PPBI - Earnings call transcript Q1 2021 | Pacific Premier Bancorp, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day and welcome to the Pacific Premier Bancorp First Quarter 2021 Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Steve Gardner, Chairman and CEO. Please go ahead.

Steve Gardner

Thank you, Betsy. everyone. morning, Good joining you I us appreciate today.

all released we you're this of morning, earnings report earlier our for As XXXX. aware, the quarter first

additional published presentation performance. We updated information has also financial on have our an that investor

you to our copy you of If would presentation. download website visit not already, Investor done we have encourage to the Relations a so

questions. then will have terms we'll I I financial items. Ron carefully. notable to noted of of some forward-looking relative the the presentation, call the our In up of our on you open our call earnings those And release our to and investor review CFO would comments. statement to of through through we encourage all details, few Safe Harbor today, and I'll read walk the a Nicholas,

results $X.XX performance the our equity of net a first from the assets a company. tangible income are and discipline quarter well the environment, at of We first people average organization. in or $XX.X financial the million return throughout strength return level the reflect delivered on added of per as X.XX% growing strong common on average the our scale to which benefits XX.XX%. as team, with Our quarter in the and Despite executing challenges current share, the high of a translated of

Asset quality remains solid, COVID-XX loan with no remaining modifications.

remaining in million, to increasing bearing $XXX of basis reduce net client noninterest and part that relationships to deposit by our XX% growth commercial stable. bearing margin a our new to the our quarter, we deposits number led XX helped interest added During contributed to annualized. points, relatively deposits noninterest costs in or The

revenue. greater our scale support will Premier the utilize improve Premier Trust our we performing we which Pacific These to businesses are systems salesforce well analytics, ability income the second accounting throughout and as system into half we overall for fee Pacific percentage a ultimately relationship move this client data and XXXX. management. business deploy simultaneously customized of the complete will recurring to our quarter, conversion trust development, business are of platform, Later and of Our

and further $X.X the quarter. was commitments, utilization first rates, growth our quarter than in new is we line billion new which While business for from a up have impacted period history, decline million loan typically seasonally a in is strongest given notable the development, loan originations. $XXX low of terms with in elevated payoffs that in more loan quarter new last particularly credit This

strengthen, across new the we greater quarter. a and The on mix X.XX% of deposit of loan prior contributing in quarter. are an that in basis balanced that were seeing we compared across business improvement loan loan in are to the the to economy seeing are which points continues the factors commitments, diversification the more to There rate portfolio. average to resulted of relationships increase the As our production lines first in in eight increase number production the loan as

improved with collaborating opportunities to and at efficiency. are level teams high close working and a develop Our new

is more low the estate as their of seeing hit are appear to sustainable line and competence reopens. scale middle to first beginning expansion, credit of of in institution translate rates the are full recovery of as We stronger at attract a the the sponsors utilization relationships sophisticated market exhibiting larger, terms investors our benefit commercial greater billion more business in confidence $XX Businesses confidence with quarter. as into banking economy end to real and ability a point That of have projects.

turn With the talent results. to impact selectively a our leaders to capabilities business. on win providing and over few which quarter add our Ron I'm is teams, positive to on call Lastly, details going our to first is new the current to their provide opportunity more to a upgrade environment the having that

Ron Nicolas

driven well primarily quarter my due directed accretion morning. in and be by ratio to net the majority a efficiency $XXX.X interest the was million Thanks, income were good quarter, The for and revenue of million prior X.XX% of on accretion quarter, of highlighting compared comments as basis the six in basis. Both at our and the X.XX% scale. quarter, offset operating loan benefit assets interest two quarter remained prior as percent days a Steve, funds. strong, at a with the $XXX.X the margin lower a as from yields, at in lower net earning provision by for cost income assets of will of partially Overall, income. lower decrease lower of linked less mix increased as total quarter XX.X% remained pre the our our points and revenue changes The lower

Our core accretion X.XX%. net interest two margin, impact excluding to basis the decreased points of

the to exceeds year. compared realized at from the prior cost transaction excess of fee in core the on flat fees when room deposit amount at second the has quarter quarter, range. expense the acquisition referral referral headcount included and and in program repricing, in income The X.XX% liquidity see largely in we With announced $XX.X from increase the costs $XX.X the income the $XX.X Noninterest down. quarter. in expect Personnel Noninterest X,XXX related merger Opus estimated We of do million PPP NIM the prior additional to quarter. we savings margin PPP in excluding less as pressure end. X,XXX costs and the million were the million, prior quarter with the was fully winds continued been $X.X some came million last

