First Quarter 2021 Summary

• Net income of $68.7 million, or $0.72 per diluted share
• Return on average assets of 1.37%, return on average equity of 9.99%, and return on average tangible common equity of 16.21%
• Increases common equity quarterly dividend by $0.03 to $0.33 per share
• Net interest margin of 3.55% and core net interest margin of 3.30%
• Cost of deposits of 0.11% in the first quarter compared with 0.14% in the prior quarter
• Non-maturity deposits of $15.4 billion, or 91.8% of total deposits
• Noninterest-bearing deposits represent 37.7% of total deposits
• Nonperforming assets represent 0.19% 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 $68.7 million, or $0.72 per diluted share, for the first quarter of 2021, compared with net income of $67.1 million, or $0.71 per diluted share, for the fourth quarter of 2020, and net income of $25.7 million, or $0.43 per diluted share, for the first quarter of 2020.

For the quarter ended March 31, 2021, the Company’s return on average assets (“ROAA”) was 1.37%, return on average equity (“ROAE”) was 9.99%, and return on average tangible common equity (“ROATCE”) was 16.21%, compared to 1.34%, 9.91%, and 16.32%, respectively, for the fourth quarter of 2020 and 0.89%, 5.05%, and 9.96%, respectively, for the first quarter of 2020. Total assets were $20.17 billion at March 31, 2021, compared to $19.74 billion at December 31, 2020, and $11.98 billion at March 31, 2020. A reconciliation of the non-U.S. generally accepted accounting principles (“GAAP”) measure of ROATCE to the GAAP measure of common stockholders' equity is set forth at the end of this press release.

Steven R. Gardner, Chairman, President, and Chief Executive Officer of the Company, commented, “Our first quarter results reflect the strength and discipline of the organization we have built, as our ability to offset a challenging environment by reducing our deposit costs, tightly controlling operating expenses, and maintaining exceptional asset quality helped us to continue generating a high level of profitability.

“We were able to largely offset another quarter of significant payoffs and a decline in credit line utilization rates with a record level of new loan production. Despite the first quarter typically being a seasonally low period for the origination of new loans, we generated more than $1.15 billion in new loan commitments, an increase of 27% compared to the prior quarter. Our teams are working very well together and they continue to generate larger and more sophisticated banking relationships. We are seeing stronger loan production across all of our primary lines of business, as well as an overall increase in the average rate on new loan commitments.

“Our loan pipeline continues to build, which should put us in a good position to generate loan growth as we move through the year, favorably remix the balance sheet towards higher yielding earning assets, and drive growth in net interest income.

“Given our consistent financial performance and our increasing confidence in the outlook for earnings growth as the economy strengthens, we have increased our common stock dividend to $0.33 per share, from $0.30 per share in the prior quarter. With our strong capital ratios, we are able to increase the capital returned to our shareholders through the dividend payout, while also being well positioned to support continued organic growth and execute on strategic transactions that we believe would further enhance the value of our franchise,” said Mr. Gardner.

FINANCIAL HIGHLIGHTS

INCOME STATEMENT HIGHLIGHTS

Net Interest Income and Net Interest Margin

Net interest income totaled $161.7 million in the first quarter of 2021, a decrease of $6.5 million, or 3.9%, from the fourth quarter of 2020. The decrease in net interest income reflected 2 less days of interest, lower average loan balances and yields, and lower accretion income, partially offset by a lower cost of funds driven by lower rates paid on deposits and lower average balances of retail and brokered certificates of deposit.

The net interest margin for the first quarter of 2021 was 3.55%, compared with 3.61% in the prior quarter. Our core net interest margin, which excludes the impact of loan accretion income of $9.9 million, compared to $11.0 million in the prior quarter, certificates of deposit mark-to-market amortization, and other adjustments, decreased 2 basis points to 3.30%, compared to 3.32% in the prior quarter. The decrease was driven by lower average loan yields and the shift in our interest-earning assets mix, partially offset by a lower cost of deposits.

