Pacific Premier Bancorp Reports Decline in Net Income and Changes in Loan and Deposit Portfolios

Pacific Premier Bancorp, Inc. reported its financial results for the third quarter and the nine months ended September 30, 2024, highlighting a decline in net income and significant changes in its loan and deposit portfolios compared to the previous fiscal period.

For the three months ended September 30, 2024, net income was $35.979 million, a decrease from $46.030 million in the same period of 2023. For the nine months, net income totaled $124.909 million, down from $166.228 million year-over-year. The decline in net income was attributed to a $5.5 million decrease in net interest income and a $4.1 million increase in noninterest expenses, partially offset by a reduction in income tax expenses.

Total interest income for the third quarter was $205.626 million, down from $224.062 million in the prior year, while interest expense increased to $74.728 million from $74.514 million. Consequently, net interest income after provision for credit losses for the third quarter was $130.412 million, compared to $145.630 million in the same quarter of 2023. The net interest margin for the quarter was 3.16%, a slight decrease from 3.12% in the previous year.

The company’s total assets decreased to $17.91 billion as of September 30, 2024, from $19.03 billion at the end of 2023. Loans held for investment also saw a significant decline, totaling $12.04 billion, down from $13.29 billion. The decrease in loans was primarily driven by reductions in commercial and industrial loans, as well as multifamily and commercial real estate loans.

Total deposits decreased by $514.7 million to $14.48 billion, with non-maturity deposits accounting for 84.3% of total deposits. The end-of-period weighted average rate on deposits increased to 1.80%, up from 1.55% at the end of 2023.

The company’s allowance for credit losses (ACL) on loans held for investment was $181.248 million, down from $192.471 million at the end of 2023. Nonperforming loans increased to $39.1 million, or 0.32% of loans held for investment, compared to $24.8 million, or 0.19% at the end of 2023. The increase in nonperforming assets was primarily due to a single commercial banking relationship.

In terms of strategic developments, the company maintained a strong capital position, with total stockholders’ equity increasing to $2.94 billion. The company declared a quarterly dividend of $0.33 per share, consistent with previous quarters, and did not repurchase any shares during the nine months ended September 30, 2024.

Overall, Pacific Premier Bancorp's financial performance reflects challenges in net income and loan growth, alongside a strategic focus on maintaining capital strength and managing credit risk.