Executive Summary

Q2 2025 delivered stable profitability with net income of $32.1M and diluted EPS of $0.33, as net interest margin expanded 6 bps to 3.12% while average deposit costs fell 5 bps to 1.60% .
Core operating trends were healthy: net interest income rose 2.7% QoQ to $126.8M, total revenue was $144.3M (NII + noninterest income), and the efficiency ratio improved to 65.3% from 67.5% in Q1 .
Asset quality remained strong: nonperforming assets declined to $26.3M (0.15% of assets), delinquency stayed at 0.02%, and net recoveries were $0.3M; ACL was 1.43% with total loss absorption capacity of 1.68% including fair value marks .
Capital and liquidity actions are catalysts near term: redemption of $150M sub notes in Q2 and planned redemption of $125M in August, plus $10.0B total liquidity (2.0x uninsured/uncollateralized deposits) ahead of the pending Columbia merger (shareholder approvals received; closing possible as early as Sept 1) .

What Went Well and What Went Wrong

What Went Well

Net interest margin expanded (3.12% vs. 3.06% in Q1) driven by lower cost of funds and higher average loan yields; management highlighted a 5 bps drop in average deposit costs to 1.60% and 6 bps NIM expansion .
Deposit franchise quality: non‑maturity deposits were 86.5% of total and noninterest‑bearing deposits 32.3%; brokered CDs fell by ~$100M QoQ; cost of non‑maturity deposits held at 1.21% .
Asset quality: NPAs fell to 0.15% of assets and recoveries outpaced charge‑offs; delinquency remained at 0.02% and classified loans stayed low (0.75% of loans) .
“We delivered solid financial results…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%,” — Steve Gardner (Chairman & CEO) .

What Went Wrong

EPS and net income declined YoY (EPS $0.33 vs. $0.43; net income $32.1M vs. $41.9M) on lower average earning assets/yields and higher noninterest expense (merger-related charges of $6.7M and $1.3M debt extinguishment loss reduced EPS by ~$0.06) .
Noninterest income fell QoQ to $17.6M (down $3.9M) due to lower trust tax fees (seasonal), lower BOLI income, and the debt extinguishment loss; noninterest expense rose to $104.4M on merger costs despite lower core OpEx ex‑merger ($97.7M) .
Loans HFI were down 1.0% QoQ and 4.7% YoY as purchases slowed and amortization/payoffs outpaced fundings; multifamily and CRE balances continued to trend lower YoY .

Financial Results

Metric	Q2 2024	Q1 2025	Q2 2025
Net Interest Income ($MM)	$136.4	$123.4	$126.8
Noninterest Income ($MM)	$18.2	$21.5	$17.6
Total Revenue ($MM) (NII + Noninterest)	$154.6	$144.8	$144.3
Diluted EPS ($)	$0.43	$0.37	$0.33
Net Interest Margin (%)	3.26	3.06	3.12
Efficiency Ratio (%)	61.3	67.5	65.3

KPIs	Q2 2024	Q1 2025	Q2 2025
Total Assets ($MM)	$18,332.3	$18,085.6	$17,783.2
Total Deposits ($MM)	$14,627.7	$14,666.2	$14,497.4
Loan‑to‑Deposit Ratio (%)	85.4	82.0	82.1
Cost of Deposits (%)	1.73	1.65	1.60
Non‑maturity Deposits (% of total)	83.7	85.9	86.5
Noninterest‑bearing Deposits (%)	31.6	32.9	32.3
NPA / Assets (%)	0.28	0.15	0.15
Delinquency / Loans (%)	0.14	0.02	0.02
CET1 Capital Ratio (%)	15.89	16.99	17.00
Tangible Common Equity Ratio (%)	11.41	11.87	12.14
Tangible Book Value per Share ($)	20.58	20.98	21.10

Loans Held for Investment ($MM)	Q2 2024	Q1 2025	Q2 2025
Multifamily	$5,473.6	$5,307.5	$5,255.0
CRE Non‑Owner Occupied	$2,245.5	$2,111.1	$2,084.8
CRE Owner‑Occupied	$2,096.5	$1,962.5	$1,918.0
Construction & Land	$453.8	$302.7	$302.8
C&I	$1,554.7	$1,609.2	$1,644.0
Franchise (Non‑RE)	$257.5	$194.5	$180.7
Single‑Family Residential	$70.4	$230.3	$224.5
Total HFI (pre‑basis adj.)	$12,518.2	$12,036.0	$11,912.7

