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PACIFIC PREMIER BANCORP INC (PPBI)·Q1 2025 Earnings Summary

Executive Summary

  • Pacific Premier did not release a standard Q1 2025 8‑K 2.02 earnings press release or host its traditional earnings call; instead, Q1 was dominated by an announced all‑stock merger with Columbia Banking System. PPBI shareholders will receive 0.915 COLB shares per PPBI share and own ~30% of the combined company .
  • The merger is positioned as low execution risk with ~30% PPBI cost saves ($127M pretax), double‑digit EPS accretion to COLB in 2026–2027, and tangible book dilution of ~7.6% with a ~3‑year earn‑back .
  • No Q1 2025 PPBI revenue/EPS/NIM data were found in filings or press materials; trend analysis relies on Q4 and Q3 reported results showing NIM pressure, strong asset quality, and improving deposit mix (Q4 diluted EPS $0.35; NIM 3.02%; cost of deposits 1.79%) .
  • Key near‑term catalysts are regulatory approvals and closing timeline (management does not expect a DOJ review and indicated an efficient process targeting 2H 2025), plus clarity on combined CRE concentration and balance‑sheet optimization .

What Went Well and What Went Wrong

What Went Well

  • Deposit remix and cost discipline: end‑period deposit cost fell to 1.72% at Q4‑end and average cost of deposits declined to 1.79%; non‑maturity deposits rose to 85.4% of total deposits .
  • Asset quality remained strong: Q4 nonperforming assets were 0.16% of total assets, delinquency was 0.02% of loans, and ACL/loans was 1.48% .
  • Management emphasized cultural/operational alignment in the merger: “Like‑minded business banks…low‑cost deposit compositions…execution risk is low,” with PPBI’s HOA, escrow, and trust businesses viewed as additive .

What Went Wrong

  • No Q1 disclosure: the company did not provide a standard Q1 2025 8‑K 2.02 release and skipped the traditional earnings call due to the Columbia/PPBI announcement call .
  • Margin pressure persisted into Q4: NIM fell to 3.02% and net interest income decreased to $124.5M; management noted continuing swap income headwinds and prepayment impacts .
  • C&I balances had been pressured by paydowns: PPBI highlighted borrower use of liquidity to reduce higher‑yielding balances in prior quarters; loan purchases supplemented growth late in Q4 .

Financial Results

MetricQ3 2024Q4 2024Q1 2025
Diluted EPS ($)$0.37 $0.35 — (not disclosed)
Net Interest Income ($USD Millions)$130.9 $124.5 — (not disclosed)
Total Revenue ($USD Millions)$149.8 $144.5 — (not disclosed)
Net Interest Margin (%)3.16 3.02 — (not disclosed)
Cost of Deposits (%)1.84 1.79 — (not disclosed)
Noninterest Expense ($USD Millions)$101.6 $100.7 — (not disclosed)

Segment and balance sheet mix (trend):

MetricQ3 2024Q4 2024Q1 2025
Total Deposits ($USD Billions)$14.48 $14.46 — (not disclosed)
Non‑maturity Deposits (% of total)84.3% 85.4% — (not disclosed)
Noninterest‑bearing Deposits (% of total)32.0% 31.9% — (not disclosed)
Loans‑to‑Deposits Ratio (%)83.1 83.3 — (not disclosed)

KPIs:

MetricQ3 2024Q4 2024Q1 2025
Nonperforming Assets (% of total assets)0.22% 0.16% — (not disclosed)
Delinquency (% of loans)0.08% 0.02% — (not disclosed)
ACL / Loans (%)1.51% 1.48% — (not disclosed)
CET1 (%)16.83 17.05 — (not disclosed)
Tangible Common Equity Ratio (%)11.83 11.92 — (not disclosed)
Tangible Book Value per Share ($)$20.81 $20.97 — (not disclosed)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net Interest Income ($USD Millions)FY 2025N/A$500–$525 Introduced
Noninterest Income ($USD Millions)FY 2025N/A$80–$85 Introduced
Noninterest Expense ($USD Millions)FY 2025N/A$405–$415 Introduced
Tax Rate (%)FY 2025N/AMid‑25% Introduced
Dividend ($/share)Q1 2025$0.33 prior$0.33 declared Jan 21, 2025 Maintained
Merger Pretax Cost Savings ($USD Millions)Post‑closeN/A~$127 (≈30% of PPBI noninterest expense) New (merger)
EPS Accretion (COLB)2026/2027N/A~14% (2026), ~15% (2027) New (merger)
TBV Dilution / Earn‑backAt closeN/A~7.6% TBV dilution; ~3‑year earn‑back New (merger)
Credit/Rate MarksAt closeN/APPBI loan rate write‑down ~$449M; HTM ~$327M; AFS ~$91M; credit mark $96M (~0.8%) with ~$48M initial provision New (merger)

