Pacific Premier Bancorp, Inc. (NASDAQ: PPBI) (the “Company” or “Pacific Premier”), the holding company of Pacific Premier Bank (the “Bank”), reported net income of $57.6 million, or $0.60 per diluted share, for the second quarter of 2023, compared with net income of $62.6 million, or $0.66 per diluted share, for the first quarter of 2023, and net income of $69.8 million, or $0.73 per diluted share, for the second quarter of 2022.
For the quarter ended June 30, 2023, the Company’s return on average assets (“ROAA”) was 1.09%, return on average equity (“ROAE”) was 8.11%, and return on average tangible common equity (“ROATCE”)(1) was 12.66%, compared to 1.15%, 8.87%, and 13.89%, respectively, for the first quarter of 2023, and 1.29%, 10.10%, and 16.07%, respectively, for the second quarter of 2022. Total assets were $20.75 billion at June 30, 2023, compared to $21.36 billion at March 31, 2023, and $21.99 billion at June 30, 2022.
Steven R. Gardner, Chairman, Chief Executive Officer, and President of the Company, commented, “We delivered solid results during a challenging second quarter. Our performance reflects our disciplined focus on prudent and proactive risk, liquidity, and capital management, as well as our commitment to expanding our long-term client relationships.
“Our track record of sound enterprise risk management, including the strategic actions we implemented during the first half of last year, has positioned us well in the face of economic uncertainty and turbulence in our industry. We are well-prepared to expand our business when compelling opportunities arise and once risk-adjusted spreads on new loans become more attractive given the dynamics of today’s interest rate environment. As always, our bankers are continuing to provide best-in-class service to our clients.
“I am proud of our team's exceptional efforts during the quarter, focusing not only on existing clients but also cultivating new banking relationships. We anticipate the ongoing uncertainty and industry challenges to continue until the Federal Reserve completes its cycle of tighter monetary policy. Our organization remains committed to providing stability for our clients, communities, and employees while delivering long-term value for our stockholders.”
____________________ | ||
(1) | Reconciliations of the non–U.S. generally accepted accounting principles (“GAAP”) measures are set forth at the end of this press release. | |
FINANCIAL HIGHLIGHTS | ||||||||||||
Three Months Ended | ||||||||||||
June 30, | March 31, | June 30, | ||||||||||
(Dollars in thousands, except per share data) | 2023 | 2023 | 2022 | |||||||||
Financial highlights (unaudited) | ||||||||||||
Net income | $ | 57,636 | $ | 62,562 | $ | 69,803 | ||||||
Net interest income | 160,092 | 168,610 | 172,765 | |||||||||
Diluted earnings per share | 0.60 | 0.66 | 0.73 | |||||||||
Common equity dividend per share paid | 0.33 | 0.33 | 0.33 | |||||||||
Return on average assets | 1.09 | % | 1.15 | % | 1.29 | % | ||||||
Return on average equity | 8.11 | 8.87 | 10.10 | |||||||||
Return on average tangible common equity (1) | 12.66 | 13.89 | 16.07 | |||||||||
Pre-provision net revenue to average assets (1) | 1.52 | 1.63 | 1.77 | |||||||||
Net interest margin | 3.33 | 3.44 | 3.49 | |||||||||
Cost of deposits | 1.27 | 0.94 | 0.06 | |||||||||
Cost of non-maturity deposits (1) | 0.71 | 0.54 | 0.04 | |||||||||
Efficiency ratio (1) | 54.1 | 51.7 | 49.0 | |||||||||
Noninterest expense as a percent of average assets | 1.91 | 1.87 | 1.83 | |||||||||
Total assets | $ | 20,747,883 | $ | 21,361,564 | $ | 21,993,919 | ||||||
Total deposits | 16,539,875 | 17,207,810 | 18,084,613 | |||||||||
Non-maturity deposits as a percent of total deposits | 81.4 | % | 82.6 | % | 92.0 | % | ||||||
Noninterest-bearing deposits as a percent of total deposits | 35.6 | 36.1 | 38.3 | |||||||||
Loan-to-deposit ratio | 82.3 | 82.4 | 83.2 | |||||||||
Book value per share | $ | 29.71 | $ | 29.58 | $ | 29.01 | ||||||
Tangible book value per share (1) | 19.79 | 19.61 | 18.86 | |||||||||
Tangible common equity ratio | 9.59 | % | 9.20 | % | 8.52 | % | ||||||
Total capital ratio | 17.24 | 16.33 | 14.41 | |||||||||
____________________ | ||
(1) | Reconciliations of the non-GAAP measures are set forth at the end of this press release. | |
INCOME STATEMENT HIGHLIGHTS
Net Interest Income and Net Interest Margin
Net interest income totaled $160.1 million in the second quarter of 2023, a decrease of $8.5 million, or 5.1%, from the first quarter of 2023. The decrease in net interest income was primarily attributable to a higher cost of funds as a result of the current interest rate environment and lower average loans and investment securities balances, partially offset by higher yields on average interest-earning assets.
