PACIFIC PREMIER BANCORP INC - Quarter Report: 2015 March (Form 10-Q)

ppbi10q-2015q1.htm

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

(Mark One)

(X)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2015

( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______ to _______

Commission File Number 0-22193

(Exact name of registrant as specified in its charter)

DELAWARE	33-0743196
(State or other jurisdiction of incorporation or organization)	(I.R.S Employer Identification No.)

17901 VON KARMAN AVENUE, SUITE 1200, IRVINE, CALIFORNIA 92614

(Address of principal executive offices and zip code)

(949) 864-8000

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [ X ] No [_]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X] No [_]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “accelerated filer”, “large accelerated filer”, and “smaller reporting company” in Rule 12b-2 of the Exchange Act).

Large accelerated filer	[ ]	Accelerated filer	[X]	Non-accelerated filer	[ ]	Smaller reporting company	[ ]
				(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2). Yes [ ] No [X]

The number of shares outstanding of the registrant's common stock as of May 8, 2015 was 21,511,426.

PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES

FORM 10-Q

INDEX

FOR THE QUARTER ENDED MARCH 31, 2015

PART I - FINANCIAL INFORMATION

Item 1 - Financial Statements

Consolidated Statements of Financial Condition: At March 31, 2015 (unaudited), December 31, 2014 (audited) and March 31, 2014 (unaudited)

Consolidated Statements of Operations: For the three months ended March 31, 2015 and 2014 (unaudited)

Consolidated Statements of Comprehensive Income: For the three months ended March 31, 2015 and 2014 (unaudited)

Consolidated Statements of Stockholders’ Equity: For the three months ended March 31, 2015 and 2014 (unaudited)

Consolidated Statements of Cash Flows: For the three months ended March 31, 2015 and 2014 (unaudited)

Notes to Consolidated Financial Statements (unaudited)

Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 3 - Quantitative and Qualitative Disclosures About Market Risk

Item 4 - Controls and Procedures

PART II - OTHER INFORMATION

Item 1 - Legal Proceedings

Item 1A - Risk Factors

Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds

Item 3 - Defaults Upon Senior Securities

Item 4 - Mine Safety Disclosures

Item 5 - Other Information

Item 6 - Exhibits

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(dollars in thousands, except share data)

	March 31,			December 31,			March 31,
ASSETS	2015			2014			2014
	(Unaudited)			(Audited)			(Unaudited)
Cash and due from banks	$	178,096		$	110,650		$	124,143
Federal funds sold		275			275			276
Cash and cash equivalents		178,371			110,925			124,419
Investment securities available for sale		280,461			201,638			202,142
FHLB and other stock, at cost		30,586			17,067			14,104
Loans held for investment		2,131,387			1,628,622			1,325,372
Allowance for loan losses		(13,646	)		(12,200	)		(8,685	)
Loans held for investment, net		2,117,741			1,616,422			1,316,687
Accrued interest receivable		8,769			7,131			5,865
Other real estate owned		997			1,037			752
Premises and equipment		9,591			9,165			9,643
Deferred income taxes		12,815			9,383			9,180
Bank owned life insurance		38,377			26,822			26,240
Intangible assets		8,203			5,614			6,374
Goodwill		51,010			22,950			22,950
Other assets		16,079			10,743			6,926
TOTAL ASSETS	$	2,753,000		$	2,038,897		$	1,745,282
LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES:
Deposit accounts:
Noninterest bearing checking	$	619,763		$	456,754		$	412,871
Interest-bearing:
Checking		130,869			131,635			137,285
Money market/savings		809,408			600,764			529,348
Retail certificates of deposit		406,649			365,168			350,690
Wholesale/brokered certificates of deposit		76,477			76,505			5,009
Total interest-bearing		1,423,403			1,174,072			1,022,332
Total deposits		2,043,166			1,630,826			1,435,203
FHLB advances and other borrowings		343,434			116,643			95,506
Subordinated debentures		70,310			70,310			10,310
Accrued expenses and other liabilities		22,843			21,526			15,403
TOTAL LIABILITIES		2,479,753			1,839,305			1,556,422
STOCKHOLDERS’ EQUITY:
Common stock, $.01 par value; 25,000,000 shares authorized;21,387,818 shares at March 31, 2015, 16,903,884 shares at December 31, 2014, and 17,224,977 shares at March 31, 2014 issued and outstanding		214			169			172
Additional paid-in capital		218,528			147,474			152,325
Retained earnings		53,220			51,431			37,447
Accumulated other comprehensive income (loss), net of tax (benefit) of $898 at March 31, 2015, $362 at December 31, 2014 and ($757) at March 31, 2014		1,285			518			(1,084	)
TOTAL STOCKHOLDERS’ EQUITY		273,247			199,592			188,860
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	2,753,000		$	2,038,897		$	1,745,282

Accompanying notes are an integral part of these consolidated financial statements.

PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in thousands, except per share data)
(unaudited)

	Three Months Ended
	March 31, 2015		March 31, 2014
INTEREST INCOME
Loans	$	24,513	$	16,585
Investment securities and other interest-earning assets		1,557		1,437
Total interest income		26,070		18,022
INTEREST EXPENSE
Deposits		1,606		1,069
FHLB advances and other borrowings		375		243
Subordinated debentures		971		75
Total interest expense		2,952		1,387
NET INTEREST INCOME BEFORE PROVISION FOR LOAN LOSSES		23,118		16,635
PROVISION FOR LOAN LOSSES		1,830		949
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES		21,288		15,686
NONINTEREST INCOME
Loan servicing fees		901		856
Deposit fees		582		454
Net gain from sales of loans		-		548
Net gain from sales of investment securities		116		62
Other-than-temporary impairment recovery (loss) on investment securities, net		-		13
Other income		427		119
Total noninterest income		2,026		2,052
NONINTEREST EXPENSE
Compensation and benefits		9,522		6,891
Premises and occupancy		1,829		1,588
Data processing and communications		702		1,131
Other real estate owned operations, net		48		13
FDIC insurance premiums		314		237
Legal, audit and professional expense		521		593
Marketing expense		603		176
Office and postage expense		499		369
Loan expense		193		184
Deposit expense		805		761
Merger related expense		3,992		626
Other expense		1,441		972
Total noninterest expense		20,469		13,541
NET INCOME BEFORE INCOME TAX		2,845		4,197
INCOME TAX		1,056		1,565
NET INCOME	$	1,789	$	2,632

EARNINGS PER SHARE
Basic	$	0.09	$	0.15
Diluted	$	0.09	$	0.15

WEIGHTED AVERAGE SHARES OUTSTANDING
Basic		20,091,924		17,041,594
Diluted		20,382,832		17,376,001

Accompanying notes are an integral part of these consolidated financial statements.

PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(dollars in thousands)
(unaudited)

	Three Months Ended
	March 31,
	2015			2014

Net income	$	1,789		$	2,632
Other comprehensive income (loss), net of tax (benefit):
Unrealized holding gains (losses) on securities arising during the period, net of income taxes (benefits) (1)		835			2,029
Reclassification adjustment for net gain on sale of securities included in net income, net of income taxes (2)		(68	)		(36	)
Net unrealized gain (loss) on securities, net of income taxes		767			1,993
Comprehensive income	$	2,556		$	4,625

(1) Income taxes on the unrealized gains (losses) on securities was $584,000 for the three months ended March 31, 2015 and $1.4 million for the three months ended March 31, 2014.
(2) Income taxes on the reclassification adjustment for net gain on sale of securities included in net income was $48,000 for the three months ended March 31, 2015 and $26,000 for the three months ended March 31, 2014.

PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 2015 AND 2014
(dollars in thousands)
(unaudited)

	Common Stock Shares			Common Stock		Additional Paid-in Capital			Accumulated Retained Earnings		Accumulated Other Comprehensive Income			Total Stockholders’ Equity

Balance at December 31, 2014		16,903,884		$	169	$	147,474		$	51,431	$	518		$	199,592
Net income										1,789					1,789
Other comprehensive income												767			767
Share-based compensation expense							200								200
Common stock issued		4,480,645			45		70,884								70,929
Warrants exercised		2,456			-		15								15
Repurchase of common stock		(5,833	)		-		(93	)							(93	)
Exercise of stock options		6,666			-		48								48
Balance at March 31, 2015		21,387,818		$	214	$	218,528		$	53,220	$	1,285		$	273,247

Balance at December 31, 2013		16,656,279		$	166	$	143,322		$	34,815	$	(3,077	)	$	175,226
Net income										2,632					2,632
Other comprehensive income												1,993			1,993
Share-based compensation expense							181								181
Common stock repurchased and retired		(3,936	)		-		(284	)							(284	)
Common stock issued		562,469			6		9,006								9,012
Stock options exercised		10,165			-		100								100
Balance at March 31, 2014		17,224,977		$	172	$	152,325		$	37,447	$	(1,084	)	$	188,860

Accompanying notes are an integral part of these consolidated financial statements.

PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
	Three Months Ended
	March 31,
	2015			2014
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	1,789		$	2,632
Adjustments to net income:
Depreciation and amortization expense		610			549
Amortization of Loan Fees and Discounts		(357	)		-
Provision for loan losses		1,830			949
Share-based compensation expense		200			181
Loss on sale and disposal of premises and equipment		-			23
Loss on sale of other real estate owned		-			11
Write down of other real estate owned		40			-
Amortization of premium/discounts on securities held for sale, net		804			637
Accretion of loan mark-to-market discount from acquisitions		(371	)		(579	)
Gain on sale of investment securities available for sale		(116	)		(62	)
Other-than-temporary impairment recovery on investment securities, net		-			(13	)
Gain on sale of loans held for investment		-			(548	)
Recoveries on loans		12			37
Principal payments from loans held for sale		-			31
Loss on loans held for sale		-			180
Deferred income tax benefit (provision)		-			(703	)
Change in accrued expenses and other liabilities, net		1,144			(3,916	)
Income from bank owned life insurance, net		(279	)		(189	)
Change in accrued interest receivable and other assets, net		(4,934	)		(372	)
Net cash provided by (used in) operating activities		372			(1,152	)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale and principal payments on loans held for investment		106,409			87,580
Decrease (increase) in undisbursed loan funds		(39,395	)		17,651
Purchase and origination of loans held for investment		(236,554	)		(108,020	)
Proceeds from sale of other real estate owned		-			423
Principal payments on securities available for sale		6,851			6,212
Purchase of securities available for sale		(40,077	)		(4,976	)
Proceeds from sale or maturity of securities available for sale		8,771			56,081
Investment in bank owned life insurance		-			(2,000	)
Purchases of premises and equipment		(525	)		(277	)
Redemption (purchase) of Federal Reserve Bank stock		506			(6	)
Redemption (purchase) of FHLB stock		(11,656	)		1,352
Cash acquired (disbursed) in acquisitions, net		2,961			(7,793	)
Net cash provided by (used in) investing activities		(202,709	)		46,227
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase (decrease) in deposit accounts		76,322			128,917
Repayment of FHLB advances and other borrowings, net		-			(176,202	)
Proceeds from FHLB advances		193,491			-
Proceeds from exercise of stock options		48			100
Warrants exercised		15			-
Repurchase of common stock		(93	)		(284	)
Net cash provided by (used in) financing activities		269,783			(47,469	)

