Below is transcript of the Pacific Premier Bancorp, Inc. (NASDAQ:PPBI)’s Fourth Quarter 2014 Earnings Call, held on January 21, 2015 at 12:00 p.m. ET. Basswood Capital, Whitebox Advisors and Springbok Capital was among Pacific Premier Bancorp, Inc. (NASDAQ:PPBI) shareholders at the end of the third quarter.
Pacific Premier Bancorp, Inc. (NASDAQ:PPBI) is a holding company for Pacific Premier Bank (Bank). As of December 31, 2011, the Company conducted business throughout Southern California from its nine locations in the counties of Los Angeles, Orange, Riverside and San Bernardino.
Company Executives:
Steve Gardner – President and Chief Executive Officer, Pacific Premier Bancorp Inc
Kent Smith – EVP, CFO, Corporate Secretary and Treasurer, Pacific Premier Bancorp Inc.
Analysts:
Matthew Clark – Managing Director, Sterne Agee Institutional Services
Andrew Liesch – CFA, Associate Director, Equity Research Group of Sandler O’Neill
Timothy Coffey – Vice President and Research Analyst, FIG Partners
Brian Zabora – Analyst, Keefe, Bruyette & Woods (KBW)
Donald A. Worthington – Banking Analyst, Raymond James
Gary Tenner, CFA – Vice President and Senior Research Analyst, D.A. Davidson Equity Capital Markets.
Operator
Good afternoon and good morning. Welcome to the Pacific Premier Bancorp Q4 2014 Conference Call. All participants will be in a listen-only mode. After today’s presentation, there will be an opportunity to ask questions. Please also note that today’s event is being recorded. At this time, I’d like to turn the conference call over to Mr. Steve Gardner, President and CEO of Pacific Premier Bancorp. Sir, please go ahead.
Steve Gardner, President and CEO
Thank you, Jamie. Good morning, everyone and I appreciate you joining us today. As you are all aware, earlier this morning we released our earnings report for the fourth quarter of 2014. I’m going to walk through some of the notable items. Kent Smith, our CFO is going to review some of the financial details and then we’ll open up the call to questions. I’ll also note that in our earnings release this morning, we have the Safe Harbor statement relative to the forward-looking comments and I would encourage all of you to take a look and read through those at you’re leisure.
We delivered strong performance in the fourth quarter, which was highlighted by our success in Business Development that resulted in more than 20% annualized growth in both Loans and Deposits. However, we had a couple of items that negatively impacted our bottom-line. The first item was $864,000 in merger-related expense in connection with our Independence Bank acquisition. The second item was a $1.7 million accrual we made in connection with the Baker class action lawsuit. The bank was named as a defendant in a class action lawsuit back in 2004, alleging various violations of Missouri Law relating to alleged excessive loan origination fees and closing costs involving approximately 16 residential loans.
Various motions to dismiss the lawsuit were denied in 2005 and 2006. After a lengthy period of inactivity, we were contacted by plaintiffs’ counsel to schedule depositions and discovery and prepare the case to go to trial in 2015. Our attorneys have analyzed the claims and evaluated the arguments and we determine to establish the accrual in consultation with our counsel. As a result of these two items, our diluted earnings per share for the fourth quarter came in at $0.23, lower than both the prior quarter and the fourth quarter of 2013. However from the perspective of our core operations we saw very positive trends in most areas of our business. We had our most productive quarter in history of the bank with $218 million in originations.
