Irvine-based Pacific Premier Bancorp Inc. continued its fast growth for a fifth consecutive year.
The bank has been on the Business Journal’s list of fastest-growing public companies since it was a “small” company with less than $100 million in revenue in 2012. That year it had 148.7% revenue growth over a two-year period to $45.2 million in annual revenue.
This year Pacific Premier is the No. 1 midsize public company with about $158.1 million in revenue, up 95.8% over a two-year span.
The rankings are based on two-year percentage revenue growth of publicly traded companies headquartered in OC. Midsized companies have annual revenue between $100 million to $500 million.
Pacific Premier had previous two-year revenue gains of 74.1% through June 2015, 32.4% through mid-2014, and 28.4% through mid-2013.
Assets, Acquisitions
Pacific Premier is the third largest Orange County-based bank in terms of assets, with about $3.6 billion on June 30, according to the most recent report to the Federal Deposit Insurance Corporation.
That’s up almost 37% from a year earlier and compares with a little more than $1 billion in assets five years ago, when it moved its headquarters from Costa Mesa to Irvine.
The bank acquired about $2.2 billion in assets and about $1.8 billion in deposits through six transactions dating back to 2012. It paid about $290.7 million in cash and equity for all of the acquired companies.
The “timely and efficient acquisitions” accelerated Pacific Premier’s growth and performance, said Steven R. Gardner, president and chief executive, in an investor presentation in September.
The acquisitions expanded operations beyond Orange County or allowed the bank to enter niche markets.
The largest and most recent acquisition closed in January when the bank acquired Security California Bancorp Inc. in Riverside. The $118.9 million cash-and-stock deal added about $734 million in assets and $654 million in deposits to the Irvine-based bank.
Pacific Premier added six branches in the counties of Riverside, San Bernardino and Orange, and a loan production office in Los Angeles County.
The bank’s second largest acquisition, for $71.5 million in cash and equity, occurred in 2014 with the purchase of Independence Bank in Newport Beach. It added about $426 million in assets and about $358 million in deposits.
The deal allowed Pacific Premier to offer “larger lending limits” and more services to customers, Gardner said in an SEC filing.
Two of the more interesting acquisitions occurred in 2012 and 2013 with the purchase of First Associations Bank in Dallas, Texas, and Infinity Franchise Holdings LLC in Montvale, N.J., respectively.
Pacific Premier acquired First Associations for about $54 million in cash and stock, adding about $356 million in assets and about $306 million in deposits. First Associations primarily served homeowners associations and HOA management companies nationwide.
“This acquisition is a unique opportunity for us to acquire a highly efficient, consistently profitable and niche-focused business that will complement our existing banking franchise,” Gardner said in a news release. “Additionally, this partnership will improve Pacific Premier’s deposit base, lower our cost of deposits and provide us the platform to accelerate future core deposit growth.”
The bank expanded its client base when it purchased Infinity Franchise in a $16 million cash-and-stock deal in 2013. Infinity Franchise had about $79 million in loan commitments and solely provided financing to franchises in the quick-service restaurant industry.
The Infinity Franchise management team originated more than $1.7 billion in loans over 20 years to the owner-operators of Yum Brands restaurants, Dunkin’ Donuts, and other national fast-food burger franchises.
“The franchisee lending business is an appealing niche market that provides excellent growth opportunities in the future,” Gardner said regarding the opportunities to provide additional loans for real estate development and business growth.
The bank reported about $9.2 million in net income in a “disappointing” third quarter ended on Sept. 30, Gardner said during a conference call.
The bank needed to double a provision to $4 million because of a commercial-and-industrial loan to an OC engineering company.
The client “had performed well for years,” Gardner said, but closed after it lost its largest customer and one of the partners had a “medical issue.”
The bank had to increase its loan losses and report lower income due to that client’s misfortunes.
But commercial-and-industrial loans are about 20% of Pacific Premier’s assets, according to the FDIC. About 61% of the bank’s assets are in real estate, about $1.2 billion in commercial real estate loans.