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		67,446			(2,394	)
CASH AND CASH EQUIVALENTS, beginning of period		110,925			126,813
CASH AND CASH EQUIVALENTS, end of period	$	178,371		$	124,419

SUPPLEMENTAL CASH FLOW DISCLOSURES
Interest paid	$	3,853		$	1,104
Income taxes paid		3,700			3,500
Assets acquired (liabilities assumed and capital created) in acquisitions (See Note 4):
Investment securities		53,752			-
FHLB and Other Stock		2,369			-
Loans		332,893			78,833
Core deposit intangible		2,903			-
Deferred income tax		3,969			-
Bank owned life insurance		11,276			-
Goodwill		28,060			5,522
Fixed assets		2,134			74
Other assets		1,726			702
Deposits		(336,018	)		-
Other borrowings		(33,300	)		(67,617	)
Other liabilities		(1,796	)		(709	)
Common stock and additional paid-in capital		(70,929	)		(9,012	)

NONCASH INVESTING ACTIVITIES DURING THE PERIOD
Investment securities available for sale purchased and not settled	$	-		$	557
Loans held for sale transfer to loans held for investment	$	-		$	2,936

Accompanying notes are an integral part of these consolidated financial statements.

PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2015

(UNAUDITED)

Note 1 - Basis of Presentation

The consolidated financial statements include the accounts of Pacific Premier Bancorp, Inc. (the “Corporation”) and its wholly owned subsidiaries, including Pacific Premier Bank (the “Bank”) (collectively, the “Company,” “we,” “our” or “us”). All significant intercompany accounts and transactions have been eliminated in consolidation.

In the opinion of management, the consolidated financial statements contain all adjustments (consisting of normal recurring accruals) necessary to present fairly the Company’s financial position as of March 31, 2015, December 31, 2014, and March 31, 2014, the results of its operations and comprehensive income for the three months ended March 31, 2015 and 2014 and the changes in stockholders’ equity and cash flows for the three months ended March 31, 2015 and 2014. Operating results or comprehensive income for the three months ended March 31, 2015 are not necessarily indicative of the results or comprehensive income that may be expected for any other interim period or the full year ending December 31, 2015.

Certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 (the “2014 Annual Report”).

The Company accounts for its investments in its wholly owned special purpose entity, PPBI Trust I, under the equity method whereby the subsidiary’s net earnings are recognized in the Company’s statement of operations.

Note 2 – Recently Issued Accounting Pronouncements

Accounting Standards Adopted in 2015

In January 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-01, Investments-Equity Method and Joint Ventures (Topic 323): "Accounting for Investments in Qualified Affordable Housing Projects." This Update permits reporting entities to make an accounting policy election to account for their investments in qualified affordable housing projects using the proportional amortization method if certain conditions are met. Under the proportional amortization method, an entity amortizes the initial cost of the investment in proportion to the tax credits and other tax benefits received and recognizes the net investment performance in the income statement as a component of income tax expense. This new guidance also requires new disclosures for all investors in these projects. ASU No. 2014-01 is effective for interim and annual reporting periods beginning after December 15, 2014 for public business entities and after December 15, 2015 for non public business entities. Upon adoption, the guidance must be applied retrospectively to all periods presented. However, entities that used the effective yield method to account for investments in these projects before adoption may continue to do so for these pre-existing investments. The Company currently accounts for such investments using the effective yield method and plans to do so for these pre-existing investments after adopting ASU No. 2014-01 on January 1, 2015. The Company expects investments made after January 1, 2015 to meet the criteria required for the proportional amortization method and plans to make such an accounting election. The Company adopted the provisions of ASU No. 2014-01 effective January 1, 2015. The adoption had no impact on the Company’s Consolidated Financial Statements.

In January 2014, the FASB issued ASU No. 2014-04, Receivables-Troubled Debt Restructuring By Creditors (Subtopic 310-40): “Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure." The objective of this guidance is to clarify when an in substance repossession or foreclosure occurs, that is, when a creditor should be considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan such that the loan receivable should be derecognized and the real estate property recognized. ASU No. 2014-04 states that an in substance repossession or foreclosure occurs, and a creditor is considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan, upon either (1) the creditor obtaining legal title to the residential real estate property upon completion of a foreclosure or (2) the borrower conveying all interest in the residential real estate property to the creditor to satisfy that loan through completion of a deed in lieu of foreclosure or through a similar legal agreement. Additionally, ASU No. 2014-04 requires interim and annual disclosure of both (1) the amount of foreclosed residential real estate property held by the creditor and (2) the recorded investment in consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure according to local requirements of the applicable jurisdiction. ASU No. 2014-04 is effective for interim and annual reporting periods beginning after December 15, 2014. The Company adopted the provisions of ASU No. 2014-4 effective January 1, 2015. The adoption had no impact on the Company’s Consolidated Financial Statements.

In June 2014, the FASB issued ASU No. 2014-11, Transfers and Servicing (Topic 860):"Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures." This Update aligns the accounting for repurchase-to-maturity transactions and repurchase agreements executed as repurchase financings with the accounting for other typical repurchase agreements. Going forward, these transactions would all be accounted for as secured borrowings. The guidance eliminates sale accounting for repurchase-to-maturity transactions and supersedes the guidance under which a transfer of a financial asset and a contemporaneous repurchase financing could be accounted for on a combined basis as a forward agreement, which has resulted in outcomes referred to as off-balance-sheet accounting. The Update requires a new disclosure for transactions economically similar to repurchase agreements in which the transferor retains substantially all of the exposure to the economic return on the transferred financial assets throughout the term of the transaction. The Update also requires expanded disclosures about the nature of collateral pledged in repurchase agreements and similar transactions accounted for as secured borrowings. The Update is effective for interim or annual period beginning after December 15, 2014. All of the Company's repurchase agreements are typical in nature (i.e., not repurchase-to-maturity transactions or repurchase agreements executed as a repurchase financing) and are accounted for as secured borrowings. The Company adopted the provisions of ASU No. 2014-11 effective January 1, 2015. The adoption had no impact on the Company’s Consolidated Financial Statements.

In August 2014, the FASB issued ASU No. 2014-14 Receivables – Troubled Debt Restructurings by Creditors (Subtopic 310-40): “Classification of Certain Government-Guaranteed Mortgage Loans upon Foreclosure”. This Update addresses classification of government-guaranteed mortgage loans, including those where guarantees are offered by the Federal Housing Administration (“FHA”), the U.S. Department of Housing and Urban Development (“HUD”), and the U.S. Department of Veterans Affairs (“VA”). Although current accounting guidance stipulates proper measurement and classification in situations where a creditor obtains from a debtor, assets in satisfaction of a receivable (such as through foreclosure), current guidance does not specify how to measure and classify foreclosed mortgage loans that are government-guaranteed. Under the provisions of this Update, a creditor would derecognize a mortgage loan that has been foreclosed upon, and recognize a separate receivable if the following conditions are met: (1) the loan has a government guarantee that is not separable from the loan before foreclosure, (2) At the time of foreclosure, the creditor has the intent to convey the real estate property to the guarantor and make a claim on the guarantee, and the creditor has the ability to recover under that claim, (3) At the time of foreclosure, any amount of the claim that is determined on the basis of the fair value of the real estate is fixed. This Update is effective for interim and annual periods beginning after December 15, 2014 for public business entities and after December 15, 2015 for non public business entities. The Company adopted the provisions of ASU No. 2014-14 effective January 1, 2015. The adoption had no impact on the Company’s Consolidated Financial Statements.

Accounting Standards Pending Adoption

In August 2014, the FASB issued guidance within ASU 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40): “Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. This Update provides guidance about management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern. The amendments require management to assess an entity's ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. This Update is effective for interim and annual periods ending after December 15, 2016. The adoption of this guidance is not expected to have a material impact on the Company's consolidated financial statements.

Note 3 – Significant Accounting Policies

Certain Acquired Loans: As part of business acquisitions, the Bank acquires certain loans that have shown evidence of credit deterioration since origination. These acquired loans are recorded at the allocated fair value, such that there is no carryover of the seller’s allowance for loan losses. Such acquired loans are accounted for individually. The Bank estimates the amount and timing of expected cash flows for each purchased loan, and the expected cash flows in excess of the allocated fair value is recorded as interest income over the remaining life of the loan (accretable yield). The excess of the loan’s contractual principal and interest over expected cash flows is not recorded (non-accretable difference). Over the life of the loan, expected cash flows continue to be estimated. If the present value of expected cash flows is less than the carrying amount, a loss is recorded through the allowance for loan losses. If the present value of expected cash flows is greater than the carrying amount, it is recognized as part of future interest income.

Goodwill and Core Deposit Intangible: Goodwill is generally determined as the excess of the fair value of the consideration transferred, plus the fair value of any noncontrolling interests in the acquiree, over the fair value of the net assets acquired and liabilities assumed as of the acquisition date. Goodwill and intangible assets acquired in a purchase business combination and determined to have an indefinite useful life are not amortized, but tested for impairment at least annually or more frequently if events and circumstances exist that indicate the necessity for such impairment tests to be performed. The Company has selected December 31 as the date to perform the annual impairment test. Intangible assets with definite useful lives are amortized over their estimated useful lives to their estimated residual values. Goodwill is the only intangible asset with an indefinite life on our balance sheet.

Core deposit intangible assets arising from whole bank acquisitions are amortized on an accelerated method over their estimated useful lives, which range from 6 to 10 years.

Use of Estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates. The allowance for loan losses, the fair value of stock-based compensation awards, the fair values of financial instruments and the status of contingencies are particularly subject to change.

Note 4 – Acquisitions

The Company accounted for the following transactions under the acquisition method of accounting which requires purchased assets and liabilities assumed to be recorded at their respective fair values at the date of acquisition. The Company determined the fair value of the core deposit intangible, securities and deposits with the assistance of third party valuations. The fair value of other real estate owned (“OREO”) was based on recent appraisals of the properties.

The estimated fair values in these acquisitions are subject to refinement as additional information relative to the closing date fair values become available through the measurement period, which can extend for up to one year after the closing date of the transaction. While additional significant changes to the closing date fair values are not expected, any information relative to the changes in these fair values will be evaluated to determine if such changes are due to events and circumstances that existed as of the acquisition date. During the measurement period, any such changes will be recorded as part of the closing date fair value.