noninterest invest million to in and expense should we $XX technology. continue people approximate Our as quarterly

allowance quality. the asset in now Turning to

forecast The and investment. factors allowance for capacity and or $XXX Our loans end, allowance finished loans for credit on quarter acquired the quarter. the absorbing allowance in million well loss affecting for Provision value totaled modest, million $X was at dynamics mix. remaining at X.XX% as of quarter level, losses the the for comprised and the portfolio of segment were the at fair the the discount X.XX% quarter the during losses held our total as prior million primarily $X.X losses credit comparable model driven credit economic by

totaled well down to points investment. million charge-offs asset quality nonperforming in total continued assets basis at for assets from with delinquencies perform our prior $X.X basis million held of Overall, $X.X net and at the quarter. XX While total of loans XX points

XX% modeling, to With balance the credit the the decreased exact continue as at portfolio years. magnitude level C&I estimate quarter. we quarters, likelihood quality, levels Securities economies at billion securities see our and of the although Given the on reserve and to at payoffs to a yield the quarter likely quarter end, a duration quarter possible it of our loans fell end. in prior are The impact the were our to utilization, which during slight strong Investment releases not and or from sheet, Total on see to is X.XX% higher CECL remained $X.XX improving respect less we lower decrease than this time. coming X.X to stable line increased

an grew and price as off run annualized XX% non-maturity the by $XXX total $XXX grew on our increase to CDs. basis, by million, our of Notably, we an broker quarter retail basis. quarter, over deposits linked During deposits X% a we continue million, down CDs on nearly or higher first we cost

support in second cost our NIM. $XX million after some off With we term our redeemed we of FHLB the high continue release, and debt past our cost in quarter, noted ways of borrowings quarter, funds it paying to back cost look lower Steve. As I'll this hand for early that, to as higher to

Steve Gardner

we we the contributions a $X coming seeing in we development exceeds will bank, positive more the from summary, growing through move pipeline the accelerate In resulting is Great, trends thanks, today billion. business are all that areas and Ron. growth loan confident year. are momentum the seeing that on loan now we're Based of in as

addition, further an income. increase utilization we remit lead a sheet projects and online. strengthens, This derive business to rates in as the In should and the come to expansion expands, economy in interest credit net new line anticipate balance investment as an

increasing performance, the we $X.XX the and to consistent outlook in Given our increased have confidence by financial XX% per our our dividend economy, for share.

back program profile able being With to expanding shareholders, both bought a while risk increase ratios, and are to our strong to the capital capital also quarter, repurchase well conservative XXX,XXX During have stock support the we we shares. earnings, growth. first our acquisitive initiated and positioned and approximately return organic

acquisitions franchise. That call any pursue and scale add prepared questions. partners to up remarks our continue happy would that open please and concludes We Betsy, answer be meaningful our US for we could the accretion, western you the earnings can questions? to to merger and throughout

Operator

from [Operator Gary Instructions] Tenner comes Davidson. First D.A. question with

Gary Tenner

of later on need that balances you allow cash remarks questions. of your anticipating to talked investing Just versus the for had and in liquidity I inform guys. the the Does guess, morning, in loan the to decision fund the kind accelerating grow you're year? Good balance to that this later a of pipeline the loan expectations for in because closing quarter? in Steve, growth growth sheet kind year. I couple about Thanks. strength

Steve Gardner

near do cash also remainder level the $X.X to of part it. level quarter that That's sheet. don't at of of Gary, quarter continue cash I the the carrying strong. full It's or we of suspect of it. the being us be have see though hi, we're the can't running I obviously, be on the balance Again, something They to, to deposit flows. of going billion throughout mindful

Gary Tenner

good. on then terms losses metrics jumped allowance side, for mean sequential the out, really And increase. But obviously I quarter credit look in credit multifamily of the thanks. Okay, the

million. for you growth that's that there space anything that in think you're is any Is $XX giving it increased in just by segment the the seeing I or commitments was cause else concern? driven and

Steve Gardner

we is added about level and, and in all in at forecast, additional on certainly generally we model, be look the add seeing which and refined, something talk really any what a will in jump can is it as I'll Gary, then we that national model in experience. utilize, color, part that and as a to continues driven Ron by and have the take their Moody's

factors estimate of itself. greater want in the on number any you it. model color any As to provide detail Ron, we

Ron Nicolas

Gary, one the Steve. did meaningful in reserve Yes, Thanks. the you Sure, levels. certainly increase increase see noted we

and of the of the continued there, multifamily papers, there. which model rents CRE vacancies, pick a white in you REIS, deteriorated bit and they're little in pricing in terms lag can both their describing the a in impact some the and analysis multifamily Moody's Specifically up, pricing,

hovering point, in So that's been as spiked XXX. and you it to to really, XXX basis had that we XXX level, saw, reserve

strictly or any it's of see deterioration the function and a do of portfolio. we did not kind not own see in model So itself, our

