Second Quarter 2021 Summary

Net income of $96.3 million, or $1.01 per diluted share
Return on average assets of 1.90%, return on average equity of 14.02%, and return on average tangible common equity of 22.45%⁽¹⁾
Tangible book value increases to $19.38, compared with $18.19 at March 31, 2021⁽¹⁾
Net interest margin of 3.44% and core net interest margin of 3.22%⁽¹⁾
Cost of deposits of 0.08% in the second quarter compared with 0.11% in the prior quarter
Non-maturity deposits of $15.8 billion, or 92.6% of total deposits
Noninterest-bearing deposits represent 39.8% of total deposits
Nonperforming assets represent 0.17% of total assets

Pacific Premier Bancorp, Inc. (NASDAQ:PPBI) (the "Company" or "Pacific Premier"), the holding company of Pacific Premier Bank (the "Bank"), reported net income of $96.3 million, or $1.01 per diluted share, for the second quarter of 2021, compared with net income of $68.7 million, or $0.72 per diluted share, for the first quarter of 2021, and net loss of $99.1 million, or $(1.41) per diluted share, for the second quarter of 2020.

For the quarter ended June 30, 2021, the Company's return on average assets ("ROAA") was 1.90%, return on average equity ("ROAE") was 14.02%, and return on average tangible common equity ("ROATCE") was 22.45%, compared to 1.37%, 9.99%, and 16.21%, respectively, for the first quarter of 2021 and (2.61)%, (17.76)%, and (29.40)%, respectively, for the second quarter of 2020. Total assets were $20.53 billion at June 30, 2021, compared to $20.17 billion at March 31, 2021, and $20.52 billion at June 30, 2020. A reconciliation of the non-U.S. generally accepted accounting principles ("GAAP") measure of ROATCE to the GAAP measure of ROAE is set forth at the end of this press release.

Steven R. Gardner, Chairman, President, and Chief Executive Officer of the Company, commented, "We continue to realize the benefits of increased size and scale, which has enabled us to generate a high level of profitability despite the challenging interest rate environment. Our performance has resulted in strong growth in our tangible book value per share from the prior quarter and allowed us to continue to return significant capital to shareholders through our common stock dividend.

"We are leveraging the collective strengths of our larger organization, and our teams are working well together to add new clients and expand existing business relationships. This is resulting in strong inflows of low-cost deposits from all of our banking groups, as well as higher levels of loan production. During the second quarter, we generated $1.58 billion in new loan commitments, an increase of 36.7% compared to the prior quarter, while loan fundings increased 54.5% resulting in annualized total loan growth of 14.5%. The increased loan production allowed us to further remix the balance sheet towards higher yielding assets.

"While we are seeing signs of improving demand, there continue to be uncertainties surrounding the COVID-19 pandemic. However, we believe that we are well positioned to deliver consistent financial performance and to capitalize on stronger credit demand as the economy progresses," said Mr. Gardner.

______________________________
¹		Reconciliations of the non-GAAP measures are set forth at the end of this press release.

FINANCIAL HIGHLIGHTS

	Three Months Ended
	June 30,			March 31,			June 30,
(Dollars in thousands, except per share data)	2021			2021			2020
Financial highlights (unaudited)
Net income (loss)	$	96,302		$	68,668		$	(99,091	)
Diluted earnings (loss) per share	1.01			0.72			(1.41		)
Common equity dividend per share paid	0.33			0.30			0.25
Return on average assets	1.90		%	1.37		%	(2.61		)%
Return on average equity	14.02			9.99			(17.76		)
Return on average tangible common equity ⁽¹⁾	22.45			16.21			(29.40		)
Pre-provision net revenue on average assets ⁽¹⁾	1.84			1.86			1.60
Net interest margin	3.44			3.55			3.79
Core net interest margin ⁽¹⁾	3.22			3.30			3.59
Cost of deposits	0.08			0.11			0.32
Efficiency ratio ⁽¹⁾	49.4			48.6			52.9
Noninterest expense (excluding merger-related expense) as a percent of average assets ⁽¹⁾	1.86		%	1.85		%	2.02		%
Total assets	$	20,529,486		$	20,173,298		$	20,517,074
Total deposits	17,015,097			16,740,007			16,976,693
Loans to deposit ratio	79.9		%	78.4		%	88.8		%
Non-maturity deposits as a percent of total deposits	92.6			91.8			88.7
Book value per share	$	29.72		$	28.56		$	28.14
Tangible book value per share ⁽¹⁾	19.38			18.19			17.58
Total risk-based capital ratio	15.61		%	16.26		%	15.69		%

______________________________
⁽¹⁾		Reconciliations of the non-GAAP measures are set forth at the end of this press release.

INCOME STATEMENT HIGHLIGHTS

Net Interest Income and Net Interest Margin

Net interest income totaled $160.9 million in the second quarter of 2021, a decrease of $718,000, or 0.4%, from the first quarter of 2021. The decrease in net interest income reflected lower average loan yields and fees, partially offset by one more day of interest and a lower cost of funds.

The net interest margin for the second quarter of 2021 was 3.44%, compared with 3.55% in the prior quarter. Our core net interest margin, which excludes the impact of loan accretion income of $9.5 million, compared to $9.9 million in the prior quarter, certificates of deposit mark-to-market amortization, and other adjustments, decreased 8 basis points to 3.22%, compared to 3.30% in the prior quarter. The decrease was driven by lower average loan yields and fees, partially offset by a lower cost of funds.