Independence Bank Acquisition

On January 26, 2015, the Company completed its acquisition of Independence Bank (“IDPK”) in exchange for consideration valued at $78.5, which consisted of $6.1 million of cash consideration for IDPK common stockholders, $1.5 million of aggregate cash consideration to the holders of IDPK stock options and warrants, and the issuance of 4,480,645 shares of the Corporation’s common stock, which was valued at $70.9 million based on the closing stock price of the Company’s common stock on January 26, 2015 of $15.83 per share.

IDPK was a Newport Beach, California based state-chartered bank. The acquisition was an opportunity for the Company to strengthen its competitive position as one of the premier community banks headquartered in Southern California. Additionally, the IDPK acquisition enhanced and connected the Company’s footprint in Southern California.

Goodwill in the amount of $28.1 million was recognized in the IDPK acquisition. Goodwill recognized in this transaction is not deductible for income tax purposes.

The following table represents the assets acquired and liabilities assumed of IDPK as of January 26, 2015 and the provisional fair value adjustments and amounts recorded by the Company in 2015 under the acquisition method of accounting:

	IDBK Book Value			Fair Value Adjustments			Fair Value
	(dollars in thousands)
ASSETS ACQUIRED
Cash and cash equivalents	$	10,486					$	10,486
Investment securities		56,503			(382	)		56,121
Loans, gross		339,502			(6,609	)		332,893
Allowance for loan losses		(3,301	)		3,301			-
Deferred income taxes		3,252			717			3,969
Bank owned life insurance		11,276						11,276
Core deposit intangible		904			1,999			2,903
Other assets		3,756			105			3,860
Total assets acquired	$	422,378		$	(869	)	$	421,508

LIABILITIES ASSUMED
Deposits	$	335,685		$	333		$	336,018
FHLB advances		33,300						33,300
Other liabilities		1,916			(120	)		1,796
Total liabilities assumed		370,901			213			371,114
Excess of assets acquired over liabilities assumed	$	51,477		$	(1,082	)		50,394
Consideration paid								78,454
Goodwill recognized							$	28,060

Infinity Franchise Holdings Acquisition

On January 30, 2014, the Company completed its acquisition of Infinity Franchise Holdings, LLC (“Infinity Holdings”) and its wholly owned operating subsidiary Infinity Franchise Capital, LLC (“IFC” and together with Infinity Holdings, “IFH”), a national lender to franchisees in the quick service restaurant (“QSR”) industry, and other direct and indirect subsidiaries utilized in its business. The value of the total consideration paid for the IFH acquisition was $17.4 million, which consisted of $8.3 million paid in cash and the issuance of 562,469 shares of the Corporation’s stock, which was valued at $16.02 per share as measured by the 10-day average closing price immediately prior to closing of the transaction.

The acquisition of IFH further diversified our loan portfolio with commercial and industrial and owner-occupied commercial real estate loans, deployed excess liquidity into higher yielding assets, to positively impact our net interest margin and further leveraged our strong capital base. The QSR franchisee lending business is a niche market that we believe provides attractive growth opportunities for the Company in the future. IFH had no delinquent loans or adversely classified assets as of the acquisition date; and the acquisition was accretive to our 2014 earnings per share.

Goodwill in the amount of $5.5 million was recognized in the IFH acquisition. Goodwill represents the future economic benefits arising from net assets acquired that are not individually identified and separately recognized and is attributable to synergies expected to be derived from the combination of the two entities. Goodwill recognized in this transaction is not deductible for income tax purposes.

The following table represents the assets acquired and liabilities assumed of IFH as of January 30, 2014 and the provisional fair value adjustments and amounts recorded by the Company in 2014 under the acquisition method of accounting:

	IFH Book Value			Fair Value Adjustments			Fair Value
	(dollars in thousands)
ASSETS ACQUIRED
Cash and cash equivalents	$	555		$	-		$	555
Loans, gross		78,833			-			78,833
Deferred loan costs		1,082			(1,082	)		-
Allowance for loan losses		(268	)		268			-
Other assets		776			-			776
Total assets acquired	$	80,978		$	(814	)	$	80,164

LIABILITIES ASSUMED
Bank loan	$	67,617		$	-		$	67,617
Accrued compensation		495			-			495
Other liabilities		214			-			214
Total liabilities assumed		68,326			-			68,326
Excess of assets acquired over liabilities assumed	$	12,652		$	(814	)		11,838
Consideration paid								17,360
Goodwill recognized							$	5,522

There were no purchased credit impaired loans acquired from IFH. For loans acquired from IFH and IDPK, the contractual amounts due, expected cash flows to be collected, interest component and fair value as of the respective acquisition dates were as follows:

	Acquired Loans
	IFH		IDPK
	(dollars in thousands)

Contractual amounts due	$	98,320	$	453,987
Cash flows not expected to be collected		-		3,795
Expected cash flows		98,320		450,192
Interest component of expected cash flows		19,487		117,299
Fair value of acquired loans	$	78,833	$	332,893

In accordance with generally accepted accounting principles, there was no carryover of the allowance for loan losses that had been previously recorded by IFH or IDPK.

The operating results of the Company for the three months ending March 31, 2015 include the operating results of IDPK since the acquisition date. The operating results of the Company for the three months ending March 31, 2014 include the operating results of IFH since the acquisition date. The following table presents the net interest and other income, net income and earnings per share as if the acquisitions of IFH and IDPK were effective as of January 1, 2014. There were no material, nonrecurring adjustments to the pro forma net interest and other income, net income and earnings per share presented below:

	Three months Ended March 31,
	2015		2014

Net interest and other income	$	24,687	$	19,715
Net income	$	802	$	3,028
Basic earnings per share	$	0.04	$	0.14
Diluted earnings per share	$	0.04	$	0.14

Note 5 – Investment Securities

The amortized cost and estimated fair value of securities were as follows:

	March 31, 2015
	Amortized Cost		Unrealized Gain		Unrealized Loss			Estimated Fair Value
	(in thousands)
Investment securities available for sale:
Municipal bonds	$	103,997	$	1,718	$	(192	)	$	105,523
Mortgage-backed securities		174,281		1,097		(440	)		174,938
Total securities available for sale	$	278,278	$	2,815	$	(632	)	$	280,461

	December 31, 2014
	Amortized Cost		Unrealized Gain		Unrealized Loss			Estimated Fair Value
	(in thousands)
Investment securities available for sale:
Municipal bonds	$	88,599	$	1,235	$	(173	)	$	89,661
Mortgage-backed securities		112,159		432		(614	)		111,977
Total securities available for sale	$	200,758	$	1,667	$	(787	)	$	201,638

	March 31, 2014
	Amortized Cost		Unrealized Gain		Unrealized Loss			Estimated Fair Value
	(in thousands)
Investment securities available for sale:
Municipal bonds	$	77,062	$	848	$	(586	)		77,324
Mortgage-backed securities		126,921		65		(2,168	)		124,818
Total securities available for sale	$	203,983	$	913	$	(2,754	)	$	202,142

At March 31, 2015, the Company had $21.9 million in Federal Home Loan Bank (“FHLB”) stock, $5.4 million in Federal Reserve Bank (“FRB”) stock, and $3.3 million in other stock, all carried at cost. During the three months ended March 31, 2015, the Company had net purchases of $13.5 million of FHLB stock through the FHLB stock purchase program.

At March 31, 2015, mortgage-backed securities (“MBS”) with an estimated par value of $59.6 million and a fair value of $61.7 million were pledged as collateral for the Bank’s three reverse repurchase agreements which totaled $28.5 million and HOA reverse repurchase agreements which totaled $14.9 million.

The table below shows the number, fair value and gross unrealized holding losses of the Company’s investment securities by investment category and length of time that the securities have been in a continuous loss position.

	March 31, 2015
	Less than 12 months							12 months or Longer							Total
					Gross							Gross							Gross
					Unrealized							Unrealized							Unrealized
			Fair		Holding					Fair		Holding					Fair		Holding
	Number		Value		Losses			Number		Value		Losses			Number		Value		Losses
	(dollars in thousands)

Municipal bonds		48	$	20,818	$	(179	)		3	$	1,073	$	(13	)		51	$	21,891	$	(192	)
Mortgage-backed securities		10		21,857		(66	)		3		15,111		(374	)		13		36,968		(440	)
Total		58	$	42,675	$	(245	)		6	$	16,184	$	(387	)		64	$	58,859	$	(632	)

	December 31, 2014
	Less than 12 months							12 months or Longer							Total
					Gross							Gross							Gross
					Unrealized							Unrealized							Unrealized
			Fair		Holding					Fair		Holding					Fair		Holding
	Number		Value		Losses			Number		Value		Losses			Number		Value		Losses
	(dollars in thousands)

Municipal bonds		35	$	18,129	$	(117	)		16	$	6,510	$	(56	)		51	$	24,639	$	(173	)
Mortgage-backed securities		7		24,353		(105	)		4		18,842		(509	)		11		43,195		(614	)
Total		42	$	42,482	$	(222	)		20	$	25,352	$	(565	)		62	$	67,834	$	(787	)

	March 31, 2014
	Less than 12 months							12 months or Longer							Total
					Gross							Gross							Gross
					Unrealized							Unrealized							Unrealized
			Fair		Holding					Fair		Holding					Fair		Holding
	Number		Value		Losses			Number		Value		Losses			Number		Value		Losses
	(dollars in thousands)

Municipal bonds		74	$	36,765	$	(476	)		12	$	5,046	$	(110	)		86	$	41,811	$	(586	)
Mortgage-backed securities		32		93,299		(1,422	)		1		12,312		(746	)		33		105,611		(2,168	)
Total		106	$	130,064	$	(1,898	)		13	$	17,358	$	(856	)		119	$	147,422	$	(2,754	)

The amortized cost and estimated fair value of investment securities available for sale at March 31, 2015, by contractual maturity are shown in the table below.

	One Year				More than One				More than Five Years				More than
	or Less				Year to Five Years				to Ten Years				Ten Years				Total
	Amortized		Fair		Amortized		Fair		Amortized		Fair		Amortized		Fair		Amortized		Fair
	Cost		Value		Cost		Value		Cost		Value		Cost		Value		Cost		Value
	(dollars in thousands)
Investment securities available for sale:
Municipal bonds	$	466	$	470	$	21,044	$	21,076	$	35,914	$	36,539	$	46,573	$	47,438	$	103,997	$	105,523
Mortgage-backed securities		-		-		251		255		27,988		28,208		146,042		146,475		174,281		174,938
Total investment securities available for sale	$	466	$	470	$	21,295	$	21,331	$	63,902	$	64,747	$	192,615	$	193,913	$	278,278	$	280,461

Any temporary impairment is a result of the change in market interest rates and not the underlying issuers’ ability to repay. The Company has the intent and ability to hold these securities until the temporary impairment is eliminated. Accordingly, the Company has not recognized the temporary impairment in earnings.

