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1. Company Snapshot

1.a. Company Description

Pacific Premier Bancorp, Inc.operates as the bank holding company for Pacific Premier Bank that provides banking services to businesses, professionals, real estate investors, and non-profit organizations.The company accepts deposit products, such as checking, money market, and savings accounts; and certificates of deposit.


Its loan portfolio includes commercial real estate owner and non-owner-occupied, multifamily, construction and land, franchise real estate secured, small business administration (SBA), and SBA paycheck protection program loans; revolving lines or credit, term loans, seasonal loans, and loans secured by liquid collateral; one-to-four family and home equity lines of credit loans; and savings account secured loans and auto loans.The company also offers cash management, electronic banking, treasury management, and online bill payment services.It operates 61 full-service depository branches located in Arizona, California, Nevada, Oregon, and Washington.


Pacific Premier Bancorp, Inc.was founded in 1983 and is headquartered in Irvine, California.

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1.b. Last Insights on PPBI

Pacific Premier Bancorp's recent performance was driven by strong quarterly earnings, with Q2 earnings per share of $0.39, beating estimates. The company's revenue stood at $126.8 million. A proposed acquisition by Columbia Banking System received shareholder and stockholder approval, and regulatory approvals were also obtained, with an anticipated merger closing date announced. These developments have positioned the company for potential growth. Its recent earnings release showcased a solid performance, with key metrics surpassing expectations.

1.c. Company Highlights

2. Pacific Premier Bancorp's Solid Q4 Earnings Amidst Challenging Environment

Pacific Premier Bancorp delivered a solid fourth quarter, with earnings per share of $0.35, a return on average assets of 75 basis points, and a return on tangible common equity of 7.2%. The company's loan portfolio increased slightly during the quarter, driven by increased C&I and consumer loans, with new origination activity accelerating to $316 million, the highest level since Q3 2022.

Publication Date: Feb -25

📋 Highlights
  • Earnings and Returns: Pacific Premier Bancorp delivered a solid fourth quarter with earnings per share of $0.35, a return on average assets of 75 basis points, and a return on tangible common equity of 7.2%.
  • Loan Portfolio Growth: The loan portfolio increased slightly during the quarter, driven by increased C&I and consumer loans, with new loan commitments totaling $316 million, the highest level since Q3 2022.
  • Asset Quality: Asset quality results remain strong, with non-performing loans decreasing $11 million to $28 million and total delinquencies falling to $2.6 million or 0.02% of loans.
  • Capital Ratios and Deployment: Capital ratios increased over the prior quarter, and the company is exploring capital deployment options, including select loan purchases and participations, further reduction of higher-cost funding sources, and strategic balance sheet restructurings.
  • Loan Growth and Yield: The company anticipates low to mid-single-digit loan growth in 2025 and expects to supplement organic loan originations with loan purchases, with a yield on new originations in the high 6s, offering opportunities to reprice the loan portfolio up over time.

Loan Growth and Asset Quality

The company expects organic originations to meet or exceed the level of prepayments and payoffs in the coming quarters, with a focus on non-CRE assets and selective CRE purchases. Meanwhile, asset quality results remain strong, with non-performing loans decreasing $11 million to $28 million and total delinquencies falling to $2.6 million or 0.02% of loans.

Financial Performance and Capital Ratios

The company's tangible common equity ratio increased 9 basis points to 11.92%, and tangible book value per share increased $0.75 year-over-year to $20.97. Ron Nicolas, CFO, noted that the company anticipates a similar net interest margin in the first quarter, with a December net interest margin of 3.03%. The company is exploring capital deployment options, including select loan purchases and participations, further reduction of higher-cost funding sources, and strategic balance sheet restructurings.

Valuation and Outlook

As Steve Gardner, Chairman and CEO, noted, "We're not playing the game of desperation on deposit pricing. We focus on long-term relationships and keeping deposit costs low while remaining competitive." This approach should help the company maintain its competitive position in the market and drive further loan growth in 2025.

3. NewsRoom

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Pacific Premier Bancorp (PPBI) Upgraded to Buy: What Does It Mean for the Stock?

Sep -03

Source: zacks.com

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Columbia Banking System Completes Acquisition of Pacific Premier Bancorp and Unifies Columbia Brand

Sep -02

Source: prnewswire.com

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Interactive Brokers Group Set to Join S&P 500, Talen Energy to Join S&P MidCap 400 and Kinetik Holdings to Join S&P SmallCap 600

Aug -25

Source: prnewswire.com

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Columbia Banking System and Pacific Premier Bancorp Announce Regulatory Approvals and Anticipated Merger Closing Date

Aug -06

Source: prnewswire.com

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Pacific Premier Posts Q2 Profit Drop

Jul -25

Source: fool.com

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Pacific Premier Bancorp (PPBI) Reports Q2 Earnings: What Key Metrics Have to Say

Jul -24

Source: zacks.com

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Pacific Premier Bancorp (PPBI) Tops Q2 Earnings Estimates

Jul -24

Source: zacks.com

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Columbia Banking System and Pacific Premier Bancorp Announce Shareholder and Stockholder Approval for Proposed Acquisition

Jul -21

Source: prnewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.40%)

6. Segments

Commercial Banking

Expected Growth: 6.4%

Pacific Premier Bancorp's 6.4% commercial banking growth is driven by strategic acquisitions, expansion into new markets, and a strong focus on relationship-based banking. Additionally, the bank's emphasis on technology investments, efficient operations, and a favorable interest rate environment have contributed to its growth momentum.

7. Detailed Products

Commercial Banking

Provides a range of financial services to businesses, including cash management, treasury management, and commercial lending.

Treasury Management

Offers cash management and treasury management solutions to help businesses optimize their financial performance.

Commercial Lending

Provides a range of commercial lending products, including term loans, lines of credit, and construction loans, to help businesses achieve their goals.

Private Banking

Offers personalized banking services to high net worth individuals, including wealth management and investment services.

Wealth Management

Provides investment management and wealth planning services to help individuals and families achieve their financial goals.

Home Lending

Offers a range of mortgage products, including purchase and refinance loans, to help individuals and families achieve their homeownership goals.

8. Pacific Premier Bancorp, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Pacific Premier Bancorp, Inc. operates in a highly competitive industry, but the threat of substitutes is mitigated by the complexity and regulatory requirements of banking services.

Bargaining Power Of Customers

Pacific Premier Bancorp, Inc. has a diverse customer base, and no single customer has significant bargaining power.

Bargaining Power Of Suppliers

Pacific Premier Bancorp, Inc. has a diverse supplier base, and no single supplier has significant bargaining power.

Threat Of New Entrants

The banking industry has high barriers to entry, including regulatory requirements and capital requirements, making it difficult for new entrants to enter the market.

Intensity Of Rivalry

The banking industry is highly competitive, with many established players competing for market share, leading to a high intensity of rivalry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 24.81%
Debt Cost 9.86%
Equity Weight 75.19%
Equity Cost 9.86%
WACC 9.86%
Leverage 32.99%

11. Quality Control: Pacific Premier Bancorp, Inc. passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Growth: 3.8

Quality: 6.8

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A-Score: 5.9/10

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

24.49$

Current Price

24.49$

Potential

-0.00%

Expected Cash-Flows