Net interest income for the second quarter of 2021 increased $30.6 million, or 23.5%, compared to the second quarter of 2020. The increase was attributable to an increase in average interest-earning assets of $4.95 billion, which primarily resulted from the acquisition of Opus Bank ("Opus") in the second quarter of 2020.

PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED AVERAGE BALANCES AND YIELD DATA
(Unaudited)

	Three Months Ended
	June 30, 2021						March 31, 2021						June 30, 2020
(Dollars in thousands)	Average Balance		Interest Income/Expense		Average Yield/ Cost		Average Balance		Interest Income/Expense		Average Yield/ Cost		Average Balance		Interest Income/Expense		Average Yield/ Cost
Assets
Cash and cash equivalents	$	1,323,186	$	315	0.10	%	$	1,309,366	$	301	0.09	%	$	796,761	$	215	0.11	%
Investment securities	4,243,644		18,012		1.70		4,087,451		17,468		1.71		1,792,432		10,568		2.36
Loans receivable, net ^{(1) (2)}	13,216,973		152,365		4.62		13,093,609		155,225		4.81		11,242,721		133,339		4.77
Total interest-earning assets	$	18,783,803	$	170,692	3.64		$	18,490,426	$	172,994	3.79		$	13,831,914	$	144,122	4.19

Liabilities
Interest-bearing deposits	$	10,395,002	$	3,265	0.13		$	10,420,199	$	4,426	0.17		$	7,317,675	$	9,655	0.53
Borrowings	486,718		6,493		5.35		523,565		6,916		5.36		431,181		4,175		3.89
Total interest-bearing liabilities	$	10,881,720	$	9,758	0.36		$	10,943,764	$	11,342	0.42		$	7,748,856	$	13,830	0.72
Noninterest-bearing deposits	$	6,341,063					$	6,034,319					$	4,970,812
Net interest income			$	160,934					$	161,652					$	130,292
Net interest margin ⁽³⁾					3.44						3.55						3.79
Cost of deposits					0.08						0.11						0.32
Cost of funds ⁽⁴⁾					0.23						0.27						0.44
Ratio of interest-earning assets to interest-bearing liabilities					172.62						168.96						178.50

______________________________
⁽¹⁾		Average balance includes loans held for sale and nonperforming loans and is net of deferred loan origination fees/costs and discounts/premiums.
⁽²⁾		Interest income includes net discount accretion of $9.5 million, $9.9 million, and $5.8 million, respectively.
⁽³⁾		Represents annualized net interest income divided by average interest-earning assets.
⁽⁴⁾		Represents annualized total interest expense divided by the sum of average total interest-bearing liabilities and noninterest-bearing deposits.

Provision for Credit Losses

For the second quarter of 2021, the Bank recorded a $38.5 million provision recapture, a decrease of $40.5 million from the $2.0 million provision expense recognized during the first quarter of 2021, and a decrease of $199.1 million from the $160.6 million provision expense recognized during the second quarter of 2020. The decrease from the first quarter of 2021 was comprised of a $33.1 million provision recapture for loan loss and a $5.3 million provision recapture for unfunded commitments. The decrease during the second quarter of 2021 was primarily due to improved economic forecasts used in the Company's CECL model relative to prior periods and the continued strong asset quality profile of the loan portfolio. The provision expense in the second quarter of 2020 reflected unfavorable changes in economic forecasts related to the onset of the COVID-19 pandemic and the Day 1 provision for credit losses of $84.4 million resulting from the acquisition of Opus.

	Three Months Ended
	June 30,			March 31,		June 30,
(Dollars in thousands)	2021			2021		2020
Provision for credit losses
Provision for loan losses	$	(33,131	)	$	315	$	150,257
Provision for unfunded commitments	(5,345		)	1,659		10,378
Total provision for credit losses	$	(38,476	)	$	1,974	$	160,635

Noninterest Income

Noninterest income for the second quarter of 2021 was $26.7 million, an increase of $3.0 million from the first quarter of 2021. The increase was primarily due to a $1.2 million increase in net gain from loan sales, a $1.0 million increase in net gain from sales of investment securities, and a $675,000 increase in trust custodial account fees, partially offset by a $647,000 decrease in other income.

During the second quarter of 2021, the Bank sold $14.7 million of SBA loans for a net gain of $1.5 million, compared to the sales of $1.3 million of SBA loans for a net gain of $69,000 and fully charged-off loans for a net gain of $292,000 during the first quarter of 2021.

Additionally, during the second quarter of 2021, the Bank sold $280.2 million of investment securities for a net gain of $5.1 million, compared to the sales of $175.3 million of investment securities for a net gain of $4.0 million in the first quarter of 2021.

Noninterest income for the second quarter of 2021 increased $19.8 million, or 287.5%, compared to the second quarter of 2020. The increase was primarily due to a $5.5 million increase in trust custodial account fees and a $1.4 million increase in escrow and exchange fees following the Opus acquisition.

The net gain from sales of loans for the second quarter of 2021 increased from the same period last year primarily due to the sales of $14.7 million of SBA loans for a net gain of $1.5 million, compared with the sales of $15.4 million of other loans for a net loss of $2.0 million during the second quarter of 2020.