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Quarterly Dividend per Share	Q3 2025	$0.33 (recent quarters)	$0.33 declared payable Aug 15, 2025	Maintained
Subordinated Notes Redemption	Q3 2025 (Aug)	—	Board approved early redemption of $125M due 2029 around Aug 15, 2025	Operational change (funding cost reduction)
Merger Timing (Columbia)	2H 2025	Pending regulatory approvals	Shareholder approvals received; closing possible as early as Sept 1, 2025, subject to approvals	Timeline clarified

Note: The company did not provide formal quantitative guidance for revenue, margins, OpEx, OI&E, or tax rate in Q2 materials; above reflects explicit actions and disclosures .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 2024)	Previous Mentions (Q1 2025)	Current Period (Q2 2025)	Trend
NIM & Deposit Costs	NIM 3.02%; cost of deposits 1.79%; intent to push pricing lower, deposit beta ~35–40%	Seasonal deposit flows; wholesale repayments to aid NIM; aiming upper end of margin range subject to deposits	NIM up to 3.12%; average deposit cost down to 1.60%; cost of funds 1.69%	Improving
Loan Growth & Mix	Rebuild pipelines; originations $316M; supplement with purchases, cautious CRE adds	C&I focus; targeted de‑emphasis of transactional multifamily; moderate growth expected	New loan commitments $578.5M; fundings $195.8M; total HFI down QoQ amid payoffs	Building commitments, balances still pressured
Asset Quality/CRE	Strong asset quality; NPAs down; classified loans down; conservative CRE stance	Due diligence supports low credit mark; multifamily stable; stay ahead of issues via monitoring	NPAs 0.15%; delinquency 0.02%; net recoveries $0.3M; ACL 1.43%	Strong/stable
Capital & Liquidity	Elevated capital ratios; liquidity strong; exploring capital actions (debt, buybacks)	Leverage to optimize balance sheet; no capital raise needed for merger	TCE ratio 12.14%; CET1 17.00%; liquidity $10.0B (2.0x uninsured deposits)	Strengthening
M&A/Integration	Open to scale via M&A; regulators more open; pursuing opportunities	Columbia to acquire PPBI; integration seen as smooth; approvals later in 2025	PPBI & COLB shareholders approved; mgmt tracking ahead; earliest close Sept 1	Advancing to close

Management Commentary

“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%… Asset quality trends remained strong, with nonperforming loans decreasing to $26.3 million, and we had net recoveries of $349,000.” — Steve Gardner, Chairman, CEO & President .
“Our second quarter new loan commitments increased to $578.5 million… brokered deposits decreasing by $99.9 million… we redeemed $150 million of higher‑cost subordinated debt.” — Steve Gardner .
“Tangible book value per share increased to $21.10 and Tier 1 common equity ratio to 17.00%.” — Company disclosure .

Q&A Highlights

PPBI did not furnish a standalone Q2 2025 earnings call transcript in the available filings window; commentary was provided via press release and investor slides . Shareholder approvals and merger integration updates were detailed in separate 8‑K filings .

Estimates Context

S&P Global consensus via GetEstimates was unavailable for PPBI due to a CIQ mapping error (tool retrieval issue). Values from S&P Global could not be obtained; therefore, comparisons below use third‑party sources.
External consensus snapshots indicate:
- EPS: Actual $0.39 vs. consensus $0.34 (beat) .
- Revenue: Actual ~$145.6M vs. consensus ~$147.7M (miss); another source shows revenue $144.32M and EPS surprise +14.7% vs. $0.34 .

Note: S&P Global Wall Street consensus was unavailable via tool; third‑party figures cited for context.

Key Takeaways for Investors

Deposit cost downtrend and NIM expansion underpin earnings resilience; continued remix away from brokered CDs supports margin trajectory .
Asset quality is a differentiator: ultra‑low delinquency (0.02%), modest NPAs (0.15%), and net recoveries provide downside protection in a cautious CRE backdrop .
Capital optimization is active: sub debt redemptions reduce interest expense and improve leverage ratios into a potential merger close, while TBV/share continues to accrete .
Loan demand is rebuilding (commitments +81% QoQ), but balance growth remains subdued as amortization/payoffs persist; watch conversion of commitments to funded balances .
Merger with Columbia is a near‑term catalyst: pro‑forma scale and fee businesses (HOA, escrow, trust) augment earnings power; shareholder approvals secured, earliest close Sept 1 pending regulators .
Short‑term trading: event‑driven setup around regulatory milestones and sub debt call execution; margins directionally supported by deposit costs.
Medium‑term thesis: strong core deposit franchise and disciplined credit, plus pro‑forma scale from the Columbia transaction, position PPBI for improved operating leverage and revenue diversification.

PACIFIC PREMIER BANCORP INC (PPBI)·Q2 2025 Earnings Summary