Pacific Premier Bancorp, Inc. Announces Second Quarter 2025 Financial Results and a Quarterly Cash Dividend of $0.33 Per Share

Second Quarter 2025 Summary

• Net income of $32.1 million, or $0.33 per diluted share
• Return on average assets of 0.71%
• Net interest margin expanded 6 bps to 3.12%
• Average cost of deposits decreased 5 bps to 1.60%
• Non-maturity deposits⁽¹⁾ to total deposits of 86.5%
• Non-interest bearing deposits to total deposits of 32.3%
• Total delinquency of 0.02% of loans held for investment
• Nonperforming assets to total assets of 0.15%, net loan recoveries of $349,000
• Tangible book value per share⁽¹⁾ increased to $21.10
• Common equity tier 1 capital ratio of 17.00%, and total risk-based capital ratio of 18.85%
• Redemption of $150.0 million in subordinated notes due 2030

Pacific Premier Bancorp, Inc. (NASDAQ: PPBI) (the “Company” or “Pacific Premier”), the holding company of Pacific Premier Bank (the “Bank”), reported net income of $32.1 million, or $0.33 per diluted share, for the second quarter of 2025, compared with net income of $36.0 million, or $0.37 per diluted share, for the first quarter of 2025, and net income of $41.9 million, or $0.43 per diluted share, for the second quarter of 2024.

For the second quarter of 2025, the Company’s return on average assets (“ROAA”) was 0.71%, return on average equity (“ROAE”) was 4.33%, and return on average tangible common equity (“ROATCE”)⁽¹⁾ was 6.66%, compared to 0.80%, 4.87%, and 7.48%, respectively, for the first quarter of 2025, and 0.90%, 5.76%, and 8.92%, respectively, for the second quarter of 2024. Total assets were $17.78 billion at June 30, 2025, compared to $18.09 billion at March 31, 2025, and $18.33 billion at June 30, 2024.

Steven R. Gardner, Chairman, Chief Executive Officer, and President of the Company, commented, “We delivered solid financial results for the second quarter, as we remain committed to our prudent, proactive approach to managing all aspects of our business as we work towards consummating our pending merger with Columbia Banking System, Inc. (“Columbia”).

“For the second quarter, we generated net income of $32.1 million, or $0.33 per share, which included non-recurring items that had an after-tax negative impact of $0.06 per share. Our net interest margin expanded by six basis points to 3.12%, driven by a five basis point reduction in our average deposit costs to 1.60%, which is reflective of our high-quality, low-cost deposit base and underscores the strong franchise that we will deliver to Columbia. Additionally, our quarter-end tangible common equity and Tier 1 common equity ratios increased to 12.14% and 17.00%, respectively.

“Asset quality trends for the second quarter remained strong, with nonperforming loans decreasing to $26.3 million, and we had net recoveries of $349,000. Overall, credit performance aligned with our expectations, as our borrowers are in stable positions despite broader macroeconomic uncertainties.

“Our second quarter new loan commitments increased to $578.5 million, nearly double the first quarter’s levels. We also maintained a favorable deposit mix, with brokered deposits decreasing by $99.9 million and noninterest-bearing deposits comprising 32.3% of total deposits. Consistent with our proactive and prudent approach to capital and liquidity management, we redeemed $150 million of higher-cost subordinated debt during the second quarter, and with the anticipated redemption of $125 million of subordinated debt in August, we effectively will eliminate our remaining wholesale funding heading into the Columbia merger.

“We are pleased to have received overwhelming stockholder support for our pending merger with Columbia and anticipate closing the transaction as soon as September 1, 2025, pending regulatory approvals and satisfaction of remaining customary closing conditions. Our integration planning efforts have been progressing seamlessly since the announcement. We currently are tracking ahead of plan, and we have never worked with a merger partner as thoroughly prepared as the Columbia team. Our employees have been collaborating effectively, and we are excited to be part of the new organization.

“Lastly, I want to extend my heartfelt thanks to my dedicated colleagues and the board of directors at Pacific Premier for their exceptional contributions, as well as to all our stakeholders for their continued support. Reflecting on the past 25 years, I feel a deep sense of pride in what we have accomplished together, growing nearly twentyfold during that time and delivering long-term value to our stockholders. I am optimistic about the future and excited for the next chapter of our company.”

FINANCIAL HIGHLIGHTS

INCOME STATEMENT HIGHLIGHTS

Net Interest Income and Net Interest Margin

Net interest income totaled $126.8 million in the second quarter of 2025, an increase of $3.4 million, or 2.7%, from the first quarter of 2025. The increase in net interest income was primarily attributable to lower cost of funds, and lower average interest-bearing liabilities, partially offset by lower average interest-earning assets.

