Saturday, May 7, 2022


PACIFIC PREMIER BANCORP INC Administration’s Dialogue and Evaluation of Monetary Situation and Outcomes of Operations (kind 10-Q)

FORWARD-LOOKING STATEMENTS This Quarterly Report on Type 10-Q comprises data and statements which are thought-about “ahead wanting statements” inside the…

By Staff , in IRAs , at May 6, 2022


FORWARD-LOOKING STATEMENTS

This Quarterly Report on Type 10-Q comprises data and statements which are
thought-about "ahead wanting statements" inside the which means of Part 27A of the
Securities Act of 1933, as amended, and Part 21E of the Change Act. These
forward-looking statements symbolize plans, estimates, goals, objectives,
pointers, expectations, intentions, projections, and statements of our beliefs
regarding future occasions, enterprise plans, goals, anticipated working
outcomes, and the assumptions upon which these statements are primarily based.
Ahead-looking statements embody with out limitation, any assertion which will
predict, forecast, point out or indicate future outcomes, efficiency or
achievements, and are sometimes recognized with phrases corresponding to "might," "might,"
"ought to," "will," "would," "imagine," "anticipate," "estimate," "anticipate,"
"intend," "plan," or phrases or phrases of comparable which means.

We warning that the forward-looking statements are primarily based largely on our
expectations and are topic to quite a lot of identified and unknown dangers and
uncertainties which are topic to vary primarily based on elements, that are, in lots of
cases, past our management. Precise outcomes, efficiency or achievements might
differ materially from these contemplated, expressed, or implied by the
forward-looking statements.

Given the continued and dynamic nature of the COVID-19 pandemic, the last word
extent of the impacts on our enterprise, monetary place, outcomes of
operations, liquidity and prospects stay unsure. Though normal enterprise
and financial situations have begun to get better, the restoration could possibly be slowed or
reversed by quite a lot of elements, together with will increase in COVID-19 infections, the
tight labor market, provide chain disruptions, inflationary pressures, or
turbulence in home or international monetary markets, which might adversely have an effect on
our revenues, the values of our belongings and liabilities, and our profitability,
cut back the provision of funding, result in a tightening of credit score, and additional
improve inventory value volatility, which might lead to impairment to our
goodwill or different intangible belongings in future intervals. Modifications to statutes,
laws, or regulatory insurance policies or practices because of, or in response,
to the COVID-19 pandemic might have an effect on us in substantial and unpredictable methods,
together with the potential opposed influence of mortgage modifications and cost
deferrals carried out in keeping with latest regulatory steerage. Along with
the foregoing, the next further elements, amongst others, might trigger our
monetary efficiency to vary materially from that expressed in such
forward-looking statements:

•The energy of the USA economic system normally and the energy of the
native economies by which we conduct operations;

•The consequences of, and adjustments in, commerce, financial, and financial insurance policies and legal guidelines,
together with rate of interest insurance policies of the Board of Governors of the Federal
Reserve System
(the “Federal Reserve”);

•Inflation/deflation, rate of interest, market, and financial fluctuations;

•The impact of adjustments in accounting insurance policies and practices or accounting
requirements, as could also be adopted now and again by financial institution regulatory companies, the
SEC, the Public Firm Accounting Oversight Board, the FASB, or different
accounting requirements setters, together with ASU 2016-13 (Matter 326), "Measurement of
Credit score Losses on Monetary Devices," generally referenced because the CECL mannequin,
which has modified how we estimate credit score losses and has elevated the required
degree of our allowance for credit score losses since adoption on January 1, 2020;

•The impact of acquisitions we've got made or might make, together with, with out
limitation, the failure to realize the anticipated income progress and/or expense
financial savings from such acquisitions, and/or the failure to successfully combine an
acquisition goal into our operations;

•The well timed improvement of aggressive new services and products and the
acceptance of those services and products by new and current clients;

•The influence of adjustments in monetary companies insurance policies, legal guidelines and laws,
together with these regarding taxes, banking, securities, and insurance coverage, and the
utility thereof by regulatory our bodies;

•The transition away from USD LIBOR and associated uncertainty in addition to, the
dangers and prices associated to our adoption of SOFR;

•The effectiveness of our threat administration framework and quantitative fashions;

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•Modifications within the degree of our nonperforming belongings and charge-offs;

•Potential credit-related impairments of securities held by us;

•The influence of present and attainable future governmental efforts to restructure
the U.S. monetary regulatory system;

•Modifications in client spending, borrowing, and financial savings habits;

•The consequences of our lack of a diversified mortgage portfolio, together with the dangers of
geographic and business concentrations;

•Our potential to draw deposits and different sources of liquidity;

•The likelihood that we might cut back or discontinue the funds of dividends on
our frequent inventory;

•Modifications within the monetary efficiency and/or situation of our debtors;

•Modifications within the aggressive setting amongst monetary and financial institution holding
firms and different monetary service suppliers;

•Geopolitical situations, together with acts or threats of terrorism, actions taken
by the USA or different governments in response to acts or threats of
terrorism and/or navy conflicts, together with the conflict between Russia and
Ukraine, which might influence enterprise and financial situations in the United
States
and overseas;

•Cybersecurity threats and the price of defending in opposition to them;

•Local weather change, together with the improved regulatory, compliance, credit score, and
reputational dangers and prices;

•Pure disasters, earthquakes, fires, and extreme climate;

•Unanticipated regulatory, authorized, or judicial proceedings; and

•Our potential to handle the dangers concerned within the foregoing.

If a number of of the elements affecting our forward-looking data and
statements proves incorrect, then our precise outcomes, efficiency, or
achievements might differ materially from these expressed in, or implied by,
forward-looking data and statements contained on this Quarterly Report on
Type 10-Q and different stories and registration statements filed by us with the
SEC. Due to this fact, we warning you to not place undue reliance on our
forward-looking data and statements. We won't replace the
forward-looking data and statements to mirror precise outcomes or adjustments
within the elements affecting the forward-looking data and statements. For
data on the elements that would trigger precise outcomes to vary from the
expectations said within the forward-looking statements, see "Danger Elements" below
Half I, Merchandise 1A of our 2021 Type 10-Ok along with Half II, Merchandise 1A - Danger
Elements of this Quarterly Report on Type 10-Q and different stories as filed with
the SEC.

Ahead-looking data and statements shouldn't be considered as predictions,
and shouldn't be the first foundation upon which traders consider us. Any
investor in our frequent inventory ought to take into account all dangers and uncertainties
disclosed in our filings with the SEC, all of that are accessible on the SEC's
web site at http://www.sec.gov.

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GENERAL

Administration's dialogue and evaluation of economic situation and outcomes of
operations is meant to supply a greater understanding of the numerous
adjustments in tendencies regarding the Firm's monetary situation, outcomes of
operations, liquidity, and capital assets. This dialogue ought to be learn in
conjunction with our 2021 Type 10-Ok, plus the unaudited consolidated monetary
statements and the notes thereto showing elsewhere on this Quarterly Report on
Type 10-Q. The outcomes for the three months ended March 31, 2022 aren't
essentially indicative of the outcomes anticipated for the 12 months ending December 31,
2022.

The Company is a California-based financial institution holding firm integrated in 1997
within the state of Delaware and registered as a financial institution holding firm below the Financial institution
Holding Firm Act of 1956, as amended ("BHCA"). Our wholly owned subsidiary,
Pacific Premier Financial institution, is a California state-chartered industrial financial institution. The Financial institution
was based in 1983 as a state-chartered thrift and subsequently transformed to a
federally-chartered thrift in 1991. The Financial institution transformed to a California-chartered
industrial financial institution and have become a member of the Federal Reserve System in March 2007.
The Financial institution can also be a member of the FHLB, which is a member of the Federal Residence
Mortgage Financial institution System. As a financial institution holding firm, the Company is topic to
regulation and supervision by the Federal Reserve. We're required to file with
the Federal Reserve quarterly and annual stories and such further data
because the Federal Reserve might require pursuant to the BHCA. The Federal Reserve might
conduct examinations of financial institution holding firms, such because the Company, and its
subsidiaries. The Company can also be a financial institution holding firm inside the which means
of the California Monetary Code. As such, the Company and its subsidiaries
are topic to the supervision and examination by, and could also be required to file
stories with, the California Division of Monetary Safety and Innovation
("DFPI").

A financial institution holding firm, such because the Company, is required to function a
supply of economic energy to its subsidiary depository establishments and to
commit assets to assist such establishments in circumstances the place it would
not accomplish that absent such a coverage. The Federal Reserve, below the BHCA, has the
authority to require a financial institution holding firm to terminate any exercise or to
relinquish management of a nonbank subsidiary (aside from a nonbank subsidiary of a
financial institution) upon the Federal Reserve's willpower that such exercise or management
constitutes a severe threat to the monetary soundness and stability of any financial institution
subsidiary of the financial institution holding firm.

As a California state-chartered industrial financial institution, which is a member of the
Federal Reserve, the Financial institution is topic to supervision, periodic examination, and
regulation by the DFPI, the Federal Reserve, the Client Monetary Safety
Bureau, and the Federal Deposit Insurance coverage Company ("FDIC"). The Financial institution's
deposits are insured by the FDIC by way of the Deposit Insurance coverage Fund. Usually
phrases, insurance coverage protection is as much as $250,000 per depositor for all deposit
accounts. On account of this residue insurance coverage operate, the FDIC additionally has
sure supervisory authority and powers over the Financial institution. If, because of an
examination of the Financial institution, the regulators ought to decide that the monetary
situation, capital assets, asset high quality, earnings prospects, administration,
liquidity, or different features of the Financial institution's operations are unsatisfactory or that
the Financial institution or our administration is violating or has violated any legislation or regulation,
numerous cures can be found to the regulators. Such cures embody the
energy to enjoin unsafe or unsound practices, to require affirmative motion to
appropriate any situations ensuing from any violation or observe, to difficulty an
administrative order that may be judicially enforced, to direct a rise in
capital, to limit progress, to evaluate civil financial penalties, to take away
officers and administrators, and finally, to request the FDIC to terminate the
Financial institution's deposit insurance coverage. As a California-chartered industrial financial institution, the Financial institution is
additionally topic to sure provisions of California legislation.

Our company headquarters are situated in Irvine, California. At March 31, 2022,
we primarily conduct enterprise all through the Western Area of the USA
from our 61 full-service depository branches situated in Arizona, California,
Nevada, Oregon, and Washington.


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On account of our natural and strategic progress technique we've got developed a
number of banking services and products inside our focused markets within the
Western United States tailor-made to small- and middle-market companies,
companies, together with the house owners and staff of these companies,
professionals, entrepreneurs, actual property traders, and non-profit
organizations, in addition to customers within the communities we serve. By way of our
branches and our web site, www.ppbi.com, we offer a wide selection of banking
services and products corresponding to: numerous kinds of deposit accounts, digital
banking, treasury administration companies, on-line invoice cost, and a wide selection of
mortgage merchandise, together with industrial enterprise loans, traces of credit score, SBA loans,
industrial actual property loans, agribusiness loans, franchise lending, dwelling fairness
traces of credit score, and development loans all through the Western United States in
main metropolitan markets inside Arizona, California, Nevada, Oregon, and
Washington. We even have acquired and enhanced nationwide specialty banking
services and products for HOA and HOA administration firms, in addition to
skilled owner-operator franchisees within the QSR business. Most lately, we
have expanded our specialty services and products choices to incorporate
industrial escrow companies by way of our Commerce Escrow division, which
facilitates industrial escrow companies and tax-deferred industrial actual property
exchanges below Part 1031 of the Inside Income Code, in addition to custodial
and upkeep companies by way of our Pacific Premier Belief division, which
serves as a custodian for self-directed IRAs in addition to sure accounts that do
not qualify as IRAs pursuant to the Inside Income Code.

The Financial institution funds its lending and funding actions with retail and industrial
deposits obtained by way of its branches, advances from the FHLB, traces of credit score,
and wholesale and brokered certificates of deposit.

Our principal supply of earnings is the web unfold between curiosity earned on
loans and investments and the curiosity prices related to deposits and
borrowings used to finance the mortgage and funding portfolios. Moreover, the
Financial institution generates charge earnings from mortgage and funding gross sales, and numerous merchandise
and companies provided to depository, mortgage, escrow, and IRA custodial shoppers.

COVID-19 PANDEMIC

The COVID-19 outbreak was declared a Public Well being Emergency of Worldwide
Concern by the World Well being Group ("WHO") on January 30, 2020 and a
pandemic by the WHO on March 11, 2020. The continued COVID-19 international pandemic and
nationwide well being emergency has triggered important disruption in the USA
and worldwide economies and monetary markets.

Whereas financial situations have improved, the continued COVID-19 pandemic has
positioned pressure on sure companies and repair suppliers, lots of which have
not been capable of conduct operations of their ordinary method. Ought to the COVID-19
pandemic persist, we anticipate it might have an effect on the next:

•Mortgage progress and curiosity earnings - Financial exercise has expanded because the
onset of the COVID-19 pandemic, nevertheless the economic system continues to expertise
provide chain disruptions, inflationary pressures, and the uncertainty created by
latest geopolitical developments. If the financial restoration begins to wane, it
might have an effect on our debtors, the companies they function, and their
monetary situation. Our debtors might have much less demand for credit score wanted to
spend money on and broaden their companies, in addition to much less demand for actual property
and client loans. Such elements would place stress on the extent of
interest-earning belongings, which can negatively influence our curiosity earnings.

