Exhibit 99.1
PACIFIC PREMIER BANCORP, INC. ANNOUNCES FIRST QUARTER 2006 RESULTS (UNAUDITED)
Costa Mesa, Calif., April 20, 2006 -- Pacific Premier Bancorp, Inc. (NASDAQ:
PPBI) (the "Company"), the holding company of Pacific Premier Bank, F.S.B. (the
"Bank"), announced first quarter net income of $1.7 million, or $0.26 per
diluted share, compared to net income of $1.6 million, or $0.24 per diluted
share, for the first quarter of 2005, an increase of 6.5%. All diluted earnings
per share amounts have been adjusted to reflect warrants and stock options
outstanding.
Return on average assets (ROAA) for the quarter ended March 31, 2006 was 1.02%,
compared to 1.18% for the same period in 2005. The Company's return on average
equity (ROAE) for the quarter ended March 31, 2006 was 13.41%, compared to
14.58% for the same period in 2005. The Company's basic and diluted book value
per share increased to $9.99 and $8.35, respectively, at March 31, 2006,
reflecting an annualized increase of 13.2% and 12.9% from December 31, 2005.
Steven R. Gardner, President and Chief Executive Officer, stated "During the
quarter, our people executed our operating strategies as we increased the levels
of higher yielding commercial real estate and business loans in our portfolio.
These loans brought new business banking relationships to the Bank which, in
part, led to the growth of transaction deposits by 5.84%, or 23.37% annualized,
over the prior quarter. Additionally, we continued our strategy of selling lower
yielding multi-family loans, which allowed us to reduce brokered deposits by
$12.6 million. Our first quarter results also reflect our investment in our
strategic growth strategy as we add additional bankers to staff our soon to be
opened fourth and fifth branches. Although this investment resulted in
additional expense during the current quarter, the increased personnel will
facilitate our ability to grow business banking relationships and, in turn, grow
core deposits in future periods."
For the three months ended March 31, 2006, net interest income increased 11.9%
to $4.6 million from $4.1 million for the same period a year earlier. The
primary reason for the increase in net interest income was the growth in
interest income which totaled $10.4 million during the quarter ended March 31,
2006 versus $7.2 million for the quarter ended March 31, 2005. Growth in
interest income was predominately attributable to a 23.4% increase in average
loans outstanding of $117.9 million and a 16.6% increase in the average
quarterly loan yield to 6.40% from 5.49%, over the prior year period. As part of
the Bank's transformation to a commercial banking platform, management has
implemented various strategies to increase interest income through the
origination of higher yielding commercial real estate and small business loans.
Partially offsetting the increase in interest income was an increase in interest
expense of 86.8%, or $2.7 million. The increase in interest expense was
attributable to increases in average deposits outstanding of $41.2 million and
average borrowings of $78.1 million, as well as the increase in the average cost
of deposits and borrowings of 96 and 155 basis points, respectively, over the
prior year period.
The Company's net interest margin for the quarter ended March 31, 2006 was 2.79%
compared to 3.06% for the period ended March 31, 2005, respectively. The
decrease in the margin was primarily attributable to increases in the average
cost of deposits and borrowings, which was partially offset by an increase in
the yield on earning assets of 92 basis points. The increase in the yield earned
on assets is attributable to the repricing of the Bank's adjustable-rate loans
and the origination of higher yielding commercial real estate and business
loans. At March 31, 2006, the Bank's loan portfolio was comprised of $581.6
million of adjustable-rate loans, representing 96.4% of its total loan portfolio
at such date. These loans, which include fixed rate hybrid loans with initial
terms of 3, 5, 7 and 10 years that become adjustable-rate loans after the
initial fixed rate period, have an overall average time to reprice of 14.0
months. The adjustable-rate loan portfolio contains $231.4 million of loans that
are scheduled to reprice in April 2006, of which $168.3 million is indexed to
the 12 Month Treasury Average rate (12-MTA), a lagging index, and $32.6 million
that is indexed to the six-month LIBOR rate. The increase in cost of funds is
attributable to the overall rising short-term interest rate environment and
strong competitor deposit pricing within the Bank's primary markets.
The provision for loan losses was zero for the three months ended March 31,
2006, compared to $145,000 for the same period in 2005. The decrease in the
provision was primarily due to a $1.6 million decrease in net loans outstanding
during the quarter compared to a $51.0 million increase in net loans during the
same period in 2005. Net charge-offs for the first quarter of 2006 were $58,000
compared to $4,000 for the same period in 2005.