Gary Tenner

like seems And daily we're loans still color in that's pricing at of thoughts of seen just that. banks then I All right Have we're pretty long-term of the rates. on any finally of pricing, terms competition, some the right. - our fixed there? coming doing at banks, hearing moderation Appreciate about mean, just the floors rate now, or and on low of you kind any kind environment? loans kind

Steve Gardner

seen any material marketplace. change real in the pricing in We haven't

Operator

Matthew next question Our from Piper comes Sandler. Clark with

Matthew Clark

Hi, going cash to be of the quarter. I good that's assets. morning, re higher and, Maybe upcoming on sounds and one But it holding NIM the less X.XX%. forward outlook you're first for going also mixing guys. assets yielding assume like

if in So want And expansion that's be down little guess does and the that the the to I surprised back you quarter. I'm I that just for upcoming the bit contemplate margin a you're half, case. expect little confirm assume thinking that's to a

Steve Gardner

accelerates It for loan comments, quarter. benefit remixes the a as growth in we and our We is balance the interest quarter heading margin. balance and is sheet do sheet That would remix as we said accelerates, current the stand that I into or estimate expect my where that expectation. net Matt is should loan as in really, the as one that the

Matthew Clark

and prepays to but magnitude those have this happen payoffs, versus might there? into have plug how last? to the you see order quarter on get trying Maybe Just do and back taken. it of a Okay, numbers we

Steve Gardner

handy? you have that do number Ron,

Ron Nicolas

in call here just Yes, a new item Matt, handy they in look of the our tell were our high later on to was impacted down the historical were it And I'll Matt smidgen, here. that. will I terms moment. again, this on prepays loan growth circle at you I a but line that still the back pretty don't quarter-to-quarter have levels. the it But that I'll quarter. utilization really

Matthew Clark

utilization here the rates bottom like of Okay, thank quarter. you. does It sound you hit at a have Have in Any usage seen color pick end April? there? the up

Steve Gardner

move we appear here does first that the had that couple remains seems trend have and But we of it we hit modestly Yes, and had the in of to here. March, holding Whether to end below Ron have. be that that's seems seen was as that the seen. by up in April, which sustainable XX% - mentioned bottom weeks be

we we'll reflective is of again, see the improving confidence economic So recovery. it believe in

Matthew Clark

sounded and Okay, of focus changed and level M&A. one any It update then out targets. versus was Have on like last primary your just coming at all on last activity? for that quarter; secondary that on me

Steve Gardner

of looking strong, institutions lot all still at Scale There than still value create this matters to a transactions opportunities. where And But fundamentally and some sense. always scale consolidating shareholder partnering to complimentary industry. more We're build with that certainly pursue is options. and those various done going pricing ensure properly can makes we Getting long-term is are a continue we attractive them, a you others. believe is with that structuring are they're them challenge.

Matthew Clark

Great, you. thank

Ron Nicolas

Matt. and that between just this quarter, $XXX tell I'll million, break million. last $XXX the payoffs you and particular was the the about approximately is Ron, that Hey, This were maturities quarter

Operator

comes David with Raymond next from Our James. Feaster question

David Feaster

a Hey, the upstream. you're mean, share, you're of I a originations. is increased and just in drive new of curious quarter everybody. more do of for you kind taking think mean, confident think, mean, prospects And loan given expectation. hires about of to just How clients record do for had, gaining and seeing improved and what growth C&I origination good increasing the mid-single you've It them the utilization? I and you outlook that? see being reasonable a ability Or activity it's that of that - great just pipeline the you think the just to year? morning, was economic it more investing? digits then I'm some move is the I more function do

Steve Gardner

true by with that past out organization, year organization we're I seeing Opus larger, little factors, that's is really sophisticated more demand. scale Plus, whether offerings, the of then team. production the it's bring And to and of our a our to the a bit the level folks ability an increase of some larger joined And of bit have treasury whether it. that I there's that the being team, integration lastly, there. a little relationships, you management David, along just understand they your But system estate driven cut able working new in real The commercial the attract are And C&I, credit the opportunities through of the side, clients. the team, the think those question. the to we're and together, more very move so well with the quickly. multitude

economy the it first as the So throughout From as things line I and all continues and the that rates, in production year utilization come the into strength have expands. the to those driving We're the earlier, the and mentioned hopeful increase loan pipeline. seems are the from quarter as of low off quarter.

