Pacific Premier Bancorp
Annual Report 2021

Plain-text annual report

2021 ANNUAL REPORT The Growth Story Continues. Founded in 1983, Pacific Premier Bank® is headquartered in Irvine, California, serving businesses and individuals throughout the United States. With $21 billion in total assets,1 we’re one of the strongest- performing and fastest-growing banks in the nation. MORE THAN 35 YEARS OF PERFORMANCE AND RESILIENCE. 1983: Pacific Premier Bank (Originally Life Bank) was founded 2000: CEO Steve Gardner and new management team hired to transform the Bank 2002: Officially changed name to Pacific Premier Bank 2011–12: Acquired Canyon National Bank Acquired Palm Desert National Bank 2013: Acquired First Associations Bank Acquired San Diego Trust Bank 2014: Acquired Infinity Franchise Holdings Acquired Independence Bank 2016: Acquired Security California Bancorp 2017: Acquired Heritage Oaks Bancorp Acquired Plaza Bancorp 2018: Acquired Grandpoint Capital, Inc. 2020: Acquired Opus Bank. Total assets grew to $20 billion Our performance and resilience have helped us earn high placements in key industry rankings. – Ranked 3rd on Forbes’ list of America’s Best Banks (2022)2 – BauerFinancial Five Star Rating for 64 Consecutive Quarters (2022) 1 Pacific Premier Bancorp, Inc. and subsidiaries on a consolidated basis, approximate total assets as of December 31, 2021. 2 © 2022, Forbes Media LLC. Used with permission. Pacific Premier Bank is a wholly owned subsidiary of Pacific Premier Bancorp, Inc. Table of Contents Inside Front Cover | About, History, and Accolades 02 | Stockholder Letter 06 | Financial Overview 07 | Our Success Attributes 08 | Equitable Impact Initiative 10 | Community Support 11 | High-Impact Loans 12 | Environmental, Social, and Governance (ESG) 13 | Board of Directors 14 | Executive Leadership 16 | Products and Services 18 | Sports and Community Sponsorships 20 | Non-GAAP Reconciliations 21 | Locations Inside Back Cover | Corporate Information PACIFIC PREMIER BANCORP, INC. | 2021 ANNUAL REPORT 1 S T O C K H O L D E R L E T T E R To Our Stockholders: 2021 marked a record year for Pacific Premier Bancorp, Inc., despite the impact of the ongoing pandemic, supply chain disruptions, and labor shortages. Our success over the past year reflects the effectiveness of our diversified commercial banking model and approach to technology- driven growth. We generated record revenue and net income for the year by leveraging the expanded capabilities of our larger and more diverse organization. Net income for the full year was $340 million, or $3.58 per diluted share, while our pre-provision net revenue, which we consider our core earnings, increased 24% to $390 million.1 The combination of strong revenue growth and prudent expense management also resulted in the following positive trends across key metrics: • Total revenue increased 19% year-over-year • Noninterest income increased 51% in 2021 • Total cost of deposits declined to 0.04% in 4Q21 • Total loans held for investment increased 8% year-over-year • Non-maturity deposits increased 10% year-over-year • Asset quality remained excellent, with net charge-offs representing just 0.02% of average loans for the year • Our efficiency ratio improved to 48.4% Our consistently strong financial performance during the year resulted in tangible book value per share increasing 9%, while we returned $140 million in capital to stockholders through our quarterly cash dividend and stock repurchase program. In short, we delivered significant value for our stockholders in 2021. 1 Pre-provision net revenue is calculated by adding to our 2021 net income of $50 million, amount attributable to income tax ($121 million), provision recapture for credit losses ($71 million), and merger-related expenses ($5,000). 2 PACIFIC PREMIER BANCORP, INC. | 2021 ANNUAL REPORT S T O C K H O L D E R L E T T E R “ Net income for the full year was $340 million, or $3.58 per diluted share, while our pre-provision net revenue, which we consider our core earnings, increased 24% to $390 million.1” Record Loan Production and Strong Inflows of Low-Cost Deposits Our scalable technology infrastructure and disciplined approach to business development have enhanced our ability to attract new clients and expand existing relationships. This past year’s results included $5.7 billion in new loan commitments and a significant increase in low-cost non-maturity deposits, which grew over 10% year-over-year and accounted for 94% of our total