Total assets as of December 31, 2024 were $17.90 billion, compared to $17.91 billion at September 30, 2024, and $19.03 billion at December 31, 2023. Steven R. Gardner, Chairman, Chief Executive Officer, and President of the Company, commented, "Our team delivered solid results in the fourth quarter, closing out the year in a strong financial position. Our performance throughout 2024 reflects the excellence of our organization and the effectiveness of our relationship-based business model that has us well-po ...

Core Insights - Analysts project that Pacific Premier Bancorp (PPBI) will report quarterly earnings of $0.32 per share, reflecting a year-over-year decline of 37.3% [1] - Revenue is expected to reach $143.43 million, marking a significant increase of 264.1% compared to the same quarter last year [1] Earnings Estimates - There has been no revision in the consensus EPS estimate for the quarter over the past 30 days, indicating a stable outlook from analysts [2] - Revisions to earnings estimates are crucial indicators for predicting investor actions regarding the stock [3] Key Metrics - The consensus estimate for 'Net interest margin' is projected at 3.1%, down from 3.3% a year ago [5] - Analysts expect the 'Efficiency Ratio' to be 70.4%, an increase from 60.1% reported in the same quarter last year [5] - The estimate for 'Average Interest-Earning Assets' stands at $16.15 billion, down from $17.74 billion in the same quarter of the previous year [5] Non-Performing Assets - 'Total NonPerforming Assets' are expected to be $43.55 million, up from $25.07 million in the same quarter last year [6] - The estimate for 'Total NonPerforming Loan' is also $43.55 million, compared to $24.82 million a year ago [6] Net Interest Income - The estimated 'Net interest income before provision for loan losses' is $124.30 million, down from $146.79 million a year ago [7] Stock Performance - Over the past month, shares of Pacific Premier Bancorp have returned -2%, compared to a -0.4% change in the Zacks S&P 500 composite [7] - Currently, PPBI holds a Zacks Rank 3 (Hold), suggesting its performance may align with the overall market in the near future [7]

Pacific Premier Bancorp (PPBI) reported $149.77 million in revenue for the quarter ended September 2024, representing a year-over-year decline of 10.9%. EPS of $0.37 for the same period compares to $0.48 a year ago.The reported revenue represents a surprise of -2.26% over the Zacks Consensus Estimate of $153.23 million. With the consensus EPS estimate being $0.39, the EPS surprise was -5.13%.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they comp ...

Company Performance - Pacific Premier Bancorp reported quarterly earnings of $0.37 per share, missing the Zacks Consensus Estimate of $0.39 per share, and down from $0.48 per share a year ago, representing an earnings surprise of -5.13% [1] - The company posted revenues of $149.77 million for the quarter ended September 2024, missing the Zacks Consensus Estimate by 2.26%, and down from $168.1 million year-over-year [1] - Over the last four quarters, the company has surpassed consensus EPS estimates two times and topped consensus revenue estimates just once [1] Stock Performance - Pacific Premier Bancorp shares have lost about 11.1% since the beginning of the year, while the S&P 500 has gained 21.5% [2] - The current status of estimate revisions is unfavorable, leading to a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [4] Earnings Outlook - The current consensus EPS estimate for the coming quarter is $0.37 on revenues of $151.55 million, and for the current fiscal year, it is $1.64 on revenues of $626.43 million [4] - The company's earnings outlook will depend on management's commentary during the earnings call and the trends in earnings estimate revisions [3] Industry Context - The Financial - Savings and Loan industry, to which Pacific Premier Bancorp belongs, is currently in the top 23% of over 250 Zacks industries, indicating a favorable industry outlook [5] - Another company in the same industry, BankFinancial, is expected to report quarterly earnings of $0.20 per share, reflecting a year-over-year change of +5.3% [5]

Financial Performance - Net income for Q3 2024 was $36.0 million, or $0.37 per diluted share, down from $41.9 million in Q2 2024 and $46.0 million in Q3 2023[1] - The company reported a net income of $35,979 thousand for the three months ended September 30, 2024, down from $46,030 thousand in the same period last year[70] - Net interest income for Q3 2024 was $130.9 million, a decrease of $5.5 million, or 4.0%, from Q2 2024[7] - Noninterest income for the third quarter of 2024 was $18.9 million, an increase of $645,000 from the previous quarter, primarily due to a decrease in Community Reinvestment Act investment loss[12] - Net interest income after provision for credit losses was $130,412 for the three months ended September 30, 2024, down from $145,630 in the same period last year, representing a decline of 10.4%[56] - Total revenue for the quarter was $149,765, reflecting a decline of 11.0% compared to $168,099 in the prior year[74] Asset and Liability Management - Total assets decreased to $17.91 billion from $18.33 billion in Q2 2024 and $20.28 billion in Q3 2023[2] - Total liabilities stood at $15,313,253 thousand, with interest-bearing liabilities yielding a cost of 2.85%[58] - Total deposits were $14.48 billion at September 30, 2024, a decrease of $146.7 million, or 1.0%, from June 30, 2024, and a decrease of $1.53 billion, or 9.5%, from September 30, 2023[34] - Total stockholders' equity increased to $2,943,937 thousand from $2,923,764 thousand, an increase of approximately 0.7%[55] - The company has an unused borrowing capacity of $8.83 billion as of September 30, 2024[42] Credit Quality - Nonperforming assets as a percentage of total assets improved to 0.22% from 0.28% in Q2 2024[5] - Provision for credit losses was $486,000 for the third quarter of 2024, a decrease from $1.26 million in the previous quarter and $3.92 million in the same quarter last year[11] - The allowance for credit losses on loans held for investment was $181.2 million as of September 30, 2024, down from $183.8 million on June 30, 2024, and down from $188.1 million on September 30, 2023[26] - Nonperforming loans amounted to $39,084 thousand as of September 30, 2024, a significant decrease from $52,119 thousand in June 30, 2024, reflecting a reduction of 25%[61] - The allowance for credit losses was $181,248 thousand, which is 464% of total nonperforming loans, indicating a strong coverage ratio[61] Loan and Deposit Trends - Loans held for investment totaled $12.04 billion at September 30, 2024, a decrease of $454.9 million, or 3.6%, from the previous quarter[19] - New loan commitments in the third quarter of 2024 were $104.1 million, down from $150.7 million in the second quarter of 2024, but up from $67.8 million in the third quarter of 2023[19] - The total loan-to-deposit ratio was 83.1% at September 30, 2024, compared to 85.4% at June 30, 2024[20] - Non-maturity deposits totaled $12.21 billion, or 84.3% of total deposits, a decrease of $29.0 million, or 0.2%, from June 30, 2024[35] - Total investor loans secured by real estate amounted to $8,068,489 thousand as of September 30, 2024, a decrease of 1.7% from $8,206,124 on June 30, 2024, and a decrease of 7.4% from $8,715,596 on September 30, 2023[23] Capital Ratios and Equity - Common equity tier 1 capital ratio increased to 16.83% from 15.89% in Q2 2024[5] - The total capital ratio stood at 20.05%, an increase from 17.74% a year earlier[46] - Tangible common equity ratio improved to 11.83%, compared to 9.87% on September 30, 2023[80] - Book value per share rose to $30.52, up from $29.78 a year ago[46] - The company declared a dividend of $0.33 per share, payable on November 12, 2024[47] Operational Efficiency - Noninterest expense totaled $101.6 million for the third quarter of 2024, an increase of $4.1 million compared to the second quarter, driven by higher legal and professional services costs[15] - Efficiency ratio increased to 66.1%, compared to 59.0% in the same quarter of the previous year[77] - Compensation and benefits expense was $53,400 for the three months ended September 30, 2024, slightly up from $54,068 in September 2023, indicating a decrease of 1.2%[56] Interest Rates and Margins - Net interest margin decreased to 3.16% in Q3 2024 from 3.26% in Q2 2024[7] - Average yield on loans was 5.31% for the third quarter of 2024, slightly up from 5.30% in the previous quarter[9] - The weighted average cost of total deposits for Q3 2024 was 1.84%, compared to 1.73% for Q2 2024, and 1.50% for Q3 2023[37] - The cost of funds increased to 1.97%, while the cost of non-maturity deposits was reported at 1.27%[58]