Noninterest income was $946,000 for the three months ended March 31, 2006,
compared to $626,000 for the same period ended March 31, 2005. The 51.1%
increase was primarily due to increases in gains from loan sales of $317,000 and
prepayment penalty income of $174,000 over the same period in 2005. During the
first quarter of 2006, the Bank sold $38.9 million of multi-family loans as part
of its strategy to diversify its loan portfolio and manage balance sheet growth.
Prepayment penalties totaling $267,000 were collected from the early payoff of
$12.7 million of multi-family and commercial real estate loans. Partially
offsetting the gain from loan sales and prepayment penalty income was a
reduction in the recoveries of charged-off loans associated with the
Participation Contract of $174,000.
Noninterest expense was $3.7 million for the three months ended March 31, 2006,
compared to $2.8 million for the same period ended March 31, 2005. The increase
in noninterest expense was the result of increases in compensation and benefits,
premises and occupancy expense, and marketing costs of $341,000, $223,000, and
$90,000, respectively. These increases are reflective of the Bank's investments
in its strategic expansion through de novo branching and the addition of
experienced business bankers to staff the new locations. The number of employees
at the Bank grew from 75 at March 31, 2005 to 97 at March 31, 2006. A large
portion of the increase in premises and occupancy expense, $117,000, is
attributable to the rent associated with the Bank's new depository branches in
the cities of Costa Mesa and Los Alamitos (both scheduled to open in the second
quarter), Newport Beach (scheduled to open in the third quarter) and the SBA
loan production office in Pasadena, which opened in January 2006. The Bank
expects to continue to add additional staffing in 2006 in connection with the
opening of the Newport Beach branch and its continued transition to a commercial
banking platform.
The Company's tax provision for the three months ended March 31, 2006 was
$151,000. For the same period a year earlier, the tax provision was $156,000.
The Company benefited from a reduction in its valuation allowance for deferred
taxes of $500,000 in both quarters ending March 31, 2006 and 2005. The Company's
valuation allowance for deferred taxes was $1.9 million at March 31, 2006.
Total assets of the Company were $684.9 million as of March 31, 2006, compared
to $702.7 million as of December 31, 2005. The $17.8 million, or 2.5%, decrease
in total assets was the result of a decrease of $28.7 million, or 84.4%, in cash
and cash equivalents which was partially offset by the purchase of Bank Owned
Life Insurance ("BOLI") of $10.0 million at the end of March 2006. The reduction
in cash and cash equivalents was primarily due to the redemption of $12.6
million and $8.7 million of broker and consumer certificates of deposit ("CDs"),
respectively. A reduction in brokered CDs was part of the Bank's stated strategy
to reduce, over time, its reliance on wholesale sources of funding. The
reduction of consumer CDs is reflective of the Bank's strategy of not matching
or exceeding the highest market rates paid on consumer CDs. Management will
negotiate rates with customers that have their full or a substantial banking
relationship with the Bank and, as such, may lose consumers who are merely
shopping for the highest rate in the market.
Net loans decreased by $1.6 million during the quarter, primarily due to loan
sales of multi-family loans totaling $38.9 million, which generated net gains of
$386,000. Net loans were also impacted by the prepayment of loans totaling $17.3
million which generated prepayment penalty income of $267,000. During the
quarter, the Bank originated $57.1 million of new loans consisting of $38.6
million of multi-family, $16.0 million of commercial real estate, and $2.5
million of business loans. Management has utilized loan sales to manage its
liquidity, interest rate risk, loan to deposit ratio, diversification of its
loan portfolio, and net balance sheet growth, and expects to continue to do so
for the foreseeable future. The Bank's pipeline of new loans, at March 31, 2006,
was $83.9 million.
The allowance for loan losses decreased $58,000 to $3.0 million as of March 31,
2006, compared to December 31, 2005. The reduction in the allowance for loan
losses was primary due to decreases in net loans of $1.6 million and non-accrual
loans of $297,000 during the quarter. The allowance for loan losses as a percent
of non-accrual loans increased to 216% as of March 31, 2006 from 181% at
December 31, 2005. Net non-accrual loans and other real estate owned were $1.2
million and $158,000, respectively, at March 31, 2006, compared to $1.5 million
and $211,000, respectively, as of December 31, 2005. The ratio of net
nonperforming assets to total assets at March 31, 2006 was 0.20%. All
nonperforming assets are concentrated in the Bank's single family residential
loans and are associated with its prior origination of sub-prime mortgages,
which were discontinued in 2000.