Unrealized gains and losses on investment securities available for sale are recognized in stockholders’ equity as accumulated other comprehensive income or loss. At March 31, 2015, the Company had accumulated other comprehensive income of $2.2 million, or $1.3 million net of tax, compared to accumulated other comprehensive loss of $880,000 or $518,000 net of tax, at December 31, 2014.

Note 6 – Loans Held for Investment

The following table sets forth the composition of our loan portfolio in dollar amounts at the dates indicated:

	March 31, 2015			December 31, 2014			March 31, 2014
	(in thousands)
Business loans:
Commercial and industrial	$	420,218		$	428,207		$	271,877
Commercial owner occupied (1)		352,351			210,995			223,848
SBA		49,855			28,404			11,045
Warehouse facilities		216,554			113,798			81,033
Real estate loans:
Commercial non-owner occupied		452,422			359,213			333,490
Multi-family		397,130			262,965			223,200
One-to-four family (2)		116,735			122,795			141,469
Construction		111,704			89,682			29,857
Land		7,243			9,088			6,170
Other loans		6,641			3,298			3,480
Total gross loans (3)		2,130,853			1,628,445			1,325,469
Less loans held for sale, net		-			-			-
Total gross loans held for investment		2,130,853			1,628,445			1,325,469
Deferred loan origination costs/(fees) and premiums/(discounts), net		534			177			(97	)
Allowance for loan losses		(13,646	)		(12,200	)		(8,685	)
Loans held for investment, net	$	2,117,741		$	1,616,422		$	1,316,687

(1) Majority secured by real estate.
(2) Includes second trust deeds.
(3) Total gross loans for March 31, 2015 are net of (i) the unaccreted mark-to-market discounts on Canyon National Bank ("Canyon National") loans of $1.2 million, on Palm Desert National Bank ("Palm Desert National") loans of $1.3 million, on SDTB loans of $151,000, and on IDPK loans of $6.9 million and (ii) the mark-to-market premium on FAB loans of $28,000.

From time to time, we may purchase or sell loans in order to manage concentrations, maximize interest income, change risk profiles, improve returns and generate liquidity.

The Company makes residential and commercial loans held for investment to customers located primarily in California. Consequently, the underlying collateral for our loans and a borrower’s ability to repay may be impacted unfavorably by adverse changes in the economy and real estate market in the region.

Under applicable laws and regulations, the Bank may not make secured loans to one borrower in excess of 25% of the Bank’s unimpaired capital plus surplus and likewise in excess of 15% for unsecured loans. These loans-to-one borrower limitations result in a dollar limitation of $83.9 million for secured loans and $50.4 million for unsecured loans at March 31, 2015. At March 31, 2015, the Bank’s largest aggregate outstanding balance of loans to one borrower was $44.9 million of secured credit.

Purchased Credit Impaired

The following table provides a summary of the Company’s investment in purchased credit impaired loans, acquired from Canyon National, Palm Desert National and IDPK, as of the period indicated:

	March 31, 2015
	Canyon National		Palm Desert National		IDPK		Total
	(in thousands)
Business loans:
Commercial and industrial	$	95	$	-	$	601	$	696
Commercial owner occupied		549		-		2,388		2,937
Real estate loans:
Commercial non-owner occupied		965		-		1,379		2,344
One-to-four family		-		1		-		1
Total purchase credit impaired	$	1,609	$	1	$	4,368	$	5,978

On the acquisition date, the amount by which the undiscounted expected cash flows of the purchased credit impaired loans exceed the estimated fair value of the loan is the “accretable yield.” The accretable yield is measured at each financial reporting date and represents the difference between the remaining undiscounted expected cash flows and the current carrying value of the purchased credit impaired loan. At March 31, 2015, the Company had $6.0 million of purchased credit impaired loans, of which $1.7 million were placed on nonaccrual status.

The following table summarizes the accretable yield on the purchased credit impaired for the three months ended March 31, 2015:

	Three Months Ended
	March 31, 2015
	Canyon National			Palm Desert National		IDPK			Total
	(in thousands)

Balance at the beginning of period	$	1,351		$	52	$	-		$	1,403
Accretable yield at acquisition		-			-		602			602
Accretion		(47	)		-		(30	)		(77	)
Disposals and other		-			-		(4	)		(4	)
Change in accretable yield		-			-		-			-
Balance at the end of period	$	1,304		$	52	$	568		$	1,924

Impaired Loans

The following tables provide a summary of the Company’s investment in impaired loans as of the period indicated:

					Impaired Loans
	Contractual Unpaid Principal Balance		Recorded Investment		With Specific Allowance		Without Specific Allowance		Specific Allowance for Impaired Loans		Average Recorded Investment		Interest Income Recognized
	(in thousands)
March 31, 2015
Business loans:
Commercial and industrial	$	2,225	$	1,853	$	-	$	1,853	$	-	$	618	$	-
Commercial owner occupied		438		379		-		379		-		382		7
Real estate loans:
Commercial non-owner occupied		698		458		-		458		-		465		12
One-to-four family		254		232		-		232		-		234		5
Totals	$	3,615	$	2,922	$	-	$	2,922	$	-	$	1,699	$	24

					Impaired Loans
	Contractual Unpaid Principal Balance		Recorded Investment		With Specific Allowance		Without Specific Allowance		Specific Allowance for Impaired Loans		Average Recorded Investment		Interest Income Recognized
	(in thousands)
December 31, 2014
Business loans:
Commercial and industrial	$	-	$	-	$	-	$	-	$	-	$	11	$	-
Commercial owner occupied		440		388		-		388		-		514		46
SBA		-		-		-		-		-		5		-
Real estate loans:
Commercial non-owner occupied		1,217		848		-		848		-		908		85
One-to-four family		256		236		-		236		-		440		17
Totals	$	1,913	$	1,472	$	-	$	1,472	$	-	$	1,878	$	148


					Impaired Loans
	Contractual Unpaid Principal Balance		Recorded Investment		With Specific Allowance		Without Specific Allowance		Specific Allowance for Impaired Loans		Average Recorded Investment		Interest Income Recognized
	(in thousands)
March 31, 2014
Business loans:
Commercial and industrial	$	67	$	31	$	-	$	31	$	-	$	10	$	-
Commercial owner occupied		870		718		-		718		-		738		-
SBA		246		14		-		14		-		14		9
Real estate loans:
Commercial non-owner occupied		1,894		1,327		-		1,327		-		1,093		17
One-to-four family		639		593		274		319		104		602		17
Totals	$	3,716	$	2,683	$	274	$	2,409	$	104	$	2,457	$	43

The Company considers a loan to be impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement or it is determined that the likelihood of the Company receiving all scheduled payments, including interest, when due is remote. The Company has no commitments to lend additional funds to debtors whose loans have been impaired.

The Company reviews loans for impairment when the loan is classified as substandard or worse, delinquent 90 days, or determined by management to be collateral dependent, or when the borrower files bankruptcy or is granted a troubled debt restructuring (“TDR”). Measurement of impairment is based on the loan’s expected future cash flows discounted at the loan’s effective interest rate, measured by reference to an observable market value, if one exists, or the fair value of the collateral if the loan is deemed collateral dependent. All loans are generally charged-off at such time the loan is classified as a loss. Valuation allowances are determined on a loan-by-loan basis or by aggregating loans with similar risk characteristics.

The following table provides additional detail on the components of impaired loans at the period end indicated:

	March 31, 2015		December 31, 2014		March 31, 2014
	(in thousands)

Nonaccruing loans	$	2,742	$	1,290	$	2,497
Accruing loans		180		182		186
Total impaired loans	$	2,922	$	1,472	$	2,683

When loans are placed on nonaccrual status all accrued interest is reversed from earnings. Payments received on nonaccrual loans are generally applied as a reduction to the loan principal balance. If the likelihood of further loss is remote, the Company will recognize interest on a cash basis only. Loans may be returned to accruing status if the Company believes that all remaining principal and interest is fully collectible and there has been at least three months of sustained repayment performance since the loan was placed on nonaccrual.

The Company does not accrue interest on loans 90 days or more past due or when, in the opinion of management, there is reasonable doubt as to the collection of interest. The Company had impaired loans on nonaccrual status of $2.7 million at March 31, 2015, $1.3 million at December 31, 2014, and $2.5 million at March 31, 2014. The Company had no loans 90 days or more past due and still accruing at March 31, 2015, December 31, 2014 or March 31, 2014.

The Company had no new TDRs during the quarter ended March 31, 2015 and March 31, 2014 and had one immaterial TDR outstanding related to a U.S. Small Business Administration (“SBA”) loan.

Concentration of Credit Risk

As of March 31, 2015, the Company’s loan portfolio was collateralized by various forms of real estate and business assets located principally in California. The Company’s loan portfolio contains concentrations of credit in multi-family real estate, commercial non-owner occupied real estate and commercial owner occupied business loans. The Bank maintains policies approved by the Bank’s Board of Directors (the “Bank Board”) that address these concentrations and continues to diversify its loan portfolio through loan originations, purchases and sales to meet approved concentration levels. While management believes that the collateral presently securing these loans is adequate, there can be no assurances that a significant deterioration in the California real estate market or economy would not expose the Company to significantly greater credit risk.

Credit Quality and Credit Risk Management

The Company’s credit quality is maintained and credit risk managed in two distinct areas. The first is the loan origination process, wherein the Bank underwrites credit quality and chooses which risks it is willing to accept. The second is in the ongoing oversight of the loan portfolio, where existing credit risk is measured and monitored, and where performance issues are dealt with in a timely and comprehensive fashion.

The Company maintains a comprehensive credit policy which sets forth minimum and maximum tolerances for key elements of loan risk. The policy identifies and sets forth specific guidelines for analyzing each of the loan products the Company offers from both an individual and portfolio wide basis. The credit policy is reviewed annually by the Bank Board. The Bank’s seasoned underwriters ensure all key risk factors are analyzed with nearly all underwriting including a comprehensive global cash flow analysis of the prospective borrowers. The credit approval process mandates multiple-signature approval by the management credit committee for every loan that requires any subjective credit analysis.

Credit risk is managed within the loan portfolio by the Company’s Portfolio Management department based on a comprehensive credit and investment review policy. This policy requires a program of financial data collection and analysis, comprehensive loan reviews, property and/or business inspections and monitoring of portfolio concentrations and trends. The Portfolio Management department also monitors asset-based lines of credit, loan covenants and other conditions associated with the Company’s business loans as a means to help identify potential credit risk. Individual loans, excluding the homogeneous loan portfolio, are reviewed at least biennially, and in most cases more often, including the assignment of a risk grade.