Branch Operations - As of June 30, 2024, the company operates 58 full-service depository branches across California, Washington, Oregon, Arizona, and Nevada[193] Financial Performance - Net income for the three months ended June 30, 2024, was $41,905 thousand, a decrease of 10.5% from $47,025 thousand for the three months ended March 31, 2024, and a decrease of 27.4% from $57,636 thousand for the three months ended June 30, 2023[220] - The return on average assets (ROAA) for the three months ended June 30, 2024, was 0.90%, down from 0.99% for the three months ended March 31, 2024, and down from 1.09% for the three months ended June 30, 2023[220] - The adjusted net income for average tangible common equity for the six months ended June 30, 2024, was $93,206 thousand, compared to $124,655 thousand for the six months ended June 30, 2023, reflecting a decrease of 25.3%[223] - Net income for the six months ended June 30, 2024, was $88,930, a decrease of 26.5% compared to $120,198 for the same period in 2023[241] - Comprehensive income for the three months ended June 30, 2024, was $47.5 million, compared to $44.9 million for the same period in 2023, reflecting an increase of 3.9%[232] Investment Securities - The company reported total AFS investment securities of $1,098,737,000 with gross unrealized losses of $30,261,000[198] - The company reported an unrealized gain on securities available-for-sale of $2.98 million for the three months ended June 30, 2024, compared to a loss of $15.55 million for the same period in 2023[232] - The company reported a net unrealized loss on AFS investment securities of $29.9 million as of June 30, 2024, an improvement from a net unrealized loss of $36.0 million at December 31, 2023[260] - The total held-to-maturity (HTM) investment securities were $1.71 billion as of June 30, 2024, down from $1.73 billion at December 31, 2023, indicating a decrease of about 1.2%[432] - The total HTM investment securities included municipal bonds valued at $1.15 billion as of June 30, 2024, with a gross unrecognized loss of $235.8 million[431] Deposits and Liquidity - Total deposits decreased to $14,627,654,000 from $14,995,626,000, a decline of 2.46%[227] - As of June 30, 2024, total deposits decreased to $14.63 billion, down $368.0 million or 2.5% from $15.00 billion at December 31, 2023[435] - The liquidity ratio was 15.2% as of June 30, 2024, exceeding the minimum policy requirement of 10.0%[445] - Uninsured deposits amounted to $5.78 billion as of June 30, 2024, compared to $5.98 billion at December 31, 2023[438] Credit Quality and Risks - The company anticipates potential increases in past due, nonaccrual, and classified loans due to economic pressures, which may lead to higher net charge-offs[197] - The company faces risks related to credit quality, particularly if economic conditions deteriorate, which could strain borrowers[197] - The allowance for credit losses (ACL) may need to be increased if future economic conditions deteriorate, impacting the company's financial performance[209] Interest Rates and Economic Conditions - The Federal Open Market Committee has been tightening monetary policy since March 2022, impacting both interest income and expense for the banking industry[196] - Economic activity in the U.S. has expanded modestly in 2024, with unemployment remaining low, but inflation is still above the Federal Reserve's 2% target[196] - The company anticipates that deposit costs will continue to increase due to elevated interest rates and competitive pressures in the near term[212] Capital and Equity - Total stockholders' equity increased to $2,923,764,000 as of June 30, 2024, from $2,882,581,000 on December 31, 2023, representing a growth of 1.43%[226] - The tangible book value per share and tangible common equity ratio are key metrics for assessing the company's capital adequacy, excluding intangible assets from calculations[225] - The company and Bank exceeded the minimum capital ratios required under Basel III, maintaining a capital conservation buffer of 2.5%[453] Operational Strategies - The company is committed to supporting its subsidiary depository institutions as a source of financial strength[192] - The company has a focus on enhancing its digital banking and treasury management services to meet customer needs[194] - The company continues to monitor economic conditions and will adjust its strategies as necessary to maintain operational stability[215] Earnings and Expenses - Basic earnings per share decreased to $0.43 from $0.60, a decline of 28.33%[230] - Noninterest expense decreased to $97,567,000 from $100,644,000, a reduction of 3.07%[230] - Cash dividends declared were $0.66 per common share, totaling $63.5 million for the six months ended June 30, 2024[234] Interest Rate Risk Management - Interest rate risk management is actively monitored, with strategies evaluated quarterly to mitigate potential impacts on net interest income[456] - The company's Earnings at Risk is projected to increase by 5.9% with a 300 basis point rate change, resulting in a $33,246 thousand increase[458] - The projected Net Interest Margin rate is forecasted to be 3.62% with a 300 basis point increase in rates[458]

Financial Data and Key Metrics Changes - The second quarter net income totaled $41.9 million or $0.43 per share, with a return on average assets of 0.90% and return on average tangible common equity of 8.92% [43][49] - Net interest income decreased to $136.4 million, primarily due to higher cost of funds and lower loan balances, resulting in a net interest margin that narrowed 13 basis points to 3.26% [55][49] - The provision for credit losses was $1.3 million, a decrease compared to the prior quarter, reflecting a smaller loan portfolio and stable asset quality [45][49] - Total assets at the end of the quarter were $18.3 billion, with total deposits at $14.6 billion, representing a linked quarter decrease of $560.2 million [57][58] Business Line Data and Key Metrics Changes - Loan production increased to $151 million, but was offset by higher loan payoffs as clients utilized excess liquidity to reduce debt [38] - Total loans held for investment declined by $522 million, driven by prepayments, paydowns, maturities, and lower C&I line utilization [57] - Noninterest income decreased to $18.2 million, down $7.6 million from the first quarter, primarily due to a prior quarter's debt extinguishment gain [81] Market Data and Key Metrics Changes - The average cost of non-maturity deposits increased to 1.17%, while total deposit costs rose to 1.73% [44][49] - Nonperforming loans were 0.42% of total loans, a decrease of 7 basis points from the prior quarter, indicating stable asset quality [60] Company Strategy and Development Direction - The company is focused on capital accumulation and proactive liquidity management, with a CET1 ratio of 15.89% and total risk-based capital ratio of 19.01% [50][39] - Management is considering various strategic options, including balance sheet repositioning and potential M&A opportunities, while maintaining a disciplined approach to credit and pricing [64][49] - The company aims to leverage its diverse client base and disciplined business development capabilities to grow loan and deposit balances as economic conditions improve [63] Management's Comments on Operating Environment and Future Outlook - Management noted a challenging operating environment marked by prolonged elevated interest rates and competitive loan and deposit pricing dynamics [48] - There is optimism regarding stabilization in loan and deposit levels as the year progresses, driven by client communications and seasonal factors [67][76] - The company remains committed to prudent credit risk management and is prepared to add new loans as demand strengthens [53][63] Other Important Information - The company sold $35 million of adversely classified loans during the quarter as part of its proactive credit risk management approach [57] - The efficiency ratio improved to 61.3%, with noninterest expense decreasing to $97.6 million [80] Q&A Session Summary Question: What gives confidence that loans and deposits will stabilize? - Confidence stems from client conversations and observed seasonality in deposit outflows, which have matched loan portfolio contractions [67] Question: Where is the company seeing activity and potential success? - There has been a modest pickup in C&I originations and construction lending, indicating potential stabilization [69][96] Question: What are the company's interests regarding capital deployment? - The company is considering various options, including M&A and balance sheet repositioning, while remaining flexible to opportunities [70][64] Question: How does the company view its capital ratios? - The company has strong capital ratios and is well-positioned to pursue organic and strategic growth opportunities [76][116] Question: Has there been any change in conversations regarding concentration risk in CRE? - There has been a heightened focus on CRE concentration, but the company has managed its portfolio well and continues to perform strongly [141]

Pacific Premier Bancorp (PPBI) reported $154.62 million in revenue for the quarter ended June 2024, representing a year-over-year decline of 14.4%. EPS of $0.43 for the same period compares to $0.60 a year ago. While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to determine their next move, some key metrics always offer a more accurate picture of a company's financial health. Here is how Pacific Premier Bancorp performed in the just repo ...

