Pacific Premier Bancorp, Inc. Announces Fourth Quarter 2023 Financial Results and a Quarterly Cash Dividend of $0.33 Per Share
1/29/2024
Fourth Quarter 2023 Summary
- Net loss of $135.4 million, or $1.44 per diluted share; adjusted net income of $48.4 million, or $0.51 per diluted share(1)
- Sold $1.26 billion of available-for-sale securities for a net after-tax loss of $182.3 million, repositioning the balance sheet
- Net interest margin expanded 16 basis points to 3.28%
- Cost of deposits of 1.56%, and cost of non-maturity deposits(1) of 1.02%
- Non-maturity deposits increased to 84.7% of total deposits
- Reduced $617.0 million in higher cost brokered certificates of deposit and $200.0 million in FHLB borrowings during the quarter
- Total delinquency of 0.08% of loans held for investment, nonperforming assets to total assets of 0.13%, and net charge-offs to average loans of 0.03%
- Common equity tier 1 capital ratio of 14.32%, and total risk-based capital ratio of 17.29%
- Tangible book value per share(1) increased $0.33 to $20.22 compared to the prior quarter
- Tangible Common Equity (“TCE”) Ratio(1) increased to 10.72%
- Available liquidity of $9.91 billion; cash and cash equivalents was $936.5 million
Irvine, Calif., January 29, 2024 -- Pacific Premier Bancorp, Inc. (NASDAQ: PPBI) (the “Company” or “Pacific Premier”), the holding company of Pacific Premier Bank (the “Bank”), reported net loss of $135.4 million, or $1.44 per diluted share, for the fourth quarter of 2023, compared with net income of $46.0 million, or $0.48 per diluted share, for the third quarter of 2023, and net income of $73.7 million, or $0.77 per diluted share, for the fourth quarter of 2022.
For the fourth quarter of 2023, the Company’s return on average assets (“ROAA”) was (2.76)%, return on average equity (“ROAE”) was (19.01)%, and return on average tangible common equity (“ROATCE”)(1) was (28.01)%, compared to 0.88%, 6.43%, and 10.08%, respectively, for the third quarter of 2023, and 1.36%, 10.71%, and 16.99%, respectively, for the fourth quarter of 2022.
Excluding net loss of $254.1 million from an investment securities repositioning transaction and $2.1 million FDIC special assessment expense(1), the Company’s adjusted net income was $48.4 million, or $0.51 per diluted share, ROAA was 0.99%, ROAE was 7.03%, and ROATCE was 11.19% for the fourth quarter of 2023.
Total assets as of December 31, 2023 were $19.03 billion, compared to $20.28 billion at September 30, 2023, and $21.69 billion at December 31, 2022.
Steven R. Gardner, Chairman, Chief Executive Officer, and President of the Company, commented, “Our team delivered another solid quarter to close out 2023, an extraordinary year for the banking industry. During the fourth quarter, we proactively repositioned our securities portfolio to enhance our future earnings profile and provide additional liquidity as we navigate a challenging operating environment. The repositioning produced immediate results, fueling a 16 basis point net interest margin expansion in the fourth quarter while our capital ratios remain among the strongest in the industry. We generated $0.51 per share in operating earnings when excluding the impact from the securities portfolio repositioning and the FDIC special assessment expense.”
“Our financial performance continues to demonstrate the strength of our franchise and our disciplined commitment to prudent capital, liquidity, and credit risk management. Throughout the year, we leveraged our best- in-class service to deepen our relationships with existing clients and attract new clients to the Bank, generating meaningful growth in new deposit account openings while maintaining pricing discipline. The new account opening activity, coupled with our ability to opportunistically deploy liquidity generated from the securities portfolio repositioning, allowed us to reduce higher cost wholesale funding in the fourth quarter by $817 million and to tightly manage our overall cost of funds, which increased only two basis points to 1.69%.”
“We enter 2024 on solid footing, with strong capital levels, ready access to significant liquidity, and favorable asset quality measures. Through our relationship-based business model, our bankers consistently communicate with our clients and monitor key trends within their individual businesses and industries. This access provides our organization with valuable information relative to market dynamics, including emerging trends in the commercial real estate markets, which we are closely monitoring. We are committed to responding quickly and proactively to any signs of stress within the loan portfolio. In short, we believe we are well-positioned heading into 2024 to continue to deliver value for our shareholders, clients, employees, and the communities we serve.”