Risk grades are based on a six-grade Pass scale, along with Special Mention, Substandard, Doubtful and Loss classifications as such classifications are defined by the regulatory agencies. The assignment of risk grades allows the Company to, among other things, identify the risk associated with each credit in the portfolio, and to provide a basis for estimating credit losses inherent in the portfolio. Risk grades are reviewed regularly by the Company’s Credit and Portfolio Review committee, and are reviewed annually by an independent third-party, as well as by regulatory agencies during scheduled examinations.

The following provides brief definitions for risk grades assigned to loans in the portfolio:

·	Pass classifications represent assets with a level of credit quality which contain no well-defined deficiency or weakness.

·	Special Mention assets do not currently expose the Bank to a sufficient risk to warrant classification in one of the adverse categories, but possess correctable deficiencies or potential weaknesses deserving management’s close attention.

Substandard assets are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. These assets are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected. OREO acquired from foreclosure is also classified as substandard.

·	Doubtful credits have all the weaknesses inherent in substandard credits, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

·	Loss assets are those that are considered uncollectible and of such little value that their continuance as assets is not warranted. Amounts classified as loss are promptly charged off.

The Portfolio Management department also manages loan performance risks, collections, workouts, bankruptcies and foreclosures. Loan performance risks are mitigated by our portfolio managers acting promptly and assertively to address problem credits when they are identified. Collection efforts are commenced immediately upon non-payment, and the portfolio managers seek to promptly determine the appropriate steps to minimize the Company’s risk of loss. When foreclosure will maximize the Company’s recovery for a non-performing loan, the portfolio managers will take appropriate action to initiate the foreclosure process.

When a loan is graded as special mention or substandard or doubtful, the Company obtains an updated valuation of the underlying collateral. If the credit in question is also identified as impaired, a valuation allowance, if necessary, is established against such loan or a loss is recognized by a charge to the allowance for loan losses (“ALLL”) if management believes that the full amount of the Company’s recorded investment in the loan is no longer collectable. The Company typically continues to obtain or confirm updated valuations of underlying collateral for special mention and classified loans on an annual basis in order to have the most current indication of fair value. Once a loan is identified as impaired, an analysis of the underlying collateral is performed at least quarterly, and corresponding changes in any related valuation allowance are made or balances deemed to be fully uncollectable are charged-off.

The following tables stratify the loan portfolio by the Company’s internal risk grading system as well as certain other information concerning the credit quality of the loan portfolio as of the periods indicated:

	Credit Risk Grades
			Special				Total Gross
	Pass		Mention		Substandard		Loans
March 31, 2015	(in thousands)
Business loans:
Commercial and industrial	$	410,328	$	1,250	$	8,640	$	420,218
Commercial owner occupied		340,685		-		11,666		352,351
SBA		49,855		-		-		49,855
Warehouse facilities		216,554		-		-		216,554
Real estate loans:
Commercial non-owner occupied		446,900		-		5,522		452,422
Multi-family		391,690		1,954		3,486		397,130
One-to-four family		115,780		-		955		116,735
Construction		111,469		-		235		111,704
Land		7,243		-		-		7,243
Other loans		6,641		-		-		6,641
Totals	$	2,097,145	$	3,204	$	30,504	$	2,130,853

	Credit Risk Grades
			Special				Total Gross
	Pass		Mention		Substandard		Loans
December 31, 2014	(in thousands)
Business loans:
Commercial and industrial	$	426,379	$	-	$	1,828	$	428,207
Commercial owner occupied		202,390		-		8,605		210,995
SBA		28,132		272		-		28,404
Warehouse facilities		113,798		-		-		113,798
Real estate loans:
Commercial non-owner occupied		355,274		-		3,939		359,213
Multi-family		261,956		501		508		262,965
One-to-four family		122,146		-		649		122,795
Construction		89,682		-		-		89,682
Land		9,088		-		-		9,088
Other loans		3,298		-		-		3,298
Totals	$	1,612,143	$	773	$	15,529	$	1,628,445

	Credit Risk Grades
			Special				Total Gross
	Pass		Mention		Substandard		Loans
March 31, 2014	(in thousands)
Business loans:
Commercial and industrial	$	270,024	$	-	$	1,853	$	271,877
Commercial owner occupied		212,663		272		10,913		223,848
SBA		11,031		-		14		11,045
Warehouse facilities		81,033		-		-		81,033
Real estate loans:
Commercial non-owner occupied		328,645		-		4,845		333,490
Multi-family		222,178		508		514		223,200
One-to-four family		140,453		-		1,016		141,469
Construction		29,857		-		-		29,857
Land		6,170		-		-		6,170
Other loans		3,478		-		2		3,480
Totals	$	1,305,532	$	780	$	19,157	$	1,325,469

The following tables set forth delinquencies in the Company’s loan portfolio at the dates indicated:

			Days Past Due								Non-
	Current			30-59		60-89		90+	Total		Accruing
March 31, 2015	(in thousands)
Business loans:
Commercial and industrial	$	417,894	$	146	$	-	$	2,178	$	420,218	$	2,455
Commercial owner occupied		351,600		349		375		27		352,351		527
SBA		49,855		-		-		-		49,855		-
Warehouse facilities		216,554		-		-		-		216,554		-
Real estate loans:
Commercial non-owner occupied		452,422		-		-		-		452,422		1,602
Multi-family		397,130		-		-		-		397,130		-
One-to-four family		116,533		149		-		53		116,735		79
Construction		111,704		-		-		-		111,704		-
Land		7,243		-		-		-		7,243		-
Other loans		6,640		1		-		-		6,641		-
Totals	$	2,127,575	$	645	$	375	$	2,258	$	2,130,853	$	4,663

			Days Past Due								Non-
	Current			30-59		60-89		90+	Total		Accruing
December 31, 2014	(in thousands)
Business loans:
Commercial and industrial	$	428,183	$	-	$	24	$	-	$	428,207	$	-
Commercial owner occupied		210,995		-		-		-		210,995		514
SBA		28,404		-		-		-		28,404		-
Warehouse facilities		113,798		-		-		-		113,798		-
Real estate loans:
Commercial non-owner occupied		359,213		-		-		-		359,213		848
Multi-family		262,965		-		-		-		262,965		-
One-to-four family		122,722		19		-		54		122,795		82
Construction		89,682		-		-		-		89,682		-
Land		9,088		-		-		-		9,088		-
Other loans		3,297		1		-		-		3,298		-
Totals	$	1,628,347	$	20	$	24	$	54	$	1,628,445	$	1,444

			Days Past Due								Non-
	Current			30-59		60-89		90+	Total		Accruing
March 31, 2014	(in thousands)
Business loans:
Commercial and industrial	$	271,845	$	-	$	32	$	-	$	271,877	$	31
Commercial owner occupied		223,402		-		-		446		223,848		864
SBA		10,985		46		-		14		11,045		14
Warehouse facilities		81,033		-		-		-		81,033		-
Real estate loans:
Commercial non-owner occupied		332,572		-		-		918		333,490		1,327
Multi-family		223,200		-		-		-		223,200		-
One-to-four family		141,348		72		-		49		141,469		438
Construction		29,857		-		-		-		29,857		-
Land		6,170		-		-		-		6,170		-
Other loans		3,480		-		-		-		3,480		-
Totals	$	1,323,892	$	118	$	32	$	1,427	$	1,325,469	$	2,674

Note 7 – Allowance for Loan Losses

The Company’s ALLL covers estimated credit losses on individually evaluated loans that are determined to be impaired as well as estimated credit losses inherent in the remainder of the loan portfolio. The ALLL is prepared using the information provided by the Company’s credit review process together with data from peer institutions and economic information gathered from published sources.

The loan portfolio is segmented into groups of loans with similar risk characteristics. Each segment possesses varying degrees of risk based on, among other things, the type of loan, the type of collateral, and the sensitivity of the borrower or industry to changes in external factors such as economic conditions. An estimated loss rate calculated using the Company’s actual historical loss rates adjusted for current portfolio trends, economic conditions, and other relevant internal and external factors, is applied to each group’s aggregate loan balances.

The following provides a summary of the ALLL calculation for the major segments within the Company’s loan portfolio.

Owner Occupied Commercial Real Estate Loans, Commercial and Industrial Loans and SBA Loans

The Company's base ALLL factor for owner occupied commercial real estate loans, commercial business loans and SBA loans is determined by management using the Bank's annualized actual trailing charge-off data over intervals of 72, 36, 24, 12 and 6 months. Adjustments to those base factors are made for relevant internal and external factors. For owner occupied commercial real estate loans, commercial business loans and SBA loans, those factors include:

·	Changes in national, regional and local economic conditions, including trends in real estate values and the interest rate environment,

·	Changes in the nature and volume of the loan portfolio, including new types of lending,

·	Changes in volume and severity of past due loans, the volume of nonaccrual loans, and the volume and severity of adversely classified or graded loans, and

·	The existence and effect of concentrations of credit, and changes in the level of such concentrations.

The resulting total ALLL factor is compared for reasonableness against the 10-year average, 15-year average, and trailing 12 month total charge-off data for all Federal Deposit Insurance Corporation (“FDIC”) insured commercial banks and savings institutions based in California. This factor is applied to balances graded pass-1 through pass-5. For loans risk graded as watch or worse, progressively higher potential loss factors are applied based on management’s judgment, taking into consideration the specific characteristics of the Bank’s portfolio and analysis of results from a select group of the Company’s peers.

Multi-Family and Non-Owner Occupied Commercial Real Estate and Construction Loans

The Company's base ALLL factor for multi-family and non-owner occupied commercial real estate and construction loans is determined by management using the Bank's annualized actual trailing charge-off data over intervals of 72, 36, 24, 12 and 6 months. Adjustments to those base factors are made for relevant internal and external factors. For multi-family and non-owner occupied commercial real estate loans, those factors include:

·	Changes in national, regional and local economic conditions, including trends in real estate values and the interest rate environment,

·	Changes in volume and severity of past due loans, the volume of nonaccrual loans, and the volume and severity of adversely classified or graded loans, and

·	The existence and effect of concentrations of credit, and changes in the level of such concentrations.

The resulting total ALLL factor is compared for reasonableness against the 10-year average, 15-year average, and trailing 12 month total charge-off data for all FDIC-insured commercial banks and savings institutions based in California. This factor is applied to balances graded pass-1 through pass-5. For loans risk graded as watch or worse, progressively higher potential loss factors are applied based on management’s judgment, taking into consideration the specific characteristics of the Bank’s portfolio and analysis of results from a select group of the Company’s peers.