•Credit score high quality - Ought to there be a decline in financial exercise, the markets we
serve might expertise will increase in unemployment, declines in client
confidence, and a reluctance on the a part of companies to spend money on and broaden
their operations, amongst different issues. Such elements might lead to further
weak spot in financial situations, place pressure on our debtors, and finally
influence the credit score high quality of our mortgage portfolio. We anticipate this might lead to
will increase within the degree of overdue, nonaccrual, and categorised loans, in addition to
increased web charge-offs. Whereas financial situations have improved because the onset
of the COVID-19 pandemic within the first quarter of 2020, there could be no assurance
the restoration will proceed. As such, ought to we expertise future deterioration
within the credit score high quality of our mortgage portfolio, it could contribute to the necessity for
further provisions for credit score losses.
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•CECL - The Firm is required to measure and document credit score losses on sure
monetary belongings, corresponding to loans and debt securities, in accordance with the CECL
mannequin stipulated below ASC 326. The CECL mannequin for measuring credit score losses is
extremely dependent upon expectations of future financial situations and requires
administration judgment. Ought to the restoration in financial situations start to wane
and expectations regarding future financial situations deteriorate, the Firm
could also be required to document further provisions for credit score losses below the CECL
mannequin.

•Impairment fees - Ought to the restoration in financial situations wane, it might
adversely influence the Firm's working outcomes and the worth of sure of our
belongings. Because of this, the Firm could also be required to write-down the worth of
sure belongings corresponding to goodwill, intangible belongings, or deferred tax belongings when
there may be proof to counsel their worth has turn into impaired or won't be
realizable at a future date.

The U.S. authorities in addition to different state and native coverage makers have
responded to the continued COVID-19 pandemic with actions geared to assist not
solely the well being and well-being of the general public, but in addition customers, companies,
and the economic system as a complete. Nonetheless, the last word influence and general
effectiveness of those actions is tough to find out at the moment.

CRITICAL ACCOUNTING POLICIES

Administration has established numerous accounting insurance policies that govern the
utility of GAAP within the preparation of our monetary statements. Sure
accounting insurance policies require administration to make estimates and assumptions that
contain a major degree of estimation uncertainty and are moderately doubtless
to have a fabric influence on the carrying worth of sure belongings and
liabilities in addition to the Firm's outcomes of operations; administration considers
these to be crucial accounting insurance policies. The estimates and assumptions
administration makes use of are primarily based on historic expertise and different elements, which
administration believes to be cheap below the circumstances. Precise outcomes
might differ considerably from these estimates and assumptions, which might
have a fabric influence on the carrying worth of the Firm's belongings and
liabilities in addition to the Firm's outcomes of operations in future reporting
intervals. Our important accounting insurance policies are described within the Notes to the
consolidated monetary statements in our 2021 Type 10-Ok.

Allowance for Credit score Losses on Loans and Off-Steadiness Sheet Commitments

The Firm accounts for credit score losses on loans and off-balance sheet
commitments, corresponding to unfunded mortgage commitments, in accordance with ASC 326 -
Monetary Devices - Credit score Losses, which requires the Firm to document an
estimate of anticipated lifetime credit score losses for loans and unfunded mortgage
commitments on the time of origination or acquisition. The ACL is maintained at
a degree deemed applicable by administration to supply for present anticipated future
credit score losses within the portfolio as of the date of the consolidated statements of
monetary situation. Estimating anticipated credit score losses requires administration to
use related forward-looking data, together with using cheap and
supportable forecasts. The estimation course of in figuring out the ACL entails a
important diploma of judgement, requiring administration to make quite a few estimates
and assumptions. These estimates and assumptions are topic to vary in future
intervals, which can have a fabric influence on the extent of the ACL and the
Firm's outcomes of operations.

The measurement of the ACL is carried out by collectively evaluating loans with
comparable threat traits, in addition to the person analysis of loans that
are deemed to now not possess traits just like others within the mortgage
portfolio. The Firm measures the ACL on industrial actual property loans and
industrial loans by way of a reduced money stream strategy utilizing a mortgage's
efficient rate of interest, whereas a historic loss charge methodology is used to
decide the ACL on retail loans. The Firm's discounted money stream
methodology incorporates a PD and LGD mannequin, which is impacted by expectations
of future financial situations. The Firm's ACL methodology additionally incorporates
estimates and assumptions regarding mortgage prepayments, future attracts on revolving
credit score amenities, and the chance an unfunded dedication will probably be drawn
upon.

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Using cheap and supportable forecasts within the ACL methodology requires
important judgment, corresponding to choosing forecast situations and associated
scenario-weighting, in addition to figuring out the suitable size of the
forecast horizon. Administration leverages financial projections from a good and
impartial third occasion to tell and supply its cheap and supportable
financial forecasts. Different inner and exterior indicators of financial forecasts
might also be thought-about by administration when growing forecast metrics. Forecasts
of financial situations and anticipated credit score losses are remodeled a two-year time
horizon, earlier than reverting to long-term common loss charges over a interval of three
years. Modifications in financial forecasts, at the side of adjustments in mortgage
particular attributes, have an effect on a mortgage's PD and LGD, which may drive
adjustments within the willpower of the ACL and may have a major influence on the
provision for credit score losses.

The Firm's ACL methodology additionally contains changes for qualitative elements
the place applicable. Qualitative changes could also be associated to and embody, however
not restricted to, elements corresponding to: (i) administration's evaluation of financial
forecasts used within the mannequin and the way these forecasts align with administration's
general analysis of present and anticipated financial situations, (ii)
group particular dangers corresponding to credit score concentrations, collateral particular
dangers, regulatory dangers, and exterior elements which will finally influence credit score
high quality, (iii) potential mannequin limitations corresponding to limitations recognized
by way of back-testing, and different limitations related to elements corresponding to
underwriting adjustments, acquisition of latest portfolios, adjustments in portfolio
segmentation, and (iv) administration's general evaluation of the adequacy of the
ACL, together with an evaluation of mannequin knowledge inputs used to find out the ACL.

The Firm has a credit score portfolio evaluation course of designed to detect downside
loans. Downside loans are sometimes these of a substandard or worse inner threat
grade, and will encompass loans on nonaccrual standing, troubled debt
restructurings, loans the place the probability of foreclosures on underlying
collateral has elevated, collateral dependent loans, and different loans the place
concern or doubt over the last word collectability of all contractual quantities due
has turn into elevated. Such loans might, within the opinion of administration, be deemed to
now not possess threat traits just like different loans within the mortgage
portfolio, and as such, might require particular person analysis to find out an
applicable ACL for the mortgage. When a mortgage is individually evaluated, the Firm
sometimes measures the anticipated credit score loss for the mortgage primarily based on a reduced
money stream strategy, until the mortgage has been deemed collateral dependent.
Collateral dependent loans are loans the place the compensation of the mortgage is anticipated
to come back from the operation of and/or eventual liquidation of the underlying
collateral. The ACL for collateral dependent loans is decided utilizing estimates
for the truthful worth of the underlying collateral, much less prices to promote.

Though administration makes use of the very best data obtainable to derive estimates
essential to measure an applicable degree of the ACL, future changes to the
ACL could also be obligatory attributable to financial, working, regulatory, and different
situations that stretch past the Firm's management. As well as, numerous
regulatory companies, as an integral a part of their examination course of,
periodically evaluation the Firm's ACL. Such companies might require the Firm to
acknowledge adjustments to the ACL primarily based on judgments completely different from these of
administration. Additional, as the scale, complexity, and composition of the mortgage
portfolio adjustments over time, corresponding to by way of the acquisition of different monetary
establishments, new product choices, consumer demand for numerous kinds of credit score,
and adjustments in our geographic footprint, the Firm might search to make further
enhancements to its ACL methodology. Such enhancements might have an effect on the
degree of the ACL in future intervals.

The ACL is recorded by way of a cost to provision for credit score losses and is
decreased by charge-offs, web of recoveries on loans beforehand charged-off. It's
the Firm's coverage to promptly charge-off mortgage balances on the time they've
been deemed uncollectible.

Please additionally see Observe 6 – Allowance for Credit score Losses, of the Notes to the
Consolidated Monetary Statements for added dialogue in regards to the
Firm’s ACL methodology.

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Enterprise Combos

The Firm accounts for enterprise mixtures below the acquisition methodology of
accounting. Upon acquiring management of an acquired entity, the Firm data
all identifiable belongings and liabilities at their estimated truthful values. Goodwill
is recorded when the consideration paid for an acquired entity exceeds the
estimated truthful worth of the web belongings acquired. Modifications to the acquisition date
truthful values of belongings acquired and liabilities assumed could also be made as
changes to goodwill throughout a one 12 months measurement interval following the date
of acquisition. Such changes are attributable to further data
obtained associated to truthful worth estimates of the belongings acquired and liabilities
assumed. Prices related to enterprise mixtures are expensed as incurred.

Revenue Taxes

The Firm is topic to federal and state taxation in numerous tax
jurisdictions inside the USA. Present earnings taxes are primarily based on
estimates for quantities payable or receivable on tax returns for the present 12 months.
Deferred tax belongings and liabilities are recorded for the anticipated future tax
penalties of occasions which were acknowledged within the Firm's monetary
statements or tax returns utilizing the asset-liability methodology. In estimating future
tax penalties, all anticipated future occasions aside from enactments of adjustments in
tax legal guidelines or tax charges are thought-about. The impact on deferred taxes of a change
in tax charges is acknowledged in earnings within the interval that features the enactment
date. Deferred tax belongings are to be acknowledged for momentary variations that
will lead to deductible quantities in future years and for tax carryforwards if,
within the opinion of administration, it's extra doubtless than not that the deferred tax
belongings will probably be realized. Modifications in earnings taxes can happen when, amongst different
issues, there are adjustments in tax legal guidelines, adjustments in tax charges, and/or adjustments in
statutory or regulatory steerage; any of which can have an effect on present and
deferred earnings taxes, and will have a fabric influence on our outcomes of
operations. The Firm's earnings tax positions are evaluated quarterly.








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NON-GAAP MEASURES

The Firm makes use of sure non-GAAP monetary measures to supply significant
supplemental data concerning the Firm's operational efficiency and to
improve traders' general understanding of such monetary efficiency.
Usually, a non-GAAP monetary measure is a numerical measure of an organization's
monetary efficiency, monetary place, or money flows that exclude (or
embody) quantities which are included in (or excluded from) essentially the most instantly
comparable measure calculated and offered in accordance with GAAP. Nonetheless,
these non-GAAP monetary measures are supplemental and aren't an alternative choice to
an evaluation primarily based on GAAP measures and might not be akin to non-GAAP
monetary measures which may be offered by different firms.

For intervals offered beneath, return on common tangible frequent fairness is a
non-GAAP monetary measure derived from GAAP-based quantities. We calculate this
determine by excluding amortization of intangible belongings expense from web earnings
and excluding the typical intangible belongings and common goodwill from the
common stockholders' fairness in the course of the interval. Administration believes that the
exclusion of such gadgets from this monetary measure offers helpful data
to realize an understanding of the working outcomes of our core enterprise.

                                                                              Three Months Ended
                                                             March 31,           December 31,          March 31,
({Dollars} in 1000's)                                          2022                 2021                 2021
Web earnings                                                 $    66,904          $    84,831          $    68,668
Plus: amortization of intangible belongings expense                  3,592                3,880                4,143

Much less: amortization of intangible belongings expense tax
adjustment (1)

                                                   1,025                1,107                1,185
Web earnings for common tangible frequent fairness              $    69,471      

$ 87,604 $ 71,626

Common stockholders' fairness                               $ 2,864,387          $ 2,851,000          $ 2,749,641
Much less: common intangible belongings                                 68,157               71,897               83,946
Much less: common goodwill                                         901,312              901,312              898,587
Common tangible frequent fairness                             $ 1,894,918      

$ 1,877,791 $ 1,767,108

Return on common fairness (2)                                      9.34  %             11.90  %              9.99  %
Return on common tangible frequent fairness (2)                     14.66  %             18.66  %             16.21  %


______________________________

(1) Amortization of intangible belongings expense adjusted by statutory tax charge.
(2) Ratio is annualized.


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Tangible e book worth per share and tangible frequent fairness to tangible belongings (the
"tangible frequent fairness ratio") are non-GAAP monetary measures derived from
GAAP-based quantities. We calculate tangible e book worth per share by dividing
tangible frequent stockholder's fairness by shares excellent. We calculate the
tangible frequent fairness ratio by excluding the steadiness of intangible belongings from
frequent stockholders' fairness and dividing by interval finish tangible belongings, which
additionally excludes intangible belongings. We imagine that this data is vital
to shareholders as tangible fairness is a measure that's in keeping with the
calculation of capital for financial institution regulatory functions, which excludes intangible
belongings from the calculation of risk-based ratios.
                                                   March 31,        

December 31,

        ({Dollars} in 1000's)                       2022              

2021

        Whole stockholders' fairness              $  2,783,018       $  

2,886,311

        Much less: intangible belongings                      967,290           

970,883

        Tangible frequent fairness                  $  1,815,728       $  

1,915,428

        Whole belongings                            $ 21,622,296       $ 

21,094,429

        Much less: intangible belongings                      967,290           

970,883

        Tangible belongings                         $ 20,655,006       $ 

20,123,546

        Tangible frequent fairness ratio                    8.79  %            

9.52 %

Widespread shares issued and excellent 94,945,849 94,389,543

        Guide worth per share                    $      29.31       $      30.58
        Much less: intangible e book worth per share          10.19              10.29
        Tangible e book worth per share           $      19.12       $      20.29



For intervals offered beneath, effectivity ratio is a non-GAAP monetary measure
derived from GAAP-based quantities. This determine represents the ratio of noninterest
expense much less different actual property owned operations, core deposit intangible
amortization, and merger-related expense to the sum of web curiosity earnings
earlier than provision for mortgage losses and complete noninterest earnings, much less acquire/(loss)
on sale of securities, different earnings - safety recoveries on funding
securities, acquire/(loss) on sale of different actual property owned, and acquire/(loss) from
debt extinguishment. Administration believes that the exclusion of such gadgets from
this monetary measure offers helpful data to realize an understanding of
the working outcomes of our core enterprise.
                                                                            Three Months Ended
                                                            March 31,          December 31,          March 31,
({Dollars} in 1000's)                                         2022                2021                 2021
Whole noninterest expense                                  $  97,648          $     97,252          $  92,489
Much less: amortization of intangible belongings                        3,592                 3,880              4,143
Much less: merger-related expense                                       -                     -                  5

Noninterest expense, adjusted                              $  94,056        

$ 93,372 $ 88,341

Web curiosity earnings earlier than provision for mortgage losses $ 161,839

   $    170,719          $ 161,652
Add: complete noninterest earnings                                 25,894                27,281             23,740
Much less: web acquire from funding securities                      2,134                 3,585              4,046
Much less: different earnings - safety recoveries                           -                     1                  2

Much less: web acquire (loss) from debt extinguishment                     -                     -               (503)

Income, adjusted                                          $ 185,599          $    194,414          $ 181,847

Effectivity ratio                                                50.7  %               48.0  %            48.6  %


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Core web curiosity earnings and core web curiosity margin are non-GAAP monetary
measures derived from GAAP primarily based quantities. We calculate core web curiosity earnings
by excluding scheduled accretion earnings, accelerated accretion earnings, premium
amortization on CDs, nonrecurring nonaccrual curiosity paid, and acquire (loss) on
rate of interest in truthful worth hedging relationships from web curiosity earnings. The
core web curiosity margin is calculated because the ratio of core web curiosity
earnings to common interest-earning belongings. Administration believes that the
exclusion of such gadgets from these monetary measures offers helpful
data to realize an understanding of the working outcomes of our core
enterprise.