2
Total deposits were $311.4 million as of March 31, 2006, compared to $327.9
million at December 31, 2005. The decrease in deposits was comprised of
decreases in brokered CDs of $12.6 million and retail CDs of $8.7 million,
partially offset by an increase in transaction accounts of $4.8 million. The
cost of deposits as of March 31, 2006 was 3.44%, an increase of 28 basis points
since December 31, 2005.
At March 31, 2006, total borrowings of the Company amounted to $315.3 million, a
$2.8 million decrease from December 31, 2005. These borrowings were comprised of
the Bank's $230.0 million and $74.0 million of FHLB term borrowings and
overnight advances, respectively, $1.0 million of other borrowings and the
Company's $10.3 million of subordinated debentures which were used to fund the
issuance of trust preferred securities. The total cost of the Company's
borrowings and deposits at March 31, 2006 was 3.92% compared to 3.63% at
December 31, 2005.
The Bank's tier 1 (core) capital and total risk-based capital ratios at March
31, 2006 were 8.18% and 12.09%, respectively. The minimum ratios for
well-capitalized banks are 5.00% and 10.00% for tier 1 (core) capital and
risk-based capital, respectively.
The Company owns all of the capital stock of the Bank, a federal savings bank.
We currently provide business and consumer banking products to our customers
through our three full-service depository branches and a loan production office
in Southern California located in the cities of San Bernardino, Seal Beach,
Huntington Beach, and Pasadena. The Bank is scheduled to open its fourth and
fifth branches in Los Alamitos and Costa Mesa, California, respectively, during
the second quarter of 2006 and its sixth branch in Newport Beach, California in
the third quarter of 2006.
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, and (6) various legal,
regulatory and litigation risks.
Contact:
Pacific Premier Bancorp, Inc.
Steven R. Gardner
President/CEO
714.431.4000
John Shindler
Executive Vice President/CFO
714.431.4000
3
PACIFIC PREMIER BANCORP AND SUBSIDIARY
CONSOLIDATED BALANCE SHEET
(In thousands)
MARCH 31, DECEMBER 31,
2006 2005
------------ ------------
(Unaudited) (Audited)
ASSETS
- -----------------------------------------------------------
Cash and due from banks $ 5,314 $ 10,055
Federal Funds Sold - 24,000
------------ ------------
Cash and cash equivalents 5,314 34,055
Investment securities available for sale 35,641 35,850
Investment securities held to maturity 14,288 13,945
Loans held for sale 415 456
Loans held for investment, net of allowance for loan losses
of $2,992 in 2006 and $3,050 in 2005 respectively 601,351 602,937
Accrued interest receivable 3,176 3,007
Foreclosed real estate 158 211
Premises and equipment 6,208 5,984
Income taxes receivable 212 133
Deferred income taxes 5,766 5,188
Bank Owned Life Insurance 10,001 -
Other assets 2,371 967
------------ ------------
Total assets $ 684,901 $ 702,733
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
- -----------------------------------------------------------
LIABILITIES:
Deposit accounts
Transaction accounts $ 86,599 $ 81,816
Certificates of deposit 224,819 246,120
------------ ------------
Total Deposits 311,418 327,936
Other borrowings 305,000 307,835
Subordinated debentures 10,310 10,310
Accrued expenses and other liabilities 5,545 6,073
------------ ------------
Total liabilities 632,273 652,154
------------ ------------
STOCKHOLDERS' EQUITY:
Common stock, $.01 par value 53 53
Additional paid-in capital 67,618 67,198
Accumulated deficit (14,319) (16,059)
Unrealized loss on available for sale securities, net of tax (724) (613)
------------ ------------
Total stockholders' equity 52,628 50,579
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 684,901 $ 702,733
============ ============
4
PACIFIC PREMIER BANCORP AND SUBSIDIARY
CONSOLIDATED INCOME STATEMENT
UNAUDITED (In thousands, except per share data)
THREE MONTHS ENDED
---------------------------
MARCH 31, MARCH 31,
2006 2005
------------ ------------
INTEREST INCOME:
- -------------------------------------------------------