	Three Months Ended
	June 30,		March 31,		June 30,
(Dollars in thousands)	2021		2021		2020
Noninterest income
Loan servicing income	$	622	$	458	$	434
Service charges on deposit accounts	2,222		2,032		1,399
Other service fee income	352		473		297
Debit card interchange fee income	1,099		787		457
Earnings on BOLI	2,279		2,233		1,314
Net gain (loss) from sales of loans	1,546		361		(2,032		)
Net gain (loss) from sales of investment securities	5,085		4,046		(21		)
Trust custodial account fees	7,897		7,222		2,397
Escrow and exchange fees	1,672		1,526		264
Other income	3,955		4,602		2,389
Total noninterest income	$	26,729	$	23,740	$	6,898

Noninterest Expense

Noninterest expense totaled $94.5 million for the second quarter of 2021, an increase of $2.0 million compared to the first quarter of 2021, primarily driven by a $926,000 increase in compensation and benefits primarily attributable to higher business incentives associated with higher loan and deposit production, and an $821,000 increase in other expense largely due to a $518,000 increase in community development support.

Noninterest expense decreased by $21.5 million compared to the second quarter of 2020. The decrease was primarily due to $39.3 million of merger-related expense for the second quarter of 2020 relating to the Opus acquisition. Excluding merger-related expense, noninterest expense increased $17.9 million compared to the second quarter of 2020, primarily due to a $10.5 million increase in compensation and benefits, a $2.8 million increase in premises and occupancy expense, all predominately as a result of the additional operations, personnel, branches, and divisions retained with the acquisition of Opus.

	Three Months Ended
	June 30,		March 31,		June 30,
(Dollars in thousands)	2021		2021		2020
Noninterest expense
Compensation and benefits	$	53,474	$	52,548	$	43,011
Premises and occupancy	12,240		11,980		9,487
Data processing	5,765		5,828		4,465
Other real estate owned operations, net	—		—		9
FDIC insurance premiums	1,312		1,181		846
Legal and professional services	4,186		3,935		3,094
Marketing expense	1,490		1,598		1,319
Office expense	1,589		1,829		1,533
Loan expense	1,165		1,115		823
Deposit expense	3,985		3,859		4,958
Merger-related expense	—		5		39,346
Amortization of intangible assets	4,001		4,143		4,066
Other expense	5,289		4,468		3,013
Total noninterest expense	$	94,496	$	92,489	$	115,970

Income Tax

For the second quarter of 2021, our income tax expense totaled $35.3 million, resulting in an effective tax rate of 26.8%, compared with income tax expense of $22.3 million and an effective tax rate of 24.5% for the first quarter of 2021, and income tax benefit of $40.3 million and an effective tax rate of 28.9% for the second quarter of 2020. Based on our actual and projected level of earnings for 2021, our estimated effective tax rate for the full year is expected to be in the range of 25 to 27%.

BALANCE SHEET HIGHLIGHTS

Loans

Loans held for investment totaled $13.59 billion at June 30, 2021, an increase of $477.2 million, or 3.6%, from March 31, 2021, and a decrease of $1.49 billion, or 9.9%, from June 30, 2020. The increase from March 31, 2021 was driven by higher loan production, partially offset by loan prepayments, maturities, and sales in the second quarter of 2021. The decrease in loans held for investment from June 30, 2020 was primarily driven by the sale of $1.13 billion of SBA PPP loans in the third quarter of 2020.

During the second quarter of 2021, the Bank generated $1.58 billion of loan commitments and funded $1.15 billion of new loans, compared with $1.15 billion in loan commitments and $746.3 million in funded loans for the first quarter of 2021, and $1.21 billion in loan commitments and $1.19 billion in funded loans for the second quarter of 2020, of which $1.13 billion was SBA PPP loans. Business line commitments totaled $2.59 billion with an average utilization rate of 31.96% for the second quarter of 2021, compared with business line commitments of $2.44 billion with an average utilization rate of 34.06% for the first quarter of 2021, and business line commitments of $2.21 billion with an average utilization rate of 43.98% for the second quarter of 2020.

At June 30, 2021, the ratio of loans held for investment to total deposits was 79.9%, compared with 78.4% and 88.8% at March 31, 2021 and June 30, 2020, respectively.

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

	Three Months Ended
(Dollars in thousands)	June 30, 2021			March 31, 2021
Beginning loan balance	$	13,124,703		$	13,237,034
New commitments	1,576,884			1,153,345
Unfunded new commitments	(423,797		)	(407,047		)
Net new fundings	1,153,087			746,298
Amortization/maturities/payoffs	(821,502		)	(773,170		)
Net draws on existing lines of credit	161,273			(82,472		)
Loan sales	(14,959		)	(1,035		)
Charge-offs	(3,290		)	(1,952		)
Net increase (decrease)	474,609			(112,331		)
Ending loan balance	$	13,599,312		$	13,124,703

The following table presents the composition of the loan portfolio as of the dates indicated:

	June 30,			March 31,			June 30,
(Dollars in thousands)	2021			2021			2020
Investor loans secured by real estate
Commercial real estate ("CRE") non-owner-occupied	$	2,810,233		$	2,729,785		$	2,783,692
Multifamily	5,539,464			5,309,592			5,225,557
Construction and land	297,728			316,458			357,426
SBA secured by real estate ⁽¹⁾	53,003			56,381			59,482
Total investor loans secured by real estate	8,700,428			8,412,216			8,426,157
Business loans secured by real estate ⁽²⁾
CRE owner-occupied	2,089,300			2,029,984			2,170,154
Franchise real estate secured	358,120			340,805			364,647
SBA secured by real estate ⁽³⁾	72,923			73,967			85,542
Total business loans secured by real estate	2,520,343			2,444,756			2,620,343
Commercial loans ⁽⁴⁾
Commercial and industrial	1,795,144			1,656,098			2,051,313
Franchise non-real estate secured	401,315			399,041			523,755
SBA non-real estate secured	13,900			14,908			21,057
SBA PPP	—			—			1,128,780
Total commercial loans	2,210,359			2,070,047			3,724,905
Retail loans
Single family residential ⁽⁵⁾	157,228			184,049			265,170
Consumer	6,240			6,324			46,309
Total retail loans	163,468			190,373			311,479
Gross loans held for investment ⁽⁶⁾	13,594,598			13,117,392			15,082,884
Allowance for credit losses for loans held for investment	(232,774		)	(266,999		)	(282,271		)
Loans held for investment, net	$	13,361,824		$	12,850,393		$	14,800,613

Total unfunded loan commitments	$	2,345,364		$	2,243,650		$	1,885,163
Loans held for sale, at lower of cost or fair value	$	4,714		$	7,311		$	1,007

______________________________
⁽¹⁾		SBA loans that are collateralized by hotel/motel real property.
⁽²⁾		Loans to businesses that are collateralized by real estate where the operating cash flow of the business is the primary source of repayment.
⁽³⁾		SBA loans that are collateralized by real property other than hotel/motel real property.
⁽⁴⁾		Loans to businesses where the operating cash flow of the business is the primary source of repayment.
⁽⁵⁾		Single family residential includes home equity lines of credit, as well as second trust deeds.
⁽⁶⁾		Includes unaccreted fair value net purchase discounts of $94.4 million, $103.9 million, and $144.5 million as of June 30, 2021, March 31, 2021, and June 30, 2020, respectively.

The total end-of-period weighted average interest rate on loans, excluding fees and discounts, at June 30, 2021 was 4.11%, compared to 4.21% at March 31, 2021 and 4.12%, or 4.46% excluding SBA PPP loans, at June 30, 2020. The quarter-over-quarter and year-over-year decreases reflect the impact of lower rates on new originations and the continued impact from prepayments of higher rate loans.

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

	June 30,		March 31,		June 30,
(Dollars in thousands)	2021		2021		2020
Investor loans secured by real estate
CRE non-owner-occupied	$	181,995	$	128,408	$	11,811
Multifamily	631,360		407,156		24,425
Construction and land	148,422		94,124		6,210
Total investor loans secured by real estate	961,777		629,688		42,446
Business loans secured by real estate ⁽¹⁾
CRE owner-occupied	181,385		110,353		17,594
Franchise real estate secured	39,320		24,429		—
SBA secured by real estate ⁽²⁾	13,445		4,101		1,204
Total business loans secured by real estate	234,150		138,883		18,798
Commercial loans ⁽³⁾
Commercial and industrial	316,162		352,530		23,782
Franchise non-real estate secured	41,501		17,647		—
SBA non-real estate secured	1,000		686		315
SBA PPP	—		—		1,124,485
Total commercial loans	358,663		370,863		1,148,582
Retail loans
Single family residential ⁽⁴⁾	14,744		13,353		2,137
Consumer	7,550		558		195
Total retail loans	22,294		13,911		2,332
Total loan commitments	$	1,576,884	$	1,153,345	$	1,212,158

______________________________
⁽¹⁾		Loans to businesses that are collateralized by real estate where the operating cash flow of the business is the primary source of repayment.
⁽²⁾		SBA loans that are collateralized by real property other than hotel/motel real property.
⁽³⁾		Loans to businesses where the operating cash flow of the business is the primary source of repayment.
⁽⁴⁾		Single family residential includes home equity lines of credit, as well as second trust deeds.

The weighted average interest rate on new loan commitments was 3.59% in the second quarter of 2021, compared with 3.63% in the first quarter of 2021 and 1.21%, or 3.97% excluding SBA PPP loans, in the second quarter of 2020.

Asset Quality and Allowance for Credit Losses

At June 30, 2021, our allowance for credit losses ("ACL") on loans held for investment was $232.8 million, a decrease of $34.2 million from March 31, 2021, and a decrease of $49.5 million from June 30, 2020. The decrease in ACL is primarily due to the provision for credit loss recapture during the current quarter, reflective of improving economic forecasts employed in the Company's CECL model relative to the prior quarter and the continued strong asset quality profile of the loan portfolio, partially offset by an increase in loans held for investment during the quarter. The decrease from June 30, 2020 was primarily due to changes in economic forecasts employed in the Company's CECL model related to the COVID-19 pandemic and lower loans held for investment.

During the second quarter of 2021, the Company incurred $1.1 million of net charge-offs, compared to $1.3 million and $4.7 million during the first quarter of 2021 and the second quarter of 2020, respectively.