Net interest income for the first quarter of 2021 increased $52.5 million, or 48.1%, compared to the first quarter of 2020. The increase was attributable to an increase in average interest-earning assets of $8.13 billion, which primarily resulted from the acquisition of Opus Bank (“Opus”) in the second quarter of 2020, as well as a higher average investment securities balance and a lower cost of funds, partially offset by lower average loan and investment yields and a higher average balance of deposits.

Provision for Credit Losses

Provision for credit losses for the first quarter of 2021 was $2.0 million, an increase of $457,000 from the fourth quarter of 2020, and a decrease of $23.5 million from the first quarter of 2020. The increase from the fourth quarter of 2020 was primarily due to a provision for unfunded commitments of $1.7 million as a result of an increase in outstanding unfunded commitments in the commercial and industrial loan segment. The provision for loan losses for the first quarter of 2021 reflected improved economic conditions, lower loans held for investment, and lower net charge-offs compared to the prior quarter. The provision in the first quarter of 2020 reflected unfavorable changes in economic forecasts related to the onset of the COVID-19 pandemic.

Noninterest Income

Noninterest income for the first quarter of 2021 was $23.7 million, an increase of $546,000 from the fourth quarter of 2020. The increase was primarily due to $2.3 million of Small Business Administration (“SBA”) Paycheck Protection Program (“PPP”) referral fees, partially offset by a $1.0 million decrease in net gain from sales of investment securities.

During the first quarter of 2021, the Bank sold $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, compared to the sale of $2.1 million of SBA loans and $59.2 million of other loans for net gains of $154,000 and $174,000, respectively, during the fourth quarter of 2020.

During the first quarter of 2021, the Bank sold $175.3 million of investment securities for a net gain of $4.0 million, compared to the sale of $202.6 million of investment securities for a net gain of $5.0 million in the fourth quarter of 2020.

Noninterest income for the first quarter of 2021 increased $9.3 million, or 64.0%, compared to the first quarter of 2020. The increase was primarily due to the addition of $7.2 million of trust custodial account fees and $1.5 million of escrow and exchange fees following the Opus acquisition, a $2.8 million increase in other income primarily due to $2.3 million of SBA PPP referral fees, a $791,000 increase in equity investment income, and an $897,000 increase in earnings on bank-owned life insurance (“BOLI”), partially offset by a $3.7 million decrease in net gain from sales of investment securities and a $410,000 decrease in net gain from the sales of loans.

The net gain from sales of loans for the first quarter of 2021 decreased from the same period last year primarily due to the sale of $1.3 million of SBA loans for a net gain of $69,000 and the sale of fully charged-off loans for a net gain of $292,000, compared with the sale of $15.9 million of SBA loans for a net gain of $1.2 million and $23.0 million of other loans for a net loss of $404,000 during the first quarter of 2020.

Noninterest Expense

Noninterest expense totaled $92.5 million for the first quarter of 2021, a decrease of $7.5 million compared to the fourth quarter of 2020, primarily due to the decrease of $5.1 million in merger-related expense associated with the Opus acquisition. Excluding merger-related expense, noninterest expense decreased $2.4 million compared to the fourth quarter of 2020, driven primarily by a $1.3 million decrease in premises and occupancy expense, a $1.2 million decrease in deposit expense, as well as other decreases, partially offset by a $663,000 increase in other expense primarily related to higher charitable contributions.

Noninterest expense increased by $25.9 million compared to the first quarter of 2020. Excluding merger-related expense, noninterest expense increased $27.6 million compared to the first quarter of 2020. The increase was primarily due to an $18.2 million increase in compensation and benefits, a $3.8 million increase in premises and occupancy expense, a $2.6 million increase in data processing expense, a $1.2 million increase in other expense, an $814,000 increase in FDIC insurance premiums, an $809,000 increase in legal and professional services, and a $726,000 increase in office expense, all predominately as a result of the additional operations, personnel, branches, and divisions retained with the acquisition of Opus. These increases were partially offset by a $1.1 million decrease in deposit expense.

