1 Acquisition of First Associations Bank Investor Presentation October 15, 2012
Forward-Looking Statements and Where to Find Additional Information Forward Looking Statements This investor presentation may contain forward-looking statements regarding Pacific Premier Bancorp, Inc. (“PPBI”), including its wholly owned subsidiary Pacific Premier Bank, First Associations Bank (“FAB”) and the proposed acquisition. These statements involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Such risks and uncertainties include, but are not limited to, the following factors: the expected cost savings, synergies and other financial benefits from the acquisition might not be realized within the expected time frames or at all; governmental approval of the acquisition may not be obtained or adverse regulatory conditions may be imposed in connection with governmental approvals of the acquisition; conditions to the closing of the acquisition may not be satisfied; and the shareholders of FAB may fail to approve the consummation of the acquisition. Annualized, pro forma, projected and estimated numbers in this investor presentation are used for illustrative purposes only, are not forecasts and may not reflect actual results. PPBI and FAB undertake 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. Notice to FAB Shareholders This investor presentation does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. In connection with the proposed acquisition transaction, a registration statement on Form S-4 will be filed with the Securities and Exchange Commission (“SEC”) by PPBI. The registration statement will contain a proxy statement/prospectus to be distributed to the shareholders of FAB in connection with their vote on the acquisition. SHAREHOLDERS OF FAB ARE ENCOURAGED TO READ THE REGISTRATION STATEMENT AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING THE PROXY STATEMENT/PROSPECTUS THAT WILL BE PART OF THE REGISTRATION STATEMENT, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED ACQUISITION. The final proxy statement/prospectus will be mailed to shareholders of FAB. Investors and security holders will be able to obtain the documents free of charge at the SEC's website, www.sec.gov. In addition, documents filed with the SEC by PPBI will be available free of charge by accessing PPBI’s website at www.ppbi.com or by writing PPBI at 1600 Sunflower Ave., 2nd Floor, Costa Mesa, California 92626, Attention: Investor Relations, or by writing FAB at 12001 N. Central Expressway, Suite 1165, Dallas, Texas 75243, Attention: Corporate Secretary. The directors, executive officers and certain other members of management and employees of PPBI may be deemed to be participants in the solicitation of proxies in favor of the acquisition from the shareholders of FAB. Information about the directors and executive officers of PPBI is included in the proxy statement for its 2012 annual meeting of PPBI shareholders, which was filed with the SEC on April 16, 2012. The directors, executive officers and certain other members of management and employees of FAB may also be deemed to be participants in the solicitation of proxies in favor of the acquisition from the shareholders of FAB. Information about the directors and executive officers of FAB will be included in the proxy statement/prospectus for the acquisition. Additional information regarding the interests of those participants and other persons who may be deemed participants in the transaction may be obtained by reading the proxy statement/prospectus regarding the proposed acquisition when it becomes available. Free copies of this document may be obtained as described in the preceding paragraph.
Transaction Rationale Valuable source of long-term low-cost core deposits o Improves PPBI’s deposit mix and enhances franchise value o Strategic Deposit platform and balance sheet liquidity will provide additional funding for PPBI’s continued o Rationale loan growth Niche depository focused business model serving the homeowners associations (“HOAs”) and o HOA management companies nationwide Pricing multiples below other recent comparable transactions o FAB is a highly efficient banking organization with consistent profitability o Financially Limited credit risk due to clean balance sheet and small loan portfolio size, which results in a o Attractive minimal fair value accounting mark Combined company is better positioned to drive long-term earnings per share growth o FAB will operate as a separate division of Pacific Premier Bank (“PPB”) o PPBI will retain all FAB employees and has entered into employment agreements with key o executive officers that will become effective upon consummation of the acquisition Structure and Associations, Inc. (“Associa”), the largest HOA management company in the United States, will o Team enter into a five (5) year Depository Services Agreement with PPB upon consummation of the acquisition The largest FAB shareholder and current FAB director, John Carona, is expected to join PPBI’s and o PPB’s Board of Directors. Mr. Carona is also the CEO and majority owner of Associa 3
Overview of First Associations Bank Overview of First Associations Bank Corporate Overview Headquarters Dallas, Texas Established in 2007 to serve the banking needs of o CEO Michael A. Kowalski HOAs and HOA management companies Employees (Full Time Equivalent) 12 Clientele located in 17 states o Corporation Type S-Corporation FAB’s business model is highly efficient and o Balance Sheet (9/30/2012) leverages online technology tools that provide HOA management companies the ability to Assets $356.2 million streamline operations through data integration and Securities $313.9 million seamless information reporting Gross Loans $18.8 million Noninterest-Bearing Deposits $81.5 million Deposit and treasury management products o Total Deposits $305.5 million include web based funds management, online ACH services, online homeowner payment Tangible Common Equity $45.9 million options, integrated third party lockbox services and remote deposit capture Performance Metrics (9/30/2012) Relationship with Associa, the largest HOA Efficiency Ratio (MRQ) 52.4% o management company in the United States Cost of Deposits (MRQ) 0.23% Pre-Tax Return on Average Assets (LTM) 1.37% Meaningful opportunity for PPBI to redeploy o Pre-Tax Income (LTM) $4.7 million FAB’s excess funding, which is currently invested Non-Performing Assets / Total Assets 0.00% in municipal bonds and mortgage backed securities Loans / Deposits 6.2% Non-Int. Bearing Deposits / Total Deposits 26.7% Non-CDs / Total Deposits 92.9% 4 Source: SNL Financial FAB regulatory call report data as of 9/30/2012
Transaction Overview $53.7 million, including consideration payable to FAB common shareholders and o Transaction Value: option and warrant holders $50.2 million payable to FAB common shareholders consisting of approximately o 75% cash / 25% PPBI common stock (1) $37.6 million in cash Consideration Detail: o $12.5 million in PPBI common stock (2) o $3.5 million in cash payable to FAB option and warrant holders o Fixed exchange ratio of 0.646x which would result in 1,279,419 shares of PPBI o Exchange Ratio: common stock to be issued to FAB shareholders (2) Required Approvals: Customary regulatory approvals and approval of FAB shareholders o Anticipated Closing: Late Q4 2012 or early Q1 2013 o Due Diligence: Completed; including extensive review of securities, loans, deposits and operations o PPB to enter into an amendment to FAB’s current Depository Services Agreement with o Other Considerations: Associa providing for a five (5) year term (1) Transaction value and consideration mix % will change based on the fluctuation in PPBI’s common stock price, the change in the value of FAB’s investment securities portfolio and the total FAB transaction costs (2) The exchange ratio was calculated based on a 5-day average closing PPBI common stock price of $9.80 immediately before announcement of the acquisition 5
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