                                                                                 Three Months Ended
                                                                March 31,           December 31,            March 31,
({Dollars} in 1000's)                                            2022                  2021                  2021
Web curiosity earnings                                          $    161,839          $    170,719          $    161,652
Much less: scheduled accretion earnings                                    2,857                 3,097                 3,878
Much less: accelerated accretion earnings                                  3,083                 4,770                 5,988
Much less: premium amortization on CDs                                      96                   183                 1,751
Much less: nonrecurring nonaccrual curiosity paid                          (356)                  349                  (603)
Much less: loss on truthful worth hedging relationships                     (1,667)                 (819)                    -
Core web curiosity earnings                                     $    157,826   

$ 163,139 $ 150,638

Common interest-earning belongings                              $ 19,240,232   

$ 19,173,458 $ 18,490,426

Web curiosity margin (1)                                              3.41  %               3.53  %               3.55  %
Core web curiosity margin (1)                                         3.33  %               3.38  %               3.30  %


______________________________

(1) Ratio is annualized.

Pre-provision web income is a non-GAAP monetary measure derived from
GAAP-based quantities. We calculate the pre-provision web income by excluding
earnings tax, provision for credit score losses, and merger-related bills from web
earnings. Administration believes that the exclusion of such gadgets from this monetary
measure offers helpful data to realize an understanding of the working
outcomes of our core enterprise and a greater comparability to the monetary outcomes of
prior intervals.

                                                                               Three Months Ended
                                                              March 31,           December 31,            March 31,
({Dollars} in 1000's)                                          2022                  2021                  2021
Curiosity earnings                                            $    168,546          $    177,006          $    172,994
Curiosity expense                                                  6,707                 6,287                11,342
Web curiosity earnings                                             161,839               170,719               161,652
Noninterest earnings                                               25,894                27,281                23,740
Income                                                         187,733               198,000               185,392
Noninterest expense                                              97,648                97,252                92,489
Add: merger-related expense                                           -                     -                     5
Pre-provision web income                                        90,085               100,748                92,908
Pre-provision web income (annualized)                     $    360,340          $    402,992          $    371,632

Common belongings                                             $ 20,956,791          $ 20,867,005          $ 19,994,260

Pre-provision web income on common belongings                        0.43  %               0.48  %               0.46  %
Pre-provision web income on common belongings
(annualized)                                                       1.72  %               1.93  %               1.86  %



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RESULTS OF OPERATIONS

The next desk presents the elements of outcomes of operations, share
knowledge, and efficiency ratios for the intervals indicated:

                                                                                   Three Months Ended
(Greenback in 1000's, besides per share knowledge and                    March 31,          December 31,          March 31,
percentages)                                                          2022                2021                 2021
Working knowledge
Curiosity earnings                                                   $ 168,546          $    177,006          $ 172,994
Curiosity expense                                                      6,707                 6,287             11,342
Web curiosity earnings                                                 161,839               170,719            161,652
Provision for credit score losses                                             448               (14,648)             1,974
Web curiosity earnings after provision for credit score losses               161,391               185,367            159,678
Web acquire from gross sales of loans                                          1,494                 1,334                361
Different noninterest earnings                                             24,400                25,947             23,379
Noninterest expense                                                  97,648                97,252             92,489
Web earnings earlier than earnings taxes                                       89,637               115,396             90,929
Revenue tax expense                                                   22,733                30,565             22,261
Web earnings                                                        $  66,904          $     84,831          $  68,668
Pre-provision web income (3)                                     $  90,085          $    100,748          $  92,908
Share knowledge
Earnings per share:
Fundamental                                                             $    0.71          $       0.90          $    0.73
Diluted                                                                0.70                  0.89               0.72
Widespread fairness dividends declared per share                             0.33                  0.33               0.30
Dividend payout ratio (1)                                             46.60  %              36.72  %           41.26  %
Efficiency ratios
Return on common belongings (2)                                           1.28  %               1.63  %            1.37  %
Return on common fairness (2)                                           9.34                 11.90               9.99
Return on common tangible frequent fairness (2)(3)                       14.66                 18.66              16.21

Pre-provision web income on common belongings (2)(3)                     1.72                  1.93               1.86
Common fairness to common belongings                                      13.67                 13.66              13.75
Effectivity ratio (3)                                                   50.7                  48.0               48.6

______________________________

(1) Dividend payout ratio is outlined as frequent fairness dividends declared per
share divided by primary earnings per share.
(2) Ratio is annualized.
(3) Reconciliations of the non-GAAP measures are set forth within the Non-GAAP
Measures part of the Administration's Dialogue and Evaluation of Monetary
Situation and Outcomes of Operations on this Type 10-Q.


Within the first quarter of 2022, we reported web earnings of $66.9 million, or $0.70
per diluted share. This compares with web earnings of $84.8 million, or $0.89 per
diluted share, for the fourth quarter of 2021. The lower in web earnings was
primarily attributable to a $15.1 million lower in provision recapture, an $8.9
million lower in web curiosity earnings, a $1.4 million lower in noninterest
earnings, and a $396,000 improve in noninterest expense, partially offset by a
$7.8 million lower in earnings tax expense. The availability recapture in the course of the
fourth quarter of 2021 was reflective of enhancing financial forecasts utilized in
the Firm's CECL mannequin relative to prior intervals, partially offset by an
improve in loans held for funding and adjustments in mortgage combine.

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Web earnings of $66.9 million, or $0.70 per diluted share, for the primary quarter
of 2022 compares to web earnings for the primary quarter of 2021 of $68.7 million,
or $0.72 per diluted share. The lower in web earnings was primarily attributable to a
$5.2 million improve in noninterest expense, partially offset by a $2.2 million
improve in noninterest earnings, and a $1.5 million lower in provision for
credit score losses. The lower within the provision for credit score losses in the course of the first
quarter of 2022 was primarily attributable to increased excellent unfunded mortgage
commitments within the first quarter of 2021.

For the three months ended March 31, 2022, the Firm's return on common
belongings was 1.28%, return on common fairness was 9.34%, and return on common
tangible frequent fairness was 14.66%. For the three months ended December 31, 2021,
the return on common belongings was 1.63%, the return on common fairness was 11.90%,
and the return on common tangible frequent fairness was 18.66%. For the three
months ended March 31, 2021, the return on common belongings was 1.37%, the return
on common fairness was 9.99%, and the return on common tangible frequent fairness
was 16.21%. For extra particulars, see "non-GAAP measures" offered below Merchandise
2 - Administration's Dialogue and Evaluation.

Web Curiosity Revenue

Our major income is web curiosity earnings, which is the distinction
between the curiosity earned on loans, funding securities, and
interest-earning balances with monetary establishments ("interest-earning
belongings") and the curiosity paid on deposits and borrowings ("interest-bearing
liabilities"). Web curiosity margin is web curiosity earnings expressed as a
share of common interest-earning belongings. Web curiosity earnings is affected
by adjustments in each rates of interest and the quantity of interest-earning belongings and
interest-bearing liabilities.

Web curiosity earnings totaled $161.8 million within the first quarter of 2022, a
lower of $8.9 million, or 5.2%, from the fourth quarter of 2021. The lower
in web curiosity earnings was primarily attributable to decrease loan-related charges and
decrease accretion earnings because of slowing prepayment exercise, two fewer
days of curiosity, and decrease common funding and mortgage yields, partially offset
by a rise in common incomes belongings and a positive remix in direction of increased
yielding loans.

The online curiosity margin for the primary quarter of 2022 was 3.41%, in contrast with
3.53% within the prior quarter. Our core web curiosity margin, which excludes the
influence of mortgage accretion earnings, loss on rate of interest contract in truthful worth
hedging relationships, and different changes, decreased 5 foundation factors to three.33%,
in comparison with 3.38% within the prior quarter, reflecting decrease mortgage prepayment charges,
decrease common funding and mortgage yields, partially offset by the favorable
shift in common earning-asset combine.

Web curiosity earnings for the primary quarter of 2022 elevated $187,000, or 0.1%,
in comparison with the primary quarter of 2021. The rise was attributable to increased
common mortgage and funding balances, decrease value of funds, primarily attributable to a
favorable deposit combine from an $894.6 million improve in common
noninterest-bearing checking, and redemptions of higher-cost subordinated
debentures, partially offset by decrease common interest-earning belongings yields.

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The next desk presents the curiosity unfold, web curiosity margin, common
balances calculated primarily based on every day common, curiosity earnings and yields earned on
common interest-earning belongings and curiosity expense and charges paid on common
interest-bearing liabilities, and the typical yield/charge by asset and legal responsibility
part for the intervals indicated:

                                                                                                                                  Common Steadiness Sheet
                                                                                                                                    Three Months Ended
                                                                     March 31, 2022                                                 December 31, 2021                                                  March 31, 2021
                                                   Common                                   Common                Common                                   Common                Common                                   Common
({Dollars} in 1000's)                             Steadiness             Curiosity            Yield/Price               Steadiness             Curiosity            Yield/Price               Steadiness             Curiosity            Yield/Price
Property
Curiosity-earning belongings:
Money and money equivalents                      $    322,236          $      90                    0.11  %       $    334,371          $      66                    0.08  %       $  1,309,366          $     301                    0.09  %
Funding securities                             4,546,408             17,852                    1.57             4,833,251             19,522                    1.62             4,087,451             17,468                

1.71

Loans receivable, web (1)(2)                     14,371,588            150,604                    4.25            14,005,836            157,418                    4.46            13,093,609            155,225               

4.81

Whole interest-earning belongings                    19,240,232            168,546                    3.55            19,173,458            177,006                    3.66            18,490,426            172,994               

3.79

Noninterest-earning belongings                        1,716,559                                                        1,693,547                                                        1,503,834
Whole belongings                                   $ 20,956,791                                                     $ 20,867,005                                                     $ 19,994,260
Liabilities and fairness
Curiosity-bearing deposits:
Curiosity checking                              $  3,537,824          $     229                    0.03  %       $  3,501,323          $     225                    0.03  %       $  3,060,055          $     419                    0.06  %
Cash market                                      5,343,973                888                    0.07             5,467,559                925                    0.07             5,447,909              2,588                    0.19
Financial savings                                             422,186                 26                    0.02               418,218                 27                    0.03               368,288                 82                    0.09
Retail certificates of deposit                    1,047,451                530                    0.21             1,084,326                517                    0.19             1,425,093              1,201                   

0.34

Wholesale/brokered certificates of
deposit                                                   -                  -                       -                     -                  -                       -               118,854                136                    

0.46

Whole interest-bearing deposits                  10,351,434              1,673                    0.07            10,471,426              1,694                    0.06            10,420,199              4,426                 

0.17

FHLB advances and different borrowings                  225,250                474                    0.85                69,538                 33                    0.19                22,012                 65                    1.20
Subordinated debentures                             330,629              4,560                    5.52               330,476              4,560                    5.52               501,553              6,851                    5.46
Whole borrowings                                    555,879              5,034                    3.63               400,014              4,593                    4.59               523,565              6,916                    5.36
Whole interest-bearing liabilities               10,907,313              6,707                    0.25            10,871,440              6,287                    0.23            10,943,764             11,342                 

0.42

Noninterest-bearing deposits                      6,928,872                                                        6,911,702                                                        6,034,319
Different liabilities                                   256,219                                                          232,863                                                          266,536
Whole liabilities                                18,092,404                                                       18,016,005                                                       17,244,619
Stockholders' fairness                              2,864,387                                                        2,851,000                                                        2,749,641
Whole liabilities and fairness                   $ 20,956,791                                                     $ 20,867,005                                                     $ 19,994,260
Web curiosity earnings                                                  $ 161,839                                                        $ 170,719                                                        $ 161,652

Web curiosity margin (3)                                                                           3.41  %                                                          3.53  %                                                          3.55  %
Price of deposits (4)                                                                              0.04                                                             0.04                                                             0.11
Price of funds (5)                                                                                 0.15                                                             0.14                                                             0.27
Ratio of interest-earning belongings to interest-bearing liabilities                                176.40                                                           176.37                                                           168.96

______________________________

(1) Common steadiness contains loans held on the market and nonperforming loans and is
web of deferred mortgage origination charges/prices and reductions/premiums.
(2) Curiosity earnings contains web low cost accretion of $5.9 million, $7.9
million, and $9.9 million, respectively.
(3) Represents annualized web curiosity earnings divided by common
interest-earning belongings.
(4) Represents annualized curiosity expense on deposits divided by the sum of
common interest-bearing deposits and noninterest-bearing deposits.
(5) Represents annualized complete curiosity expense divided by the sum of common
complete interest-bearing liabilities and noninterest-bearing deposits.