Income Tax

For the first quarter of 2021, our effective tax rate was 24.5%, compared with 25.4% for the fourth quarter of 2020 and 18.5% for the first quarter of 2020. The decrease in effective tax rate compared with the prior quarter was primarily due to the excess tax benefit from stock-based compensation recognized in the first quarter. The lower effective tax rate from the first quarter of 2020 was due to tax benefits of $2.6 million associated with net operating loss carryback related to our acquisition of Grandpoint Capital, Inc. in 2018 as a result of Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) that was signed into law on March 27, 2020 in response to the COVID-19 pandemic.

BALANCE SHEET HIGHLIGHTS

Loans

Loans held for investment totaled $13.12 billion at March 31, 2021, a decrease of $119.0 million from December 31, 2020, and an increase of $4.36 billion from March 31, 2020. The decrease from December 31, 2020 was driven by loan maturities and prepayments as well as lower line utilization rates, partially offset by higher funded loans in the first quarter of 2021.

During the first quarter of 2021, the Bank generated $1.15 billion of loan commitments and funded $746.3 million of new loans, compared with $911.3 million in loan commitments and $712.5 million in funded loans for the fourth quarter of 2020, and $443.7 million in loan commitments and $353.9 million in funded loans for the first quarter of 2020. Business line utilization rates decreased to 29.7% at the end of the first quarter of 2021, compared with 36.1% at the end of the fourth quarter of 2020 and 50.6% at the end of first quarter of 2020.

The increase in loans held for investment from March 31, 2020 was primarily due to the acquisition of Opus, which added $5.94 billion in gross loans, or $5.81 billion of loans held for investment after purchase accounting adjustments at the time of acquisition.

At March 31, 2021, the ratio of loans held for investment to total deposits was 78.4%, compared with 81.6% and 96.3% at December 31, 2020 and March 31, 2020, respectively.

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

The total end-of-period weighted average interest rate on loans, excluding fees and discounts, at March 31, 2021 was 4.21%, compared to 4.27% at December 31, 2020 and 4.76% at March 31, 2020. The quarter-over-quarter and year-over-year decreases reflect the impact of lower rates on new originations as well as the repricing of loans as a result of the Federal Reserve Board's federal funds rate decrease in March 2020.

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

The weighted average interest rate on new loan commitments was 3.63% in the first quarter of 2021, compared with 3.55% in the fourth quarter of 2020 and 4.59% in the first quarter of 2020.

Asset Quality and Allowance for Credit Losses

At March 31, 2021, our allowance for credit losses (“ACL”) on loans held for investment was $267.0 million, a slight decrease of $1.0 million from December 31, 2020 and an increase of $151.6 million from March 31, 2020, and continues to reflect the impact of the COVID-19 pandemic and resulting uncertainty in the macroeconomic environment. The slight decrease from December 31, 2020 was driven principally by lower loans held for investment and loan mix. The increase from March 31, 2020 was primarily due to the acquisition of Opus during the second quarter of 2020, which added a Day 1 provision for loan losses of $75.9 million for non-purchased credit deteriorated (“PCD”) loans and $21.2 million for PCD loans, as well as the unfavorable changes in economic forecasts employed in the Company's CECL model related to the COVID-19 pandemic during 2020.

During the first quarter of 2021, the Company incurred $1.3 million of net charge-offs, compared to $6.4 million and $1.3 million during the fourth quarter of 2020 and the first 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:

The ratio of allowance for credit losses to loans held for investment at March 31, 2021 was 2.04%, compared to 2.02% at December 31, 2020 and 1.32% at March 31, 2020. Under the guidance of ASC 820: Fair Value Measurements and Disclosures, the fair value net discount on loans acquired through total bank acquisitions was $103.9 million, or 0.79% of total loans held for investment, as of March 31, 2021, compared to $113.8 million, or 0.85% of total loans held for investment, as of December 31, 2020, and $35.9 million, or 0.41% of total loans held for investment, as of March 31, 2020.