deposits at year-end. The addition of larger, more sophisticated middle-market companies and strong credit sponsors of commercial real estate projects helped make 2021 our most productive year ever. We entered 2022 with the highest level of commercial loan commitments in our history, and are well-positioned to take advantage of continued loan growth opportunities going forward. Executing on Our Technology-Driven Growth Strategy For many years, we have prioritized investing in technology to support and drive growth. At the center of our technology-driven growth strategy is Premier360SM, our innovative technology platform that enhances the ability of our cross-functional teams to collaborate and work together seamlessly to deliver superior client services and solutions. In 2021, we introduced additional new products and features to our suite of treasury management services designed to enhance the client experience, leverage efficiencies, and deepen client relationships. Our new features include, among others, a more modernized online business banking platform, new credit card offerings, and a refined mobile banking experience. These efforts have enabled us to expand our coverage area and the number of clients served, while improving their experience and strengthening our relationships. 1 Pre-provision net revenue is calculated by adding to our 2021 net income of $50 million, amount attributable to income tax ($121 million), provision recapture for credit losses ($71 million), and merger-related expenses ($5,000). PACIFIC PREMIER BANCORP, INC. | 2021 ANNUAL REPORT 3 S T O C K H O L D E R L E T T E R ” Our scalable technology and culture of continuous improvement will continue to allow us to add new clients and expand existing relationships.” Reinforcing the Pacific Premier Culture Our five Success Attributes embody our culture: Achieve, Communicate, Improve, Integrity, and Urgency. Over the past decade, our Success Attributes have been key to building a high-performing institution focused on continuous improvement throughout our organization. Throughout 2021—a year in which we focused on organic growth—we continued to draw upon our Success Attributes to expand our approach to Environmental, Social, and Governance (ESG) initiatives. We continued to make meaningful investments in our employees, clients, and communities, and we are excited to share our inaugural Corporate Social Responsibility Report highlighting these investments and efforts, which we released this spring. 4 PACIFIC PREMIER BANCORP, INC. | 2021 ANNUAL REPORT S T O C K H O L D E R L E T T E R ” We believe we are well positioned to take advantage of compelling acquisition opportunities that complement our disciplined approach to organic growth.” A Strong Foundation for Generating Profitable Growth and Enhancing Franchise Value As we look ahead, we expect the dynamic economic environment to present both new growth opportunities and challenges from inflation and the ongoing pandemic. Our scalable technology and culture of continuous improvement will continue to allow us to add new clients and expand existing relationships. We believe we are well positioned to take advantage of compelling acquisition opportunities that complement our disciplined approach to organic growth. We have an established track record of successfully identifying, structuring, and integrating acquisitions that create value for our stockholders. Our experienced management team is prepared to leverage the infrastructure we have built to capitalize on compelling opportunities if, and when, they arise. We are committed to operating the Company in a balanced approach while delivering value to stockholders in varying economic environments. Our performance over the past year is a testament to this approach. On behalf of the Board of Directors, I want to thank our stockholders for your continued support of our vision, strategy, and execution. Steven R. Gardner Chairman, CEO, and President PACIFIC PREMIER BANCORP, INC. | 2021 ANNUAL REPORT 5 F I N A N C I A L O V E R V I E W WE DELIVERED RECORD FINANCIAL PERFORMANCE IN 2021. During 2021, our team produced solid results as net income was a record $340 million, driven by a 19% increase in total revenue, which totaled $770 million. The record level of total revenue and continued improvement in our efficiency ratio was a direct result of our ability to gain scale and quickly realize synergies through successfully executing our acquisition strategy. Throughout