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Modifications in our web curiosity earnings are a operate of adjustments in quantity, days in
a interval, and charges of interest-earning belongings and interest-bearing liabilities.
The next tables current the influence that the quantity, days in a interval, and
charge adjustments have had on our web curiosity earnings for the intervals indicated. For
every class of interest-earning belongings and interest-bearing liabilities, we
have offered data on adjustments to our web curiosity earnings with respect to:

•Modifications in quantity (adjustments in quantity multiplied by prior charge);

•Modifications in days in a interval (adjustments in days in a interval multiplied by every day
curiosity; no adjustments in days for comparisons of the three months ended March 31,
2022 to the three months ended March 31, 2021);

•Modifications in rates of interest (adjustments in rates of interest multiplied by prior quantity
and contains the popularity of reductions/premiums and deferred charges/prices); and

•The online change or the mixed influence of quantity, days in a interval, and charge
adjustments allotted proportionately to adjustments in quantity, days in a interval, and
adjustments in rates of interest.

                                                     Three Months Ended March 31, 2022
                                                                In comparison with
                                                    Three Months Ended December 31, 2021
                                                         Enhance (Lower) On account of

    ({Dollars} in 1000's)                    Quantity            Days          Fee          Web
    Curiosity-earning belongings
    Money and money equivalents            $        (2)        $     (2)     $     28      $     24
    Funding securities                     (1,137)               -          (533)       (1,670)
    Loans receivable, web                      3,890           (3,347)       (7,357)       (6,814)
    Whole interest-earning belongings              2,751           (3,349)     

(7,862) (8,460)

    Curiosity-bearing liabilities
    Curiosity checking                              2               (5)            7             4
    Cash market                                 (21)             (20)            4           (37)
    Financial savings                                        -               (1)            -            (1)
    Retail certificates of deposit               (16)             (12)           41            13

    FHLB advances and different borrowings           176              (11)          276           441
    Subordinated debentures                        2                -            (2)            -
    Whole interest-bearing liabilities           143              (49)          326           420

Change in web curiosity earnings $ 2,608 $ (3,300) $ (8,188) $ (8,880)

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                                                           Three Months Ended March 31, 2022
                                                                      In comparison with
                                                           Three Months Ended March 31, 2021
                                                               Enhance (Lower) On account of

({Dollars} in 1000's)                                      Quantity                     Fee                Web
Curiosity-earning belongings
Money and money equivalents                                $     (296)               $      85          $     (211)
Funding securities                                         1,882                   (1,498)                384
Loans receivable, web                                        14,273                  (18,894)             (4,621)
Whole interest-earning belongings                                15,859                  (20,307)             (4,448)
Curiosity-bearing liabilities
Curiosity checking                                                48                     (238)               (190)
Cash market                                                    (48)                  (1,652)             (1,700)
Financial savings                                                          14                      (70)                (56)
Retail certificates of deposit                                 (267)                    (404)               (671)
Wholesale/brokered certificates of deposit                      (68)                     (68)               (136)
FHLB advances and different borrowings                              514                     (105)                409
Subordinated debentures                                      (2,358)                      67              (2,291)
Whole interest-bearing liabilities                           (2,165)                  (2,470)             (4,635)
Change in web curiosity earnings                            $   18,024                $ (17,837)         $      187




Provision for Credit score Losses

For the primary quarter of 2022, the Firm recorded a $448,000 provision
expense, in comparison with a $14.6 million provision recapture in the course of the fourth
quarter of 2021, and a $2.0 million provision expense in the course of the first quarter
of 2021. The availability expense in the course of the first quarter of 2022 was pushed
principally by mortgage progress and better web charge-offs, in addition to the influence of
rising macroeconomic uncertainties. With the rising chance of draw back
dangers attributable to excessive inflation, the conflict between Russia and Ukraine and the
uncertainty of its financial influence, and the potential that the economic system might enter
right into a interval of recession, the Firm is rigorously monitoring the present and
forecasted macroeconomic setting, in addition to key modeling variables.

The availability recapture for the fourth quarter of 2021 was primarily reflective
of enhancing financial forecasts employed within the Firm's CECL mannequin, partially
offset by the fourth quarter mortgage progress and adjustments in mortgage combine. The availability
expense for the primary quarter of 2021 was a results of a rise in excellent
unfunded commitments within the industrial and industrial mortgage phase in
conjunction with continued unfavorable, however enhancing financial situations and
forecasts mirrored within the Firm's CECL mannequin.

Web mortgage charge-offs for the three months ending March 31, 2022 totaled
$446,000, in contrast with web mortgage recoveries of $981,000 for the three months
ending December 31, 2021, and web mortgage charge-offs of $1.3 million for the three
months ending March 31, 2021.
                                                Three Months Ended                                                        Variance From
                               March 31,           December 31,           March 31,                December 31, 2021                         March 31, 2021
({Dollars} in 1000's)           2022                  2021                 2021                 $                   %                    $                    %
Provision for credit score
losses
Provision for mortgage
losses                       $      211          $     (14,710)         $      315          $  14,921              (101.4) %       $        (104)             (33.0) %
Provision for unfunded
commitments                         218                     51               1,659                167               327.5                 (1,441)             (86.9)

Provision for HTM
securities                           19                     11                   -                  8                72.7                     19                  -
Whole provision for
credit score losses                $      448          $     (14,648)         $    1,974          $  15,096              (103.1) %       $      (1,526)             (77.3) %


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Noninterest Revenue

The next desk presents the elements of noninterest earnings for the
intervals indicated:

                                                    Three Months Ended                                                      Variance From
                                   March 31,           December 31,          March 31,               December 31, 2021                        March 31, 2021
({Dollars} in 1000's)                2022                 2021                 2021                $                  %                   $                    %
Noninterest earnings
Mortgage servicing earnings             $     419          $         505          $     458          $     (86)            (17.0) %       $         (39)             (8.5) %
Service fees on deposit
accounts                              2,615                  2,590              2,032                 25               1.0                    583              28.7
Different service charge earnings                367                    391                473                (24)             (6.1)                  (106)            (22.4)
Debit card interchange charge
earnings                                  836                    769                787                 67               8.7                     49               6.2
Earnings on financial institution owned life
insurance coverage                             3,221                  3,521              2,233               (300)             (8.5)                   988              44.2
Web acquire from gross sales of
loans                                 1,494                  1,334                361                160              12.0                  1,133             313.9
Web acquire from gross sales of
funding securities                 2,134                  3,585              4,046             (1,451)            (40.5)                (1,912)            (47.3)

Belief custodial account
charges                                 11,579                 11,611              7,222                (32)             (0.3)                 4,357              60.3
Escrow and trade charges              1,661                  2,221              1,526               (560)            (25.2)                   135               8.8
Different earnings                          1,568                    754              4,602                814             108.0                 (3,034)            (65.9)
Whole noninterest earnings          $  25,894          $      27,281          $  23,740          $  (1,387)             (5.1) %       $       2,154               9.1  %


Noninterest earnings for the primary quarter of 2022 was $25.9 million, a lower
of $1.4 million from the fourth quarter of 2021. The lower was primarily due
to a $1.5 million lower in web acquire from gross sales of funding securities and a
$560,000 lower in escrow and trade charges, partially offset by an $814,000
improve in different earnings, which included $530,000 increased CRA funding earnings.

In the course of the first quarter of 2022, the Financial institution bought $17.8 million of SBA loans for a
web acquire of $1.5 million, in comparison with the gross sales of $13.3 million of SBA loans
for a web acquire of $1.3 million in the course of the fourth quarter of 2021.

Moreover, in the course of the first quarter of 2022, the Financial institution bought $658.5 million of
funding securities for a web acquire of $2.1 million, in comparison with the gross sales of
$267.1 million of funding securities for a web acquire of $3.6 million within the
fourth quarter of 2021.

Noninterest earnings for the primary quarter of 2022 elevated $2.2 million,
in comparison with the primary quarter of 2021. The rise was primarily attributable to a $4.4
million improve in belief custodial account charges, a $1.1 million improve in web
acquire from gross sales of loans, and a $988,000 improve in earnings on financial institution owned life
insurance coverage ("BOLI"), partially offset by a $3.0 million lower in different earnings
and a $1.9 million lower in web acquire from gross sales of funding securities.

The online acquire from gross sales of loans for the primary quarter of 2022 elevated from
the identical interval final 12 months reflecting increased web acquire from the gross sales of $17.8
million of SBA loans for a web acquire of $1.5 million, in contrast with the gross sales of
$1.3 million of SBA loans for a web acquire of $69,000 and totally charged-off loans
for a web acquire of $292,000 in the course of the first quarter of 2021.

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Noninterest Expense

The next desk presents the elements of noninterest expense for the
intervals indicated:
                                                       Three Months Ended                                                       Variance From
                                      March 31,           December 31,          March 31,               December 31, 2021                         March 31, 2021
({Dollars} in 1000's)                   2022                 2021                 2021                $                  %                   $                     %
Noninterest expense
Compensation and advantages            $  56,981          $      56,076          $  52,548          $     905               1.6  %       $       4,433                 8.4  %
Premises and occupancy                  11,952                 11,403             11,980                549               4.8                    (28)               (0.2)
Information processing                          5,996                  5,881              5,828                115               2.0                    168                 2.9
Different actual property owned
operations, web                              -                      -                  -                  -                 -                      -                   -
FDIC insurance coverage premiums                  1,396                  1,389              1,181                  7               0.5                    215                18.2
Authorized {and professional}
companies                                 4,068                  5,870              3,935             (1,802)            (30.7)                   133                 3.4
Advertising and marketing expense                        1,809                  1,821              1,598                (12)             (0.7)                   211                13.2
Workplace expense                           1,203                  1,463              1,829               (260)            (17.8)                  (626)              (34.2)
Mortgage expense                             1,134                    857              1,115                277              32.3                     19                 1.7
Deposit expense                          3,751                  3,836              3,859                (85)             (2.2)                  (108)               (2.8)
Merger-related expense                       -                      -                  5                  -                 -                     (5)             (100.0)
Amortization of intangible
belongings                                   3,592                  3,880              4,143               (288)             (7.4)                  (551)              (13.3)
Different expense                            5,766                  4,776              4,468                990              20.7                  1,298                29.1
Whole noninterest expense            $  97,648          $      97,252          $  92,489          $     396               0.4  %       $       5,159                 5.6  %





Noninterest expense totaled $97.6 million for the primary quarter of 2022, an
improve of $396,000 in comparison with the fourth quarter of 2021, primarily pushed by
a $990,000 improve in different expense primarily attributable to the next credit score loss
reserve for belief custodial account charges receivable and better bills for
Pacific Premier Belief, a $905,000 improve in compensation and advantages, and a
$549,000 improve in premises and occupancy expense, partially offset by a $1.8
million lower in authorized {and professional} companies.

Noninterest expense elevated by $5.2 million in comparison with the primary quarter of
2021. The rise was primarily attributable to a $4.4 million improve in compensation
and advantages and a $1.3 million improve in different expense, partially offset by a
$626,000 lower in workplace expense and a $551,000 lower in amortization of
intangible belongings.

The Firm’s effectivity ratio was 50.7% for the primary quarter of 2022, in contrast
to 48.0% for the fourth quarter of 2021, and 48.6% for the primary quarter of
2021.

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Revenue Taxes

For the three months ended March 31, 2022, December 31, 2021, and March 31,
2021, earnings tax expense was $22.7 million, $30.6 million, and $22.3 million,
respectively, and the efficient earnings tax charge was 25.4%, 26.5%, and 24.5%,
respectively. Our efficient tax charge for the three months ended March 31, 2022
differs from the 21% federal statutory charge because of the influence of state taxes as
nicely as numerous everlasting tax variations, together with tax-exempt earnings from
municipal securities, BOLI earnings, tax credit from low-income housing tax
credit score investments, and the train of inventory choices and vesting of different
stock-based compensation.

The overall quantity of unrecognized tax advantages was $1.4 million at March 31, 2022
and December 31, 2021, and was comprised of unrecognized tax advantages associated to
the Opus acquisition in 2020. The overall quantity of tax advantages that, if
acknowledged, would favorably influence the efficient tax charge was $563,000 at
March 31, 2022 and December 31, 2021. The Firm doesn't imagine that the
unrecognized tax advantages will change considerably inside the subsequent twelve
months.

The Firm acknowledges curiosity and penalties associated to unrecognized tax
advantages in earnings tax expense. The Firm had accrued for $42,000 and $31,000
of such curiosity at March 31, 2022 and December 31, 2021, respectively. No
quantities for penalties had been accrued.

The Firm and its subsidiaries are topic to U.S. Federal earnings tax, as nicely
as earnings and franchise tax in a number of state jurisdictions. The statute of
limitations associated to the consolidated Federal earnings tax returns is closed for
all tax years as much as and together with 2017. The expirations of the statutes of
limitations associated to the varied state earnings and franchise tax returns fluctuate
by state.

The Firm accounts for earnings taxes by recognizing deferred tax belongings and
liabilities primarily based upon momentary variations between the quantities for monetary
reporting functions and the tax foundation of its belongings and liabilities. Deferred tax
belongings are decreased by a valuation allowance when, within the opinion of administration,
it's extra doubtless than not that some portion, or all, of the deferred tax asset
won't be realized. In assessing the conclusion of deferred tax belongings,
administration evaluates each optimistic and destructive proof, together with the
existence of any cumulative losses within the present 12 months and the prior two years,
the forecasts of future earnings, relevant tax planning methods, and
assessments of present and future financial and enterprise situations. This
evaluation is up to date quarterly and adjusted as obligatory. Based mostly on the evaluation,
the Firm has decided {that a} valuation allowance for deferred tax belongings
was not required as of March 31, 2022 and December 31, 2021.

FINANCIAL CONDITION

At March 31, 2022, belongings totaled $21.62 billion, a rise of $527.9 million,
or 2.5%, from $21.09 billion at December 31, 2021. The rise was primarily
attributable to will increase in money and money equivalents of $504.6 million and complete loans
of $438.6 million, partially offset by a $437.1 million lower in funding
securities. In the course of the quarter, we took actions to place the steadiness sheet
for the next rate of interest setting and macroeconomic uncertainty, which
included rising our liquidity place and decreasing the scale and length of
the AFS securities portfolio to fund increased yielding mortgage progress.