difficult the guidance give our and relationships, don't on we growth, drive activities environment. this because focused clients we making loan on behaviors to that as We're focus in know we're far that business new existing that's far well. more forecast and As the just sure serving very

David Feaster

assets just Okay, there I the And any then curious pleased increased the started from need contribution the the that's as just and grow. AU, increased was on an see helpful, under see escrow quarter. we business, contribution deposit to I'm well. to business truck whether to you in updates custody,

Just and converted? get curious some updates to expectations, growth maybe those businesses just on want those client trended lines, how any is

Steve Gardner

the we're escrow only that to the hard we as trust here their is business with vice there escrow and half mentioned, Sure, of business synergies attractive business The and system, us through through optimistic trust working existing this smoothly, outline the retool technology side begin and and talent on core we're doing, salesforce getting reflective seeing versa. tremendously team for been well second it's are the the of to growth together. through from is convert focused business, teams I will year ensure the some the and people opportunity production a And the XXXX the built think quarter, greater deploy their system the of our here that the that in to there not we're foundation business. accelerate. go going systems, and in I into we're around And the great to but us, really operating it's opportunities to and processes platform. referrals that system. to in it's in And worked operating core core Again, think the the fairly that will place from the that loan nice the

David Feaster

And touched I on commentary on to to up Okay. some just wanted just, gears technology. following you on shift your

do incremental your And You investment. API about think the that across just the talked docket. How talked about way remarks kind initiatives the prepared some investments text You have organizations, you run banking, continued on forward? are where of about technology? we've in and an and your you focusing about on on salesforce want you what's update and get to talked our going of

Steve Gardner

that we've new what Sure, the businesses proprietary second technologies management, and allowed number our low have the measure we and continuing existing and us that digitization drives it's we in use a drive of through place. that technology banking, in our in and branches of it's really that customized efficiencies, branch clients, it's But that helps have, have to in has adding we that the where couple in push improvement, platform is and of throughout products leveraging continued utilization part large and from that out locations seeing more here and be relatively and treasury systems can those learned part the our develop complementary and online services are taking those will deploy then organization. efficiencies quarter. consolidating to the technology it And in we

David Feaster

Thank great much. That's so color. it. you Got

Steve Gardner

I might think done mention it you folks a we've we or lot We going at do. tell out. roll know it, David; about what we to that don't Once we're telegraph point. it

Operator

Our question from next comes Bohlen Jacquelynne KBW. from

Jacquelynne Bohlen

Good a wanted prepared basis. It I Steven, morning. to touch like up wrote down FTE, Hi, went looked correctly on on Ron. quarter in it I linked if it remarks.

to the So just was. of what see that wanted driver

Steve Gardner

people. It invest continuing the to to talent add in and organization

Jacquelynne Bohlen

is guess that would I producers. of lot And Okay. a

Steve Gardner

Yes, that of ahead, Go is certainly a part Ron. it.

Ron Nicolas

say, fair amount was that increases Steve. the I was A going is Yes, just producers. XX correct. Yes, to of were

Jacquelynne Bohlen

would that and And quarter increased Okay. the overall later expecting adds they expense level quarter. that of the in plays it some second into you're

Ron Nicolas

end That's correct, quarter Yes, the in they Jackie. area. were more

Jacquelynne Bohlen

Okay. if we've the on about but investment been conversation expect, years And correct I'm for know I just then in lot last of wrong on would continued that. centered this, Steve, me any I talking of a

to continuing upgrades organization just find to feel the where that institutions. some beneficial So and you is you people from pulling doing can people other talent

So a that's just going ongoing to item. be continued kind of

Steve Gardner

will It And always way the we it's that's be, has it, and think people. or it about whether Jackie. technology always been

to organization. seeking at constantly are improve We the

Jacquelynne Bohlen

little will second one not of check one to it is housekeeping that redemption the double just be for want first right? in I then rate, the quarter, And in included me, in just April, quarters in terms debt expense

Steve Gardner

is That correct.

Operator

session. The Thank presentation. question-and-answer our attending concludes now you has for conference This concluded. today's

now You disconnect. may

Steve Gardner	Chairman, President and Chief Executive Officer
Ron Nicolas	Senior Executive Vice President and Chief Financial Officer
Gary Tenner	D.A. Davidson & Co
Matthew Clark	Piper Sandler Companies
David Feaster	Raymond James & Associates
Jacquelynne Bohlen	Keefe Bruyette & Woods Inc

Pacific Premier Bancorp (PPBI) 27 Apr 212021 Q1 Earnings call transcript