the year, we continued to drive stockholder value as tangible book value per share increased 9% from 2020. Additionally, we returned $140 million in capital to our stockholders during 2021, which included a 10% increase in our quarterly dividend to $0.33 per share in the second quarter of 2021. Total Revenue ($ in millions) Efficiency Ratio1 64.7% 61.3% +36% CAGR $770 $646 55.9% 53.6% $483 $424 51.6% 51.0% $279 50.8% 49.8% 48.4% $173 $121 $87 $67 Tangible Book Value per Share1 with Dividends $3.20 $0.88 $18.84 $16.97 $1.91 $20.29 $18.65 R G A 1 3 % C $15.26 $12.51 $11.17 $10.12 $9.08 2013 2014 2015 2016 2017 2018 2019 2020 2021 2013 2014 2015 2016 2017 2018 2019 2020 2021 Total Assets ($ in millions) Capital Returned to Stockholders in 2021 ($ in millions) $140 $21,094 $19,737 R G A 3 7 % C $8,025 $11,487 $11,776 $4,036 $2,790 $1,714 $2,038 $35 $31 $42 $31 2013 2014 2015 2016 2017 2018 2019 2020 2021 Q1 2021 Q2 2021 Q3 2021 Q4 2021 FY 2021 1 A reconciliation of the non-GAAP measures of tangible book value per share and efficiency ratio derived from GAAP measures are set forth in the “Non-GAAP Reconciliation” section included herein. 6 PACIFIC PREMIER BANCORP, INC. | 2021 ANNUAL REPORT 6 PACIFIC PREMIER BANCORP, INC. | 2021 ANNUAL REPORT O U R S U C C E S S AT T R I B U T E S THE SUCCESS ATTRIBUTES THAT GUIDE OUR BUSINESS. Our Success Attributes speak to how we conduct business and reflect the culture we have built over the decades. They also drive our accomplishments and guide how we operate the organization and interact with each other. Ultimately, they help ensure we deliver at the absolute highest level for our clients, colleagues, communities, and stockholders, making us one of the top-performing banks in the nation. ACHIEVE Our achievements are how we are measured individually and as an organization. URGENC Y We operate with a sense of urgency by making decisions today, not tomorrow. Our clients and colleagues deserve nothing less. SUCCESS ATTRIBUTES COM MUNICATE By communicating and collaborating with each other, we make better decisions. IN TE GR ITY We conduct business in the right way and take responsibility for our actions. IM PROVE Having a winning attitude means understanding we can always do better both personally and as an organization. PACIFIC PREMIER BANCORP, INC. | 2021 ANNUAL REPORT 7 E Q U I TA B L E I M PA C T I N I T I AT I V E Equitable Impact Initiative During 2021, the pandemic highlighted persistent inequities in wealth, housing, education, and health for communities of color and other marginalized populations. To combat these ills, we launched our Equitable Impact Initiative, a multi-year $50 million commitment to key organizations and programs designed to reduce social and economic disparities in underserved communities. As a result of this Initiative, the SoLa Black Impact Fund will receive a $30 million investment to support prosperity and racial equity within Black and Brown communities. In addition, the SDS Supportive Housing Fund will receive a $15 million investment to finance approximately 1,800 new units of permanent supportive housing for people currently experiencing homelessness within communities that are predominantly minority. Other key partners for this initiative include Local Initiatives Support Corporation Los Angeles (LISC LA), which received $150,000 to help its efforts in transforming underserved neighborhoods. In addition, Community Capital Management will receive a $5 million contribution to its Minority CARES initiative, which will enable it to invest in market-rate, investment-grade bonds to increase opportunity for people of color. The California Reinvestment Coalition (CRC) Resilience Fund will also receive a $500,000 grant over two years to help minority-owned small businesses and communities of color disproportionately impacted by the pandemic. Together, these and other efforts supported by our Equitable Impact Initiative are making a tangible difference in the communities we serve. 