Loans $ 9,770 $ 6,767
Other interest-earning assets 604 440
------------ ------------
Total interest income 10,374 7,207
------------ ------------
INTEREST EXPENSE:
- -------------------------------------------------------
Interest-bearing deposits 2,710 1,680
Other borrowings 2,861 1,266
Subordinated debentures 184 135
------------ ------------
Total interest expense 5,755 3,081
------------ ------------
NET INTEREST INCOME 4,619 4,126
------------ ------------
PROVISION FOR LOAN LOSSES - 145
------------ ------------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 4,619 3,981
------------ ------------
NONINTEREST INCOME:
- -------------------------------------------------------
Loan servicing fee income 338 152
Bank and other fee income 102 128
Net gain from loan sales 386 69
Other income 120 277
------------ ------------
Total noninterest income 946 626
------------ ------------
NONINTEREST EXPENSE:
- -------------------------------------------------------
Compensation and benefits 2,230 1,889
Premises and occupancy 545 322
Data processing 95 83
Net loss (gain) on foreclosed real estate 81 (9)
Marketing expense 133 43
Other expense 590 489
------------ ------------
Total noninterest expense 3,674 2,817
------------ ------------
NET INCOME BEFORE TAXES 1,891 1,790
PROVISION FOR INCOME TAXES 151 156
------------ ------------
NET INCOME $ 1,740 $ 1,634
============ ============
Basic Average Shares Outstanding 5,254,160 5,258,738
Basic Earnings per Share $ 0.33 $ 0.31
Diluted Average Shares Outstanding 6,681,371 6,699,788
Diluted Earnings per Share $ 0.26 $ 0.24
5
PACIFIC PREMIER BANCORP AND SUBSIDIARY
STATISTICAL INFORMATION
UNAUDITED (In thousands)
AS OF AS OF AS OF
MARCH 31, DECEMBER 31, MARCH 31,
2006 2005 2005
------------ ------------ ------------
ASSET QUALITY:
- --------------------------------------------------
Non-accrual loans, net of specific allowance $ 1,205 $ 1,502 $ 1,734
Real estate owned $ 158 $ 211 $ 264
Nonperforming assets, net of specific allowance $ 1,363 $ 1,713 $ 1,998
Net charge-offs (recoveries) for the quarter ended $ 58 $ (92) $ 4
Allowance for loan losses $ 2,992 $ 3,050 $ 2,767
Net charge-offs to average loans, annualized 0.04% (0.06)% 0.00%
Net non-accrual loans to total loans 0.20% 0.25% 0.33%
Net non-accrual loans to total assets 0.18% 0.21% 0.30%
Net non-performing assets to total assets 0.20% 0.24% 0.34%
Allowance for loan losses to total loans 0.49% 0.50% 0.53%
Allowance for loan losses to non-accrual loans 215.90% 180.82% 142.06%
AVERAGE BALANCE SHEET: FOR THE QUARTER ENDED
- --------------------------------------------------
Total assets $ 683,151 $ 666,938 $ 554,062
Loans $ 610,581 $ 595,328 $ 492,721
Deposits $ 331,723 $ 329,799 $ 290,482
Borrowings $ 282,318 $ 269,579 $ 204,250
Subordinated debentures $ 10,310 $ 10,310 $ 10,310
SHARE DATA:
- --------------------------------------------------
Basic book value $ 9.99 $ 9.67 $ 8.65
Diluted book value $ 8.35 $ 8.09 $ 7.28
Closing stock price $ 11.73 $ 11.80 $ 11.00
PACIFIC PREMIER BANK CAPITAL:
- --------------------------------------------------
Tier 1 (core) capital $ 55,660 $ 54,376 $ 50,498
Tier 1 (core) capital ratio 8.18% 7.79% 8.65%
Total risk-based capital ratio 12.09% 11.78% 13.02%
LOAN PORTFOLIO
- --------------------------------------------------
Real estate loans:
Multi-family $ 446,398 $ 459,714 $ 426,784
Commercial and land 136,209 125,426 75,025
One-to-four family 15,429 16,561 19,853
Business loans 5,432 3,248 844
Other loans 27 27 77
------------ ------------ ------------
Total gross loans $ 603,495 $ 604,976 $ 522,583
============ ============ ============
Three Months Three Months Three Months
Ended Ended Ended
March 31, December 31, March 31,
2006 2005 2005
------------ ------------ ------------
PROFITABILITY AND PRODUCTIVITY:
- ----------------------------------------------------
Return on average assets 1.02% 1.02% 1.18%
Return on average equity 13.41% 13.58% 14.58%
Net interest margin 2.79% 2.75% 3.06%
Non-interest expense to total assets 2.15% 1.49% 1.92%
Efficiency ratio 64.56% 62.05% 59.47%
6