One-to-Four Family and Consumer Loans

The Company's base ALLL factor for one-to-four family and consumer loans is determined by management using the Bank's annualized actual trailing charge-off data over intervals of 72, 36, 24, 12 and 6 months. Adjustments to those base factors are made for relevant internal and external factors. For one-to-four family and consumer loans, those factors include:

·	Changes in national, regional and local economic conditions, including trends in real estate values and the interest rate environment, and

·	Changes in volume and severity of past due loans, the volume of nonaccrual loans, and the volume and severity of adversely classified or graded loans.

Warehouse Facilities

The Company's warehouse facilities are structured as repurchase facilities, whereby we purchase funded one-to-four family loans on an interim basis. Therefore, the base ALLL factor for warehouse facilities is equal to that for one-to-four family and consumer loans as discussed above. Adjustments to the base factor are made for relevant internal and external factors. Those factors include:

·	Changes in national, regional and local economic conditions, including trends in real estate values and the interest rate environment,

·	Changes in the nature and volume of the loan portfolio, including new types of lending, and

·	The existence and effect of concentrations of credit, and changes in the level of such concentrations.

The resulting total ALLL factor is compared for reasonableness against the 10-year average, 15-year average, and trailing 12 month total charge-off data for one-to-four family loans for all FDIC-insured commercial banks and savings institutions based in California. This factor is applied to balances graded pass-1 through pass-5. For loans risk graded as watch or worse, progressively higher potential loss factors are applied based on management’s judgment, taking into consideration the specific characteristics of the Bank’s portfolio and analysis of results from a select group of the Company’s peers.

The following tables summarize the allocation of the ALLL as well as the activity in the ALLL attributed to various segments in the loan portfolio as of and for the three months ended for the periods indicated:

	Commercial and industrial			Commercial owner occupied			SBA			Warehouse Facilities			Commercial non-owner occupied			Multi-family			One-to-four family			Construction			Land			Other loans			Total
	(dollars in thousands)

Balance, December 31, 2014	$	4,200		$	1,757		$	568		$	546		$	2,007		$	1,060		$	842		$	1,088		$	108		$	24		$	12,200
Charge-offs		(396	)		-			-			-			-			-			-			-			-			-			(396	)
Recoveries		12			-			-			-			-			-			-			-			-			-			12
Provisions for (reduction in) loan losses		1,116			96			(21	)		343			124			243			(168	)		122			(30	)		5			1,830
Balance, March 31, 2015	$	4,932		$	1,853		$	547		$	889		$	2,131		$	1,303		$	674		$	1,210		$	78		$	29		$	13,646

Amount of allowance attributed to:
Specifically evaluated impaired loans	$	-		$	-		$	-		$	-		$	-		$	-		$	-		$	-		$	-		$	-		$	-
General portfolio allocation		4,932			1,853			547			889			2,131			1,303			674			1,210			78			29			13,646

Loans individually evaluated for impairment		1,853			379			-			-			458			-			232			-			-			-			2,922
Specific reserves to total loans individually evaluated for impairment		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Loans collectively evaluated for impairment	$	418,365		$	351,972		$	49,855		$	216,554		$	451,964		$	397,130		$	116,503		$	111,704		$	7,243		$	6,641		$	2,127,931
General reserves to total loans collectively evaluated for impairment		1.18	%		0.53	%		1.10	%		0.41	%		0.47	%		0.33	%		0.58	%		1.08	%		1.08	%		0.44	%		0.64	%

Total gross loans	$	420,218		$	352,351		$	49,855		$	216,554		$	452,422		$	397,130		$	116,735		$	111,704		$	7,243		$	6,641		$	2,130,853
Total allowance to gross loans		1.17	%		0.53	%		1.10	%		0.41	%		0.47	%		0.33	%		0.58	%		1.08	%		1.08	%		0.44	%		0.64	%


	Commercial and industrial			Commercial owner occupied			SBA			Warehouse Facilities			Commercial non-owner occupied			Multi-family			One-to-four family			Construction			Land			Other loans			Total
	(dollars in thousands)

Balance, December 31, 2013	$	1,968		$	1,818		$	151		$	392		$	1,658		$	817		$	1,099		$	136		$	127		$	34		$	8,200
Charge-offs		(124	)		-			-			-			(365	)		-			(12	)		-			-			-			(501	)
Recoveries		5			-			2			-			-			-			30			-			-			-			37
Provisions for (reduction in) loan losses		516			(64	)		26			(16	)		564			(12	)		(198	)		187			(46	)		(8	)		949
Balance, March 31, 2014	$	2,365		$	1,754		$	179		$	376		$	1,857		$	805		$	919		$	323		$	81		$	26		$	8,685

Amount of allowance attributed to:
Specifically evaluated impaired loans	$	-		$	-		$	-		$	-		$	-		$	-		$	104		$	-		$	-		$	-		$	104
General portfolio allocation		2,365			1,754			179			376			1,857			805			815			323			81			26			8,581

Loans individually evaluated for impairment		31			718			14			-			1,327			-			593			-			-			-			2,683
Specific reserves to total loans individually evaluated for impairment		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%		17.54	%		0.00	%		0.00	%		0.00	%		3.88	%
Loans collectively evaluated for impairment	$	271,846		$	223,130		$	11,031		$	81,033		$	332,163		$	223,200		$	140,876		$	29,857		$	6,170		$	3,480		$	1,322,786
General reserves to total loans collectively evaluated for impairment		0.87	%		0.79	%		1.62	%		0.46	%		0.56	%		0.36	%		0.58	%		1.08	%		1.31	%		0.75	%		0.65	%

Total gross loans	$	271,877		$	223,848		$	11,045		$	81,033		$	333,490		$	223,200		$	141,469		$	29,857		$	6,170		$	3,480		$	1,325,469
Total allowance to gross loans		0.87	%		0.78	%		1.62	%		0.46	%		0.56	%		0.36	%		0.65	%		1.08	%		1.31	%		0.75	%		0.66	%

Note 8 – Subordinated Debentures

In August 2014, the Corporation issued $60 million in aggregate principal amount of 5.75% Subordinated Notes Due 2024 (the “Notes”) in a private placement transaction to institutional accredited investors (the “Private Placement”). The Corporation contributed $40 million of net proceeds from the Private Placement to the Bank to support general corporate purposes. The Notes will bear interest at an annual fixed rate of 5.75%, with the first interest payment on the Notes occurring on March 3, 2015, and interest will be paid semiannually each March 3 and September 3 until September 3, 2024.

In connection with the Private Placement, the Corporation obtained ratings from Kroll Bond Rating Agency (“KBRA”). KBRA assigned investment grade ratings of BBB+ and BBB for the Corporation's senior secured debt and subordinated debt, respectively, and a senior deposit rating of A- for the Bank.

In March 2004, the Corporation issued $10.3 million of Floating Rate Junior Subordinated Deferrable Interest Debentures (the “Subordinated Debentures”) to PPBI Trust I, which funded the payment of $10.0 million of Floating Rate Trust Preferred Securities (“Trust Preferred Securities”) issued by PPBI Trust I in March 2004. The net proceeds from the offering of Trust Preferred Securities were contributed as capital to the Bank to support further growth. Interest is payable quarterly on the Subordinated Debentures at three-month LIBOR plus 2.75% per annum, for an effective rate of 3.00% per annum as of March 31, 2015.

The Corporation is not allowed to consolidate PPBI Trust I into the Company’s consolidated financial statements. The resulting effect on the Company’s consolidated financial statements is to report only the Subordinated Debentures as a component of the Company’s liabilities.

Note 9 – Earnings Per Share

Basic earnings per share excludes dilution and is computed by dividing net income or loss available to common stockholders by the weighted average number of common shares outstanding for the period, excluding common shares in treasury. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted from the issuance of common stock that would then share in earnings and excludes common shares in treasury. Stock options exercisable for shares of common stock are excluded from the computation of diluted earnings per share if they are anti-dilutive due to their exercise price exceeding the average market price during the period.

The impact of stock options which are anti-dilutive are excluded from the computations of diluted earnings per share. The dilutive impact of these securities could be included in future computations of diluted earnings per share if the market price of the common stock increases. The following table sets forth the number of stock options excluded for the periods indicated:

	Three Months Ended
	March 31,
	2015	2014

Stock options excluded	967,050	700,598

The following tables set forth the Company’s unaudited earnings per share calculations for the periods indicated:

	Three Months Ended March 31,
	2015						2014
	Net				Per Share		Net				Per Share
	Income		Shares		Amount		Income		Shares		Amount
	(dollars in thousands, except per share data)
Net income	$	1,789					$	2,632
Basic income available to common stockholders		1,789		20,091,924	$	0.09		2,632		17,041,594	$	0.15
Effect of dilutive stock options and warrants		-		290,908				-		334,407
Diluted income available to common stockholders plus assumed conversions	$	1,789		20,382,832	$	0.09	$	2,632		17,376,001	$	0.15

Note 10 – Fair Value of Financial Instruments

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Financial instruments are considered Level 1 when the valuation is based on quoted prices in active markets for identical assets or liabilities. Level 2 financial instruments are valued using quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or models using inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Financial instruments are considered Level 3 when their values are determined using pricing models, discounted cash flow methodologies or similar techniques, and at least one significant model assumption or input is unobservable and when determination of the fair value requires significant management judgment or estimation.

Because no market exists for a significant portion of the Company’s financial instruments, fair value estimates are based on judgments regarding current economic conditions, risk characteristics of various financial instruments, and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the fair values presented. The following methods and assumptions were used by the Company to estimate the fair value of its financial instruments at March 31, 2015, December 31, 2014 and March 31, 2014:

Cash and due from banks – The carrying amounts of cash and short-term instruments approximate fair values and are classified as Level 1.

Securities Available for Sale – Where possible, the Company utilizes quoted market prices to measure debt and equity securities; such items are classified as Level 1 in the hierarchy and include equity securities, US government bonds and securities issued by federally sponsored agencies. When quoted market prices for identical assets are unavailable or the market for the asset is not sufficiently active, varying valuation techniques are used. Common inputs in valuing these assets include, among others, benchmark yields, issuer spreads, forward mortgage-backed securities trade prices and recently reported trades. Such assets are classified as Level 2 in the hierarchy and typically include private label mortgage-backed securities and corporate bonds. Pricing on these securities are provided to the Company by a pricing service vendor. In the Level 3 category, the Company classifies securities that reflect other-than-temporary impairments (“OTTI”) based on a discounted cash flow of the security or a determination of fair value that requires significant management judgment or consideration.

FHLB, FRB, Other Stock – The carrying value approximates the fair value based upon the redemption provisions of the stock and are classified as Level 1.