8 PACIFIC PREMIER BANCORP, INC. | 2021 ANNUAL REPORT E Q U I TA B L E I M PA C T I N I T I AT I V E “Without Pacific Premier’s willingness to help, our vision for this program would never have happened.” LISC LA Local Initiatives Support Corporation Los Angeles (LISC LA) is one of 31 offices of the Local Initiatives Support Corporation, a national nonprofit organization transforming underserved neighborhoods into thriving communities of opportunity and choice. Pacific Premier donated $150,000 to LISC LA in 2021 and volunteered 15 hours serving on the Advisory Committee. This allowed LISC LA to launch a first-of-its-kind business accelerator program, the Black Business Excellence Technical Assistance Initiative (BBET). Tunua Thrash-Ntuk, Executive Director, LISC LA The BBET initiative is a 10-week program helping those in the personal care sector, a business segment particularly hard-hit by the pandemic. “Many of the business owners in this space had their livelihoods threatened and had feelings of being isolated and without support,” according to Tunua Thrash-Ntuk, Executive Director, LISC LA. As part of the BBET program, these businesses have access to 10 training modules led by industry experts in the field, as well as weekly mentoring from a business provider, networking opportunities, and pitch opportunities. PACIFIC PREMIER BANCORP, INC. | 2021 ANNUAL REPORT 9 C O M M U N I T Y S U P P O R T We work closely with organizations dedicated to improving local communities. Driven by purpose, we continuously assess the needs of our communities through active engagement with nonprofit organizations and other community stakeholders. During 2021, our comprehensive approach to building strong communities continued to benefit disadvantaged individuals and communities in the areas of affordable housing, economic development, and other community services. To learn more, we invite you to view the Community Section in our 2021 Corporate Social Responsibility Report. 475+ Organizations Across AZ, CA, NV, OR, & WA $3.9 million Charitable Grants 7,460+ Employee Volunteer Hours 10 PACIFIC PREMIER BANCORP, INC. | 2021 ANNUAL REPORT H I G H - I M PA C T L O A N S High-Impact Loans As our partner stories below indicate, high-impact loans to community-minded organizations have a profound impact in the areas we serve. COMMUNITY DEVELOPMENT PARTNERS Community Development Partners (CDP) constructs and manages affordable housing in California, Arizona, Nevada, and Oregon. Pacific Premier actively participates with CDP in securing loans from the Federal Home Loan Bank of San Francisco’s Affordable Housing Program (AHP). As just one example of this partnership in 2021, CDP used a $560,000 AHP loan to develop a 57-unit project for chronically homeless individuals in Santa Ana, California. Pacific Premier also originated several lines of credit, including one to finance pre-development project expenses for affordable housing construction projects in Orange County. ” As a family-run business, we value the long-term relationship we have with Pacific Premier Bank. We’ve grown together over the past eight years. They understand that we are building communities, not just housing units.” Kyle Paine President, Community Development Partners ”My father started this business, and all my siblings actively participate in it today. He liked working with a local bank that understood the importance local businesses can have on their communities–and that’s why we continue working with Pacific Premier today.” Alex Arevalo President, Arevalo Foods AREVALO FOODS Arevalo Foods is a family-owned and -operated business that has made authentic flour and corn tortillas for more than 30 years. Its core competency is to supply the prepared frozen food market with the tortillas necessary to make value-added products, with clientele in 24 countries around the world. Arevalo’s relationship with Pacific Premier started with the financing of an 85,000-square-foot bakery, and our relationship continues today with a variety of products and services. In 2021, this included a loan for capital that will enable further growth and expansion for this local business that provides over 100 jobs. PACIFIC PREMIER BANCORP, INC. | 2021 ANNUAL REPORT 11 E N V I R O N M E N TA L , S O C I A L , A N D G O V E R N A N C E ( E S G ) We’re committed to ESG. Society faces many critical issues that require timely and responsible action from all of us. As an action-oriented organization, our goal is to operate with a sense of thoughtful urgency on key Environmental, Social, and Governance (ESG) issues. We work to enhance our approach to these issues through engagement with diverse constituencies, including our clients, leaders in the communities we serve, and our stockholders. We also closely monitor ESG initiatives and reporting requirements, and evaluate short- and long-term goals to hold ourselves accountable. You can find details on our ESG approach, as well as programs and initiatives, in our 2021 Corporate Social Responsibility Report. We continue to explore reporting metrics based on the Sustainability Accounting Standards Board (SASB), Task Force on Climate-related Financial Disclosures (TCFD), and the United Nations Sustainable Development Goals (SDGs). 