[Financial Highlights](index=1&type=section&id=Financial%20Highlights) Pacific Premier Bancorp achieved **$41.9 million** net income in Q2 2024, bolstering capital ratios and increasing loan production Q2 2024 Key Performance Indicators | Metric | Q2 2024 | Q1 2024 | Q2 2023 | | :--- | :--- | :--- | :--- | | Net Income ($ millions) | 41.9 | 47.0 | 57.6 | | Diluted EPS ($) | 0.43 | 0.49 | 0.60 | | ROAA (%) | 0.90 | 0.99 | 1.09 | | ROAE (%) | 5.76 | 6.50 | 8.11 | | ROATCE (Non-GAAP) (%) | 8.92 | 10.05 | 12.66 | | Net Interest Margin (%) | 3.26 | 3.39 | 3.33 | | Tangible Common Equity Ratio (Non-GAAP) (%) | 11.41 | 10.97 | 9.59 | | Common Equity Tier 1 Capital Ratio (%) | 15.89 | 15.02 | 14.34 | - CEO Steven R. Gardner highlighted the company's disciplined approach to balance sheet and risk management, resulting in capital ratios (**TCE of 11.41%**, **CET1 of 15.89%**) that are near the top of peer averages[51](index=51&type=chunk) - Business development saw increased loan production of **$150.7 million**. Total deposits declined due to clients paying down loans and seasonal factors like tax payments, while the deposit mix remained favorable with noninterest-bearing deposits at **31.6%** of the total[51](index=51&type=chunk) - The company expects stabilization in loan and deposit balances in the second half of the year and is positioned to capitalize on future opportunities due to strong capital and liquidity levels[33](index=33&type=chunk)[34](index=34&type=chunk) [Income Statement Analysis](index=4&type=section&id=INCOME%20STATEMENT%20HIGHLIGHTS) Net interest income declined in Q2 2024, noninterest income decreased due to non-recurring gains, and noninterest expenses fell [Net Interest Income and Net Interest Margin](index=4&type=section&id=Net%20Interest%20Income%20and%20Net%20Interest%20Margin) Net interest income for Q2 2024 was **$136.4 million**, a decrease of **6.0%** from Q1 2024 and **14.8%** from Q2 2023, driven by lower loan balances and higher funding costs - Net interest income decreased by **$8.7 million** (**6.0%**) from the first quarter of 2024, mainly due to lower average loan balances and higher cost of deposits[37](index=37&type=chunk) - The net interest margin (NIM) for Q2 2024 decreased **13 basis points** to **3.26%** from **3.39%** in the prior quarter, primarily due to a higher cost of deposits[56](index=56&type=chunk) Net Interest Margin and Funding Costs | Metric | Q2 2024 | Q1 2024 | Q2 2023 | | :--- | :--- | :--- | :--- | | Net Interest Margin (%) | 3.26 | 3.39 | 3.33 | | Cost of Deposits (%) | 1.73 | 1.59 | 1.27 | | Cost of Funds (%) | 1.86 | 1.73 | 1.45 | [Provision for Credit Losses](index=5&type=section&id=Provision%20for%20Credit%20Losses) The total provision for credit losses in Q2 2024 was **$1.3 million**, a significant reduction from **$3.9 million** in Q1 2024, including **$1.8 million** for loan losses Provision for Credit Losses Breakdown (in thousands) | Component | Q2 2024 | Q1 2024 | Q2 2023 | | :--- | :--- | :--- | :--- | | Provision for loan losses | $1,756 | $6,288 | $610 | | Provision for unfunded commitments | $(505) | $(2,425) | $1,003 | | Provision for held-to-maturity securities | $14 | $(11) | $(114) | | **Total provision for credit losses** | **$1,265** | **$3,852** | **$1,499** | [Noninterest Income](index=5&type=section&id=Noninterest%20Income) Noninterest income for Q2 2024 was **$18.2 million**, a **$7.6 million** decrease from the previous quarter, primarily due to a non-recurring gain on debt extinguishment - The decrease from Q1 2024 was mainly due to the prior quarter's **$5.1 million** gain on debt extinguishment, a **$1.7 million** decrease in trust custodial account fees, and a **$1.3 million** decrease in Community Reinvestment Act (CRA) investment income[41](index=41&type=chunk) Noninterest Income Components (in thousands) | Component | Q2 2024 | Q1 2024 | Q2 2023 | | :--- | :--- | :--- | :--- | | Trust custodial account fees | $8,950 | $10,642 | $9,360 | | Earnings on bank owned life insurance | $4,218 | $4,159 | $3,487 | | Service charges on deposit accounts | $2,710 | $2,688 | $2,670 | | Other (loss) income | $(167) | $5,959 | $2,031 | | **Total noninterest income** | **$18,222** | **$25,774** | **$20,539** | [Noninterest Expense](index=6&type=section&id=Noninterest%20Expense) Total noninterest expense decreased by **$5.1 million** quarter-over-quarter to **$97.6 million**, primarily driven by a **$3.1 million** decrease in legal and professional services - The decrease from Q1 2024 was primarily due to a **$3.1 million** decrease in legal and professional services, driven by a **$4.0 million** insurance claim receivable[43](index=43&type=chunk) Noninterest Expense Components (in thousands) | Component | Q2 2024 | Q1 2024 | Q2 2023 | | :--- | :--- | :--- | :--- | | Compensation and benefits | $53,140 | $54,130 | $53,424 | | Deposit expense | $12,289 | $12,665 | $9,194 | | Premises and occupancy | $10,480 | $10,807 | $11,615 | | Legal and professional services | $1,078 | $4,143 | $4,716 | | **Total noninterest expense** | **$97,567** | **$102,633** | **$100,644** | [Income Tax](index=6&type=section&id=Income%20Tax) Income tax expense for Q2 2024 totaled **$13.9 million**, resulting in an effective tax rate of **24.9%**, lower than prior quarters Income Tax Expense and Effective Tax Rate | Metric | Q2 2024 | Q1 2024 | Q2 2023 | | :--- | :--- | :--- | :--- | | Income Tax Expense ($ millions) | 13.9 | 17.4 | 20.9 | | Effective Tax Rate (%) | 24.9 | 27.0 | 26.6 | [Balance Sheet Analysis](index=7&type=section&id=BALANCE%20SHEET%20HIGHLIGHTS) Total assets decreased to **$18.33 billion**, with loans and deposits declining, while asset quality improved [Loans](index=8&type=section&id=Loans) Loans held for investment totaled **$12.49 billion** at quarter-end, a **4.0%** decrease from Q1 2024, primarily due to increased prepayments, despite increased new loan origination activity - Loans held for investment decreased by **$522.1 million** (**4.0%**) from March 31, 2024, due to increased prepayments, maturities, and a decrease in credit line draws[90](index=90&type=chunk) - New loan commitments increased to **$150.7 million** in Q2 2024, up from **$45.6 million** in Q1 2024 and **$148.5 million** in Q2 2023[64](index=64&type=chunk) Loan Portfolio Composition (in thousands) | Loan Category | June 30, 2024 | March 31, 2024 | June 30, 2023 | | :--- | :--- | :--- | :--- | | Investor loans secured by real estate | $8,206,124 | $8,390,158 | $8,826,439 | | Business loans secured by real estate | $2,417,673 | $2,492,726 | $2,657,344 | | Commercial loans | $1,822,597 | $2,087,328 | $2,106,395 | | Retail loans | $71,758 | $74,183 | $73,234 | | **Total Loans Held for Investment** | **$12,489,951** | **$13,012,071** | **$13,610,282** | [Allowance for Credit Losses (ACL)](index=10&type=section&id=Allowance%20for%20Credit%20Losses) The Allowance for Credit Losses (ACL) on loans was **$183.8 million**, a decrease of **$8.5 million** from the prior quarter, reflecting portfolio changes and net charge-offs of **$10.3 million** - The ACL decreased by **$8.5 million** from March 31, 2024, reflecting changes in loan portfolio size, composition, and economic forecasts[68](index=68&type=chunk) - Net charge-offs of **$10.3 million** were incurred, primarily related to the sale of substandard non-owner-occupied CRE and multifamily loans[94](index=94&type=chunk) ACL Ratios | Metric | June 30, 2024 | March 31, 2024 | June 30, 2023 | | :--- | :--- | :--- | :--- | | ACL to Loans Held for Investment (%) | 1.47 | 1.48 | 1.41 | [Asset Quality](index=11&type=section&id=Asset%20Quality) Asset quality metrics improved in Q2 2024, with nonperforming assets decreasing to **$52.1 million** (**0.28%** of total assets) and classified loans declining Key Asset Quality Metrics (in thousands) | Metric | June 30, 2024 | March 31, 2024 | June 30, 2023 | | :--- | :--- | :--- | :--- | | Nonperforming assets | $52,119 | $64,054 | $17,421 | | Nonperforming assets to total assets (%) | 0.28 | 0.34 | 0.08 | | Total classified assets | $183,833 | $204,937 | $120,216 | | Total delinquency | $17,923 | $12,178 | $30,951 | | Delinquency as a % of loans | 0.14 | 0.09 | 0.23 | [Investment Securities](index=11&type=section&id=Investment%20Securities) Total investment securities increased by **$155.7 million** to **$3.03 billion**, primarily due to purchases of AFS U.S. Treasury securities, comprising **$1.32 billion** AFS and **$1.71 billion** HTM securities - The increase in Q2 2024 was mainly from **$443.1 million** in purchases of AFS U.S. Treasury securities, partially offset by **$291.5 million** in principal payments, amortization, and redemptions[100](index=100&type=chunk) - The portfolio consists of **$1.32 billion** in available-for-sale (AFS) and **$1.71 billion** in held-to-maturity (HTM) securities as of June 30, 2024[73](index=73&type=chunk) [Deposits](index=13&type=section&id=Deposits) Total deposits decreased by **3.7%** quarter-over-quarter to **$14.63 billion**, driven by reductions in noninterest-bearing and money market accounts, though non-maturity deposits remain strong at **83.7%** - Total deposits decreased by **$560.2 million** (**3.7%**) from Q1 2024, largely due to reductions in noninterest-bearing checking and money market/savings accounts[102](index=102&type=chunk) - Non-maturity deposits totaled **$12.24 billion**, representing **83.7%** of total deposits[76](index=76&type=chunk) Deposit Costs | Metric | Q2 2024 | Q1 2024 | Q2 2023 | | :--- | :--- | :--- | :--- | | Weighted Average Cost of Total Deposits (%) | 1.73 | 1.59 | 1.27 | | Weighted Average Cost of Non-Maturity Deposits (%) | 1.17 | 1.06 | 0.71 | [Borrowings](index=13&type=section&id=Borrowings) Total borrowings remained stable at **$532.2 million**, composed of **$200.0 million** in FHLB term advances and **$332.2 million** in subordinated debt, with **$8.65 billion** in unused borrowing capacity - Total borrowings at June 30, 2024 were **$532.2 million**, comprised of **$200.0 million** of FHLB term advances and **$332.2 million** of subordinated debt[79](index=79&type=chunk) - Unused borrowing capacity was **$8.65 billion** as of June 30, 2024, from FHLB, correspondent banks, and the Federal Reserve's discount window[108](index=108&type=chunk) [Capital