Loans Held for Investment— The fair value of loans, other than loans on nonaccrual status, was estimated by discounting the remaining contractual cash flows using the estimated current rate at which similar loans would be made to borrowers with similar credit risk characteristics and for the same remaining maturities, reduced by deferred net loan origination fees and the allocable portion of the allowance for loan losses. Accordingly, in determining the estimated current rate for discounting purposes, no adjustment has been made for any change in borrowers’ credit risks since the origination of such loans. Rather, the allocable portion of the allowance for loan losses is considered to provide for such changes in estimating fair value. As a result, this fair value is not necessarily the value which would be derived using an exit price. These loans are included within Level 3 of the fair value hierarchy. The carrying amount of accrued interest receivable approximates its fair value as a Level 1 classification.

OREO – OREO assets are recorded at the fair value less estimated costs to sell at the time of foreclosure. The fair value of OREO assets is generally based on recent real estate appraisals adjusted for estimated selling costs. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are typically significant and result in a Level 3 classification of the inputs for determining fair value.

Accrued Interest Receivable/Payable – The carrying amount approximates fair value and is classified as Level 1.

Deposit Accounts— The fair values estimated for demand deposits (interest and noninterest checking, passbook savings, and certain types of money market accounts) are, by definition, equal to the amount payable on demand at the reporting date (i.e., their carrying amounts) resulting in a Level 1 classification. Fair values for fixed-rate certificates of deposit are estimated using a discounted cash flow calculation that applies interest rates currently being offered on certificates to a schedule of the aggregate expected monthly maturities on time deposits in a Level 2 classification. The carrying amount of accrued interest payable approximates its fair value as a Level 1 classification.

FHLB Advances and Other Borrowings— For these instruments, the fair value of short term borrowings is estimated to be the carrying amount and is classified as Level 1. The fair value of long term borrowings and debentures is determined using rates currently available for similar borrowings or debentures with similar credit risk and for the remaining maturities and are classified as Level 2. The carrying amount of accrued interest payable approximates its fair value as a Level 1 classification.

Subordinated Debentures – The fair value of subordinated debentures is estimated by discounting the balance by the current three-month LIBOR rate plus the current market spread. The fair value is determined based on the maturity date as the Company does not currently have intentions to call the debenture and is classified as Level 2.

Off-Balance Sheet Commitments and Standby Letters of Credit – The majority of the Bank’s commitments to extend credit carry current market interest rates if converted to loans. Because these commitments are generally unassignable by either the Bank or the borrower, they only have value to the Bank and the borrower. The notional amount disclosed for off-balance sheet commitments and standby letters of credit is the amount available to be drawn down on all lines and letters of credit. The cost to assume is calculated at 10% of the notional amount and is classified as Level 2.

Estimated fair values are disclosed for financial instruments for which it is practicable to estimate fair value. These estimates are made at a specific point in time based on relevant market data and information about the financial instruments. These estimates do not reflect any premium or discount that could result from offering the Company’s entire holdings of a particular financial instrument for sale at one time, nor do they attempt to estimate the value of anticipated future business related to the instruments. In addition, the tax ramifications related to the realization of unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in any of these estimates.

The fair value estimates presented herein are based on pertinent information available to management as of the periods indicated.

	At March 31, 2015
	Carrying Amount		Level 1		Level 2		Level 3		Estimated Fair Value
	(in thousands)
Assets:
Cash and cash equivalents	$	178,371	$	178,371	$	-	$	-	$	178,371
Securities available for sale		280,461		-		280,461		-		280,461
FHLB, Federal Reserve Bank, and other stock, at cost		30,586		30,586		-		-		30,586
Loans held for investment, net		2,117,741		-		-		2,205,161		2,205,161
Accrued interest receivable		8,769		8,769		-		-		8,769
Other real estate owned		997		-		-		997		997

Liabilities:
Deposit accounts		2,043,166		1,576,056		479,204		-		2,055,260
FHLB advances		300,000		300,031		-		-		300,031
Other borrowings		43,434		-		45,084		-		45,084
Subordinated debentures		70,310		-		69,501		-		69,501
Accrued interest payable		177		177		-		-		177

	Notional Amount		Level 1		Level 2		Level 3		Cost to Cede or Assume
Off-balance sheet commitments and standby letters of credit	$	403,084	$	-	$	40,308	$	-	$	40,308

	At December 31, 2014
	Carrying Amount		Level 1		Level 2		Level 3		Estimated Fair Value
	(in thousands)
Assets:
Cash and cash equivalents	$	110,925	$	110,925	$	-	$	-	$	110,925
Securities available for sale		201,638		-		201,638		-		201,638
FHLB, Federal Reserve Bank, and other stock, at cost		17,067		17,067		-		-		17,067
Loans held for investment, net		1,616,422		-		-		1,686,046		1,686,046
Accrued interest receivable		7,131		7,131		-		-		7,131
Other real estate owned		1,037		-		-		1037		1,037

Liabilities:
Deposit accounts		1,630,826		1,216,847		519,898		-		1,736,745
FHLB advances		70,000		70,025		-		-		70,025
Other borrowings		46,643		-		48,312		-		48,312
Subordinated debentures		70,310		-		33,456		-		33,456
Accrued interest payable		209		209		-		-		209

	Notional Amount		Level 1		Level 2		Level 3		Cost to Cede or Assume
Off-balance sheet commitments and standby letters of credit	$	355,024	$	-	$	35,502	$	-	$	35,502

	At March 31, 2014
	Carrying Amount		Level 1		Level 2		Level 3		Estimated Fair Value
	(in thousands)
Assets:
Cash and cash equivalents	$	124,419	$	124,419	$	-	$	-	$	124,419
Securities available for sale		202,142		-		202,142		-		202,142
FHLB, Federal Reserve Bank, and other stock, at cost		14,104		14,104		-		-		14,104
Loans held for investment, net		1,316,687		-		-		1,392,661		1,392,661
Accrued interest receivable		5,865		5,865		-		-		5,865
Other real estate owned		752		-		-		752		752

Liabilities:
Deposit accounts		1,435,203		1,110,877		354,437		-		1,465,314
FHLB advances		50,000		50,000		-		-		50,000
Other borrowings		45,506		-		47,708		-		47,708
Subordinated debentures		10,310		-		4,649		-		4,649
Accrued interest payable		168		168		-		-		168

	Notional Amount		Level 1		Level 2		Level 3		Cost to Cede or Assume
Off-balance sheet commitments and standby letters of credit	$	246,014	$	-	$	24,601	$	-	$	24,601

A loan is considered impaired when it is probable that payment of interest and principal will not be made in accordance with the contractual terms of the loan agreement. Impairment is measured based on the fair value of the underlying collateral or the discounted expected future cash flows. The Company measures impairment on all non-accrual loans for which it has reduced the principal balance to the value of the underlying collateral less the anticipated selling cost. As such, the Company records impaired loans as non-recurring Level 2 when the fair value of the underlying collateral is based on an observable market price or current appraised value. When current market prices are not available or the Company determines that the fair value of the underlying collateral is further impaired below appraised values, the Company records impaired loans as Level 3. At March 31, 2015, substantially all the Company’s impaired loans were evaluated based on the fair value of their underlying collateral based upon the most recent appraisal available to management.

The Company’s valuation methodologies may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. While management believes the Company’s valuation methodologies are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date.

The following fair value hierarchy table presents information about the Company’s financial instruments measured at fair value on a recurring basis at the dates indicated:

	March 31, 2015
	Fair Value Measurement Using
	Level 1		Level 2		Level 3		Securities at Fair Value
	(in thousands)
Investment securities available for sale:
Municipal bonds	$	-	$	105,523	$	-	$	105,523
Mortgage-backed securities		-		174,938		-		174,938
Total securities available for sale	$	-	$	280,461	$	-	$	280,461

	March 31, 2014
	Fair Value Measurement Using
	Level 1		Level 2		Level 3		Securities at Fair Value
	(in thousands)
Investment securities available for sale:
Municipal bonds	$	-	$	77,324	$	-		77,324
Mortgage-backed securities		-		124,818		-		124,818
Total securities available for sale	$	-	$	202,142	$	-	$	202,142

The fair value of impaired loans was determined using Level 3 assumptions, and represents impaired loan balances for which a specific reserve has been established or on which a write down has been taken. Generally, the Company obtains third party appraisals (or property evaluations) and/or collateral audits in conjunction with internal analyses based on historical experience on its impaired loans and other real estate owned to determine fair value. In determining the net realizable value of the underlying collateral for impaired loans, the Company will then discount the valuation to cover both market price fluctuations and selling costs the Company expected would be incurred in the event of foreclosure. In addition to the discounts taken, the Company’s calculation of net realizable value considered any other senior liens in place on the underlying collateral.

The following table provides a summary of the financial instruments the Company measures at fair value on a non-recurring basis as of the periods indicated:

	March 31, 2015
	Fair Value Measurement Using
	Level 1		Level 2		Level 3		Assets at Fair Value
	(in thousands)
Assets
Collateral dependent impaired loans	$	-	$	-	$	2,742	$	2,742
Other real estate owned		-		-		997		997
Total assets	$	-	$	-	$	3,739	$	3,739

	March 31, 2014
	Fair Value Measurement Using
	Level 1		Level 2		Level 3		Assets at Fair Value
	(in thousands)
Assets
Collateral dependent impaired loans	$	-	$	-	$	1,730	$	1,730
Other real estate owned		-		-		752		752
Total assets	$	-	$	-	$	2,482	$	2,482

The following table presents quantitative information about level 3 of fair value measurements for financial instruments measured at fair value on a non-recurring basis for the periods indicated:

	March 31, 2015
				Range
	Fair Value		Valuation Techniques	Rate	Maturity (years)	Unobservable Inputs
Collateral dependent impaired loans:
Business loans:
Commercial and industrial	$	1,853	Collateral valuation	6.70%	8		0 - 10%
Commercial owner occupied		379	Collateral valuation	6.75%	7		0 - 10%
Real estate loans:
Commercial non-owner occupied		458	Collateral valuation	7.00%	12		0 - 15%
One-to-four family		52	Collateral valuation	8.00 - 15.00%	5 - 16		0 - 10%
Total collateral dependent impaired loans	$	2,742

Other real estate owned
Land	$	711	Collateral valuation	--	--		0 - 10%
One-to-four family		286	Collateral valuation	--	--		0 - 10%
Total other real estate owned	$	997


	March 31, 2014
				Range
	Fair Value		Valuation Techniques	Rate	Maturity (years)	Unobservable Inputs
Collateral dependent impaired loans:
Business loans:
Commercial and industrial	$	31	Collateral valuation	6.00%	3		0 - 10%
Commercial owner occupied		718	Collateral valuation	7.00 - 11.75%	3 - 8		0 - 10%
SBA		14	Collateral valuation	6.00%	7		0 - 20%
Real estate loans:
Commercial non-owner occupied		918	Collateral valuation	6.13 - 7.00%	12-13		0 - 15%
One-to-four family		49	Collateral valuation	11.10 - 15.00%	6 - 15		0 - 10%
Total collateral dependent impaired loans	$	1,730

Other real estate owned
Land	$	752	Collateral valuation	--	--
Total other real estate owned	$	752

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains information and statements that are considered “forward looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements represent plans, estimates, objectives, goals, guidelines, expectations, intentions, projections and statements of our beliefs concerning future events, business plans, objectives, expected operating results and the assumptions upon which those statements are based. Forward-looking statements include without limitation, any statement that may predict, forecast, indicate or imply future results, performance or achievements, and are typically identified with words such as “may,” “could,” “should,” “will,” “would,” “believe,” “anticipate,” “estimate,” “expect,” “intend,” “plan,” or words or phrases of similar meaning. We caution that the forward-looking statements are based largely on our expectations and are subject to a number of known and unknown risks and uncertainties that are subject to change based on factors which are, in many instances, beyond our control. Actual results, performance or achievements could differ materially from those contemplated, expressed, or implied by the forward-looking statements.