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:

	Three Months Ended June 30, 2021
(Dollars in thousands)	Beginning ACL Balance		Charge-offs			Recoveries		Provision for Credit Losses			Ending ACL Balance
Investor loans secured by real estate
CRE non-owner occupied	$	45,545	$	—		$	—	$	1,567		$	47,112
Multifamily	79,815		—			—		(20,756		)	59,059
Construction and land	13,263		—			—		(3,715		)	9,548
SBA secured by real estate ⁽¹⁾	5,141		—			—		(460		)	4,681
Business loans secured by real estate ⁽²⁾
CRE owner-occupied	41,594		—			15		(5,862		)	35,747
Franchise real estate secured	10,876		—			—		560			11,436
SBA secured by real estate ⁽³⁾	6,451		—			80		(214		)	6,317
Commercial loans ⁽⁴⁾
Commercial and industrial	43,373		(3,290		)	2,098		(2,302		)	39,879
Franchise non-real estate secured	18,903		—			—		(1,590		)	17,313
SBA non-real estate secured	890		—			2		(162		)	730
Retail loans
Single family residential ⁽⁵⁾	822		—			1		(153		)	670
Consumer loans	326		—			—		(44		)	282
Totals	$	266,999	$	(3,290	)	$	2,196	$	(33,131	)	$	232,774

______________________________
⁽¹⁾		SBA loans that are collateralized by hotel/motel real property.
⁽²⁾		Loans to businesses that are collateralized by real estate where the operating cash flow of the business is the primary source of repayment.
⁽³⁾		SBA loans that are collateralized by real property other than hotel/motel real property.
⁽⁴⁾		Loans to businesses where the operating cash flow of the business is the primary source of repayment.
⁽⁵⁾		Single family residential includes home equity lines of credit, as well as second trust deeds.

The ratio of allowance for credit losses to loans held for investment at June 30, 2021 was 1.71%, compared to 2.04% at March 31, 2021 and 2.02% at June 30, 2020, excluding SBA PPP loans. Under the guidance of ASC 820: Fair Value Measurements and Disclosures, the fair value net discount on loans acquired through total bank acquisitions was $94.4 million, or 0.69% of total loans held for investment, as of June 30, 2021, compared to $103.9 million, or 0.79% of total loans held for investment, as of March 31, 2021, and $144.5 million, or 1.03% of total loans held for investment excluding SBA PPP loans, as of June 30, 2020.

Nonperforming assets totaled $34.4 million, or 0.17% of total assets, at June 30, 2021, compared with $38.9 million, or 0.19% of total assets, at March 31, 2021, and $34.2 million, or 0.17% of total assets, at June 30, 2020. During the second quarter of 2021, nonperforming loans decreased $4.5 million to $34.4 million from March 31, 2021. Total loan delinquencies were $19.3 million, or 0.14% of loans held for investment, at June 30, 2021, compared to $22.6 million, or 0.17% of loans held for investment, at March 31, 2021, and $38.2 million, or 0.25% of loans held for investment, at June 30, 2020.

Classified loans totaled $131.4 million, or 0.97% of loans held for investment, at June 30, 2021, compared with $134.7 million, or 1.03% of loans held for investment, at March 31, 2021, and $89.9 million, or 0.60% of loans held for investment, at June 30, 2020. The year-over-year increase was driven, in part, by the migration to the substandard risk grade of approximately $56.4 million of loans subject to temporary loan modifications relating to COVID-19 under the CARES Act during 2020, as well as the net changes in risk ratings.

Interest is not typically accrued on loans 90 days or more past due or when, in the opinion of management, there is reasonable doubt as to the timely collection of principal or interest. There were no loans 90 days or more past due and still accruing interest at June 30, 2021. There were six troubled debt restructured loans belonging to two borrower relationships totaling $17.8 million at June 30, 2021, compared to no troubled debt restructured loans at March 31, 2021 and $700,000 at June 30, 2020.

At June 30, 2021, there was one residential loan for $819,000 classified as a COVID-19 modification under Section 4013 of the CARES Act. Additionally, as of June 30, 2021, there were no loans in-process for potential modification. At March 31, 2021, there were no loans remaining within their modification period and no loans were in-process for potential modification.

	June 30,			March 31,			June 30,
(Dollars in thousands)	2021			2021			2020
Asset quality
Nonperforming loans	$	34,387		$	38,909		$	33,825
Other real estate owned	—			—			386
Nonperforming assets	$	34,387		$	38,909		$	34,211

Total classified assets ⁽¹⁾	$	131,350		$	134,667		$	90,334
Allowance for credit losses	232,774			266,999			282,271
Allowance for credit losses as a percent of total nonperforming loans	677		%	686		%	835		%
Nonperforming loans as a percent of loans held for investment	0.25			0.30			0.22
Nonperforming assets as a percent of total assets	0.17			0.19			0.17
Classified loans to total loans held for investment	0.97			1.03			0.60
Classified assets to total assets	0.64			0.67			0.44
Net loan charge-offs for the quarter ended	$	1,094		$	1,334		$	4,650
Net loan charge-offs for the quarter to average total loans	0.01		%	0.01		%	0.04		%
Allowance for credit losses to loans held for investment ⁽²⁾	1.71			2.04			1.87
Loans modified under the CARES Act	$	819		$	—		$	2,244,974
Loans modified under the CARES Act as a percent of loans held for investment	0.01		%	—		%	14.88		%
Delinquent loans
30 - 59 days	$	207		$	13,116		$	6,248
60 - 89 days	83			61			4,133
90+ days	19,045			9,410			27,807
Total delinquency	$	19,335		$	22,587		$	38,188
Delinquency as a percentage of loans held for investment	0.14		%	0.17		%	0.25		%

______________________________
⁽¹⁾		Includes substandard loans and other real estate owned.
⁽²⁾		At June 30, 2021, 45% of loans held for investment include a fair value net discount of $94.4 million, or 0.69% of loans held for investment. At March 31, 2021, 51% of loans held for investment include a fair value net discount of $103.9 million, or 0.79% of loans held for investment. At June 30, 2020, 56% of loans held for investment include a fair value net discount of $144.5 million, or 1.03% of loans held for investment excluding SBA PPP loans.