12 PACIFIC PREMIER BANCORP, INC. | 2021 ANNUAL REPORT L E A D E R S H I P BOARD OF DIRECTORS Our Board continues to strengthen our corporate governance practices to enhance long-term stockholder value. Corporate giving and responsibility are pillars of our business culture. We are honored to have received the best available QualityScore composite rating for Governance from Institutional Shareholder Services (ISS).1 CHAIRMAN Steven R. Gardner Chairman, CEO, and President of Pacific Premier Bancorp, Inc. LEAD INDEPENDENT DIRECTOR M. Christian Mitchell Audit Committee Chair Enterprise Risk Committee Member Nominating and Governance Committee Member Barbara S. Polsky Enterprise Risk Committee Chair Compensation Committee Member Nominating and Governance Committee Member Zareh H. Sarrafian Nominating and Governance Committee Chair Audit Committee Member Jaynie Miller Studenmund Compensation Committee Chair Enterprise Risk Committee Member Ayad A. Fargo Compensation Committee Member Nominating and Governance Committee Member Joseph L. Garrett Compensation Committee Member Nominating and Governance Committee Member Jeffrey C. Jones Audit Committee Member Compensation Committee Member Nominating and Governance Committee Member Rose E. McKinney-James Independent Director2 George M. Pereira Audit Committee Member Enterprise Risk Committee Member Cora M. Tellez Compensation Committee Member Richard C. Thomas Audit Committee Member Enterprise Risk Committee Member 1 Effective as of February 5, 2021. 2 Rose E. McKinney-James appointed to the Board, effective March 28, 2022. PACIFIC PREMIER BANCORP, INC. | 2021 ANNUAL REPORT 13 L E A D E R S H I P EXECUTIVE LEADERSHIP Pacific Premier Bank Steven R. Gardner Chairman and Chief Executive Officer Edward Wilcox President and Chief Operating Officer Ronald J. Nicolas, Jr. Senior Executive Vice President, Chief Financial Officer Sherri V. Scott Senior Executive Vice President, Director of ESG and Corporate Responsibility Michael S. Karr Senior Executive Vice President, Chief Risk Officer Steve Arnold Senior Executive Vice President, General Counsel & Corporate Secretary Daniel Borland Senior Executive Vice President, Head of Real Estate & SBA Stephen Friedman Senior Executive Vice President, Regional President Mark Gouvion Senior Executive Vice President, Head of Retail Banking Donn Jakosky Senior Executive Vice President, Chief Credit Officer Peggy Ohlhaver Senior Executive Vice President, Chief Human Resources Officer Jocelyn Pastore Senior Executive Vice President, Regional President Thomas Rice Senior Executive Vice President, Chief Innovation Officer Jamie Robinson Senior Executive Vice President, Head of Commercial Banking Lori Wright Senior Executive Vice President, Deputy Chief Financial Officer 14 PACIFIC PREMIER BANCORP, INC. | 2021 ANNUAL REPORT L E A D E R S H I P Wayne Anderson Executive Vice President, Director of Credit Risk Management Michael Bridge Executive Vice President, Deputy Chief Credit Officer Christopher Chapman Executive Vice President, Head of CRE Construction & Bridge Financing Kevin Cutter Executive Vice President, Regional President Daniel Denekamp Executive Vice President, President of Association Banking Peter Duncan Executive Vice President, Director of Corporate Finance Russell Ellsworth Executive Vice President, Head of Treasury Management Thomas Galindo Executive Vice President, Regional President Kurt Heckers Executive Vice President, Chief BSA Officer Sylvia Jaques Executive Vice President, Director of Loan Servicing Joseph Kim Executive Vice President, Head of CRE Term Lending Group Rocky Laverty Executive Vice President, Community Relations Officer Ellen Lee Executive Vice President, Chief Compliance Officer Michael Milik Executive Vice President, Group Head—Owner User Real Estate Robert Minsky Executive Vice President, Head of Escrow and Exchange Sabrenna Pannacciulli Executive Vice President, Director of TM Sales & Specialty Banking G. Scott Peterson Executive Vice President, Head of Regional Credit II Chris Porcelli Executive Vice President, Head of Credit— Real Estate & SBA Patricia Rubio De Luca Executive Vice President, Deputy Chief Risk Officer Michael Vallorosi Executive Vice President, President