Loans

Loans held for funding totaled $14.73 billion at March 31, 2022, a rise
of $437.9 million, or 3.1%, from $14.30 billion at December 31, 2021. The
improve was pushed by a rise in loans funded and better industrial line
utilization charges and decrease ranges of prepayments and maturities in the course of the
first three months of 2022. Business line utilization charges elevated from an
common charge of 35.2% for the fourth quarter of 2021 to 39.5% for the primary
quarter of 2022. Since December 31, 2021, investor loans secured by actual property
elevated $174.6 million, enterprise loans secured by actual property elevated $144.1
million, industrial loans elevated $135.0 million, and retail loans decreased
$15.8 million.
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The overall end-of-period weighted common rate of interest on loans, web of charges and
reductions, at March 31, 2022 was 3.92%, in comparison with 3.95% at December 31, 2021.
The lower displays the influence of decrease charges on new originations, prepayments
of upper charge loans, and the change within the mixture of loans.

Loans held on the market primarily symbolize the assured portion of SBA loans,
which the Financial institution originates on the market, and totaled $11.6 million at March 31, 2022,
a rise of $777,000 from $10.9 million at December 31, 2021.

The next desk units forth the composition of our mortgage portfolio in greenback
quantities and as a share of the portfolio, and provides the weighted common
rate of interest by mortgage class on the dates indicated:
                                                                        March 31, 2022                                                         December 31, 2021
                                                                                                 Weighted                                                                  Weighted
                                                                         %                 Common                                           %                 Common
({Dollars} in 1000's)                              Quantity               of Whole             Curiosity Fee                 Quantity                 of Whole             Curiosity Fee
Investor loans secured by actual property
CRE non-owner-occupied                          $  2,774,650                 18.8  %                    4.16  %       $      2,771,137                 19.4  %                    4.19  %
Multifamily                                        6,041,085                 41.0                       3.70                 5,891,934                 41.2                       3.75
Development and land                                303,811                  2.1                       4.89                   277,640                  1.9                       4.88
SBA secured by actual property                            42,642                  0.2                       4.98                    46,917                  0.3                       4.98
Whole investor loans secured by actual property        9,162,188                 62.1                       3.89                 8,987,628                 62.8                       3.93
Enterprise loans secured by actual property
CRE owner-occupied                                 2,391,984                 16.2                       4.03                 2,251,014                 15.7                       4.07
Franchise actual property secured                        384,267                  2.7                       4.60                   380,381                  2.7                       4.60
SBA secured by actual property                            68,466                  0.5                       5.11                    69,184                  0.5                       5.23
Whole enterprise loans secured by actual property        2,844,717                 19.4                       4.13                 2,700,579                 18.9                       4.18
Business loans
Business and industrial                          2,242,632                 15.2                       3.62                 2,103,112                 14.7                       3.61
Franchise non-real property secured                    388,322                  2.6                       4.75                   392,576                  2.7                       4.76
SBA non-real property secured                           10,761                  0.1                       5.52                    11,045                  0.1                       5.54

Whole industrial loans                             2,641,715                 17.9                       3.79                 2,506,733                 17.5                       3.80
Retail loans
Single household residential                             79,978                  0.5                       4.05                    95,292                  0.7                       4.01
Client                                               5,157                  0.1                       4.87                     5,665                  0.1                       4.98
Whole retail loans                                    85,135                  0.6                       4.08                   100,957                  0.8                       4.05
Gross loans held for funding (1)               14,733,755                100.0  %                    3.92                14,295,897                100.0  %                    3.95
Allowance for credit score losses for loans held for
funding                                          (197,517)                                                                 (197,752)
Loans held for funding, web                  $ 14,536,238                                                          $     14,098,145

Whole unfunded mortgage commitments                 $  2,940,370                                                          $      2,507,911
Loans held on the market, at decrease of value or truthful
worth                                           $     11,646                                                          $         10,869


______________________________

(1) Contains web deferred origination charges of $3.9 million and $3.5 million, and
unaccreted truthful worth web buy reductions of $71.2 million and $77.1 million
as of March 31, 2022 and December 31, 2021, respectively.




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Delinquent Loans. When a borrower fails to make required funds on a mortgage and
doesn't treatment the delinquency inside 30 days, we usually provoke proceedings
to pursue our cures below the mortgage paperwork. For loans secured by actual
property, we document a discover of default and, after offering the required notices
to the borrower, start foreclosures proceedings. If the mortgage shouldn't be reinstated
inside the time permitted by legislation, we might promote the property at a foreclosures sale
the place we usually purchase title to the property. Loans delinquent 30 or extra
days as a share of loans held for funding had been 0.30% at March 31,
2022, in comparison with 0.14% at December 31, 2021. The quarter-over-quarter improve
in mortgage delinquencies was primarily because of the addition of two C&I loans
totaling $25.3 million belonging to a single relationship that had been 30 - 59 days
delinquent at March 31, 2022.

The next desk units forth delinquencies within the Firm's mortgage portfolio as
of the dates indicated:

                                             30 - 59 Days                            60 - 89 Days                           90 Days or Extra                            Whole
                                                         Principal                                Principal                               Principal                           Principal
                                        # of              Steadiness               # of               Steadiness              # of               Steadiness            # of             Steadiness
({Dollars} in 1000's)                 Loans             of Loans              Loans              of Loans              Loans             of Loans            Loans           of Loans
At March 31, 2022
Investor loans secured by actual
property
CRE non-owner-occupied                      -           $      -                     -           $      -                    4           $ 12,018                4           $ 12,018

Whole investor loans secured by
actual property                                 -                  -                     -                  -                    4             12,018                4             12,018
Enterprise loans secured by actual
property
CRE owner-occupied                          -                  -                     -                  -                    3              4,901                3              4,901

SBA secured by actual property                  -                  -                     -                  -                    1                441                1                441
Whole enterprise loans secured by
actual property                                 -                  -                     -                  -                    4              5,342                4              5,342
Business loans
Business and industrial                   7             25,332                     2                 74                    1                243               10             25,649

SBA non-real property secured                 -                  -                     -                  -                    1                642                1                642
Whole industrial loans                      7             25,332                     2                 74                    2                885               11             26,291
Retail loans

Whole retail loans                          -                  -                     -                  -                    -                  -                -                  -
Whole                                       7           $ 25,332                     2           $     74                   10           $ 18,245               19           $ 43,651
Delinquent loans to loans held for
funding                                                  0.17  %                                     -  %                                 0.13  %                             0.30  %


.
.
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                                             30 - 59 Days                         60 - 89 Days                         90 Days or Extra                            Whole
                                                         Principal                           Principal                               Principal                           Principal
                                        # of              Steadiness            # of             Steadiness              # of               Steadiness            # of             Steadiness
({Dollars} in 1000's)                 Loans             of Loans            Loans           of Loans              Loans             of Loans            Loans           of Loans
At December 31, 2021
Investor loans secured by actual
property
CRE non-owner-occupied                      -           $      -                -           $      -                    3           $ 10,255                3           $ 10,255
Multifamily                                 1              1,230                -                  -                    -                  -                1              1,230

SBA secured by actual property                  -                  -                -                  -                    1                337                1                337
Whole investor loans secured by
actual property                                 1              1,230                -                  -                    4             10,592                5             11,822
Enterprise loans secured by actual
property
CRE owner-occupied                          -                  -                -                  -                    3              4,952                3              4,952

SBA secured by actual property                  -                  -                -                  -                    1                441                1                441
Whole enterprise loans secured by
actual property                                 -                  -                -                  -                    4              5,393                4              5,393
Business loans
Business and industrial                   8                 92                -                  -                    2              1,462               10              1,554

SBA non-real property secured                 1                 73                -                  -                    1                653                2                726
Whole industrial loans                      9                165                -                  -                    3              2,115               12              2,280
Retail loans

Whole retail loans                          -                  -                -                  -                    -                  -                -                  -
Whole                                      10           $  1,395                -           $      -                   11           $ 18,100               21           $ 19,495
Delinquent loans to loans held for
funding                                                  0.01  %                                -  %                                 0.13  %                             0.14  %




Troubled Debt Restructurings

We generally modify or restructure loans when the borrower is experiencing
monetary difficulties by making a concession to the borrower within the type of
adjustments within the amortization phrases, reductions within the rates of interest, the
acceptance of interest-only funds, and, in restricted circumstances, concessions to the
excellent mortgage balances. These loans are categorised as TDRs. At March 31, 2022
and December 31, 2021, the Firm had six loans totaling $16.9 million and
$17.3 million, respectively, modified as TDRs, that are comprised of three CRE
owner-occupied loans and one C&I mortgage totaling $5.1 million and $5.2 million,
respectively, belonging to 1 borrower relationship with the phrases modified due
to chapter, and two franchise non-real property secured loans totaling
$11.8 million and $12.1 million, respectively, belonging to a different borrower
relationship with the phrases modified for cost deferral. All TDRs had been on
nonaccrual standing as of March 31, 2022 and December 31, 2021.



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Nonperforming Property

Nonperforming belongings encompass loans whereby we've got ceased accruing curiosity
(nonaccrual loans), OREO, and different repossessed belongings owned. Nonaccrual loans
usually encompass loans which are 90 days or extra overdue or loans the place, in
the opinion of administration, there may be cheap doubt as to the gathering of
principal and curiosity.

Nonperforming belongings totaled $55.3 million, or 0.26% of complete belongings, at
March 31, 2022, a rise from $31.3 million, or 0.15% of complete belongings, at
December 31, 2021. There was no different actual property owned at March 31, 2022 and
December 31, 2021. All nonperforming belongings consisted of nonperforming loans at
March 31, 2022 and December 31, 2021. The rise in nonperforming belongings since
December 31, 2021 was primarily because of the addition of two C&I loans totaling
$25.3 million belonging to a single relationship that had been positioned on nonaccrual
throughout first quarter of 2022.

The Firm had one CRE owner-occupied mortgage of $1.8 million that was 90 days or
extra overdue and accruing at March 31, 2022, in comparison with no loans 90 days or
extra overdue and accruing at December 31, 2021.

The next desk units forth our composition of nonperforming belongings on the
dates indicated:

({Dollars} in 1000's)                                                March 31, 2022          December 31, 2021
Nonperforming belongings
Investor loans secured by actual property
CRE non-owner-occupied                                               $      

10,243 $ 10,255

SBA secured by actual property                                                      573                       937
Whole investor loans secured by actual property                                  10,816                    11,192
Enterprise loans secured by actual property
CRE owner-occupied                                                            4,901                     4,952

SBA secured by actual property                                                      575                       589
Whole enterprise loans secured by actual property                                   5,476                     5,541
Business loans
Business and industrial                                                    26,588                     1,798
Franchise non-real property secured                                            11,779                    12,079
SBA non-real property secured                                                     642                       653
Whole industrial loans                                                       39,009                    14,530
Retail loans
Single household residential                                                         8                        10

Whole retail loans                                                                8                        10
Whole nonperforming loans                                                    55,309                    31,273
Different actual property owned                                                           -                         -
Different belongings owned                                                                -                         -
Whole                                                                $       55,309          $         31,273

Allowance for credit score losses                                          $      197,517          $        197,752
Allowance for credit score losses as a p.c of complete
nonperforming loans                                                             357  %                    632  %
Nonperforming loans as a p.c of loans held for funding                  0.38                      0.22
Nonperforming belongings as a p.c of complete belongings                              0.26                      0.15
TDRs included in nonperforming loans                                 $       16,923          $         17,277




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Allowance for Credit score Losses

The Firm maintains an ACL for loans and unfunded mortgage commitments in
accordance with ASC 326, which requires the Firm to document an estimate of
anticipated lifetime credit score losses for loans and unfunded mortgage commitments on the
time of origination or acquisition. The ACL is maintained at a degree deemed
applicable by administration to supply for anticipated credit score losses within the portfolio
as of the date of the consolidated statements of economic situation. Estimating
anticipated credit score losses requires administration to make use of related forward-looking
data, together with using cheap and supportable forecasts. The
measurement of the ACL is carried out by collectively evaluating loans with
comparable threat traits. Loans which were deemed by administration to no
longer possess comparable threat traits are evaluated individually below a
discounted money stream strategy, and loans which were deemed collateral
dependent are evaluated individually primarily based on the anticipated estimated truthful worth
of the underlying collateral.

The Firm measures the ACL on industrial actual property and industrial loans
utilizing a reduced money stream strategy, utilizing the mortgage's efficient rate of interest,
whereas the ACL for retail loans is predicated on a historic loss charge mannequin. The
discounted money stream methodology depends on a number of important elements
important to the event of estimates for future money flows on loans and
unfunded commitments. These elements encompass: (i) the PD, (ii) the LGD,
which represents the estimated severity of the loss when a mortgage is in default,
(iii) estimates for prepayment exercise on loans, and (iv) the EAD. Within the case
of unfunded mortgage commitments, the Firm incorporates estimates for
utilization, primarily based on historic mortgage knowledge. PD and LGD for investor loans
secured by actual property are derived from a 3rd occasion, utilizing proxy mortgage
data, and mortgage and property degree attributes. Moreover, LGD for these
loans incorporates an estimate for the loss severity related to loans the place
the borrower fails to fulfill their debt obligation at maturity. Exterior elements
that influence PD and LGD for industrial actual property loans embody: adjustments within the
index for CRE pricing, GDP progress charge, unemployment charges, and the Client
Worth Index.

For enterprise loans secured by actual property and industrial loans, PD is predicated on
an internally developed ranking scale that assigns PD primarily based on the Firm's
inner threat grades for every mortgage. Modifications in threat grades for these loans
lead to adjustments in PD. The Firm obtains LGD for these loans from a 3rd
occasion that has a substantial database of credit score associated data particular to
the monetary companies business and the kind of loans inside these segments.

PD for each investor and enterprise actual property loans, in addition to industrial loans
is closely impacted by present and anticipated financial situations.