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024)Previous Mentions (Q4 2024)Current Period (Q1 2025)Trend
M&A postureOpen to strategic deals; capital optionality Pursuing opportunities; buyback and restructurings weighed Announced merger with COLB; low execution risk, complementary footprints/products Escalated to execution
Deposit costsSpot cost 1.80%; costs may have peaked End‑period 1.72%; average 1.79%; remix to non‑maturity Seasonal deposit contraction at COLB; wholesale repayments late in quarter Improving mix; merger scale benefit
NIM/Swap incomeSwap contributed 16 bps; ~$3–$4M planned Q4 Swap income ~$4M; ~$2–$3M expected Q1 COLB NIM 3.6% comment; focus on deposit flows Stabilization efforts continue
CRE exposureNot expanding multifamily; focus C&I Will add modestly, remain cautious Pro forma CRE ~320–330%; ex‑multifamily ~168% Manage concentration downward over time
Loan growthPipeline building; pricing adjustments Low‑mid single‑digit FY25; supplement with purchases; new commitments $316M Combined footprint accelerates SoCal coverage; balance sheet optimization flexibility Better demand outlook with scale
Regulatory timelineN/AN/APre‑flight regulator meetings; no DOJ review; aiming 2H 2025 close Path looks clearer

Management Commentary

  • “Columbia and Pacific Premier are like‑minded business banks…execution risk for this transaction is low…we expect very little disruption to depositors, borrowers, and our banking teams.” — Clint Stein (COLB CEO) .
  • “Pacific Premier’s HOA banking, escrow and 1031 exchange businesses [are] additive…driving additional fee income and low‑cost core deposits.” — Clint Stein .
  • “Our end‑of‑period weighted average deposit rate declined 8 bps to 1.72%…we saw increased lower‑cost transaction deposits.” — Steve Gardner (PPBI CEO, Q4 call) .
  • “Asset quality remained strong…nonperforming loans decreased to $28M…total delinquencies fell to $2.6M.” — Steve Gardner (Q4 call) .

Q&A Highlights

  • Regulatory and closing: Management cited “body of evidence” for faster approvals in their size cohort and no DOJ review; targeted 2025 close .
  • CRE concentration: Pro forma CRE ~320–330%; removing multifamily brings it to ~168%; plan to walk down ratios over time .
  • Buyback: Previously contemplated buyback is likely pushed out by the merger to prioritize closing and capital positioning .
  • Cost saves/marks: ~$127M pretax cost saves (~30% of PPBI opex), ~$96M credit mark (~0.8% of loans), and initial ~$48M provision on non‑PCD loans post‑close .
  • Strategic footprint: Merger accelerates Southern California expansion “by a decade,” adds HOA, escrow, custodial trust capabilities to drive fee income .

Estimates Context

  • Wall Street consensus (S&P Global) for Q1 2025 EPS and revenue for PPBI was not retrievable via the S&P Global tool due to a mapping issue; treat consensus as unavailable. We attempted to fetch “Primary EPS Consensus Mean” and “Revenue Consensus Mean” for Q1 2025, but the request failed (no CIQ mapping for PPBI).*
    Values were intended to be retrieved from S&P Global but were unavailable at the time of analysis.

Key Takeaways for Investors

  • The quarter’s narrative is merger‑driven: focus on regulatory milestones and integration planning rather than quarterly beats/misses; no Q1 2025 PPBI 8‑K 2.02 was found and the traditional call was canceled .
  • Franchise value hinges on fee businesses and deposit quality: HOA/escrow/trust augment fee income and low‑cost deposits in SoCal—monitor retention and cross‑sell after close .
  • Capital and asset quality underpin optionality: CET1 17.05%, TCE 11.92%, NPA 0.16% (Q4) provide resilience through integration and potential balance‑sheet optimization .
  • Margin recovery path depends on deposit costs and swap runoff: deposit costs trended down; swap income headwind persists—watch guidance execution ($500–$525M NII in FY25) .
  • CRE concentration management is a watch‑item: pro forma CRE ~320–330% with plans to reduce—track runoff in transactional multifamily and retention of relationship CRE .
  • Near‑term trading implications: stock may trade on merger spread/closing timing given management’s confidence in approvals and no DOJ review—watch S‑4 filing and regulatory updates .
  • Medium‑term thesis: scale in the West with top‑10 SoCal deposit share, cost saves, and fee businesses should support earnings power; execution on synergy capture and deposit retention is key .

Sources and Document Review Notes

  • Q1 2025 earnings call transcript (merger announcement with Columbia Banking System): full transcript read –.
  • PPBI Q4 2024 earnings press release: full document read with detailed financials –.
  • PPBI Q3 2024 earnings press release: full document read with detailed financials –.
  • PPBI press release announcing timing for Q1 2025 results (Apr 24): read .
  • Other Q1 2025 press: Forbes “Best Banks” recognition (Feb 6): read .
  • External legal press statements regarding merger (information context only): .

No Q1 2025 PPBI 8‑K 2.02 press release was found in the document catalog through 2025‑06‑30, and the company did not host its traditional Q1 earnings call due to the merger announcement call .