and Shareholder Returns](index=13&type=section&id=Capital%20and%20Shareholder%20Returns) Capital ratios significantly strengthened in Q2 2024, with a **$0.33** per share dividend declared [Capital Ratios](index=14&type=section&id=Capital%20Ratios) Capital ratios strengthened across the board in Q2 2024, with the tangible common equity to tangible assets ratio increasing to **11.41%** and the Common Equity Tier 1 (CET1) capital ratio rising to **15.89%** - Tangible book value per share increased by **$0.25** to **$20.58**, and the tangible common equity to tangible assets ratio increased **44 basis points** to **11.41%** compared to Q1 2024[80](index=80&type=chunk) - The Company and Bank exceeded all minimum regulatory capital ratios, including the fully phased-in capital conservation buffer, and the Bank qualified as 'well capitalized'[81](index=81&type=chunk) Consolidated Capital Ratios | Ratio | June 30, 2024 | March 31, 2024 | June 30, 2023 | | :--- | :--- | :--- | :--- | | Tangible common equity ratio (Non-GAAP) (%) | 11.41 | 10.97 | 9.59 | | Common equity tier 1 capital ratio (%) | 15.89 | 15.02 | 14.34 | | Tier 1 capital ratio (%) | 15.89 | 15.02 | 14.34 | | Total capital ratio (%) | 19.01 | 18.23 | 17.24 | [Dividend and Stock Repurchase Program](index=14&type=section&id=Dividend%20and%20Stock%20Repurchase%20Program) On July 22, 2024, the Board of Directors declared a quarterly cash dividend of **$0.33** per share, with no shares repurchased during Q2 2024 - A dividend of **$0.33** per share was declared, payable on August 12, 2024, to stockholders of record as of August 5, 2024[82](index=82&type=chunk) - No shares of common stock were repurchased during the second quarter of 2024[82](index=82&type=chunk) [Appendix: Financial Tables](index=17&type=section&id=Appendix%3A%20Financial%20Tables) This appendix provides detailed unaudited financial statements, including income statements, balance sheets, and non-GAAP reconciliations [Consolidated Statements of Income](index=18&type=section&id=Consolidated%20Statements%20of%20Income) Presents the company's revenues, expenses, and net income for the three and six months ended June 30, 2024, and June 30, 2023 - This table provides a detailed breakdown of the company's income statement for the current and comparative periods[7](index=7&type=chunk) [Consolidated Balance Sheets](index=17&type=section&id=Consolidated%20Balance%20Sheets) Details the company's assets, liabilities, and stockholders' equity as of June 30, 2024, compared to several prior quarter-ends - This table provides a snapshot of the company's financial position at the end of the reporting period and previous periods[132](index=132&type=chunk) [Consolidated Average Balances and Yield Data](index=19&type=section&id=Consolidated%20Average%20Balances%20and%20Yield%20Data) Provides average balances for assets and liabilities, along with corresponding interest income/expense and average yields/costs, used to calculate net interest margin - This table details the average balances, interest, and yields/costs for interest-earning assets and interest-bearing liabilities[8](index=8&type=chunk)[133](index=133&type=chunk) [Loan Portfolio Composition](index=20&type=section&id=Loan%20Portfolio%20Composition) Presents a detailed breakdown of the loan portfolio by category for the current and several preceding quarters - This table shows the composition of the loan portfolio across various real estate and commercial loan types over the last five quarters[117](index=117&type=chunk)[134](index=134&type=chunk) [Asset Quality Information](index=21&type=section&id=Asset%20Quality%20Information) Contains key asset quality metrics, including nonperforming assets, classified assets, allowance for credit losses, and delinquency data over the last five quarters - This table provides a trend analysis of key asset quality indicators over the past five quarters[11](index=11&type=chunk)[118](index=118&type=chunk) [Nonaccrual and Past Due Loans](index=23&type=section&id=Nonaccrual%20and%20Past%20Due%20Loans) Provides detailed information on nonaccrual loans, including collateral dependency, and a breakdown of loans by past due status - These tables detail the composition of nonaccrual loans and the aging of past due loans as of June 30, 2024[12](index=12&type=chunk)[14](index=14&type=chunk)[121](index=121&type=chunk) [Credit Risk Grades](index=24&type=section&id=Credit%20Risk%20Grades) Classifies the loan portfolio by internal credit risk grades (Pass, Special Mention, Substandard, Doubtful) for each loan category - This table shows the internal risk rating distribution of the gross loan portfolio as of June 30, 2024[15](index=15&type=chunk)[140](index=140&type=chunk) [GAAP to Non-GAAP Reconciliations](index=29&type=section&id=GAAP%20to%20Non-GAAP%20Reconciliations) Provides reconciliations for non-GAAP financial measures used in the report, such as ROATCE, tangible book value per share, efficiency ratio, and adjusted pre-provision net revenue - This section reconciles non-GAAP measures like Return on Average Tangible Common Equity (ROATCE), Tangible Common Equity Ratio, Efficiency Ratio, and Pre-Provision Net Revenue to their GAAP counterparts[21](index=21&type=chunk)[25](index=25&type=chunk)[141](index=141&type=chunk) [Other Information](index=15&type=section&id=Other%20Information) This section provides conference call details, a corporate overview, and a standard forward-looking statements disclaimer [Conference Call and Webcast](index=15&type=section&id=Conference%20Call%20and%20Webcast) The company will host a conference call on July 24, 2024, at 9:00 a.m. PT to discuss the financial results, with a live webcast and archived version available online - A conference call to discuss financial results is scheduled for July 24, 2024, at 9:00 a.m. PT / 12:00 p.m. ET[4](index=4&type=chunk) [About Pacific Premier Bancorp, Inc.](index=15&type=section&id=About%20Pacific%20Premier%20Bancorp%2C%20Inc.) Pacific Premier Bancorp, Inc. is the parent company of Pacific Premier Bank, a commercial bank with approximately **$18 billion** in total assets, serving businesses and investors across the western U.S. - Pacific Premier Bancorp, Inc. is the parent of Pacific Premier Bank, one of the largest banks headquartered in the western U.S. with approximately **$18 billion** in total assets[129](index=129&type=chunk) [Forward-Looking Statements](index=16&type=section&id=FORWARD-LOOKING%20STATEMENTS) This section contains a standard disclaimer regarding forward-looking statements, cautioning that actual results may differ materially due to various risks and uncertainties - The report contains forward-looking statements based on management's current expectations, which are subject to inherent risks and uncertainties[5](index=5&type=chunk) - Key risks include U.S. economic strength, interest rate policies, deposit competition, credit risk, regulatory changes, and geopolitical conditions[5](index=5&type=chunk)[130](index=130&type=chunk)

[PART I - FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) This section provides the unaudited consolidated financial statements and management's discussion and analysis for the Company [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements and detailed notes, highlighting Q1 2024's decreased assets and net income, and increased equity [Consolidated Statements of Financial Condition (Unaudited)](index=3&type=section&id=Consolidated%20Statements%20of%20Financial%20Condition%20(Unaudited)) Total assets and liabilities slightly decreased by March 31, 2024, while stockholders' equity increased, driven by reduced FHLB advances and higher deposits | Metric | March 31, 2024 (in thousands) | December 31, 2023 (in thousands) | | :--------------------------------- | :------------------------------ | :------------------------------- | | Total assets | $18,813,181 | $19,026,645 | | Loans held for investment, net | $12,819,731 | $13,096,549 | | Total deposits | $15,187,828 | $14,995,626 | | FHLB advances and other borrowings | $200,000 | $600,000 | | Total stockholders' equity | $2,902,801 | $2,882,581 | [Consolidated Statements of Income (Unaudited)](index=4&type=section&id=Consolidated%20Statements%20of%20Income%20(Unaudited)) Net income for Q1 2024 decreased year-over-year due to lower net interest income and higher credit loss provisions, despite increased noninterest income | Metric | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | | :----------------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Net interest income before provision for credit losses | $145,127 | $168,610 | | Provision for credit losses | $3,852 | $3,016 | | Total noninterest income | $25,774 | $21,186 | | Net income | $47,025 | $62,562 | | Diluted EPS | $0.49 | $0.66 | [Consolidated Statements of Comprehensive Income (Unaudited)](index=5&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20(Unaudited)) Comprehensive income for Q1 2024 decreased year-over-year, primarily due to lower net income, partially offset by unrealized gains on AFS securities | Metric | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | | :-------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Net income | $47,025 | $62,562 | | Other comprehensive income, net of tax | $3,909 | $2,518 | | Comprehensive income, net of tax | $50,934 | $65,080 | [Consolidated Statements of Stockholders' Equity (Unaudited)](index=6&type=section&id=Consolidated%20Statements%20of%20Stockholders'%20Equity%20(Unaudited)) Stockholders' equity increased from Q4 2023 to Q1 2024, driven by net income and comprehensive income, partially offset by dividends | Metric | March 31, 2024 (in thousands) | December 31, 2023 (in thousands) | | :------------------------- | :---------------------------- | :------------------------------- | | Total stockholders' equity | $2,902,801 | $2,882,581 | | Net income | $47,025 | - | | Cash dividends declared | $(31,635) | - | [Consolidated Statements of Cash Flows (Unaudited)](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows%20(Unaudited)) Net cash from operating and investing activities decreased in Q1 2024 year-over-year, while cash used in financing decreased due to deposit changes and debt repayments | Metric | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | | :----------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Net