The net interest margin for the second quarter of 2025 increased 6 basis points to 3.12%, from 3.06% in the prior quarter. The increase was primarily due to lower cost of funds as well as increased average loan yields.

Net interest income for the second quarter of 2025 decreased $9.6 million, or 7.1%, compared to the second quarter of 2024. The decrease was attributable to lower average interest-earning asset balances and yields, partially offset by lower average interest-bearing liabilities balances and lower cost of funds.

Provision for Credit Losses

For the second quarter of 2025, the Company recorded a $2.1 million provision reversal, compared to a $3.7 million provision reversal for the first quarter of 2025, and a $1.3 million provision expense for the second quarter of 2024. The reversal of provision for credit losses for the current quarter was largely attributable to the decrease in loan balances and changes in the loan composition, partially offset by increases associated with higher unfunded commitments.

Noninterest Income

Noninterest income for the second quarter of 2025 was $17.6 million, a decrease of $3.9 million from the first quarter of 2025. The decrease was primarily due to a $1.5 million decrease in trust custodial account income related to annual tax fees recognized in the prior quarter, a $1.4 million decrease in earnings on bank owned life insurance, and a $1.3 million loss on debt extinguishment, resulting from the early redemption of $150.0 million in subordinated notes.

Noninterest income for the second quarter of 2025 decreased $657,000 compared to the second quarter of 2024.

Noninterest Expense

Noninterest expense totaled $104.4 million for the second quarter of 2025, an increase of $4.1 million compared to the first quarter of 2025. The increase was primarily due to merger-related expense of $6.7 million for the second quarter of 2025 relating to the pending merger with Columbia. Excluding the merger-related expense, noninterest expense totaled $97.7 million, a decrease of $2.6 million compared to the first quarter of 2025 primarily attributable to a $2.6 million decrease in legal and professional services.

Noninterest expense for the second quarter of 2025 increased by $6.8 million compared to the second quarter of 2024. The increase was primarily due to merger-related expense of $6.7 million for the second quarter of 2025.

Income Tax

For the second quarter of 2025, income tax expense totaled $10.0 million, resulting in an effective tax rate of 23.7%, compared with income tax expense of $12.2 million and an effective tax rate of 25.4% for the first quarter of 2025, and income tax expense of $13.9 million and an effective tax rate of 24.9% for the second quarter of 2024.

BALANCE SHEET HIGHLIGHTS

Loans

Loans held for investment totaled $11.90 billion at June 30, 2025, a decrease of $120.9 million, or 1.0% from March 31, 2025, and a decrease of $587.9 million, or 4.7%, from June 30, 2024. The decrease from March 31, 2025 was primarily due to lower loan purchases, partially offset by lower prepayments and maturities.

New origination activity during the second quarter of 2025 increased compared to both the first quarter of 2025 and the second quarter of 2024. New loan commitments totaled $578.5 million, and new loan fundings totaled $195.8 million, compared to $319.3 million in loan commitments and $207.3 million in new loan fundings for the first quarter of 2025, and $150.7 million in loan commitments and $58.6 million in new loan fundings for the second quarter of 2024.

At June 30, 2025, the total loan-to-deposit ratio was 82.1%, compared to 82.0% and 85.4% at March 31, 2025 and June 30, 2024, respectively.

The following table presents the primary loan roll-forward activities for total gross loans, including both loans held for investment and loans held for sale, during the quarters indicated:

The following table presents the composition of the loans held for investment as of the dates indicated:

The total end-of-period weighted average interest rate on loans at June 30, 2025 was 4.83%, compared to 4.80% at March 31, 2025, and 4.88% at June 30, 2024. The quarter-over-quarter increase was primarily attributable to higher-yielding new loan fundings and loan purchases.

The following table presents the composition of loan commitments originated during the quarters indicated:

The weighted average interest rate on new loan commitments was 7.10% in the second quarter of 2025, compared to 6.95% in the first quarter of 2025, and 8.58% in the second quarter of 2024.

Allowance for Credit Losses

At June 30, 2025, our allowance for credit losses (“ACL”) on loans held for investment was $170.7 million, a decrease of $4.3 million from March 31, 2025 and a decrease of $13.1 million from June 30, 2024. The decreases in the ACL from March 31, 2025 and June 30, 2024 primarily reflects the relative changes in the size and composition of our loan portfolio, partially offset by increases associated with economic forecasts.

During the second quarter of 2025, the Company had $349,000 of net recoveries, compared to $343,000 of net recoveries during the first quarter of 2025, and $10.3 million of net charge-offs during the second quarter of 2024.