Investment Securities

Investment securities totaled $4.51 billion at June 30, 2021, an increase of $627.1 million from March 31, 2021, and an increase of $2.14 billion from June 30, 2020. The increase in the second quarter of 2021 compared to the prior quarter was primarily the result of $968.1 million in purchases and a $58.4 million increase in mark-to-market fair value adjustment, partially offset by $280.2 million in sales and $119.2 million in principal payments, amortization, and redemptions. The increase in investment securities from June 30, 2020 was primarily the result of $3.57 billion in purchases, partially offset by $869.5 million in sales, $515.0 million in principal payments, amortization, and redemptions, and a $44.5 million decrease in mark-to-market fair value adjustment. The Company's assessment of held-to-maturity and available-for-sale investment securities indicated that no ACL was required with respect to investment securities as of June 30, 2021.

Deposits

At June 30, 2021, deposits totaled $17.02 billion, an increase of $275.1 million, or 1.6%, from March 31, 2021, and an increase of $38.4 million, or 0.2%, from June 30, 2020. At June 30, 2021, non-maturity deposits totaled $15.76 billion, or 92.6% of total deposits, an increase of $386.2 million, or 2.5%, from March 31, 2021, and an increase of $697.5 million, or 4.6%, from June 30, 2020. During the second quarter of 2021, deposit increases included $465.7 million in noninterest-bearing deposits, primarily driven by an increase in business deposit account balances, partially offset by decreases of $93.7 million in retail certificates of deposits, $51.7 million in interest-bearing checking deposits, $27.7 million in money market and savings deposits, and $17.4 million in brokered certificates of deposit as compared to the first quarter of 2021.

The weighted average cost of deposits for the second quarter of 2021 was 0.08%, compared to 0.11% for the first quarter of 2021, and 0.32% for the second quarter of 2020, including the favorable impact of the acquired certificates of deposit mark-to-market amortization of 0.02%, 0.04%, and 0.03%, respectively. The decrease in the weighted average cost of deposits in the second quarter of 2021 compared to the prior quarters was principally driven by lower pricing as well as deposit mix.

The end of period weighted average rate of deposits at June 30, 2021 was 0.08%.

	June 30,			March 31,			June 30,
(Dollars in thousands)	2021			2021			2020
Deposit accounts
Noninterest-bearing checking	$	6,768,384		$	6,302,703		$	5,899,442
Interest-bearing:
Checking	3,103,343			3,155,071			3,098,454
Money market/savings	5,883,672			5,911,417			6,060,031
Retail certificates of deposit	1,259,698			1,353,431			1,651,976
Wholesale/brokered certificates of deposit	—			17,385			266,790
Total interest-bearing	10,246,713			10,437,304			11,077,251
Total deposits	$	17,015,097		$	16,740,007		$	16,976,693

Cost of deposits	0.08		%	0.11		%	0.32		%
Noninterest-bearing deposits as a percentage of total deposits	39.8			37.7			34.8
Non-maturity deposits as a percent of total deposits	92.6			91.8			88.7
Core deposits as a percent of total deposits ⁽¹⁾	96.5			96.2			94.9

______________________________
⁽¹⁾		Core deposits are all transaction accounts and non-brokered certificates of deposit less than $250,000.

Borrowings

At June 30, 2021, total borrowings amounted to $476.6 million, a decrease of $35.0 million from March 31, 2021, and a decrease of $65.8 million from June 30, 2020. Total borrowings at June 30, 2021 is comprised of $476.6 million of subordinated debt. The decrease in borrowings at June 30, 2021 as compared to March 31, 2021 was primarily due to the redemption of $25 million in subordinated notes in April 2021 and the maturity of the remaining $10.0 million Federal Home Loan Bank of San Francisco ("FHLB") advances. The decrease in borrowings at June 30, 2021 as compared to June 30, 2020 was primarily due to the redemption of $25 million in subordinated notes and the redemption of $41.0 million in FHLB advances.

Capital Ratios

At June 30, 2021, our common stockholders' equity was $2.81 billion, or 13.70% of total assets, compared with $2.70 billion, or 13.40%, at March 31, 2021, and $2.65 billion, or 12.94%, at June 30, 2020, with a book value per share of $29.72, compared with $28.56 at March 31, 2021, and $28.14 at June 30, 2020. At June 30, 2021, our ratio of tangible common equity to total assets was 9.38%, compared with 8.97% at March 31, 2021, and 8.50% at June 30, 2020, with a tangible book value per share of $19.38, compared with $18.19 at March 31, 2021, and $17.58 at June 30, 2020. Reconciliations of the non-GAAP measures of tangible common equity ratio and tangible book value per share to the GAAP measures of common stockholders' equity and book value per share, respectively, are set forth at the end of this press release.