The ACL for retail loans is predicated on a historic loss charge mannequin, which
incorporates loss charges derived from a 3rd occasion that has a substantial
database of credit score associated data for retail loans. Loss charges for retail
loans are dependent upon mortgage degree and exterior elements corresponding to: FICO, classic,
geography, unemployment charges, and adjustments in client actual property costs.

The Firm's ACL contains assumptions regarding present and future financial
situations utilizing cheap and supportable forecasts and the way these forecasts
are anticipated to influence a borrower's potential to fulfill their obligation to the
Financial institution and the last word collectability of future money flows over the lifetime of a
mortgage. The Firm makes use of financial situations from an impartial third occasion. These
financial forecast situations are primarily based on previous occasions, present situations, and
the probability of future occasions occurring. Administration periodically evaluates
financial situations, determines whether or not to make the most of a number of probability-weighted
situations, and, if a number of situations are utilized, evaluates and determines the
weighting for every situation used within the Firm's ACL mannequin, and thus the
situations and weightings of every situation might change in future intervals. Financial
situations chosen, in addition to the assumptions inside these situations, and whether or not
to make use of a weighted a number of situation strategy, can fluctuate from one interval to the
subsequent primarily based on adjustments in present and anticipated financial situations, and attributable to
the incidence of particular occasions corresponding to the continued COVID-19 pandemic, the conflict
between Russia and Ukraine, and ongoing inflationary pressures all through the
U.S. economic system.

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As of March 31, 2022, the Firm's ACL mannequin used three weighted situations
representing a base-case situation, an upside situation, and a draw back situation.
The weightings assigned to every situation had been as follows: the base-case
situation, or almost certainly situation, was assigned a weighting of 40%, whereas the
upside and draw back situations had been every assigned a weighting of 30%. The Firm
evaluated the weightings of every financial situation within the present interval and
decided the present weightings of 40% for the base-case situation, and 30% for
every of the upside and draw back situations appropriately mirror the probability
of outcomes for every situation given the present financial setting. Using
three weighted situations at March 31, 2022 and the weighting assigned to every
situation is in keeping with the strategy used within the Firm's ACL mannequin at
December 31, 2021.

Given latest developments within the geopolitical panorama with the conflict between
Russia and Ukraine, ongoing inflationary pressures within the U.S. economic system, and
normal uncertainty surrounding future financial situations, the Firm took
into consideration these and different elements when figuring out the appropriateness
of financial situations used within the ACL mannequin at March 31, 2022. Because of this, the
Firm used the financial forecast as of December 31, 2021 within the ACL mannequin,
which was extra reflective of the present financial setting in addition to the
probability of future financial situations occurring as of March 31, 2022.
Additional, financial situations used within the ACL mannequin embody the present and
estimated future influence related to the continued COVID-19 pandemic.

The Firm presently forecasts PDs and LGDs primarily based on financial situations over a
two-year interval, which we imagine is an affordable and supportable interval. Past
this level, PDs and LGDs revert to their historic long-term averages. The
Firm has mirrored this reversion over a interval of three years in every of its
financial situations used to generate the general probability-weighted forecast.
Modifications in financial forecasts influence the PD, LGD, and EAD for every mortgage, and
due to this fact affect the quantity of future money flows from every mortgage the Firm
doesn't anticipate to gather.

You will need to word that the Firm's ACL mannequin depends on a number of financial
variables, that are used below a number of financial situations. Though nobody
financial variable can totally reveal the sensitivity of the ACL calculation
to adjustments within the financial variables used within the mannequin, the Firm has
recognized sure financial variables which have important affect within the
Firm's mannequin for figuring out the ACL. As of March 31, 2022, the Firm's ACL
mannequin integrated the next assumptions for key financial variables within the
base-case, upside, and draw back situations:

Base-case Situation:

•U.S. unemployment declines to three.5% by way of the tip of 2022 and holds comparatively
fixed at roughly 3.5% all through 2023.

•U.S. actual GDP progress decelerates all through 2022 from roughly 5.4% to
roughly 2.8% by the tip of 2022. U.S. actual GDP progress accelerates barely
from 2.7% from the start of 2023 to 2.8% in direction of the tip of 2023.

•CRE index progress accelerates in 2022 from 0.4% within the second quarter of 2022 to
roughly 8.3% by the tip of 2022. Progress within the CRE index then decelerates
from roughly 11.2% in the beginning of 2023 to six.8% by the tip of 2023.

•The ten-year U.S. Treasury yield ends 2022 at roughly 2.4%, and will increase
to roughly 3.1% by the tip of 2023.

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Upside Situation:

•U.S. unemployment charge declines to roughly 3.1% by way of the tip of 2022
and holds comparatively fixed at roughly 3.0% all through 2023.

•U.S. actual GDP progress decelerates all through 2022 from roughly 9.3% to
roughly 4.2% by the tip of 2022. U.S. actual GDP progress decelerates from
roughly 4.4% in early 2023 to roughly 1.9% by the tip of 2023.

•CRE index progress accelerates in 2022 from roughly 1.9% within the second
quarter of 2022 to roughly 14.1% by the tip of 2022. Progress within the CRE
index then decelerates from roughly 15.0% in the beginning of 2023 to
roughly 6.9% by the tip of 2023.

•The ten-year U.S. Treasury yield ends 2022 at roughly 2.3%, after which
will increase to roughly 3.0% by the tip of 2023.

Draw back Situation:

•U.S. unemployment charge will increase to roughly 8.2% by way of the tip of 2022
after which declines reasonably to roughly 8.0% by the tip of 2023.

•U.S. actual GDP declines decelerate in 2022 from roughly -4.0% within the
second quarter to roughly -1.9% by the tip of 2023. U.S. actual GDP then
returns to accelerating progress all through 2023, with progress of roughly
3.4% by the tip of 2023.

•CRE index declines speed up in 2023 from roughly -3.5% within the second
quarter of 2023 to roughly -19.5% by the tip of 2023. The CRE index
declines decelerate by way of the third quarter of 2023 from roughly -10.9%
to -3.8%. The CRE index then returns to progress within the fourth quarter of 2023.

•The ten-year U.S. Treasury yield ends 2022 at roughly 1.2%, after which
will increase to roughly 2.1% by the tip of 2023.


The Firm periodically considers the necessity for qualitative changes to the
ACL. Qualitative changes could also be associated to and embody, however not be restricted
to, elements corresponding to: (i) administration's evaluation of financial forecasts utilized in
the mannequin and the way these forecasts align with administration's general analysis of
present and anticipated financial situations, (ii) group particular dangers such
as credit score concentrations, collateral particular dangers, regulatory dangers, and
exterior elements which will finally influence credit score high quality, (iii) potential
mannequin limitations corresponding to limitations recognized by way of back-testing, and different
limitations related to elements corresponding to underwriting adjustments, acquisition of
new portfolios and adjustments in portfolio segmentation, and (iv) administration's
general evaluation of the adequacy of the ACL, together with an evaluation of mannequin
knowledge inputs used to find out the ACL.

As of March 31, 2022, qualitative changes primarily relate to sure
segments of the mortgage portfolio deemed by administration to be of a higher-risk
profile the place administration believes the quantitative part of the Firm's
ACL mannequin might not have totally captured the related influence to the ACL. In
addition, qualitative changes additionally relate to heightened uncertainty as to
future macroeconomic situations and the associated influence on sure mortgage segments.
Qualitative changes to the ACL had been made for SBA investor loans secured by
actual property, development loans, and franchise loans. Administration evaluations the
want for an applicable degree of qualitative changes on a quarterly foundation,
and as such, the quantity and allocation of qualitative changes might change in
future intervals.


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The next charts quantify sure elements attributing to the adjustments within the
ACL on loans held for funding for the three months ended March 31, 2022 and
March 31, 2021:

[[Image Removed: ppbi-20220331_g2.jpg]] [[Image Removed: ppbi-20220331_g3.jpg]]

The lower within the ACL for loans held for funding in the course of the three months
ended March 31, 2022 of $235,000 was comprised of $446,000 in web charge-offs,
partially offset by a $211,000 provision for credit score losses. The availability for
credit score losses for the three months ended March 31, 2022 was reflective of upper
loans held for funding and rising financial uncertainties, offset by improved
financial forecasts and asset high quality.

The lower within the ACL for loans held for funding in the course of the three months
ended March 31, 2021 of $1.0 million is reflective of $1.3 million in web
charge-offs, partially offset by a $315,000 provision for credit score losses. The
provision for credit score losses for the three months ended March 31, 2021 was
reflective of unfavorable financial situations and forecasts used within the
Firm's ACL mannequin.

No assurance could be given that we'll not, in any explicit interval, maintain
credit score losses that exceed the quantity reserved, or that subsequent analysis of
our mortgage portfolio, in mild of prevailing elements, together with financial
situations which will adversely have an effect on our market space or different circumstances,
won't require important will increase within the ACL. As well as, regulatory
companies, as an integral a part of their examination course of, periodically evaluation
our ACL and will require us to acknowledge further provisions to extend the
allowance and document charge-offs in anticipation of future losses. Ought to any of
the elements thought-about by administration in evaluating the suitable degree of the
ACL change, together with the scale and composition of the mortgage portfolio, the credit score
high quality of the mortgage portfolio, in addition to forecasts of future financial
situations, the Firm's estimate of present anticipated credit score losses might additionally
considerably change and have an effect on the extent of future provisions for credit score
losses.

At March 31, 2022, the Firm believes the ACL was sufficient to cowl present
anticipated credit score losses within the mortgage portfolio.

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The next desk units forth the Firm's ACL, its corresponding share
of the mortgage class steadiness, and the share of mortgage steadiness to complete gross
loans in every of the mortgage classes listed for the intervals indicated:

                                                                          March 31, 2022                                                      December 31, 2021
                                                                          Allowance as a %        % of Loans in                                 Allowance as a %        % of Loans in
                                                                            of Class            Class to                                    of Class            Class to
({Dollars} in 1000's)                                  Quantity                 Whole               Whole Loans               Quantity                  Whole               Whole Loans
Investor loans secured by actual property
CRE non-owner-occupied                             $      35,974                   1.30  %               18.8  %       $        37,380                   1.35  %               19.4  %
Multifamily                                               54,325                   0.90                  41.0                   55,209                   0.94                  41.2
Development and land                                      5,219                   1.72                   2.1                    5,211                   1.88                   1.9
SBA secured by actual property                                 3,050                   7.15                   0.2                    3,201                   6.82                   0.3
Whole investor loans secured by actual property               98,568                   1.08                  62.1                  101,001                   1.12                  62.8
Enterprise loans secured by actual property
CRE owner-occupied                                        31,891                   1.33                  16.2                   29,575                   1.31                  15.7
Franchise actual property secured                              7,977                   2.08                   2.7                    7,985                   2.10                   2.7
SBA secured by actual property                                 5,195                   7.59                   0.5                    4,866                   7.03                   0.5
Whole enterprise loans secured by actual property               45,063                   1.58                  19.4                   42,426                   1.57                  18.9
Business loans
Business and industrial                                 38,598                   1.72                  15.2                   38,136                   1.81                  14.7
Franchise non-real property secured                         14,304                   3.68                   2.6                   15,084                   3.84                   2.7
SBA non-real property secured                                  490                   4.55                   0.1                      565                   5.12                   0.1

Whole industrial loans                                    53,392                   2.02                  17.9                   53,785                   2.15                  17.5
Retail loans
Single household residential                                    233                   0.29                   0.5                      255                   0.27                   0.7
Client loans                                               261                   5.06                   0.1                      285                   5.03                   0.1
Whole retail loans                                           494                   0.58                   0.6                      540                   0.53                   0.8
Whole                                              $     197,517                   1.34  %              100.0  %       $       197,752                   1.38  %              100.0  %



At March 31, 2022, the ratio of allowance for credit score losses to loans held for
funding was 1.34%, a lower from 1.38% at December 31, 2021. Our
unamortized truthful worth low cost on the loans acquired totaled $71.2 million, or
0.48% of complete loans held for funding, at March 31, 2022, in comparison with $77.1
million, or 0.54% of complete loans held for funding, at December 31, 2021.