The net interest margin for the second quarter of 2023 decreased 11 basis points to 3.33%, from 3.44% in the prior quarter. The lower net interest margin was due to a higher cost of funds, partially offset by higher yields on interest-earning assets and higher loan prepayment fees.
Net interest income for the second quarter of 2023 decreased $12.7 million, or 7.3%, compared to the second quarter of 2022. The decrease was attributable to a higher cost of funds and lower average loans and investment securities balances, partially offset by higher yields on average interest-earning assets.
PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES | |||||||||||||||||||||||||||
CONSOLIDATED AVERAGE BALANCES AND YIELD DATA | |||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||||||
June 30, 2023 | March 31, 2023 | June 30, 2022 | |||||||||||||||||||||||||
(Dollars in thousands) | Average
| Interest
| Average
| Average
| Interest
| Average
| Average
| Interest
| Average
| ||||||||||||||||||
Assets | |||||||||||||||||||||||||||
Cash and cash equivalents | $ | 1,433,137 | $ | 16,600 | 4.65 | % | $ | 1,335,611 | $ | 13,594 | 4.13 | % | $ | 702,663 | $ | 1,211 | 0.69 | % | |||||||||
Investment securities | 3,926,568 | 25,936 | 2.64 | 4,165,681 | 26,791 | 2.57 | 4,254,961 | 17,560 | 1.65 | ||||||||||||||||||
Loans receivable, net (1) (2) | 13,927,145 | 182,852 | 5.27 | 14,394,775 | 180,958 | 5.10 | 14,919,182 | 164,455 | 4.42 | ||||||||||||||||||
Total interest-earning assets | $ | 19,286,850 | $ | 225,388 | 4.69 | $ | 19,896,067 | $ | 221,343 | 4.51 | $ | 19,876,806 | $ | 183,226 | 3.70 | ||||||||||||
Liabilities | |||||||||||||||||||||||||||
Interest-bearing deposits | $ | 10,797,708 | $ | 53,580 | 1.99 | % | $ | 11,104,624 | $ | 40,234 | 1.47 | % | $ | 10,722,522 | $ | 2,682 | 0.10 | % | |||||||||
Borrowings | 1,131,465 | 11,716 | 4.15 | 1,319,114 | 12,499 | 3.83 | 933,417 | 7,779 | 3.34 | ||||||||||||||||||
Total interest-bearing liabilities | $ | 11,929,173 | $ | 65,296 | 2.20 | $ | 12,423,738 | $ | 52,733 | 1.72 | $ | 11,655,939 | $ | 10,461 | 0.36 | ||||||||||||
Noninterest-bearing deposits | $ | 6,078,543 | $ | 6,219,818 | $ | 7,030,205 | |||||||||||||||||||||
Net interest income | $ | 160,092 | $ | 168,610 | $ | 172,765 | |||||||||||||||||||||
Net interest margin (3) | 3.33 | % | 3.44 | % | |||||||||||||||||||||||