The following table provides the allocation of the ACL for loans held for investment as well as the activity in the ACL attributed to various segments in the loan portfolio as of and for the period indicated:

The ratio of ACL to loans held for investment at June 30, 2025 decreased to 1.43%, compared to 1.46% at March 31, 2025 and 1.47% at June 30, 2024. The fair value net discount on loans acquired through bank acquisitions was $29.5 million, or 0.25% of total loans held for investment, as of June 30, 2025, compared to $31.3 million, or 0.26% of total loans held for investment, as of March 31, 2025, and $38.6 million, or 0.31% of total loans held for investment, as of June 30, 2024.

Asset Quality

Nonperforming assets totaled $26.3 million, or 0.15% of total assets, at June 30, 2025, compared to $27.7 million, or 0.15% of total assets, at March 31, 2025, and $52.1 million, or 0.28% of total assets, at June 30, 2024. Loan delinquencies were $2.0 million, or 0.02% of loans held for investment, at June 30, 2025, compared to $2.1 million, or 0.02% of loans held for investment, at March 31, 2025, and $17.9 million, or 0.14% of loans held for investment, at June 30, 2024.

Classified loans totaled $89.1 million, or 0.75% of loans held for investment, at June 30, 2025, compared to $89.2 million, or 0.74% of loans held for investment, at March 31, 2025, and $183.8 million, or 1.47% of loans held for investment, at June 30, 2024.

The following table presents the asset quality metrics of the loan portfolio as of the dates indicated.

Investment Securities

At June 30, 2025, available-for-sale (“AFS”) and held-to-maturity (“HTM”) investment securities were $1.58 billion and $1.69 billion, respectively, compared to $1.76 billion and $1.70 billion, respectively, at March 31, 2025, and $1.32 billion and $1.71 billion, respectively, at June 30, 2024.

In total, investment securities were $3.27 billion at June 30, 2025, a decrease of $188.9 million from March 31, 2025, and an increase of $239.4 million from June 30, 2024. The decrease in the second quarter of 2025 compared to the prior quarter was primarily due to principal payments, amortization and accretion, and redemptions totaling $288.4 million, partially offset by purchases of $99.4 million in shorter-term AFS U.S. Treasury securities and an improvement of $135,000 in AFS investment securities mark-to-market unrealized loss.

The increase in investment securities from June 30, 2024 was the result of $1.14 billion in purchases of primarily AFS securities and, to a lesser extent, HTM securities, and an improvement of $20.2 million in AFS securities mark-to-market unrealized loss, partially offset by principal payments, amortization and accretion, and redemptions totaling $919.1 million.

Deposits

At June 30, 2025, total deposits were $14.50 billion, a decrease of $168.9 million, or 1.2%, from March 31, 2025, and a decrease of $130.3 million, or 0.9%, from June 30, 2024. The decrease from the prior quarter was primarily driven by decreases of $139.3 million in noninterest-bearing checking, $106.2 million in maturity deposits, primarily driven by a $99.9 million reduction in brokered certificates of deposit, and $44.7 million in interest-bearing checking, partially offset by an increase of $121.4 million in money market and savings.

The decrease from June 30, 2024 was attributable to decreases of $283.8 million in brokered certificates of deposit and $147.7 million in retail certificates of deposit, partially offset by an increase of $191.1 million in money market and savings, $71.7 million in noninterest-bearing checking, and $38.5 million in interest-bearing checking.

At June 30, 2025, non-maturity deposits⁽¹⁾ totaled $12.54 billion, or 86.5% of total deposits, a decrease of $62.6 million, or 0.5%, from March 31, 2025, and an increase of $301.2 million, or 2.5%, from June 30, 2024.

At June 30, 2025, maturity deposits totaled $1.96 billion, a decrease of $106.2 million, or 5.1%, from March 31, 2025, and a decrease of $431.5 million, or 18.0%, from June 30, 2024.

The weighted average cost of total deposits for the second quarter of 2025 decreased to 1.60%, compared to 1.65% for the first quarter of 2025, and 1.73% for the second quarter of 2024. The weighted average cost of non-maturity deposits⁽¹⁾ for the second quarter of 2025 was 1.21%, compared to 1.20% for the first quarter of 2025, and 1.17% for the second quarter of 2024.

At June 30, 2025, the end-of-period weighted average rate of total deposits was 1.60%, compared to 1.61% at March 31, 2025, and 1.81% at June 30, 2024. At June 30, 2025, the end-of-period weighted average rate of non-maturity deposits was 1.24%, compared to 1.19% at March 31, 2025, and 1.25% at June 30, 2024.