Nonperforming assets totaled $38.9 million, or 0.19% of total assets, at March 31, 2021, compared with $29.2 million, or 0.15% of total assets, at December 31, 2020 and $21.1 million, or 0.18% of total assets, at March 31, 2020. During the first quarter of 2021, nonperforming loans increased $9.7 million to $38.9 million from December 31, 2020. Total loan delinquencies were $22.6 million, or 0.17% of loans held for investment, at March 31, 2021, compared to $13.3 million, or 0.10% of loans held for investment, at December 31, 2020, and $28.9 million, or 0.33% of loans held for investment, at March 31, 2020.

Classified loans totaled $134.7 million, or 1.03% of loans held for investment, at March 31, 2021, compared with $128.3 million, or 0.97% of loans held for investment, at December 31, 2020, and $54.1 million, or 0.62% of loans held for investment, at March 31, 2020. The year-over-year increase was driven, in part, by the migration to the substandard risk grade of approximately $54.4 million of loans subject to temporary loan modifications during 2020, the addition of classified loans from the Opus acquisition in the second quarter of 2020, as well as the net changes in risk ratings during fiscal 2020.

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 March 31, 2021. There were no troubled debt restructured loans at March 31, 2021 or December 31, 2020. Troubled debt restructured loans totaled $2.3 million at March 31, 2020.

At March 31, 2021, there were no loans remaining within their modification period due to COVID-19 hardship under the CARES Act. Additionally, as of March 31, 2021, there were no loans in-process for potential modification. At December 31, 2020, 52 loans totaling $79.5 million, or 0.60% of loans held for investment, remained within their COVID-19 hardship modification period, of which $20.2 million of loans had migrated to the substandard risk grade. No loans were in-process for potential modification as of December 31, 2020.

Investment Securities

Investment securities totaled $3.88 billion at March 31, 2021, a decrease of $75.6 million, or 1.9%, from December 31, 2020, and an increase of $2.51 billion, or 182.7%, from March 31, 2020. The decrease in the first quarter of 2021 compared to the prior quarter was primarily the result of $175.3 million in sales, $170.4 million in principal payments, amortization, and redemptions, and a $105.7 million decrease in mark-to-market fair value adjustment, partially offset by $375.8 million in purchases. The increase in investment securities from March 31, 2020 was primarily the result of $2.99 billion in purchases and $829.9 million of investment securities acquired from Opus, partially offset by $780.4 million in sales, $445.5 million in principal payments, amortization and redemptions, and an $83.5 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 as of March 31, 2021.

Deposits

At March 31, 2021, deposits totaled $16.74 billion, an increase of $525.8 million from December 31, 2020 and an increase of $7.65 billion from March 31, 2020. At March 31, 2021, non-maturity deposits totaled $15.37 billion, or 91.8% of total deposits, an increase of $781.9 million, or 5.4%, from December 31, 2020 and an increase of $7.35 billion, or 91.6%, from March 31, 2020. During the first quarter of 2021, deposit increases included $291.6 million in noninterest-bearing deposits, $248.4 million in money market and savings deposits, and $241.8 million in interest-bearing checking deposits, partially offset by decreases of $118.1 million in retail certificates of deposits and $137.9 million in brokered certificates of deposit as compared to the fourth quarter of 2020. The increase in deposits from March 31, 2020 was primarily due to the acquisition of Opus.

The weighted average cost of deposits for the first quarter of 2021 was 0.11%, compared to 0.14% for the fourth quarter of 2020, and 0.48% for the first quarter of 2020, including the favorable impact of the acquired certificates of deposit mark-to-market amortization. The decrease in the weighted average cost of deposits in the first quarter of 2021 compared to the prior quarters was principally driven by lower pricing across all deposit product categories.