of Franchise Lending Tamara Wendoll Executive Vice President, Chief Operating Officer— Pacific Premier Trust Brooks Wise Executive Vice President, Regional President PACIFIC PREMIER BANCORP, INC. | 2021 ANNUAL REPORT 15 P R O D U C T S A N D S E R V I C E S The Support Businesses Need to Succeed COMMERCIAL BANKING SERVICES FRANCHISE RESTAURANT LENDING We offer a robust array of commercial banking and lending services, We provide conventional financing for experienced multi-unit including working capital lines of credit, equipment financing, foreign operators of the nation’s leading franchised restaurant brands. exchange, and merchant services to help businesses grow. COMMERCIAL REAL ESTATE We provide real estate property owners, investors, brokers, and developers with customized lending solutions for all asset categories, including multi-family, office, retail, self-storage, and industrial. COMMUNITY AND HOMEOWNER ASSOCIATION BANKING We provide HOAs and their property management companies with industry-leading technology and tools to improve efficiencies, reduce risk, and scale their operations. CONSTRUCTION We offer construction financing to investors and developers for a wide variety of residential and commercial projects. PROPERTY BANKING We offer banking solutions for commercial real estate property owners, operators, developers, and investors to streamline the payment collection process and enhance the reconciliation process. SBA & USDA FINANCING As a leader in government guaranteed loans, Pacific Premier helps borrowers with SBA 7(a), SBA 504, and USDA B&I Guaranteed Loans. FIDUCIARY BANKING Our team of experienced bankers is available to assist with a variety of fiduciary banking needs, including escrow and title, guardianships, special needs trusts, court blocked accounts, and attorney-client trust deposits. 16 PACIFIC PREMIER BANCORP, INC. | 2021 ANNUAL REPORT P R O D U C T S A N D S E R V I C E S SPECIALIZED LENDING SERVICES We offer a variety of specialized financing solutions in Healthcare, Agribusiness, and ESOP Financing, backed by years of industry- © 2022 Pacific Premier Trust, a Division of Pacific Premier specific lending experience. TREASURY MANAGEMENT SERVICES Bank | All Rights Reserved. Pacific Premier Trust, a Division of Pacific Premier Bank, performs the duties of an independent custodian of assets for self-directed individual and business retirement accounts and does not provide investment We offer a full array of customizable treasury management solutions advice, sell investments, or offer any tax or legal advice. to help businesses leverage technology to streamline operations, Clients or potential clients are advised to perform their own expand their reach, and lower transaction risks. ESCROW AND 1031 EXCHANGE SERVICES Commerce Escrow, a Division of Pacific Premier Bank, is a leading choice of attorneys and real estate professionals. Their team of experienced professionals is available to assist with a variety of escrow and exchange services, including commercial real estate escrows and 1031 exchanges. due diligence in choosing any investment opportunity as well as selecting any professional to assist them with an investment opportunity. Alternative investment products are not insured by the FDIC; are not deposits or other obligations of, or guaranteed by, the Bank, or any of its divisions; and are subject to investment risks, including possible loss of the principal amount invested. Pacific Premier Trust is not affiliated with any financial professional, investment sponsor, or investment, tax, or legal advisor. SELF-DIRECTED IRAS INVESTMENT PRODUCTS: NOT FDIC INSURED | NO BANK GUARANTEE | MAY LOSE VALUE, INCLUDING LOSS OF PRINCIPAL Pacific Premier Trust, a Division of Pacific Premier Bank, is an industry leader in the custody of alternative assets within a Self- Directed Individual Retirement Account (SDIRA). PACIFIC PREMIER BANCORP, INC. | 2021 ANNUAL REPORT 17 S P O R T S A N D C O M M U N I T Y S P O N S O R S H I P S Partnerships Worth Cheering About At Pacific Premier, we proudly partner with teams in the NFL, NHL, and NCAA. Each team invests in its local and regional communities, and our partnerships help us discover new business and community service opportunities. We have worked together as teammates to launch and support numerous community events. LOS ANGELES CHARGERS Chargers Bolts Community Crew Connects Fans with Volunteer Opportunities The Los Angeles Chargers and Pacific Premier Bank have teamed up to launch the Bolts Community Crew, powered by Pacific Premier Bank—a volunteer platform aimed at connecting Chargers fans to volunteer opportunities. 