The following table presents the composition of deposits as of the dates indicated.

Borrowings

At June 30, 2025, total borrowings amounted to $124.0 million, a decrease of $148.6 million from March 31, 2025, and a decrease of $408.1 million from June 30, 2024. Total borrowings at June 30, 2025 were comprised of $124.0 million of subordinated notes. The decrease in borrowings at June 30, 2025 as compared to March 31, 2025 was due to the early redemption of $150.0 million in subordinated notes. The decrease in borrowings at June 30, 2025 as compared to June 30, 2024 was due to a decrease of $200.0 million in FHLB term advances, the early redemption of $150.0 million in subordinated notes during this quarter, and the maturity of $60.0 million in subordinated notes in 2024.

As of June 30, 2025, our unused borrowing capacity was $9.15 billion, which consists of available lines of credit with FHLB and other correspondent banks, as well as access through the Federal Reserve Bank’s discount window, none of which were utilized during the second quarter of 2025.

Capital Ratios

At June 30, 2025, our common stockholders’ equity was $2.98 billion, or 16.73% of total assets, compared with $2.97 billion, or 16.41%, at March 31, 2025, and $2.92 billion, or 15.95%, at June 30, 2024. At June 30, 2025, the ratio of tangible common equity to tangible assets⁽¹⁾ increased 27 basis points and 73 basis points to 12.14%, compared with 11.87% at March 31, 2025, and 11.41% at June 30, 2024, respectively. Tangible book value per share⁽¹⁾ increased $0.12 and $0.52 to $21.10, compared with $20.98 at March 31, 2025, and $20.58 at June 30, 2024, respectively.

Effective January 1, 2025, the full effect of current expected credit losses (“CECL”) on regulatory capital over the five-year transition period was phased in. At June 30, 2025, the Company and Bank were in compliance with the capital conservation buffer requirement and exceeded the minimum Common Equity Tier 1, Tier 1, and total capital ratios, inclusive of the fully phased-in capital conservation buffer of 7.0%, 8.5%, and 10.5%, respectively, and the Bank qualified as “well capitalized” for purposes of the federal bank regulatory prompt corrective action regulations.

Dividend and Stock Repurchase Program

On July 23, 2025, the Company’s Board of Directors declared a $0.33 per share dividend, payable on August 15, 2025 to stockholders of record as of August 5, 2025. In January 2021, the Company’s Board of Directors approved a stock repurchase program, which authorized the repurchase of up to 4,725,000 shares of its common stock. During the second quarter of 2025, the Company did not repurchase any shares of common stock.

Subsequent events

On July 14, 2025, the Company’s Board of Directors approved the early redemption of $125.0 million in subordinated notes due 2029 on or around August 15, 2025.

About Pacific Premier Bancorp, Inc.

Pacific Premier Bancorp, Inc. (Nasdaq: PPBI) is the parent company of Pacific Premier Bank, National Association, a nationally chartered commercial bank focused on serving small, middle-market, and corporate businesses throughout the western United States in major metropolitan markets in California, Washington, Oregon, Arizona, and Nevada. Founded in 1983, Pacific Premier Bank has grown to become one of the largest banks headquartered in the western region of the United States, with approximately $18 billion in total assets. Pacific Premier Bank provides banking products and services, including deposit accounts, digital banking, and treasury management services, to businesses, professionals, entrepreneurs, real estate investors, and nonprofit organizations. Pacific Premier Bank also offers a wide array of loan products, such as commercial business loans, lines of credit, SBA loans, commercial real estate loans, agribusiness loans, franchise lending, home equity lines of credit, and construction loans. Pacific Premier Bank offers commercial escrow services and facilitates 1031 Exchange transactions through its Commerce Escrow division. Pacific Premier Bank offers clients IRA custodial services through its Pacific Premier Trust division, which has over $18 billion of assets under custody and close to 30,000 client accounts comprised of self-directed investors, financial institutions, capital syndicators, and financial advisors. Additionally, Pacific Premier Bank provides nationwide customized banking solutions to Homeowners’ Associations and Property Management companies. Pacific Premier Bank is an Equal Housing Lender and Member FDIC. For additional information about Pacific Premier Bancorp, Inc. and Pacific Premier Bank, visit our website: www.ppbi.com.

FORWARD-LOOKING STATEMENTS

The statements contained herein that are not historical facts are forward-looking statements based on management’s current expectations and beliefs concerning future developments and their potential effects on the Company including, without limitation, plans, strategies and goals, and statements about the Company’s expectations regarding revenue and asset growth, financial performance and profitability, loan and deposit growth, yields and returns, loan diversification and credit management, stockholder value creation, tax rates, liquidity, and the impact of acquisitions we have made or may make.