The end of period weighted average rate of deposits at March 31, 2021 was 0.12%.

Borrowings

At March 31, 2021, total borrowings amounted to $511.6 million, a decrease of $20.9 million from December 31, 2020 and a decrease of $224.7 million from March 31, 2020. Total borrowings at March 31, 2021 included $10.0 million of Federal Home Loan Bank of San Francisco (“FHLB”) advances and $501.6 million of subordinated debt. At March 31, 2021, total borrowings represented 2.5% of total assets, compared to 2.7% and 6.1%, as of December 31, 2020 and March 31, 2020, respectively. The decrease in borrowings at March 31, 2021 as compared to December 31, 2020 was primarily due to lower FHLB advances. The decrease in borrowings at March 31, 2021 as compared to March 31, 2020 was primarily due to lower FHLB advances, partially offset by the issuance in June 2020 of $150 million in aggregate principal amount of the Company's 5.375% Fixed-to-Floating Rate Subordinated Notes due June 15, 2030, as well as the $135 million aggregate principal amount of subordinated notes assumed by the Bank in connection with the acquisition of Opus in the second quarter of 2020.

Capital Ratios

At March 31, 2021, our common stockholder's equity was $2.70 billion, or 13.40% of total assets, compared with $2.75 billion, or 13.92%, at December 31, 2020 and $2.00 billion, or 16.72%, at March 31, 2020, with a book value per share of $28.56, compared with $29.07 at December 31, 2020 and $33.40 at March 31, 2020. At March 31, 2021, our ratio of tangible common equity to total assets was 8.97%, compared with 9.40% at December 31, 2020 and 10.06% at March 31, 2020, with a tangible book value per share of $18.19, compared with $18.65 at December 31, 2020 and $18.60 at March 31, 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 March 31, 2021, the Company exceeded all regulatory minimum capital adequacy requirements, inclusive of the fully phased in capital conservation buffer, with a tier 1 leverage ratio of 9.66%, common equity tier 1 capital ratio of 12.05%, tier 1 capital ratio of 12.05%, and total capital ratio of 16.26%.

At March 31, 2021, the Bank had a tier 1 leverage ratio of 11.13%, common equity tier 1 capital ratio of 13.90%, tier 1 capital ratio of 13.90%, and total capital ratio of 15.92%. These capital ratios 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 7.00%, 8.50%, and 10.50%, respectively.

Dividend and Stock Repurchase Program

On April 23, 2021, the Company's Board of Directors declared a $0.33 per share dividend, payable on May 14, 2021 to stockholders of record as of May 7, 2021. This represents a $0.03 per share, or 10% increase, compared to the prior quarter’s quarterly dividend rate. On January 11, 2021, the Company’s Board of Directors approved a new stock repurchase program, which authorized the repurchase 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.

Subsequent Events

On April 15, 2021, the Company redeemed all three subordinated notes totaling $25.0 million that the Company assumed as part of the acquisition of Plaza Bancorp, Inc. in 2017. Prior to redemption, the subordinated notes carried a fixed interest rate of 7.125% and were scheduled to mature on June 26, 2025. The subordinated notes securities were called at 103% of the principal amount of the notes, plus accrued and unpaid interest, for an aggregate amount of $25.8 million. The Company recorded a loss on early debt extinguishment of $647,000 after considering $103,000 fair value mark related to purchase accounting adjustments.

Conference Call and Webcast

The Company will host a conference call at 9:00 a.m. PT / 12:00 p.m. ET on April 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 May 4, 2021 at (877) 344-7529, conference ID 10153857.

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 approximately $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 approximately $17 billion of assets under custody and approximately 43,000 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. The COVID-19 pandemic is adversely affecting us, our customers, counterparties, employees, and third-party service providers, and given its ongoing and dynamic nature, the ultimate extent of the impacts on our business, financial position, results of operations, liquidity, and prospects is 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 expected discontinuation of 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 newly approved 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.

(PPBI-ER)