2021 Examples Include: • Hundreds of thank-you cards from the Bolts Community Crew virtual campaign were written and delivered to frontline workers at Hoag Hospital. • Over 1,100 lbs. of trash was removed from the LA River and its watershed during a virtual month-long volunteer opportunity with Friends of the LA River to mark Earth Day 2021. • Nearly 250,000 non-perishable food kits were packed on the National Day of Service in partnership with the Annual 9/11 Meal Pack Day in Los Angeles. • 170 bicycles and helmets were assembled by the Bolts Community Crew and later given away during the holiday season to underserved students in Los Angeles. • The Small Business Football Experience awarded small businesses with a Chargers home game suite experience for making a positive impact on their community. ANAHEIM DUCKS Military Appreciation For many years, Pacific Premier Bank has partnered with the Anaheim Ducks to salute military personnel in a Salute to Those Who Serve presentation at every Ducks home game. We also teamed up as the presenting sponsor of the Ducks Military Appreciation Night to help honor our military. It was our privilege to continue this tradition in 2021. Thank you to everyone who has served our country. 18 PACIFIC PREMIER BANCORP, INC. | 2021 ANNUAL REPORT S P O R T S A N D C O M M U N I T Y S P O N S O R S H I P S PAC-12 Pacific Premier Partners with the Pac-12 Pacific Premier Bank is the Official Bank of the Pac-12 Conference. Comprising 12 leading universities, the conference aims to develop the next generation of student-athlete leaders. Pacific Premier also sponsors two Pac-12 programs that help promote social justice. As part of “Touchdowns for Equality,” Pacific Premier donated $100 to organizations focused on social justice for every touchdown scored by a Pac-12 football team during the 2021 season. With “Threes for Equality,” the Bank donated $100 for every three-pointer made during the 2021 Pac-12 men’s and women’s basketball tournaments. In all, Pacific Premier’s contributions totaled $78,400. CAL POLY Advocating for Innovation at Cal Poly CIE The Cal Poly Center for Innovation and Entrepreneurship Small Business Development Center supports small business owners and entrepreneurs in the Central Coast by providing high quality business assistance. Their annual event, AngelCon, presented by Pacific Premier Bank, offers tech-based startups the opportunity to compete live for investment up to $150,000 from angel investors. We are proud to support this event with an annual donation of $12,500, enabling innovation within our communities. PACIFIC PREMIER BANCORP, INC. | 2021 ANNUAL REPORT 19 N O N - G A A P R E C O N C I L I AT I O N S Tangible Book Value per Share For the Year Ended December 31, (Dollars in thousands, except per share data) 2013 2014 2015 2016 2017 2018 2019 2020 2021 Total stockholders' equity $175,226 $199,592 $298,980 $459,740 $1,241,996 $1,969,697 $2,012,594 $2,746,649 $2,886,311 Less: intangible assets (24,056) (28,564) (58,002) (111,941) (536,343) (909,282) (891,634) (984,076) (970,883) Tangible common equity $151,170 $171,028 $240,978 $347,799 $705,653 $1,060,415 $1,120,960 $1,762,573 $1,915,428 Basic shares outstanding 16,656,279 16,903,884 21,570,746 27,798,283 46,245,050 62,480,755 59,506,057 94,483,136 94,389,543 Book value per share $10.52 $11.81 $13.86 $16.54 $26.86 $31.52 $33.82 $29.07 $30.58 Less: intangible book value per share Tangible book value per share (1.44) $9.08 (1.69) (2.69) (4.03) (11.60) (14.55) (14.98) (10.42) (10.29) $10.12 $11.17 $12.51 $15.26 $16.97 $18.84 $18.65 $20.29 Efficiency Ratio (Dollars in thousands) 2013 2014 2015 2016 2017 2018 2019 2020 2021 Total noninterest expense $50,815 $54,938 $73,332 $98,063 $167,958 $249,905 $259,065 $381,119 $380,277 For the Year Ended December 31, Less: amortization of intangible assets Less: other real estate owned operations, net (764) (618) (1,014) (1,350) (2,039) (6,144) (13,594) (17,245) (17,072) (15,936) (75) (121) (385) (72) (4) (160) (1) Less: merger-related expense (6,926) (1,490) (4,799) (4,388) (21,002) (18,454) (656) (49,129) — (5) Noninterest expense, adjusted $42,507 $52,359 $67,062 $91,251 $140,740 $217,853 $241,004 $314,917 $364,336 Net interest income before provision for loan losses $58,444 $73,635 $106,299 $153,075 $247,502 $392,711 $447,301 $574,211 $662,374 Add: total noninterest income 8,811 13,377 14,388 19,602 31,114 31,027 35,236 71,325 107,850 Less: net gain from investment securities (1,544) (1,547) (290) (1,797) (2,737) (1,399) (8,571) (13,882) (16,906) Less: other income—securities recoveries Less: net (gain) loss from other real estate owned Less: net loss from debt extinguishment 4 — — 29 — — — — — 205 (18) — (1) (46) — (4) (281) (2) (52) (2) 112 (10) — — 612 — 180 Revenue, adjusted Efficiency Ratio $65,715 $85,494 $120,397 $171,067 $275,832 $422,054 $474,524 $631,764 $753,488 64.7% 61.3% 55.9% 53.6% 51.0% 51.6% 50.8% 49.8% 48.4% 20 PACIFIC PREMIER BANCORP, INC. | 2021 ANNUAL REPORT L O C AT I O N S OVER 60 BRANCH LOCATIONS ACROSS THE WESTERN U.S. A R I Z O N A Maricopa County 2575 East Camelback Road Suite 100 Phoenix, AZ 85016 Pima County 4400 East Broadway Boulevard Suite 112 Tucson, AZ 85711 6400 North Oracle Road Tucson, AZ 85704 C A L I F O R N I A Los Angeles County 192 North Canon Drive Beverly Hills, CA 90210 2141 Rosecrans Avenue, Suite 1100 El Segundo, CA 90245 16500 Ventura Boulevard Suite 100 Encino, CA 91436 2100 Foothill Boulevard Suite B La Verne, CA 91750 110 South Fairfax Avenue Los Angeles, CA 90036 11661 San Vicente Boulevard Los Angeles, CA 90049 2401 West Whittier Boulevard Suite B Montebello, CA 90640 790 East Colorado Boulevard Suite 150 Pasadena, CA 91101 1715 Via El Prado Redondo Beach, CA 90277 82 Peninsula Center Suite A Rolling Hills Estates, CA 90274 1000 North Western Avenue Suite 101 San Pedro, CA 90732 23600 Hawthorne Boulevard Suite B Torrance, CA 90505 Orange County 3748 East Coast Highway Corona Del Mar, CA 92625 200 West Commonwealth Avenue Fullerton, CA 92832 19011 Magnolia Street Huntington Beach, CA 92646 17901 Von Karman Avenue Suite 200 Irvine, CA 92614 24050 Aliso Creek Road Suite 1A Laguna Niguel, CA 92677 4957 Katella Avenue Suite B Los Alamitos, CA 90720 4667 MacArthur Boulevard Suite 100 Newport Beach, CA 92660 1045 West Katella Avenue Suite 100 Orange, CA 92867 17672 Yorba Linda Boulevard Yorba Linda, CA 92886 Riverside County 102 East Sixth Street Suite 100 Corona, CA 92879 40723 Murrieta Hot Springs Road Murrieta, CA 92562 73-745 El Paseo Palm Desert, CA 92260 78000 Fred Waring Drive Suite 100 Palm Desert, CA 92211 901 East Tahquitz Canyon Way Palm Springs, CA 92262 3403 Tenth Street Suite 100 Riverside, CA 92501 Santa Barbara County 1035 State Street Santa Barbara, CA 93101 1825 South Broadway Santa Maria, CA 93454 San Bernardino County 201 East State Street Redlands, CA 92373 306 West 2nd Street Suite 100 San Bernardino, CA 92401 73700 Gorgonio Drive Twentynine Palms, CA 92277 San Diego County 7690 El Camino Real Carlsbad, CA 92009 800 West Valley Parkway Suite 100 Escondido, CA 92025 7979 Ivanhoe Avenue Suite 150 La Jolla, CA 92037 501 West Broadway Suite 550 San Diego, CA 92101 325 South Santa Fe Avenue Suite 101 Vista, CA 92083 San Luis Obispo County 1530 East Grand Avenue Arroyo Grande, CA 93420 7480 El Camino Real Atascadero, CA 93422 2255 Main Street Cambria, CA 93428 898 Morro Bay Boulevard Morro Bay, CA 93442 545 12th Street Paso Robles, CA 93446 400 South River Road Paso Robles, CA 93446 1144 Morro Street San Luis Obispo, CA 93401 N E V A D A Clark County 10777 West Twain Avenue Suite 150 Las Vegas, NV 89135 O R E G O N Multnomah County 525 Southwest Broadway Portland, OR 97205 W A S H I N G T O N Clark County 2001 Southeast Columbia River Drive Suite 101 Vancouver, WA 98661 King County 188 106th Avenue Northeast Suite 200 Bellevue, WA 98004 305 Front Street North Issaquah, WA 98027 139 Bendigo Boulevard North North Bend, WA 98045 1401 4th Avenue Seattle, WA 98101 Skagit County 528 East College Way Mount Vernon, WA 98273 Snohomish County 437 5th Avenue South Suite 101 Edmonds, WA 98020 10524 19th Avenue Southeast Everett, WA 98208 2901 Rucker Avenue Everett, WA 98201 19520 Highway 99 Suite 102 Lynnwood, WA 98036 815 State Avenue Marysville, WA 98270 1101 Avenue D Building B Snohomish, WA 98290 PACIFIC PREMIER BANCORP, INC. | 2021 ANNUAL REPORT 21 C O R P O R AT E I N F O R M AT I O N Corporate Headquarters 17901 Von Karman Avenue, Suite 1200 Irvine, CA 92614 888.388.5433 www.ppbi.com IRinfo@ppbi.com | NASDAQ: PPBI Transfer Agent American Stock Transfer & Trust Co. 6201 15th Avenue Brooklyn, NY 11219 800.937.5449 www.astfinancial.com PACIFIC PREMIER BANCORP, INC. 17901 VON KARMAN AVENUE SUITE 1200 IRVINE, CA 92614 888.388.5433 | PPBI.COM 

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