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The next desk units forth the Firm's web charge-offs as a share to
the typical mortgage held for funding balances in every of the mortgage classes, as
nicely as different credit score associated percentages at and for the intervals indicated:

                                                                                                                                       Three Months Ended
                                                                March 31, 2022                                                          December 31, 2021                                                          March 31, 2021
                                        Web Cost-offs           Common Mortgage                                   Web Cost-offs           Common Mortgage                                   Web Cost-offs           Common Mortgage
({Dollars} in 1000's)                   (Recoveries)               Steadiness                Share              (Recoveries)              Steadiness                Share              (Recoveries)              Steadiness                Share
Investor loans secured by actual property
CRE non-owner-occupied                $              -          $   2,758,078                  -%               $           (78)         $   2,799,901                  -%               $           154          $   2,675,671                0.01%
Multifamily                                          -              5,903,012                  -%                             -              5,761,101                  -%                             -              5,201,868                  -%
Development and land                                -                295,490                  -%                             -                293,937                  -%                             -                318,632                  -%
SBA secured by actual property                          70                 45,392                0.15%                           (2)                50,546                  -%                           265                 56,196                0.47%
Whole investor loans secured by actual
property                                              70              9,001,972                  -%                           (80)             8,905,485                  -%                           419              8,252,367                0.01%
Enterprise loans secured by actual property
CRE owner-occupied                                 (10)             2,266,066                  -%                           (12)             2,243,161                  -%                           (15)             2,044,442                  -%
Franchise actual property secured                        -                382,381                  -%                             -                356,467                  -%                             -                344,687                  -%
SBA secured by actual property                           -                 75,189                  -%                             -                 72,217                  -%                            98                 77,152                0.13%
Whole enterprise loans secured by actual
property                                             (10)             2,723,636                  -%                           (12)             2,671,845                  -%                            83              2,466,281                  -%
Business loans
Business and industrial                          338              2,155,582                0.02%                         (561)             1,913,974               (0.03)%                         678              1,692,213                0.04%
Franchise non-real property secured                    -                389,323                  -%                          (325)               385,922               (0.08)%                         156                418,805                0.04%
SBA non-real property secured                         48                 11,607                0.41%                           (2)                12,107               (0.02)%                          (2)                15,312               (0.01)%
Whole industrial loans                             386              2,556,512                0.02%                         (888)             2,312,003               (0.04)%                         832              2,126,330                0.04%
Retail loans
Single household residential                            -                 84,181                  -%                             -                110,277                  -%                             -                241,872                  -%
Client                                             -                  4,846                  -%                            (1)                 5,868               (0.02)%                           -                  6,612                  -%
Whole retail loans                                   -                 89,027                  -%                            (1)               116,145                  -%                             -                248,484                  -%
Whole                                 $            446          $  14,371,147                  -%               $          (981)         $  14,005,478               (0.01)%             $         1,334          $  13,093,462                0.01%

Allowance for credit score losses to loans
held for funding                                                                          1.34%                                                                    1.38%                                                                    2.04%
Nonperforming loans to loans held for
funding                                                                                   0.38%                                                                    0.22%                                                                    0.30%
Allowance for credit score losses to
nonperforming loans                                                                           357%                                                                     632%                                                                     686%






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Funding Securities

We primarily use our funding portfolio for liquidity functions, capital
preservation, and to assist our rate of interest threat administration methods.
Investments totaled $4.22 billion at March 31, 2022, a lower of $437.1
million, or 9.4%, from $4.66 billion at December 31, 2021, primarily to fund
higher-yielding mortgage progress. The lower was primarily the results of $658.5
million in gross sales, $109.3 million in principal funds, reductions from the AFS
securities transferred to HTM, amortization, and redemptions, in addition to a
$168.1 million lower in mark-to-market truthful worth changes, partially
offset by $498.9 million in purchases, primarily company debt securities and
collateralized mortgage obligations. Usually, the acquisition of funding
securities is primarily associated to investing extra liquidity from our banking
operations. In the course of the first quarter of 2022, we've got maintained a portion of
the AFS securities portfolio in extremely liquid, short-term securities whereas additionally
persevering with to decrease the efficient length of this portfolio to 4.0 years at
March 31, 2022 from 4.1 years at December 31, 2021. This technique enhances our
rate of interest sensitivity profile to the present charge setting and offers
us with the pliability to rapidly redeploy these funds into higher-yielding
belongings as alternatives come up.

At March 31, 2022, AFS and HTM funding securities had been $3.22 billion and
$996.4 million, respectively, in comparison with $4.27 billion and $381.7 million,
respectively, at December 31, 2021. In the course of the first quarter of 2022, the
Firm reassessed classification of sure investments with longer length
and transferred roughly $386.8 million of municipal bonds and $255.0
million of mortgage-backed securities, each of which the Firm intends and has
the power to carry to maturity, from AFS to HTM securities. The switch of
these securities was accounted for at truthful worth. The municipal bonds had a web
carrying quantity of $379.9 million with a pre-tax unrealized lack of $6.9
million, and the mortgage-backed securities had a web carrying quantity of $238.8
million with a pre-tax unrealized lack of $16.2 million, which had been mirrored as
reductions on the date of switch. These reductions, in addition to the associated
unrealized losses in collected different complete earnings, are amortized into
curiosity earnings as yield changes by way of earnings over the remaining time period of
the securities. The amortization of the unrealized holding loss reported in
collected different complete earnings largely offsets the impact on curiosity
earnings of the amortization of the low cost. No features or losses had been recorded at
the time of switch. See Observe 4 - Funding Securities to the consolidated
monetary statements on this Type 10-Q.

The ACL on funding securities is decided for each the AFS and HTM
classifications of the funding portfolio in accordance with the steerage ASC
326 and evaluated on a quarterly foundation. As of March 31, 2022, the Firm had an
ACL of $41,000 for HTM funding securities categorised as municipal bonds,
which had been transferred from AFS in the course of the third and fourth quarters of 2021 and
first quarter of 2022. The Firm had an ACL of $22,000 ACL for HTM funding
securities at December 31, 2021. As of March 31, 2022 and December 31, 2021,
there was no ACL for the Firm's AFS funding securities. The Firm
acknowledged $19,000 and $11,000 of provision for credit score losses for HTM funding
securities in the course of the three months March 31, 2022 and December 31, 2021,
respectively. There was no provision for credit score losses acknowledged for HTM
funding securities in the course of the three months March 31, 2021.
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The next desk units forth the amortized prices and weighted common yields
on our HTM funding safety portfolio by contractual maturity as of the date
indicated. Weighted common yields are an arithmetic computation of earnings
inside every maturity vary primarily based on the amortized prices of securities, not on a
tax-equivalent foundation.
                                                                                                                                       March 31, 2022
                                                  One Yr                                 Greater than One                            Greater than 5 Years                             Greater than
                                                   or Much less                                 to 5 Years                                to Ten Years                                 Ten Years                                    Whole
                                                            Weighted                                     Weighted                                    Weighted                                   Weighted                                   Weighted
                                                             Common                                      Common                                     Common                                    Common                                    Common
({Dollars} in 1000's)                  Quantity                Yield                 Quantity                 Yield                Quantity                 Yield                Quantity                Yield                Quantity      

Yield

HTM funding securities:
Municipal bonds                            -                        -                      -                     -          $     44,774                  1.52  %       $   703,113                  2.07  %       $   747,887                  2.04  %
Mortgage-backed securities                 -                        -                      -                     -                     -                     -              247,050                  1.66              247,050                  1.66
Different                                      -                        -                      -                     -                     -                     -                1,486                  0.97                1,486                  0.97
Whole HTM funding
securities                                 -                        -  %                   -                     -  %       $     44,774                  1.52  %       $   951,649                  1.97  %       $   996,423                  1.94  %
Whole securities                     $     -                        -  %       $     481,351                  0.69  %       $  1,356,991                  1.47  %       $ 2,380,176                  1.65  %       $ 4,218,518                  1.49  %



The next desk presents the truthful worth of AFS and the amortized value of HTM
funding securities portfolios by Moody's credit score rankings at March 31, 2022.

                                                                                                                                  Collateralized            Mortgage-backed
({Dollars} in 1000's)             U.S. Treasury            Company            Company Debt           Municipal Bonds         Mortgage Obligations            Securities              Different              Whole                 %
Aaa - Aa3                        $       13,990          $ 369,227          $        39,946          $      1,163,171          $         855,256          $       1,213,773          $     -          $ 3,655,363               86.6  %
A1 - A3                                       -                  -                  340,566                         -                          -                          -                -              340,566                8.1
Baa1 - Baa3                                   -              6,550                  214,553                         -                          -                          -            1,486              222,589                5.3
Whole                            $       13,990          $ 375,777          $       595,065          $      1,163,171          $         855,256          $       1,213,773          $ 1,486          $ 4,218,518              100.0  %



At March 31, 2022, 94.7% of the Firm's funding securities portfolio was
rated "A1 -A3" or increased. We proceed to observe the standard of our funding
securities portfolio in accordance with present monetary situations and
financial setting.

Liabilities and Stockholders’ Fairness

Whole liabilities had been $18.84 billion at March 31, 2022, in comparison with $18.21
billion at December 31, 2021. The rise of $631.2 million, or 3.5%, from
December 31, 2021 was primarily attributable to a $573.6 million improve in deposits,
$42.0 million improve in FHLB advances, and $15.4 million improve in different
liabilities.

Deposits. At March 31, 2022, deposits totaled $17.69 billion, a rise of
$573.6 million, or 3.4%, from $17.12 billion at December 31, 2021. Non-maturity
deposits totaled $16.66 billion, or 94.2% of complete deposits, a rise of
$600.9 million, or 3.7%, from December 31, 2021. The rise in deposits
included $349.3 million in noninterest-bearing checking, $185.7 million in
interest-bearing checking, and $65.9 million in cash market/financial savings, primarily
pushed by a rise in enterprise deposit account balances, partially offset by
a deliberate lower of $27.3 million in retail certificates of deposit.

The overall finish of interval weighted common charge of deposits at March 31, 2022
stay unchanged at 0.04%, in comparison with December 31, 2021.

Our ratio of loans held for funding to deposits was 83.3% and 83.5% at
March 31, 2022 and December 31, 2021, respectively.

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The next desk units forth the distribution of the Firm’s deposit
accounts on the dates indicated and the weighted common rates of interest as of
the final day of every interval for every class of deposits offered:

                                                                March 31, 2022                                                         December 31, 2021
                                                                 % of Whole           Weighted Common                                     % of Whole           Weighted Common
({Dollars} in 1000's)                      Steadiness               Deposits                  Fee                    Steadiness                 Deposits                  Fee
Noninterest-bearing checking            $  7,106,548                    40.2  %                    -  %       $      6,757,259                    39.5  %                    -  %
Curiosity-bearing deposits:
Checking                                   3,679,067                    20.8                    0.04                 3,493,331                    20.4                    0.02
Cash market                               5,445,870                    30.8                    0.07                 5,387,168                    31.5                    0.07
Financial savings                                      426,727                     2.4                    0.02                   419,558                     2.5                    0.02
Time deposit accounts:
Lower than 1.00%                              996,562                     5.6                    0.22                 1,012,473                     5.9                    0.18
1.00 - 1.99                                   28,441                     0.2                    1.52                    39,322                     0.2                    1.49
2.00 - 2.99                                    6,008                       -                    2.21                     6,296                       -                    2.23
3.00 - 3.99                                        -                       -                       -                       182                       -                    3.45
4.00 - 4.99                                        -                       -                       -                         -                       -                       -
5.00 and larger                                   -                       -                       -                         -                       -                       -
Whole time deposit accounts                1,031,011                     5.8                    0.26                 1,058,273                     6.2                    0.24
Whole interest-bearing deposits           10,582,675                    59.8                    0.08                10,358,330                    60.5                    0.07
Whole deposits                          $ 17,689,223                   100.0  %                 0.04  %       $     17,115,589                   100.0  %                 0.04  %



The next desk units forth the estimated deposits exceeding the FDIC
insurance coverage restrict:

({Dollars} in 1000's)      March 31, 2022       December 31, 2021
Uninsured deposits         $     6,598,952      $        6,220,802




The estimated mixture period of time deposits in extra of the FDIC insurance coverage
restrict is $352.4 million at March 31, 2022 and $357.1 million at December 31,
2021. The next desk units forth the maturity distribution of the estimated
uninsured time deposits:

({Dollars} in 1000's)                March 31, 2022       December 31, 2021
3 months or much less                     $       307,612      $          297,595
Over 3 months by way of 6 months                18,450                  

28,187

Over 6 months by way of 12 months               19,261                  23,051
Over 12 months                                 7,120                   8,287
Whole                                $       352,443      $          357,120


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Borrowings. At March 31, 2022, complete borrowings amounted to $930.7 million, an
improve of $42.2 million, or 4.7%, from $888.6 million at December 31, 2021.
Whole borrowings at March 31, 2022 had been comprised of $600.0 million of FHLB
advances and $330.7 million of subordinated debentures. The rise in
borrowings at March 31, 2022 as in comparison with December 31, 2021 was primarily due
to a rise of $600.0 million in FHLB time period advances, offset by compensation of
$550.0 million in FHLB in a single day advances and $8.0 million in different short-term
borrowings. At March 31, 2022, complete borrowings represented 4.3% of complete belongings
and had an end-of-period weighted common charge of three.28%, in contrast with 4.2% of
complete belongings and an end-of-period weighted common charge of two.12% at December 31,
2021.

At March 31, 2022, complete subordinated debentures had been comprised of the
following:

•Subordinated notes of $60.0 million at a hard and fast charge of 5.75% due September 3,
2024 (the "Notes I") and a carrying worth of $59.7 million, web of unamortized
debt issuance value of $299,000. Curiosity is payable semiannually at 5.75% per
annum;

•Subordinated notes of $125.0 million at 4.875% fixed-to-floating charge due Could
15, 2029 (the "Notes II") and a carrying worth of $123.2 million, web of
unamortized debt issuance value of $1.8 million. Curiosity is payable semiannually
at an preliminary mounted charge of 4.875% each year. From and together with Could 15, 2024,
however excluding the maturity date or the date of earlier redemption, the Notes II
will bear curiosity at a floating charge equal to three-month LIBOR plus a ramification
of two.50% each year, payable quarterly in arrears; and

•Subordinated notes of $150.0 million at 5.375% fixed-to-floating charge due
June 15, 2030 (the "Notes III") and a carrying worth of $147.8 million, web of
unamortized debt issuance value of $2.2 million. Curiosity on the Notes III accrue
at a charge equal to five.375% each year from and together with June 15, 2020 to, however
excluding, June 15, 2025, payable semiannually in arrears. From and together with
June 15, 2025 to, however excluding, June 15, 2030 or the sooner redemption date,
curiosity will accrue at a floating charge each year equal to a benchmark charge,
which is anticipated to be three-month time period SOFR, plus a ramification of 517 foundation
factors, payable quarterly in arrears.


For extra details about the subordinated debentures, see Observe 8 –
Subordinated Debentures to the Consolidated Monetary Statements on this Type
10-Q.

The next desk units forth sure data concerning the Firm’s
borrowed funds on the dates indicated:

                                                             March 31, 2022                                      December 31, 2021
                                                                           Weighted                                               Weighted
({Dollars} in 1000's)                           Steadiness                 Common Fee                  Steadiness                  Common Fee
FHLB advances                                $     600,000                          2.15  %       $       550,000                          0.20  %

Subordinated debentures                            330,726                          5.32                  330,567                          5.33
Whole borrowings                             $     930,726                          3.28  %       $       888,567                          2.12  %

Weighted common value of
borrowings in the course of the quarter                         3.63  %                                                4.59  %
Borrowings as a p.c of complete belongings                4.3                                                    4.2




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Stockholders' Fairness. Whole stockholders' fairness was $2.78 billion as of
March 31, 2022, a $103.3 million lower from $2.89 billion at December 31,
2021. The present quarter's lower in stockholders' fairness was primarily due
to $136.4 million in complete loss from the influence of upper rates of interest
on our AFS securities portfolio, and $31.1 million in money dividends, partially
offset by $66.9 million web earnings.