Such statements involve inherent risks and uncertainties, many of which are difficult to predict and are generally beyond the control of the Company. There can be no assurance that future developments affecting the Company will be the same as those anticipated by management. The Company cautions readers that a number of important factors could cause actual results to differ materially from those expressed in, or implied or projected by, such forward-looking statements. These risks and uncertainties include, but are not limited to, the following: the strength of the United States (“U.S.”) economy in general and the strength of the local economies in which we conduct operations; adverse developments in the banking industry, for example the high-profile bank failures in 2023, and the potential impact of such developments on customer confidence, liquidity, and regulatory responses to these developments; the effects of, and changes in, trade, monetary, and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System; interest rate, liquidity, economic, market, credit, operational, and inflation risks associated with our business, including the speed and predictability of changes in these risks; our ability to attract and retain deposits and access to other sources of liquidity, particularly in a rising or high interest rate environment, and the quality and composition of our deposits; business and economic conditions generally and in the financial services industry, nationally and within our current and future geographic markets, including the labor market, ineffective management of the U.S. Federal budget or debt, fluctuations in the real estate market, or turbulence or uncertainty in domestic or foreign financial markets; the effect of acquisitions we have made or may make, including, without limitation, the failure to achieve the expected revenue growth and/or expense savings from such acquisitions, and/or the failure to effectively integrate an acquisition target into our operations; the timely development of competitive new products and services and the acceptance of these products and services by new and existing customers; possible impairment charges to goodwill, including any impairment that may result from increased volatility in our stock price; the impact of changes in financial services policies, laws, and regulations, including those concerning taxes, banking, securities, and insurance, and the application thereof by regulatory bodies; compliance risks, including any increased costs of monitoring, testing, and maintaining compliance with complex laws and regulations; the effectiveness of our risk management framework and quantitative models; the effect of changes in accounting policies and practices or accounting standards, as may be adopted from time-to-time by bank regulatory agencies, the U.S. Securities and Exchange Commission (“SEC”), the Public Company Accounting Oversight Board, the Financial Accounting Standards Board or other accounting standards setters; possible credit-related impairments of securities held by us; changes in the level of our nonperforming assets and charge-offs; the impact of governmental efforts to restructure or adjust the U.S. financial regulatory system; the impact of recent or future changes in the FDIC insurance assessment rate or the rules and regulations related to the calculation of the FDIC insurance assessment amount, including any special assessments; changes in consumer spending, borrowing, and savings habits; the effects of concentrations in our loan portfolio, including commercial real estate and the risks of geographic and industry concentrations; the possibility that we may reduce or discontinue the payments of dividends on our common stock; the possibility that we may discontinue, reduce or otherwise limit the level of repurchases of our common stock we may make from time to time pursuant to our stock repurchase program; changes in the financial performance and/or condition of our borrowers; changes in the competitive environment among financial and bank holding companies and other financial service providers; geopolitical conditions, including acts or threats of terrorism, actions taken by the United States or other governments in response to acts or threats of terrorism, and/or military conflicts, including the war between Russia and Ukraine and conflict in the Middle East, all of which could impact business and economic conditions in the United States and abroad; tariffs, trade policies, and related tensions, which could impact our clients, specific industry sectors and/or broader economic conditions and financial market; public health crises and pandemics and their effects on the economic and business environments in which we operate, including on our credit quality and business operations, as well as the impact on general economic and financial market conditions; cybersecurity threats and the cost of defending against them; climate change, including the enhanced regulatory, compliance, credit, and reputational risks and costs; natural disasters, earthquakes, fires, and severe weather; unanticipated regulatory, legal, or judicial proceedings; the possibility that the Company’s pending merger with Columbia does not close when expected or at all because required regulatory or other approvals and other conditions to closing are not received or satisfied on a timely basis or at all; the possibility that the anticipated benefits and cost savings from the merger with Columbia may not be fully realized or may take longer to realize than expected; disruptions to the Company’s business as a result of the announcement and pendency of the merger with Columbia; the possibility that the merger with Columbia may be more expensive to complete than anticipated, including as a result of unexpected factors or events; and our ability to manage the risks involved in the foregoing. Additional factors that could cause actual results to differ materially from those expressed in the forward-looking statements are discussed in the Company’s 2024 Annual Report on Form 10-K and quarterly report on Form 10-Q for the quarter ended March 31, 2025 filed with the SEC and available at the SEC’s Internet site (http://www.sec.gov).

The Company undertakes no obligation to revise or publicly release any revision or update to these forward-looking statements to reflect events or circumstances that occur after the date on which such statements were made.