans held for investment, net of allowance for
loan losses of $2,195 in 2004 and $1,984 in 2003
respectively 349,842 246,796
Accrued interest receivable 1,513 1,122
Foreclosed real estate 531 979
Premises and equipment 5,193 5,330
Deferred income taxes 3,419 2,950
Participation Contract 1,626 5,977
Other assets 1,045 695
Total assets $423,699 $309,368
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Deposit accounts $268,923 $221,447
Other borrowings 99,900 48,600
Subordinated debentures 10,310 -
Accrued expenses and other liabilities 3,161 1,989
Total liabilities 382,294 272,036
STOCKHOLDERS' EQUITY:
Common stock, $.01 par value 53 53
Additional paid-in capital 67,546 67,546
Accumulated deficit (25,745) (30,021)
Accumulated adjustments to stockholders' equity (449) (246)
Total stockholders' equity 41,405 37,332
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $423,699 $309,368
PACIFIC PREMIER BANCORP AND SUBSIDIARY
CONSOLIDATED INCOME STATEMENT
UNAUDITED (In thousands, except per share data)
Three Months Ended Six Months Ended
June 30, June 30, June 30, June 30,
INTEREST INCOME: 2004 2003 2004 2003
Loans $4,643 $3,059 $8,696 $5,951
Other interest-earning
assets 1,057 1,083 2,269 2,220
Total interest income 5,700 4,142 10,965 8,171
INTEREST EXPENSE:
Interest-bearing deposits 1,290 1,250 2,508 2,541
Other borrowings 354 100 586 254
Notes payable - 479 - 955
Subordinated debentures 98 53 106 106
Total interest expense 1,742 1,882 3,200 3,856
NET INTEREST INCOME 3,958 2,260 7,765 4,315
PROVISION FOR LOAN LOSSES 208 42 264 681
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 3,750 2,218 7,501 3,634
NONINTEREST INCOME:
Loan servicing fee income 99 208 243 372
Bank and other fee income 152 107 293 208
Net gain on loan sales 58 207 58 207
Net gain from investment
securities - - 1,573 143
Other income 215 209 316 440
Total noninterest income 524 731 2,483 1,370
NONINTEREST EXPENSE:
Compensation and benefits 1,641 1,134 3,264 2,278
Premises and occupancy 334 361 697 708
Data processing 74 98 153 197
Net loss (gain) on
foreclosed real estate 23 (43) 41 51
Other expense 658 933 1,347 1,562
Total noninterest expense 2,730 2,483 5,502 4,796
NET INCOME BEFORE TAXES 1,544 466 4,482 208
PROVISION FOR INCOME
TAXES 194 (398) 206 (398)
NET INCOME (LOSS) FROM
OPERATIONS $1,350 $864 $4,276 $606
Basic Average Shares
Outstanding 5,255,072 1,333,572 5,255,072 1,333,572
Basic Earnings per Share $0.26 $0.65 $0.81 $0.45
Diluted Average Shares
Outstanding 6,559,354 2,561,005 6,567,392 2,552,066
Diluted Earnings per Share $0.21 $0.34 $0.65 $0.24
PACIFIC PREMIER BANCORP AND SUBSIDIARY
Statistical Information
UNAUDITED (In thousands)
As of As of As of
June 30, June 30, December 31,
2004 2003 2003
Asset Quality:
Non-accrual loans $2,278 $3,793 $2,730
Nonperforming assets $2,876 $5,269 $3,453
Real estate owned $531 $1,369 $979
Net charge-offs for the
quarter ended $67 $133 $131
Allowance for loan losses $2,195 $2,656 $1,984
Net charge-offs to average
loans, annualized 0.08% 0.30% 0.25%
Non-accrual loans to total
loans 0.65% 2.07% 1.09%
Non-accrual loans to total
assets 0.54% 1.51% 0.88%
Allowance for credit losses to
total loans 0.62% 1.45% 0.79%
Allowance for credit losses to
non-accrual loans 96.36% 70.02% 72.67%
Average Balance Sheet: for the
Quarter ended
Total assets $401,330 $235,133 $279,734
Loans $325,895 $177,190 $211,065
Deposits $256,695 $198,130 $214,796
Borrowings $90,810 $11,313 $28,432
Notes payable & Subordinated
notes $10,310 $12,992 $2,269
Share Data:
Basic Book Value $7.88 $8.90 $7.10
Diluted Book Value $6.68 $4.59 $5.98
Closing Stock Price $10.65 $7.64 $11.09
6 months 6 months 12 months
ended ended ended
June 30, June 30, December 31,
2004 2003 2003
Profitability and
Productivity:
Return on average assets 2.31% 0.51% 0.82%
Return on average equity 19.58% 10.77% 12.43%
Net interest margin 4.37% 3.91% 4.06%
Non-interest expense to total
assets 1.29% 3.83% 3.16%
Efficiency ratio 60.40% 84.36% 81.19%
Pacific Premier Bank Capital
Ratios:
Tier 1 Capital Ratio 9.10% 6.82% 8.94%
Total Risk-based Capital Ratio 13.61% 10.96% 13.22%
CONTACT: Pacific Premier Bancorp, Inc., Costa Mesa
Steven R. Gardner or John Shindler, 714-431-4000