Our e book worth per share decreased to $29.31 at March 31, 2022 from $30.58 at
December 31, 2021. At March 31, 2022, the Firm's tangible frequent fairness to
tangible belongings ratio was 8.79%, a lower from 9.52% at December 31, 2021. Our
tangible e book worth per share was $19.12, in contrast with $20.29 at December 31,
2021, and $18.19 at March 31, 2021. For extra particulars, see "non-GAAP
measures" offered below Merchandise 2 - Administration's Dialogue and Evaluation.

CAPITAL RESOURCES AND LIQUIDITY

Our major sources of funds are deposits, advances from the FHLB and different
borrowings, principal and curiosity funds on loans, and earnings from
investments, to fulfill our monetary obligations, which come up primarily from the
withdrawal of deposits, extension of credit score, and cost of working bills.
Whereas maturities and scheduled amortization of loans are a predictable supply of
funds, deposit inflows and outflows in addition to mortgage prepayments are tremendously
influenced by market rates of interest, financial situations, and competitors.

Along with the curiosity funds on loans and investments in addition to charges
collected on the companies we offer, our major sources of funds generated
in the course of the first three months of 2022 had been from:

•Proceeds of $725.4 million from the sale, prepayments, or maturity of
securities available-for-sale;

•Principal funds on loans held for funding of $690.8 million;

•Deposit progress of $573.6 million;

•Principal funds on securities of $81.6 million; and

•Elevated FHLB borrowings of fifty.0 million.

We used these funds to:

•Originate loans held for funding of $1.05 billion;

•Buy AFS securities of $499.2 million;

•Return capital to shareholders by way of $31.1 million in dividends;

•Originate loans held on the market of $18.8 million;


Our most liquid belongings are unrestricted money and short-term investments. The
ranges of those belongings are depending on our working, lending, and investing
actions throughout any given interval. Our liquidity place is repeatedly
monitored and changes are made to the steadiness between sources and makes use of of
funds as deemed applicable. At March 31, 2022, money and money equivalents
totaled $809.3 million, and the market worth of our funding securities AFS
totaled $3.22 billion. If further funds are wanted, we've got further
sources of liquidity that may be accessed, together with FHLB advances, federal fund
traces, the Federal Reserve Board's lending applications, in addition to mortgage and
funding securities gross sales. As of March 31, 2022, the utmost quantity we might
borrow by way of the FHLB was $8.44 billion, of which $5.26 billion was remaining
obtainable for borrowing primarily based on collateral pledged of $8.45 billion in actual
property loans. At March 31, 2022, we had $600.0 million in FHLB time period borrowings.
At March 31, 2022, we additionally had a $243,000 line with the FRB low cost window
secured by funding securities in addition to unsecured traces of credit score
aggregating to $330.0 million with different correspondent banks from which to
buy federal funds. As of March 31, 2022, our liquidity ratio was 21.8%,
which is above the Firm's minimal coverage requirement of 10.0%. The Firm
frequently screens liquidity, fashions liquidity stress situations to make sure that
sufficient liquidity is obtainable, and has contingency funding plans in place,
that are reviewed and examined on an everyday, recurring foundation.
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To the extent that 2022 deposit progress shouldn't be adequate to fulfill our ongoing
commitments to fund maturing and withdrawable deposits, repay maturing
borrowings, fund current and future loans, or make investments, we might entry
funds by way of our FHLB borrowing association, unsecured traces of credit score, or
different sources.

The Financial institution maintains liquidity pointers within the Firm's Liquidity Coverage that
permits the acquisition of brokered deposit funds, in an quantity to not exceed 10%
of complete deposits or 8% of complete belongings, as a secondary supply for funding. At
March 31, 2022, we had $5.6 million in brokered cash market deposits, which
constituted 0.03% of complete deposits and 0.03% of complete belongings at that date.

The Company is a company entity separate and aside from the Financial institution that should
present for its personal liquidity. The Company's major sources of liquidity
are dividends from the Financial institution. There are statutory and regulatory provisions that
restrict the power of the Financial institution to pay dividends to the Company. Administration
believes that such restrictions won't have a fabric influence on the power
of the Company to fulfill its ongoing money obligations. In the course of the three months
ended March 31, 2022, the Financial institution paid $31.1 million in dividends to the
Company.

The Company maintains a line of credit score with U.S. Financial institution with availability of
$25.0 million line of credit score that can expire on September 27, 2022. The
Company anticipates renewing the road of credit score upon expiration. This line
of credit score offers an extra supply of liquidity on the Company degree.
At March 31, 2022, the Company had no excellent balances in opposition to this
line.

In the course of the first quarter of 2022, the Company declared a quarterly dividend
cost of $0.33 per share. On April 22, 2022, the Firm's Board of Administrators
declared a $0.33 per share dividend, payable on Could 13, 2022 to stockholders of
document as of Could 6, 2022. The Company's Board of Administrators periodically
evaluations whether or not to declare or pay money dividends, taking into consideration, amongst
different issues, normal enterprise situations, the Firm's monetary outcomes,
future prospects, capital necessities, authorized and regulatory restrictions, and
such different elements because the Company's Board of Administrators might deem related.

On January 11, 2021, the Firm's Board of Administrators accepted a inventory
repurchase program, which approved the repurchase of as much as 4,725,000 shares of
its frequent inventory, representing roughly 5% of the Firm's issued and
excellent shares of frequent inventory and roughly $150 million of frequent
inventory as of December 31, 2020 primarily based on the closing value of the Firm's frequent
inventory on December 31, 2020. In the course of the first quarter of 2022, the Firm did
not repurchase any shares of frequent inventory. See Half II, Merchandise 2 - Unregistered
Gross sales of Fairness Securities and Use of Proceeds for added data.

Our materials money necessities might embody funding current mortgage commitments,
funding fairness investments and reasonably priced housing partnerships for LIHTC,
withdrawal/maturity of current deposits, compensation of borrowings, working
lease funds, and expenditures obligatory to keep up present operations.

The Firm enters into contractual obligations within the regular course of enterprise
as a supply of funds for its asset progress and to fulfill required capital wants.
The next schedule summarizes maturities and principal funds due on our
contractual obligations, excluding accrued curiosity:

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                                                                            March 31, 2022
({Dollars} in 1000's)                            Lower than 1 12 months           Greater than 1 12 months              Whole

FHLB advances and different borrowings              $         200,000          $         400,000          $     600,000
Subordinated debentures                                         -                    330,726                330,726
Certificates of deposit                                   911,586                    119,425              1,031,011
Working leases                                           20,045                     58,000                 78,045
Reasonably priced housing partnerships dedication                  5,439                     11,432                 16,871
Whole contractual money obligations              $       1,137,070          

$ 919,583 $ 2,056,653



We imagine that the Firm's liquidity sources will probably be adequate to fulfill the
contractual obligations as they turn into due by way of the upkeep of sufficient
liquidity ranges.

Within the odd course of enterprise, we enter into numerous transactions to fulfill
the financing wants of our clients, which, in accordance with GAAP, aren't
included in our consolidated steadiness sheets. These transactions embody
off-balance sheet commitments, together with commitments to increase credit score and
standby letters of credit score, and commitments to fund investments that qualify for
CRA credit score. The next desk presents a abstract of the Firm's commitments
to increase credit score by expiration interval:

                                                           March 31, 2022
 ({Dollars} in 1000's)               Lower than 1 12 months       Greater than 1 

12 months Whole

 Mortgage commitments to increase credit score   $       1,522,948      $       1,373,989      $ 2,896,937
 Standby letters of credit score                      43,433                      -           43,433
 Whole                               $       1,566,381      $       1,373,989      $ 2,940,370



Since many commitments to increase credit score are anticipated to run out, the whole
dedication quantities don't essentially symbolize future money necessities. For
additional data, see Observe 15 - Off-Steadiness Sheet Preparations, Commitments,
and Contingencies, to the consolidated monetary statements of the
Firm's 2021 Type 10-Ok.

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Regulatory Capital Compliance

The Company and the Financial institution are topic to numerous regulatory capital
necessities administered by federal banking companies. Failure to fulfill minimal
capital necessities can provoke sure necessary, and probably further
discretionary, actions by regulators that, if undertaken, might have a direct
materials impact on the Company's and the Financial institution's monetary statements. Underneath
capital adequacy pointers and the regulatory framework for immediate corrective
motion, the Company and the Financial institution should meet particular capital pointers that
contain quantitative measures of the Company's and the Financial institution's belongings,
liabilities, and sure off-balance sheet gadgets as calculated below regulatory
accounting practices. The Company's and the Financial institution's capital quantities and
classification are additionally topic to qualitative judgments by the regulators about
elements, threat weightings, and different elements.

Quantitative measures established by regulation to make sure capital adequacy
require the Financial institution to keep up capital as a way to meet sure capital ratios to
be thought-about adequately capitalized or nicely capitalized below the regulatory
framework for immediate corrective motion. As of the latest formal
notification from the Federal Reserve, the Financial institution was categorized as "nicely
capitalized." There aren't any situations or occasions since that notification that
administration believes have modified the Financial institution's categorization.

Closing complete regulatory capital guidelines for U.S. banking organizations
pursuant to the capital framework of the Basel Committee on Banking Supervision,
usually known as "Basel III", grew to become efficient for the Firm and the
Financial institution on January 1, 2015, topic to phase-in intervals for sure of their
elements and different provisions. Starting January 1, 2016, Basel III
carried out a requirement for all banking organizations to keep up a capital
conservation buffer above the minimal risk-based capital necessities so as
to keep away from sure limitations on capital distributions, inventory repurchases and
discretionary bonus funds to govt officers. The capital conservation
buffer is solely comprised of frequent fairness tier 1 capital, and it applies
to every of the three risk-based capital ratios however to not the leverage ratio.
The capital conservation buffer totally phased in at 2.50% by January 1, 2019. At
March 31, 2022, the Firm and Financial institution are in compliance with the capital
conservation buffer requirement and exceeded the minimal frequent fairness Tier 1,
Tier 1, and complete capital ratio, inclusive of the totally phased-in capital
conservation buffer, of seven.00%, 8.50%, and 10.50%, respectively, and the Financial institution
certified as "well-capitalized" for functions of the federal financial institution regulatory
immediate corrective motion laws.

In February 2019, the U.S. federal financial institution regulatory companies accepted a ultimate
rule modifying their regulatory capital guidelines and offering an choice to
phase-in over a three-year interval the Day 1 opposed regulatory capital results
of CECL accounting customary. Moreover, in March 2020, the U.S. Federal financial institution
regulatory companies issued an interim ultimate rule that gives banking
organizations an choice to delay the estimated CECL influence on regulatory capital
for an extra two years for a complete transition interval of as much as 5 years to
present regulatory aid to banking organizations to raised deal with supporting
lending to creditworthy households and companies in mild of latest strains on
the U.S. economic system because of the COVID-19 pandemic. The capital aid within the
interim is calibrated to approximate the distinction in allowances below CECL
relative to the incurred loss methodology for the primary two years of the
transition interval utilizing a 25% scaling issue. The cumulative distinction on the
finish of the second 12 months of the transition interval is then phased into regulatory
capital at 25% per 12 months over a three-year transition interval. The ultimate rule was
adopted and have become efficient in September 2020. The Firm carried out the CECL
mannequin commencing January 1, 2020 and elected to part within the full impact of CECL
on regulatory capital over the five-year transition interval. This cumulative
distinction on the finish of 2021 will probably be phased in regulatory capital over the
three-year interval from January 1, 2022 by way of December 31, 2024.

For regulatory capital functions, the Company’s subordinated debt is included
in Tier 2 capital. See Observe 8 – Subordinated Debentures for added
data.

                                      102
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As outlined in relevant laws and set forth within the desk beneath, the
Company and the Financial institution proceed to exceed the regulatory capital minimal
necessities, and the Financial institution continues to exceed the “nicely capitalized” requirements
and the required conservation buffer on the dates indicated:

                                                                                           Minimal Required
                                                                                             for Capital
                                                                                          Adequacy Functions
                                                                                             Inclusive of
                                                                                               Capital               Minimal Required
                                                                                             Conservation          For Properly Capitalized
                                                             Precise                             Buffer                  Requirement
March 31, 2022
Pacific Premier Bancorp, Inc. Consolidated
Tier 1 leverage ratio                                        10.10%                             4.00%                       N/A
Widespread fairness tier 1 capital ratio                           11.80%                             7.00%                       N/A
Tier 1 capital ratio                                         11.80%                             8.50%                       N/A
Whole capital ratio                                          14.37%                             10.50%                      N/A

Pacific Premier Financial institution
Tier 1 leverage ratio                                        11.66%                             4.00%                      5.00%
Widespread fairness tier 1 capital ratio                           13.61%                             7.00%                      6.50%
Tier 1 capital ratio                                         13.61%                             8.50%                      8.00%
Whole capital ratio                                          14.47%                             10.50%                    10.00%

                                                                                           Minimal Required
                                                                                             for Capital
                                                                                          Adequacy Functions
                                                                                             Inclusive of
                                                                                               Capital               Minimal Required
                                                                                             Conservation          For Properly Capitalized
                                                             Precise                             Buffer                  Requirement
December 31, 2021
Pacific Premier Bancorp, Inc. Consolidated
Tier 1 leverage ratio                                        10.08%                             4.00%                       N/A
Widespread fairness tier 1 capital ratio                           12.11%                             7.00%                       N/A
Tier 1 capital ratio                                         12.11%                             8.50%                       N/A
Whole capital ratio                                          14.62%                             10.50%                      N/A

Pacific Premier Financial institution
Tier 1 leverage ratio                                        11.62%                             4.00%                      5.00%
Widespread fairness tier 1 capital ratio                           13.96%                             7.00%                      6.50%
Tier 1 capital ratio                                         13.96%                             8.50%                      8.00%
Whole capital ratio                                          14.70%                             10.50%                    10.00%


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