cash provided by operating activities | $56,946 | $75,171 | | Net cash provided by investing activities | $274,294 | $630,104 | | Net cash used in financing activities | $(238,895) | $(381,628) | | Net change in deposit accounts | $192,202 | $(144,591) | | Repayments of long-term borrowings | $(394,933) | $0 | [Notes to Consolidated Financial Statements (Unaudited)](index=10&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements%20(Unaudited)) These notes detail the basis of presentation, accounting policies, and specific financial instruments, covering investment securities, loans, credit losses, and other key financial areas [Note 1 – Basis of Presentation](index=10&type=section&id=Note%201%20%E2%80%93%20Basis%20of%20Presentation) The consolidated financial statements include the Company and its subsidiaries, reflecting normal adjustments and adhering to consolidation principles for controlled entities - The consolidated financial statements include Pacific Premier Bancorp, Inc. and its wholly-owned subsidiaries, including Pacific Premier Bank[22](index=22&type=chunk) - Unaudited statements reflect normal recurring adjustments and should be read in conjunction with the 2023 Form 10-K[23](index=23&type=chunk)[24](index=24&type=chunk) - The Company consolidates voting entities where it has control or a controlling financial interest in a variable interest entity (VIE)[25](index=25&type=chunk) [Note 2 – Recently Issued Accounting Pronouncements](index=11&type=section&id=Note%202%20%E2%80%93%20Recently%20Issued%20Accounting%20Pronouncements) The Company adopted ASU 2023-02 with no material impact and is evaluating ASU 2023-09 and ASU 2023-07, effective after December 15, 2024 - ASU 2023-02 (Investments - Equity Method and Joint Ventures) adopted in 2024, allowing proportional amortization for tax credit structures; no material impact[27](index=27&type=chunk) - ASU 2023-09 (Income Taxes - Improvements to Income Tax Disclosures) effective for annual periods beginning after December 15, 2024; impact being evaluated[28](index=28&type=chunk) - ASU 2023-07 (Segment Reporting - Improvements to Reportable Segments) effective for annual periods beginning after December 15, 2024; impact being evaluated[30](index=30&type=chunk) [Note 3 – Significant Accounting Policies](index=12&type=section&id=Note%203%20%E2%80%93%20Significant%20Accounting%20Policies) No significant changes to accounting policies from the 2023 Form 10-K were made, with financial statements relying on management's estimates and assumptions - No significant changes to accounting policies from the 2023 Form 10-K as of March 31, 2024[31](index=31&type=chunk) - Financial statements require management estimates and assumptions, which could differ from actual results[32](index=32&type=chunk) [Note 4 – Investment Securities](index=13&type=section&id=Note%204%20%E2%80%93%20Investment%20Securities) The investment securities portfolio comprises AFS and HTM securities, with AFS showing improved net unrealized losses and HTM having a slight ACL decrease | Metric | March 31, 2024 (in thousands) | December 31, 2023 (in thousands) | | :----------------------------------- | :---------------------------- | :------------------------------- | | Total AFS investment securities (fair value) | $1,154,021 | $1,140,071 | | Total HTM investment securities (amortized cost) | $1,720,481 | $1,729,541 | - Net unrealized loss on AFS investment securities (net of tax): **$24.4 million** (Mar 31, 2024) vs **$25.8 million** (Dec 31, 2023)[37](index=37&type=chunk) | Metric | March 31, 2024 (in thousands) | December 31, 2023 (in thousands) | | :----------------------------------- | :---------------------------- | :------------------------------- | | ACL for HTM investment securities (municipal bonds) | $115 | $126 | - No ACL for AFS investment securities at March 31, 2024, as unrealized losses were deemed due to general market conditions, not credit[47](index=47&type=chunk) | Metric | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | | :----------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Amortized cost of AFS investment securities sold | $0 | $304,182 | [Note 5 – Loans Held for Investment](index=17&type=section&id=Note%205%20%E2%80%93%20Loans%20Held%20for%20Investment) The loan portfolio decreased to **$13.01 billion** at March 31, 2024, with increases in delinquent and nonaccrual loans primarily from large commercial relationships | Metric | March 31, 2024 (in thousands) | December 31, 2023 (in thousands) | | :----------------------------------- | :---------------------------- | :------------------------------- | | Loans held for investment, net | $12,819,731 | $13,096,549 | | Total unfunded loan commitments | $1,459,515 | $1,703,470 | - The Bank's largest aggregate outstanding balance of loans to one borrower was **$319.3 million**, secured by multifamily properties, as of March 31, 2024[63](index=63&type=chunk) | Metric | March 31, 2024 (in thousands) | December 31, 2023 (in thousands) | | :----------------------------------- | :---------------------------- | :------------------------------- | | Classified loans (Substandard, Doubtful, Loss) | $204,700 (1.57% of loans) | $142,000 (1.07% of loans) | - Delinquent loans (30 or more days past due) as a percentage of total loans held for investment increased to **0.09%** at March 31, 2024, from **0.08%** at December 31, 2023[266](index=266&type=chunk) | Metric | March 31, 2024 (in thousands) | December 31, 2023 (in thousands) | | :----------------- | :---------------------------- | :------------------------------- | | Nonaccrual loans | $63,806 | $24,817 | | Collateral dependent loans | $39,794 | $12,222 | | Modified loans to troubled borrowers (MLTB) | $12,161 | $12,595 | - The increase in nonaccrual loans at March 31, 2024, was primarily due to a single, diversified commercial banking relationship totaling **$37.6 million** and another lending relationship totaling **$1.9 million**[78](index=78&type=chunk)[82](index=82&type=chunk) [Note 6 – Allowance for Credit Losses](index=31&type=section&id=Note%206%20%E2%80%93%20Allowance%20for%20Credit%20Losses) The ACL for loans slightly decreased to **$192.3 million** at March 31, 2024, driven by net charge-offs and provisions, with the Company utilizing a CECL model | Metric | March 31, 2024 (in thousands) | December 31, 2023 (in thousands) | | :----------------------------------- | :---------------------------- | :------------------------------- | | ACL for loans held for investment | $192,340 | $192,471 | | ACL for off-balance sheet commitments | $16,839 | $19,264 | | Metric | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | | :----------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Net charge-offs | $6,419 | $3,284 | | Provision for loan losses | $6,288 | $3,021 | | Metric | March 31, 2024 | December 31, 2023 | | :----------------------------------- | :------------- | :---------------- | | ACL to loans held for investment ratio | 1.48% | 1.45% | | ACL to nonperforming loans ratio | 301% | 776% | - The Company's ACL model uses a discounted cash flow approach for commercial real estate and commercial loans, and a historical loss rate model for retail loans, incorporating probability of default (PD), loss given default (LGD), exposure at default (EAD), and economic forecasts[94](index=94&type=chunk)[95](index=95&type=chunk)[96](index=96&type=chunk)[97](index=97&type=chunk)[98](index=98&type=chunk)[100](index=100&type=chunk)[101](index=101&type=chunk)[102](index=102&type=chunk)[103](index=103&type=chunk)[104](index=104&type=chunk) [Note 7 – Goodwill and Other Intangible Assets](index=36&type=section&id=Note%207%20%E2%80%93%20Goodwill%20and%20Other%20Intangible%20Assets) Goodwill remained stable at **$901.3 million**, while other intangible assets decreased to **$40.4 million** due to amortization, with no impairment identified | Metric | March 31, 2024 (in thousands) | December 31, 2023 (in thousands) | | :------------------------- | :---------------------------- | :------------------------------- | | Goodwill | $901,312 | $901,312 | | Net intangible assets | $40,449 | $43,285 | | Metric | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | | :------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Amortization of intangible assets | $2,836 | $3,171 | - Estimated aggregate amortization expense for core deposit and customer relationship intangible assets for the next five years: **$11.1 million** (2024), **$10.0 million** (2025), **$8.9 million** (2026), **$7.2 million** (2027), and **$4.0 million** (2028)[116](index=116&type=chunk) [Note 8 – Subordinated Debentures](index=37&type=section&id=Note%208%20%E2%80%93%20Subordinated%20Debentures) Subordinated debentures increased to **$332.0 million** at March 31, 2024, with a **5.30%** weighted interest rate, qualifying as Tier 2 capital | Metric | March 31, 2024 (in thousands) | December 31, 2023 (in thousands) | | :------------------------- | :---------------------------- | :------------------------------- | | Total subordinated debentures | $332,001 | $331,842 | | Weighted interest rate | 5.30% | 5.31% | - Subordinated notes due 2024: **$60.0 million** principal, **5.75%** interest[118](index=118&type=chunk) - Subordinated notes due 2029: **$125.0 million** principal, **4.875%** fixed until May 15, 2024, then 3-month term SOFR +2.762%[118](index=118&type=chunk) - Subordinated notes due 2030: **$150.0 million** principal, **5.375%** fixed until June 15, 2025, then 3-month term SOFR +5.17%[118](index=118&type=chunk) - Subordinated notes qualify as Tier 2 capital, subject to phase-out by **20%** annually in the five years preceding maturity[122](index=122&type=chunk) [Note 9 – Earnings Per Share](index=38&type=section&id=Note%209%20%E2%80%93%20Earnings%20Per%20Share) Basic and diluted EPS for Q1 2024 decreased to **$0.49** from **$0.66** in Q1 2023, calculated using the two-class method | Metric | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :----------------------------------- | :-------------------------------- | :-------------------------------- | | Basic earnings per common share | $0.49 | $0.66 | | Diluted earnings per common share | $0.49 | $0.66 | | Net income allocated to common