The Company implemented the CECL model on January 1, 2020 and elected to phase in the full effect of CECL on regulatory capital over the five-year transition period. At June 30, 2021, the Company had a tier 1 leverage ratio of 9.83%, common equity tier 1 capital ratio of 11.89%, tier 1 capital ratio of 11.89%, and total capital ratio of 15.61%. At June 30, 2021, the Bank had a tier 1 leverage ratio of 11.31%, common equity tier 1 capital ratio of 13.67%, tier 1 capital ratio of 13.67%, and total capital ratio of 15.44%. The capital ratios of the Company and the Bank exceeded the "well capitalized" standards defined by the federal banking regulators of 5.00% for tier 1 leverage ratio, 6.50% for common equity tier 1 capital ratio, 8.00% for tier 1 capital ratio, and 10.00% for total capital ratio and exceeded the minimum capital ratio levels inclusive of the fully phased-in capital conservation buffer of 4.00%, 7.00%, 8.50%, and 10.50%, respectively.

	June 30,			March 31,			June 30,
Capital ratios	2021			2021			2020
Pacific Premier Bancorp, Inc. Consolidated
Tier 1 leverage ratio	9.83		%	9.66		%	12.00		%
Common equity tier 1 risk-based capital ratio	11.89			12.05			11.32
Tier 1 capital ratio	11.89			12.05			11.32
Total capital ratio	15.61			16.26			15.69
Tangible common equity ratio ⁽¹⁾	9.38			8.97			8.50

Pacific Premier Bank
Tier 1 leverage ratio	11.31		%	11.13		%	13.49		%
Common equity tier 1 risk-based capital ratio	13.67			13.90			12.73
Tier 1 capital ratio	13.67			13.90			12.73
Total capital ratio	15.44			15.92			14.81

Share data
Book value per share	$	29.72		$	28.56		$	28.14
Tangible book value per share ⁽¹⁾	19.38			18.19			17.58
Common equity dividends declared per share	0.33			0.30			0.25
Closing stock price ⁽²⁾	42.29			43.44			21.68
Shares issued and outstanding	94,656,575			94,644,415			94,350,902
Market capitalization ⁽²⁾⁽³⁾	$	4,003,027		$	4,111,353		$	2,045,528

______________________________
⁽¹⁾		A reconciliation of the GAAP measures of tangible common equity and tangible book value per share to the GAAP measures of common stockholders' equity and book value per share, respectively, is set forth at the end of this press release.
⁽²⁾		As of the last trading day prior to period end.
⁽³⁾		Dollars in thousands.

Dividend and Stock Repurchase Program

On July 23, 2021, the Company's Board of Directors declared a $0.33 per share dividend, payable on August 13, 2021 to stockholders of record as of August 6, 2021. In January 2021, the Company's Board of Directors approved a new stock repurchase program, which authorized the repurchase of up to 4,725,000 shares of its common stock. During the first quarter of 2021, the Company repurchased 199,674 shares of common stock at an average price of $34.51 per share with a total market value of $6.9 million under its stock repurchase program. The Company did not repurchase additional shares during the second quarter ended June 30, 2021.

Subsequent Events

On July 1, 2021, the Company redeemed $135.0 million subordinated notes acquired from Opus and $5.2 million junior subordinated debt associated with Heritage Oaks Capital Trust II. On July 7, 2021, the Company redeemed $5.2 million junior subordinated debt associated with Santa Lucia Bancorp (CA) Capital Trust. The subordinated notes and junior subordinated debt were redeemed at par, plus accrued and unpaid interest, for an aggregate amount of $149.2 million. The Company recorded a net gain on early debt extinguishment of $970,000 related to purchase accounting adjustments.

On July 16, 2021, the Bank consolidated two branch offices in San Luis Obispo County of California into nearby branch offices with minimal disruption to clients and daily operations. The consolidated branches were identified largely based on the proximity of neighboring branches, deposit base, historic growth, and market opportunity to improve further the overall efficiency of operations, as well as the Bank's goals related to Fair Lending and the Community Reinvestment Act. After the branch consolidations, the Bank operates 63 branches in major metropolitan markets in California, Washington, Oregon, Arizona, and Nevada.

Conference Call and Webcast

The Company will host a conference call at 9:00 a.m. PT / 12:00 p.m. ET on July 27, 2021 to discuss its financial results. Analysts and investors may participate in the question-and-answer session. A live webcast will be available on the Webcasts page of the Company's investor relations website. An archived version of the webcast will be available in the same location shortly after the live call has ended. The conference call can be accessed by telephone at (866) 290-5977 and asking to be joined to the Pacific Premier Bancorp conference call. Additionally, a telephone replay will be made available through August 3, 2021 at (877) 344-7529, conference ID 10157972.

About Pacific Premier Bancorp, Inc.

