Costa Mesa-based Pacific Premier Bancorp Inc. has acquired First Associations Bank in Dallas for $53.7 million in a mix of cash and stock payments.
Pacific Premier’s subsidiary, Pacific Premier Bank, is among the largest banks based in Orange County, with about $1.09 billion in assets at the end of the third quarter. The acquisition is expected to boost the bank’s assets by about $356.2 million.
The latest deal is Pacific Premier’s third acquisition, and its first buy of a healthy bank. Pacific Premier bought Palm Desert-based Palm Desert National Bank and Palm Springs-based Canyon National Bank over the past two years, both of which had been taken over by the Federal Deposit Insurance Corp.
“First Associations has been profitable for 21 quarters ever since founding,” said Steve Gardner, chief executive of Pacific Premier. “It’s a very efficient business. They have 13 employees who have done an excellent job.”
First Associations is a state chartered bank that exclusively serves homeowners associations and related management companies.
“The niche business that they operate provides a lot of liquidity to us to fund our loans,” Gardner said. “The deal gives us a lot of deposits, day one. And it gives us a platform to continue to grow low-cost core deposits. For [First Associations], they need some place to invest their deposits. We’ll be putting that into work.”
First Associations held $305.5 million in total deposits and $18.8 million in outstanding loans at the end of September. The additions will take Pacific Premier’s deposit base to about $1.2 billion and boost its total loans to about $882.5 million.
• Headquarters: Costa Mesa
• Business: Bank holding company
• Founded: 1997
• Ticker symbol: PPBI (Nasdaq)
• 2011 revenue: $56.7 million
• Recent earnings: $3.5 million for third quarter
• Market value: About $114.3 million
• Notable: Set to relocate headquarters to Irvine
Pacific Premier reported a third-quarter profit of $3.5 million, beating analysts’ expectations with a 41% jump from a year earlier. The company is in preparations to relocate its headquarters to Irvine mid-fourth quarter.
There are no plans to shift any personnel or operations to OC.
“We’re just going to operate the business as a division of the bank,” Gardner said. “At the same time, we’re not looking to build out a commercial franchise in Dallas; we’re more focused in acquisitions here.”
About 80% of First Associations’ deposits were gained through the bank’s relationship with Dallas-based property management firm Associations Inc., Gardner said. Pacific Premier looks to continue the relationship with the company under a five-year extension on an existing depository services agreement.
Chief Executive of Associations John Carona, who also is First Associations’ largest shareholder, is expected to join Pacific Premier’s board of directors when the acquisition is completed.
The transaction is expected to close in the fourth quarter or first quarter of next year.