stockholders | $46,246k | $61,739k | | Weighted average diluted common shares | 94,477,355 | 94,182,522 | [Note 10 – Fair Value of Financial Instruments](index=39&type=section&id=Note%2010%20%E2%80%93%20Fair%20Value%20of%20Financial%20Instruments) Financial instruments are measured at fair value using a three-level hierarchy, with AFS securities and swaps as Level 2, and certain loans/OREO as Level 3 - Fair value hierarchy: Level 1 (unadjusted quoted prices in active markets), Level 2 (observable inputs other than Level 1), Level 3 (unobservable inputs)[128](index=128&type=chunk)[129](index=129&type=chunk)[130](index=130&type=chunk) - AFS investment securities and interest rate swaps are generally classified as Level 2[135](index=135&type=chunk)[137](index=137&type=chunk)[140](index=140&type=chunk) - Individually evaluated collateral dependent loans and OREO are measured at fair value on a nonrecurring basis using Level 3 inputs[145](index=145&type=chunk)[147](index=147&type=chunk) | Metric | March 31, 2024 (in thousands) | December 31, 2023 (in thousands) | | :----------------------------------- | :---------------------------- | :------------------------------- | | Total estimated fair value of financial assets | $15,996,288 | $16,199,097 | | Total estimated fair value of financial liabilities | $15,747,163 | $15,945,592 | [Note 11 – Derivative Instruments](index=46&type=section&id=Note%2011%20%E2%80%93%20Derivative%20Instruments) The Company uses derivative instruments, including fair value hedges (interest rate swaps) with a **$1.35 billion** notional amount, to manage market risks and assist customers - Interest rate swaps designated as fair value hedges had an aggregate notional amount of **$1.35 billion** at March 31, 2024, and December 31, 2023[156](index=156&type=chunk) | Metric | March 31, 2024 (in thousands) | December 31, 2023 (in thousands) | | :----------------------------------- | :---------------------------- | :------------------------------- | | Cumulative fair value hedging adjustment in hedged assets | $(32,324) | $(29,551) | | Metric | March 31, 2024 (in thousands) | December 31, 2023 (in thousands) | | :----------------------------------- | :---------------------------- | :------------------------------- | | Total derivative assets (fair value) | $6,496 | $5,644 | | Total derivative liabilities (fair value) | $12,019 | $10,715 | | Metric | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | | :----------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Gain (loss) on derivatives designated as hedging instruments | $10,016 | $(3,586) | [Note 12 – Balance Sheet Offsetting](index=50&type=section&id=Note%2012%20%E2%80%93%20Balance%20Sheet%20Offsetting) Derivative financial instruments may be offset in the consolidated statements of financial condition under master netting arrangements, with variation margin payments treated as settlements | Metric | March 31, 2024 (in thousands) | December 31, 2023 (in thousands) | | :----------------------------------- | :---------------------------- | :------------------------------- | | Gross interest rate swap assets | $6,488 | $5,643 | | Net interest rate swap assets (after cash collateral) | $1,068 | $1,033 | | Gross interest rate swap liabilities | $12,019 | $10,705 | | Net interest rate swap liabilities (after cash collateral) | $12,019 | $10,705 | [Note 13 – Variable Interest Entities](index=51&type=section&id=Note%2013%20%E2%80%93%20Variable%20Interest%20Entities) The Company is involved with VIEs through securitization and affordable housing but does not consolidate them, with maximum exposure to loss at **$47.6 million** and **$54.3 million** respectively - The Company is not the primary beneficiary of the VIEs and does not consolidate its interests in them[170](index=170&type=chunk)[173](index=173&type=chunk)[175](index=175&type=chunk) | Metric | March 31, 2024 (in thousands) | December 31, 2023 (in thousands) | | :----------------------------------- | :---------------------------- | :------------------------------- | | Maximum exposure to loss from multifamily loan securitization | $47,563 | $47,994 | | Maximum exposure to loss from affordable housing partnerships | $54,338 | $57,016 | - Reserve for estimated losses with respect to the reimbursement obligation for multifamily loan securitization was **$345,000** at both March 31, 2024, and December 31, 2023[174](index=174&type=chunk) [Note 14 – Tax Equity Investments](index=52&type=section&id=Note%2014%20%E2%80%93%20Tax%20Equity%20Investments) Tax equity investments, primarily in affordable housing, had a carrying value of **$85.4 million** at March 31, 2024, with **$31.1 million** in unfunded commitments | Metric | March 31, 2024 (in thousands) | December 31, 2023 (in thousands) | | :----------------------------------- | :---------------------------- | :------------------------------- | | Carrying value of tax equity investments | $85,485 | $88,805 | | Metric | March 31, 2024 (in thousands) | | :----------------------------------- | :---------------------------- | | Total unfunded commitments associated with tax equity investments | $31,147 | | Unfunded commitments due in 2024 | $10,085 | | Metric | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | | :----------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Tax credit and other tax benefits recognized | $4,217 | $3,776 | | Amortization of investments | $3,475 | $3,050 | [Note 15 – Subsequent Events](index=53&type=section&id=Note%2015%20%E2%80%93%20Subsequent%20Events) On April 22, 2024, the Board declared a cash dividend of **$0.33** per share, payable May 13, 2024 - Quarterly cash dividend of **$0.33** per share declared on April 22, 2024, payable May 13, 2024[182](index=182&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=54&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the Company's financial condition, operations, liquidity, and capital, including forward-looking statements, economic developments, and detailed analysis of key financial metrics [Forward-Looking Statements](index=54&type=section&id=Forward-Looking%20Statements) Forward-looking statements are subject to various known and unknown risks and uncertainties, including economic conditions, interest rates, and regulatory changes - Forward-looking statements are based on expectations and subject to known and unknown risks and uncertainties[186](index=186&type=chunk) - Key factors that could cause actual results to differ include the strength of the U.S. economy, banking industry developments, interest rate policies, liquidity, acquisitions, regulatory changes, and cybersecurity threats[187](index=187&type=chunk) - Investors are cautioned not to place undue reliance on forward-looking statements and should consider all risks disclosed in SEC filings[188](index=188&type=chunk)[189](index=189&type=chunk) [General](index=56&type=section&id=General) Pacific Premier Bancorp, Inc. operates Pacific Premier Bank in the Western U.S. through 58 branches, offering diverse banking products and services to businesses and non-profits - Pacific Premier Bancorp, Inc. is a bank holding company, and Pacific Premier Bank is a California state-chartered commercial bank[191](index=191&type=chunk) - The Company operates primarily in the Western U.S. with **59** (now **58** after April 2024 consolidation) full-service branches in California, Washington, Oregon, Arizona, and Nevada[194](index=194&type=chunk) - Offers a wide array of banking products and services tailored to small- and middle-market businesses, corporations, professionals, entrepreneurs, real estate investors, and non-profit organizations[196](index=196&type=chunk) - Specialty banking products and services include Homeowners' Associations (HOA) and quick-service restaurant (QSR) franchise lending, commercial escrow, and IRA custodial services[196](index=196&type=chunk) - The principal source of income is the net spread between interest earned on loans and investments and interest costs on deposits and borrowings, supplemented by fee income[198](index=198&type=chunk) [Recent Developments](index=57&type=section&id=Recent%20Developments) FOMC's monetary tightening led to higher interest rates, impacting interest income and expenses, with the Company anticipating effects on loan growth, credit quality, and liquidity - The FOMC's monetary policy tightening due to persistent inflation has resulted in higher interest rates, impacting both interest income and expenses[199](index=199&type=chunk) - Anticipated impacts of economic conditions include: pressure on loan growth and interest income, potential decline in credit quality leading to higher past due/nonaccrual loans and increased provision for credit losses, possible increase in ACL, potential impairment charges on goodwill/intangibles/deferred tax assets, negative impact on AFS investment securities valuation and stockholders' equity, continued increase in deposit costs, and challenges in retaining/attracting deposits[199](index=199&type=chunk)[200](index=200&type=chunk) - The Company is focused on serving customers, employee well-being, and executing strategic initiatives while monitoring the economic environment and industry conditions[201](index=201&type=chunk) [Critical Accounting Policies](index=59&type=section&id=Critical%20Accounting%20Policies) Critical accounting policies, including ACL for loans and goodwill, require significant management judgment and estimates, which could materially impact financial statements - Critical accounting policies include the allowance for credit losses on loans and off-balance sheet commitments, as well as goodwill[202](index=202&type=chunk) - These policies require significant management judgment and estimates, which are subject to change and could materially impact financial statements[202](index=202&type=chunk) [Non-GAAP Measures](index=60&type=section&id=Non-GAAP%20Measures) The Company uses several non-GAAP financial measures, such as adjusted ROAA, ROATCE, and efficiency ratio, to provide supplemental information on operational performance and comparability, excluding nonrecurring items | Metric | Q1 2024 | Q4 2023 | Q1 2023 | | :----------------------------------------- | :--------- | :--------- | :--------- | | Adjusted ROAA (annualized) | 1.00% | 0.99% | 