Pacific Premier Bancorp, Inc. (NASDAQ:PPBI) is the parent company of Pacific Premier Bank, a California-based 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 over $20 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 $17 billion of assets under custody and approximately 44,000 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, 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. Given the ongoing and dynamic nature of the COVID-19 pandemic, the ultimate extent of the impacts on our business, financial position, results of operations, liquidity and prospects remain uncertain. Continued deterioration in general business and economic conditions, including further increases in unemployment rates, or turbulence in domestic or global financial markets could adversely affect our revenues and the values of our assets and liabilities, reduce the availability of funding, lead to a tightening of credit, and further increase stock price volatility, which could result in impairment to our goodwill in future periods. In addition, changes to statutes, regulations, or regulatory policies or practices as a result of, or in response to the COVID-19 pandemic, could affect us in substantial and unpredictable ways, including the potential adverse impact of loan modifications and payment deferrals implemented consistent with recent regulatory guidance. Other risks and uncertainties include, but are not limited to, the following: the strength of the United States economy in general and the strength of the local economies in which we conduct operations; 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; inflation/deflation, interest rate, market, and monetary fluctuations; 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; 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; the effectiveness of our risk management framework and quantitative models; changes in the level of our nonperforming assets and charge-offs; the transition away from USD LIBOR and uncertainty regarding potential alternative reference rates, including SOFR; 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, including ASU 2016-13 (Topic 326), "Measurement of Credit Losses on Financial Instruments," commonly referenced as the CECL model, which has changed how we estimate credit losses and may further increase the required level of our allowance for credit losses in future periods; possible credit related impairments of securities held by us; possible impairment charges to goodwill; the impact of governmental efforts to restructure the U.S. financial regulatory system; changes in consumer spending, borrowing, and savings habits; the effects of our lack of a diversified loan portfolio, including the risks of geographic and industry concentrations; our ability to attract deposits and other sources of liquidity; the possibility that we may reduce or discontinue the payments of dividends on our common stock; the possibility that we may discontinue our stock repurchase program or reduce or otherwise limit the level of repurchases of our common stock we may make from time to time pursuant to such 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, which could impact business and economic conditions in the United States and abroad; public health crisis and pandemics, including the COVID-19 pandemic, 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, including the costs of compliance with potential legislation to combat cybersecurity at a state, national, or global level; unanticipated regulatory or legal proceedings; 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 2020 Annual Report on Form 10-K 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.


PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Unaudited)

	June 30,			March 31,			December 31,			September 30,			June 30,
(Dollars in thousands)	2021			2021			2020			2020			2020
ASSETS
Cash and cash equivalents	$	631,888		$	1,554,668		$	880,766		$	1,103,077		$	1,341,730
Interest-bearing time deposits with financial institutions	2,708			2,708			2,845			2,845			2,845
Investments held-to-maturity, at amortized cost	18,933			21,931			23,732			27,980			32,557
Investment securities available-for-sale, at fair value	4,487,447			3,857,337			3,931,115			3,600,731			2,336,066
FHLB, FRB, and other stock, at cost	117,738			117,843			117,055			116,819			94,658
Loans held for sale, at lower of amortized cost or fair value	4,714			7,311			601			1,032			1,007
Loans held for investment	13,594,598			13,117,392			13,236,433			13,450,840			15,082,884
Allowance for credit losses	(232,774		)	(266,999		)	(268,018		)	(282,503		)	(282,271		)
Loans held for investment, net	13,361,824			12,850,393			12,968,415			13,168,337			14,800,613
Accrued interest receivable	67,529			65,098			74,574			73,112			78,408
Other real estate owned	—			—			—			334			386
Premises and equipment	73,821			76,329			78,884			80,326			76,542
Deferred income taxes, net	81,741			104,450			89,056			108,050			105,859
Bank owned life insurance	444,645			292,932			292,564			290,875			305,901
Intangible assets	77,363			81,364			85,507			90,012			94,550
Goodwill	901,312			900,204			898,569			898,434			901,166
Other assets	257,823			240,730			292,861			282,276			344,786
Total assets	$	20,529,486		$	20,173,298		$	19,736,544		$	19,844,240		$	20,517,074
LIABILITIES
Deposit accounts:
Noninterest-bearing checking	$	6,768,384		$	6,302,703		$	6,011,106		$	5,895,744		$	5,899,442
Interest-bearing:
Checking	3,103,343			3,155,071			2,913,260			2,937,910			3,098,454
Money market/savings	5,883,672			5,911,417			5,662,969			5,778,688			6,060,031
Retail certificates of deposit	1,259,698			1,353,431			1,471,512			1,542,029			1,651,976
Wholesale/brokered certificates of deposit	—			17,385			155,330			176,436			266,790
Total interest-bearing	10,246,713			10,437,304			10,203,071			10,435,063			11,077,251
Total deposits	17,015,097			16,740,007			16,214,177			16,330,807			16,976,693
FHLB advances and other borrowings	—			10,000			31,000			41,000			41,006
Subordinated debentures	476,622			501,611			501,511			501,443			501,375
Accrued expenses and other liabilities	224,348			218,582			243,207			282,905			343,353
Total liabilities	17,716,067			17,470,200			16,989,895			17,156,155			17,862,427
STOCKHOLDERS' EQUITY
Common stock	931			931			931			930			930
Additional paid-in capital	2,352,112			2,348,445			2,354,871			2,351,532			2,348,415
Retained earnings	433,852			368,911			330,555			289,960			247,078
Accumulated other comprehensive income (loss)	26,524			(15,189		)	60,292			45,663			58,224
Total stockholders' equity	2,813,419			2,703,098			2,746,649			2,688,085

Pacific Premier Bancorp, Inc. Announces Second Quarter 2021 Financial Results and a Quarterly Cash Dividend of $0.33 Per Share