1.15% | | Adjusted ROATCE (annualized) | 10.13% | 11.19% | 13.89% | | Adjusted diluted EPS | $0.49 | $0.51 | $0.66 | | Tangible book value per share | $20.33 | $20.22 | $19.61 | | Tangible common equity ratio | 10.97% | 10.72% | - | | Adjusted efficiency ratio (excl. FDIC special assessment) | 59.8% | 58.8% | 51.7% | | Adjusted pre-provision net revenue (annualized) | $275,164k | $263,880k | $353,776k | | Cost of non-maturity deposits | 1.06% | 1.02% | 0.54% | [Results of Operations](index=67&type=section&id=RESULTS%20OF%20OPERATIONS) The Company reported net income of **$47.0 million** for Q1 2024, a significant increase from Q4 2023 but a decrease from Q1 2023, with net interest margin increasing to **3.39%** [Overview](index=67&type=section&id=Overview) Net income for Q1 2024 was **$47.0 million** (**$0.49** diluted EPS), increasing from Q4 2023 but decreasing from Q1 2023 due to varied income and expense factors | Metric | Q1 2024 | Q4 2023 | Q1 2023 | | :--------------- | :--------- | :---------- | :--------- | | Net income (loss) | $47,025k | $(135,376)k | $62,562k | | Diluted EPS | $0.49 | $(1.44) | $0.66 | | ROAA | 0.99% | (2.76)% | 1.15% | | ROAE | 6.50% | (19.01)% | 8.87% | | ROATCE | 10.05% | (28.01)% | 13.89% | [Net Interest Income](index=68&type=section&id=Net%20Interest%20Income) Net interest income slightly decreased to **$145.1 million** in Q1 2024 from Q4 2023, but net interest margin increased to **3.39%**, while year-over-year income decreased significantly | Metric | Q1 2024 | Q4 2023 | Q1 2023 | | :----------------------------------- | :--------- | :--------- | :--------- | | Net interest income | $145,127k | $146,789k | $168,610k | | Net interest margin | 3.39% | 3.28% | 3.44% | | Cost of deposits | 1.59% | 1.56% | 0.94% | | Average interest-earning assets | $17,238,117k | $17,743,168k | $19,896,067k | | Average yield on interest-earning assets | 4.98% | 4.86% | 4.51% | | Average cost of interest-bearing liabilities | 2.52% | 2.46% | 1.72% | [Provision for Credit Losses](index=71&type=section&id=Provision%20for%20Credit%20Losses) Provision for credit losses increased to **$3.9 million** in Q1 2024, driven by economic forecasts and specific reserves, partially offset by decreased loans | Metric | Q1 2024 (in thousands) | Q4 2023 (in thousands) | Q1 2023 (in thousands) | | :----------------------------------- | :--------------------- | :--------------------- | :--------------------- | | Total provision for credit losses | $3,852 | $1,696 | $3,016 | | Provision for loan losses | $6,288 | $8,275 | $3,021 | | Provision for unfunded commitments | $(2,425) | $(6,577) | $(189) | [Noninterest Income](index=72&type=section&id=Noninterest%20Income) Noninterest income was **$25.8 million** in Q1 2024, significantly increasing from Q4 2023 due to the absence of prior repositioning losses and a gain on debt extinguishment | Metric | Q1 2024 (in thousands) | Q4 2023 (in thousands) | Q1 2023 (in thousands) | | :----------------------------------- | :--------------------- | :--------------------- | :--------------------- | | Total noninterest income (loss) | $25,774 | $(234,194) | $21,186 | | Net (loss) gain from sales of investment securities | $0 | $(254,065) | $138 | | Other income (includes gain on debt extinguishment) | $5,959 | $1,562 | $1,261 | | Trust custodial account fees | $10,642 | $9,388 | $11,025 | [Noninterest Expense](index=73&type=section&id=Noninterest%20Expense) Noninterest expense totaled **$102.6 million** for Q1 2024, slightly decreasing from Q4 2023 due to lower FDIC special assessment, but increasing year-over-year | Metric | Q1 2024 (in thousands) | Q4 2023 (in thousands) | Q1 2023 (in thousands) | | :------------------------- | :--------------------- | :--------------------- | :--------------------- | | Total noninterest expense | $102,633 | $102,770 | $101,352 | | FDIC insurance premiums | $2,629 | $4,267 | $2,425 | | Deposit expense | $12,665 | $11,152 | $8,436 | | Efficiency ratio | 60.2% | 60.1% | 51.7% | [Income Taxes](index=74&type=section&id=Income%20Taxes) Income tax expense for Q1 2024 was **$17.4 million** with an effective tax rate of **27.0%**, contrasting with a tax benefit in Q4 2023 due to a pre-tax loss | Metric | Q1 2024 (in thousands) | Q4 2023 (in thousands) | Q1 2023 (in thousands) | | :------------------------- | :--------------------- | :--------------------- | :--------------------- | | Income tax expense (benefit) | $17,391 | $(56,495) | $22,866 | | Effective income tax rate | 27.0% | 29.4% | 26.8% | | Metric | March 31, 2024 (in thousands) | December 31, 2023 (in thousands) | | :------------------------- | :---------------------------- | :------------------------------- | | Unrecognized tax benefits | $1,400 | $1,400 | | Accrued interest on unrecognized tax benefits | $231 | $200 | [Financial Condition](index=75&type=section&id=FINANCIAL%20CONDITION) The Company's financial condition at March 31, 2024, shows decreased total assets and liabilities, driven by reduced loans and FHLB advances, while stockholders' equity increased [Overview](index=75&type=section&id=Overview) Total assets decreased to **$18.81 billion** at March 31, 2024, with liabilities also down, while stockholders' equity increased due to net income and comprehensive income | Metric | March 31, 2024 (in billions) | December 31, 2023 (in billions) | | :------------------------- | :--------------------------- | :------------------------------ | | Total assets | $18.81 | $19.03 | | Total liabilities | $15.91 | $16.14 | | Total stockholders' equity | $2.90 | $2.88 | | Metric | March 31, 2024 | December 31, 2023 | | :----------------------------------- | :------------- | :---------------- | | Book value per share | $30.09 | $30.07 | | Tangible book value per share | $20.33 | $20.22 | | Tangible common equity to tangible assets ratio | 10.97% | 10.72% | [Loans](index=75&type=section&id=Loans) Loans held for investment decreased by **$276.9 million** to **$13.01 billion** at March 31, 2024, with increased delinquent and nonperforming assets due to specific commercial relationships | Metric | March 31, 2024 (in billions) | December 31, 2023 (in billions) | | :----------------------------------- | :--------------------------- | :------------------------------ | | Loans held for investment | $13.01 | $13.29 | | Weighted average interest rate on loans | 4.91% | 4.87% | - Delinquent loans (30 or more days past due) as a percentage of total loans held for investment increased to **0.09%** at March 31, 2024, from **0.08%** at December 31, 2023[266](index=266&type=chunk) | Metric | March 31, 2024 (in thousands) | December 31, 2023 (in thousands) | | :----------------------------------- | :---------------------------- | :------------------------------- | | Nonperforming assets | $64,054 (0.34% of total assets) | $25,065 (0.13% of total assets) | | Nonperforming loans | $63,806 (0.49% of loans) | $24,817 (0.19% of loans) | | Classified loans (Substandard, Doubtful, Loss) | $200,580 (1.57% of loans) | $137,420 (1.07% of loans) | | Modified loans to troubled borrowers (MLTB) | $12,161 | $12,595 | [Allowance for Credit Losses](index=86&type=section&id=Allowance%20for%20Credit%20Losses) The ACL for loans held for investment was **$192.3 million** at March 31, 2024, with a **1.48%** ratio to loans, determined by a CECL model and qualitative adjustments | Metric | March 31, 2024 (in thousands) | December 31, 2023 (in thousands) | | :----------------------------------- | :---------------------------- | :------------------------------- | | ACL for loans held for investment | $192,340 | $192,471 | | Metric | March 31, 2024 | December 31, 2023 | | :----------------------------------- | :------------- | :---------------- | | ACL to loans held for investment ratio | 1.48% | 1.45% | | ACL to nonperforming loans ratio | 301% | 776% | | Net charge-offs to average loans held for investment | 0.05% | 0.03% | - The CECL model incorporates reasonable and supportable economic forecasts from an independent third party, with PDs and LGDs forecasted over a two-year period and reverting to long-term averages over three years[283](index=283&type=chunk)[284](index=284&type=chunk) - Qualitative adjustments are considered quarterly for higher-risk loan segments or where the quantitative model may not fully reflect adequate levels, based on management's judgment[286](index=286&type=chunk) [Investment Securities](index=90&type=section&id=Investment%20Securities) The investment securities portfolio slightly increased to **$2.87 billion** at March 31, 2024, primarily investment grade and diversified, with AFS and HTM components | Metric | March 31, 2024 (in billions) | December 31, 2023 (in billions) | | :----------------------------------- | :--------------------------- | :------------------------------ | | Total investment securities | $2.87 | $2.87 | | AFS investment securities | $1.15 | $1.14 | | HTM investment securities | $1.72 | $1.73 | - The effective duration of the AFS securities portfolio was **0.9 years** at March 31, 2024, compared to **0.7 years** at December 31, 2023[294](index=294&type=chunk) | Metric | March 31, 2024 (in thousands) | December 31, 2023 (in thousands) | | :----------------------------------- | :---------------------------- | :------------------------------- | | ACL for HTM investment securities | $115 | $126 | - No ACL for AFS investment securities at March 31, 2024[296](index=296&type=chunk) - **84.9%** of the investment securities portfolio had a Moody's credit rating of Aaa-Aa3 at March 31, 2024[299](index=299&type=chunk) [Deposits](index=92&type=section&id=Deposits) Total deposits increased by **$192.2 million** to **$15.19 billion** at March 31, 2024, with non-maturity deposits at **84.4%** and uninsured deposits totaling **$6.14 billion** | Metric | March 31, 2024 (in billions) | December 31, 2023 (in billions) | | :----------------------------------- | :--------------------------- | :------------------------------ | | Total deposits | $15.19 | $15.00 | | Non-maturity deposits | $12.82 (84.4% of total deposits) | $12.70 (84.7% of total deposits) | | Noninterest-bearing checking | $4,997,636k (32.9% of total deposits) | $4,932,817k (32.9% of total deposits) | | Weighted average rate of deposits | 1.66% | 1.55% | | Uninsured deposits | $6,138,719k | $5,976,621k | | Insured and collateralized deposits as % of total deposits | 66% | 66% | | Loans held for investment to deposits ratio | 85.7% | 88.6% | [Borrowings](index=93&type=section&id=Borrowings) Total borrowings decreased by **$399.8 million** to **$532.0 million** at March 31, 2024, primarily due to a reduction in FHLB term advances | Metric | March 31, 2024 (in thousands) | December 31, 2023 (in thousands) | | :------------------------- | :---------------------------- | :------------------------------- | | Total borrowings | $532,001 | $931,842 | | FHLB advances | $200,000 | $600,000 | | Subordinated debentures | $332,001 | $331,842 | | Borrowings as a percent of total assets | 2.8% | 4.9% | | Weighted average rate of borrowings | 5.07% | 3.93% | [Capital Resources and Liquidity](index=95&type=section&id=CAPITAL%20RESOURCES%20AND%20LIQUIDITY) The Company maintains robust capital and liquidity, exceeding regulatory minimums, with substantial liquid assets and unused borrowing capacity providing strong coverage [Liquidity Management](index=95&type=section&id=Liquidity%20Management) The Company's liquidity sources include deposits and FHLB advances, with **$9.90 billion** in readily available liquidity providing **190.9%** coverage to uninsured deposits - Unused borrowing capacity was **$8.53 billion** at March 31, 2024, including FHLB, FRB discount window, and correspondent bank lines[315](index=315&type=chunk) - Combined readily available liquidity (cash, time deposits, short-term, unpledged AFS U.S. Treasury securities) totaled approximately **$9.90 billion** at March 31, 2024[315](index=315&type=chunk) - The coverage ratio of readily available liquidity to uninsured and uncollateralized deposits was **190.9%** at March 31, 2024[315](index=315&type=chunk) - The liquidity ratio was **14.4%** at March 31, 2024, exceeding the Company's minimum policy requirement of **10.0%**[316](index=316&type=chunk) - Brokered deposits amounted to **$572.1 million**, representing **3.77%** of total deposits and **3.04%** of total assets at March 31, 2024[318](index=318&type=chunk) - The Bank paid **$31.6 million** in dividends to the Corporation during the three months ended March 31, 2024[319](index=319&type=chunk) - The Corporation maintains a **$25.0 million** line of credit with U.S. Bank, with no outstanding balance at March 31, 2024[320](index=320&type=chunk) [Material Cash Requirement](index=96&type=section&id=Material%20Cash%20Requirement) Material cash requirements include funding loan commitments, equity investments, and debt repayment, with total contractual obligations of **$2.98 billion**, **$2.32 billion** due within one year | Metric | Total (in thousands) | Less than 1 year (in thousands) | | :----------------------------------- | :------------------- | :------------------------------ | | Total contractual cash obligations | $2,980,982 | $2,318,813 | | Loan commitments to extend credit | $1,411,838 | $950,471 | | Affordable housing partnerships commitment | $31,147 | $14,924 | [Regulatory Capital Compliance](index=98&type=section&id=Regulatory%20Capital%20Compliance) The Company and Bank exceed all regulatory capital minimums, including the capital conservation buffer, and are categorized as 'well capitalized,' with ratios strengthening in Q1 2024 - The Bank was categorized as 'well capitalized' as of the most recent formal notification from the Federal Reserve[329](index=329&type=chunk) - The Company and Bank are in compliance with the capital conservation buffer requirement and exceeded minimum Common Equity Tier 1, Tier 1, and Total Capital ratios, inclusive of the fully phased-in capital conservation buffer[330](index=330&type=chunk) | Metric | March 31, 2024 | December 31, 2023 | | :----------------------------------- | :------------- | :---------------- | | Pacific Premier Bancorp, Inc. Consolidated | | | | Tier 1 leverage ratio | 11.48% | 11.03% | | Common equity tier 1 capital ratio | 15.02% | 14.32% | | Tier 1 capital ratio | 15.02% | 14.32% | | Total capital ratio | 18.23% | 17.29% | | Pacific Premier Bank | | | | Tier 1 leverage ratio | 12.97% | 12.43% | | Common equity tier 1 capital ratio | 16.96% | 16.13% | | Tier 1 capital ratio | 16.96% | 16.13% | | Total capital ratio | 18.21% | 17.23% | - The Company elected to phase in the full effect of CECL on regulatory capital over a five-year transition period[331](index=331&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=98&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section details the Company's exposure to market risk, primarily interest rate risk, managed by the Asset Liability Committee to limit adverse effects on NII and EVE [Asset/Liability Management and Market Risk](index=100&type=section&id=Asset%2FLiability%20Management%20and%20Market%20Risk) Market risk, mainly interest rate risk from asset/liability repricing mismatches, is managed by the Asset Liability Committee to mitigate adverse impacts on NII and EVE - Market risk primarily arises from interest rate risk in lending, investments, and deposit taking activities[334](index=334&type=chunk) - The Asset Liability Committee is responsible for implementing the Bank's interest rate risk management policy to limit adverse effects on NII and EVE[334](index=334&type=chunk) [Interest Rate Risk Management](index=100&type=section&id=Interest%20Rate%20Risk%20Management) The Company manages interest rate risk through portfolio structuring and pricing, monitoring NII and EVE sensitivity, with low sensitivity to rising rates and expected NII increases | Metric | March 31, 2024 (in thousands) | | :----------------------------------- | :---------------------------- | | Projected NII change for +300 bps shift | $44,467 (7.3% increase) | | EVE change for +300 bps shift | $(413,729) (13.0% decrease) | - The Company's sensitivity to changes in interest rates is low for rising rates, aided by interest rate swaps for hedging purposes, with Earnings at Risk expected to increase as rates rise[339](index=339&type=chunk) - The Company has minimal direct market risk from foreign exchange and no exposure from commodities[340](index=340&type=chunk) [Item 4. Controls and Procedures](index=102&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2024, with no material changes in internal control over financial reporting [Evaluation of Disclosure Controls and Procedures](index=102&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) Management, including CEO and CFO, concluded the Company's disclosure controls and procedures were effective as of March 31, 2024 - The Company's disclosure controls and procedures were effective as of March 31, 2024[341](index=341&type=chunk) [Changes in Internal Controls over Financial Reporting](index=102&type=section&id=Changes%20in%20Internal%20Controls%20over%20Financial%20Reporting) No material changes in internal control over financial reporting occurred during the quarter ended March 31, 2024 - No material changes in internal control over financial reporting occurred during the quarter ended March 31, 2024[342](index=342&type=chunk) [PART II - OTHER INFORMATION](index=103&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) This section provides other required information, including legal proceedings, risk factors, equity sales, defaults, and exhibits [Item 1. Legal Proceedings](index=103&type=section&id=Item%201.%20Legal%20Proceedings) The Company is involved in ordinary course legal proceedings, which management believes will not materially impact its operations or financial condition - Legal proceedings are in the ordinary course of business[345](index=345&type=chunk) - Management believes these proceedings will not have a material adverse impact on the Company's results of operations or financial condition[345](index=345&type=chunk) [Item 1A. Risk Factors](index=103&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the risk factors previously described in the Company's Annual Report on Form 10-K for the year ended December 31, 2023 - No material changes to risk factors as previously described in the 2023 Form 10-K[346](index=346&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=103&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) A stock repurchase program for up to **4,725,000** shares was authorized, but no shares were repurchased during Q1 2024 - Stock repurchase program authorized for up to **4,725,000** shares of common stock[347](index=347&type=chunk) - No shares of common stock were repurchased during the first quarter of 2024[347](index=347&type=chunk)[349](index=349&type=chunk) - Maximum number of shares that may yet be purchased under the program is **4,245,056**[349](index=349&type=chunk) [Item 3. Defaults Upon Senior Securities](index=103&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) There were no defaults upon senior securities during the reporting period - No defaults upon senior securities[350](index=350&type=chunk) [Item 4. Mine Safety Disclosures](index=103&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the Company's operations - Not applicable[351](index=351&type=chunk) [Item 5. Other Information](index=103&type=section&id=Item%205.%20Other%20Information) No officer or director adopted or terminated any Rule 10b5-1 trading plans or non-Rule 10b5-1 arrangements during Q1 2024 - No officer or director adopted or terminated any Rule 10b5-1 trading plans or non-Rule 10b5-1 trading arrangements during the quarter ended March 31, 2024[352](index=352&type=chunk) [Item 6. Exhibits](index=104&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including corporate governance documents, certifications, and XBRL-related documents - Exhibits include corporate governance documents (Certificate of Incorporation, Bylaws), certifications (CEO, CFO), and XBRL Instance, Schema, Calculation, Definitions, Label, and Presentation Linkbase Documents[353](index=353&type=chunk) [SIGNATURES](index=105&type=section&id=SIGNATURES) The report was duly signed by Steven R. Gardner (Chairman, CEO, and President) and Ronald J. Nicolas, Jr. (SVP and CFO) on April 26, 2024 - The report was signed by Steven R. Gardner (Chairman, CEO, and President) and Ronald J. Nicolas, Jr. (Senior Executive Vice President and CFO) on April 26, 2024[358](index=358&type=chunk)