The following factors, among others, could cause our financial performance to differ materially from that expressed in such forward-looking statements:

·	The strength of the United States economy in general and the strength of the local economies in which we conduct operations;

·	The effects of, and changes in, trade, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System (the “Federal Reserve”);

·	Inflation/deflation, interest rate, market and monetary fluctuations;

·	The timely development of competitive new products and services and the acceptance of these products and services by new and existing customers;

·	The impact of changes in financial services policies, laws and regulations, including those concerning taxes, banking, securities and insurance, and the application thereof by regulatory bodies;

·	Technological and social media changes;

·	The effect of acquisitions we have made or may make, if any, including, without limitation, the failure to achieve the expected revenue growth or expense savings from such acquisitions, or the failure to effectively integrate an acquisition target into our operations;

·	Changes in the level of our nonperforming assets and charge-offs;

·	The effect of changes in accounting policies and practices, as may be adopted from time-to-time by bank regulatory agencies, the SEC, the Public Company Accounting Oversight Board, the FASB or other accounting standards setters;

·	Possible OTTI of securities held by us;

·	Changes in consumer spending, borrowing and savings habits;

·	The effects of our lack of a diversified loan portfolio, including the risks of geographic and industry concentrations;

·	Ability to attract deposits and other sources of liquidity;

·	Changes in the financial performance and/or condition of our borrowers;

·	Changes in the competitive environment among financial and bank holding companies and other financial service providers;

·	Geopolitical conditions, including acts or threats of terrorism, actions taken by the United States or other governments in response to acts or threats of terrorism and/or military conflicts, which could impact business and economic conditions in the United States and abroad;

·	Unanticipated regulatory or judicial proceedings; and

·	Our ability to manage the risks involved in the foregoing.

If one or more of the factors affecting our forward-looking information and statements proves incorrect, then our actual results, performance or achievements could differ materially from those expressed in, or implied by, forward-looking information and statements contained in this Quarterly Report on Form 10-Q and other reports and registration statements filed by us with the SEC. Therefore, we caution you not to place undue reliance on our forward-looking information and statements. We will not update the forward-looking information and statements to reflect actual results or changes in the factors affecting the forward-looking information and statements. For information on the factors that could cause actual results to differ from the expectations stated in the forward-looking statements, see “Risk Factors” under Part I, Item 1A of our 2014 Annual Report.

Forward-looking information and statements should not be viewed as predictions, and should not be the primary basis upon which investors evaluate us. Any investor in our common stock should consider all risks and uncertainties disclosed in our filings with the SEC, all of which are accessible on the SEC’s website at http://www.sec.gov.

GENERAL

This discussion should be read in conjunction with our Management Discussion and Analysis of Financial Condition and Results of Operations included in our 2014 Annual Report, plus the unaudited consolidated financial statements and the notes thereto appearing elsewhere in this Quarterly Report on Form 10-Q. The results for the three months ended March 31, 2015 are not necessarily indicative of the results expected for the year ending December 31, 2015.

The Corporation is a California-based bank holding company incorporated in the state of Delaware and registered as a bank holding company under the Bank Holding Company Act of 1956, as amended (“BHCA”). Our wholly owned subsidiary, Pacific Premier Bank, is a California state-chartered commercial bank. As a bank holding company, the Corporation is subject to regulation and supervision by the Federal Reserve. We are required to file with the Federal Reserve quarterly and annual reports and such additional information as the Federal Reserve may require pursuant to the BHCA. The Federal Reserve may conduct examinations of bank holding companies, such as the Corporation, and its subsidiaries. The Corporation is also a bank holding company within the meaning of the California Financial Code. As such, the Corporation and its subsidiaries are subject to examination by, and may be required to file reports with, the California Department of Business Oversight-Division of Financial Institutions (“DBO”).

A bank holding company, such as the Corporation, is required to serve as a source of financial strength to its subsidiary depository institutions and to commit resources to support such institutions in circumstances where it might not do so absent such a policy. The Federal Reserve, under the BHCA, has the authority to require a bank holding company to terminate any activity or to relinquish control of a nonbank subsidiary (other than a nonbank subsidiary of a bank) upon the Federal Reserve’s determination that such activity or control constitutes a serious risk to the financial soundness and stability of any bank subsidiary of the bank holding company.

As a California state-chartered commercial bank which is a member of the Federal Reserve, the Bank is subject to supervision, periodic examination and regulation by the DBO and the Federal Reserve. The Bank’s deposits are insured by the FDIC through the Deposit Insurance Fund. In general terms, insurance coverage is up to $250,000 per depositor for all deposit accounts. As a result of this deposit insurance function, the FDIC also has certain supervisory authority and powers over the Bank. If, as a result of an examination of the Bank, the regulators should determine that the financial condition, capital resources, asset quality, earnings prospects, management, liquidity or other aspects of the Bank’s operations are unsatisfactory or that the Bank or our management is violating or has violated any law or regulation, various remedies are available to the regulators. Such remedies include the power to enjoin unsafe or unsound practices, to require affirmative action to correct any conditions resulting from any violation or practice, to issue an administrative order that can be judicially enforced, to direct an increase in capital, to restrict growth, to assess civil monetary penalties, to remove officers and directors and ultimately to request the FDIC to terminate the Bank’s deposit insurance. As a California-chartered commercial bank, the Bank is also subject to certain provisions of California law.

We provide banking services within our targeted markets in California to businesses, including the owners and employees of those businesses, professionals, real estate investors and non-profit organizations, as well as consumers in the communities we serve. Additionally, through our HOA Banking and Lending and Franchise Capital units we can provide customized cash management, electronic banking services and credit facilities to HOAs, HOA management companies and QSR franchise owners nationwide. At March 31, 2015, the Bank operated 16 full-service depository branches in California located in the cities of Encinitas, Huntington Beach, Irvine, Los Alamitos, Newport Beach, Palm Desert (2), Palm Springs (2), San Bernardino, San Diego (2), Seal Beach, Tustin, Riverside and Corona. Our corporate headquarters are located in Irvine, California. Through our branches and our web site at www.ppbi.com, we offer a broad array of deposit products and services for both business and consumer customers, including checking, money market and savings accounts, cash management services, electronic banking, and on-line bill payment. We also offer a variety of loan products, including commercial business loans, lines of credit, commercial real estate loans, SBA loans, residential home loans, and home equity loans. The Bank funds its lending and investment activities with retail deposits obtained through its branches, advances from the FHLB, lines of credit, and wholesale and brokered certificates of deposits.

Our principal source of income is the net spread between interest earned on loans and investments and the interest costs associated with deposits and borrowings used to finance the loan and investment portfolios. Additionally, the Bank generates fee income from loan and investment sales and various products and services offered to both depository and loan customers.

CRITICAL ACCOUNTING POLICIES

Management has established various accounting policies that govern the application of U.S. GAAP in the preparation of our financial statements. Our significant accounting policies are described in the Notes to the Consolidated Financial Statements in our 2014 Annual Report. There have been no significant changes to our Critical Accounting Policies as described in our 2014 Annual Report.

Certain accounting policies require management to make estimates and assumptions which have a material impact on the carrying value of certain assets and liabilities; management considers these to be critical accounting policies. The estimates and assumptions management uses are based on historical experience and other factors, which management believes to be reasonable under the circumstances. Actual results could differ significantly from these estimates and assumptions, which could have a material impact on the carrying value of assets and liabilities at balance sheet dates and our results of operations for future reporting periods.

We consider the ALLL to be a critical accounting policy that requires judicious estimates and assumptions in the preparation of our financial statements that is particularly susceptible to significant change. For further information, see “Allowances for Loan Losses” discussed in Note 7 to the Consolidated Financial Statements in this Quarterly Report on Form 10-Q and Note 5 to the Consolidated Financial Statements in our 2014 Annual Report.

IDPK ACQUISITION

Effective January 26, 2015, the Company acquired IDPK, a Newport Beach, California, based state-chartered bank, pursuant to the terms of a definitive agreement entered into by the Corporation, the Bank and IDPK on October 22, 2014. As a result of the IDPK acquisition, the Bank acquired and recorded at the acquisition date assets with a fair value of approximately $449.6 million, including:

·	$332.9 million of gross loans;

·	$56.1 million in investment securities;

·	$28.1 million in goodwill;

·	$11.3 million in bank owned life insurance;

·	$10.5 million of cash and cash equivalents;

·	$7.8 million of other types of assets; and

·	$2.9 million of a core deposit intangible.

Also as a result of the IDPK acquisition, the Bank recorded equity of $70.9 million in connection with the Corporation’s stock issued to IDPK shareholders as part of the acquisition consideration and assumed at acquisition date liabilities with a fair value of approximately $371.1 million, including:

·	$270.0 million in deposit transaction accounts;

·	$66.0 million in retail certificates of deposit;

·	$33.3 million in FHLB advances; and

·	$1.8 million other liabilities.

The fair values of the assets acquired and liabilities assumed were determined based on the requirements of FASB ASC Topic 820: Fair Value Measurements and Disclosures.

The acquisition was an opportunity for the Company to strengthen its competitive position as one of the premier community banks headquartered in Southern California. Additionally, the IDPK acquisition enhanced and connected the Company’s footprint in Southern California.

IFH ACQUISITION

On January 30, 2014, the Company acquired IFH, a national lender to franchisees in the QSR industry, and other direct and indirect subsidiaries utilized in its business, pursuant to the terms of a definitive agreement entered into by the Corporation, the Bank and Infinity on November 15, 2013. As a result of the IFH acquisition, the Bank acquired and recorded at the acquisition date assets with a fair value of approximately $80.2 million, including $78.8 million in loans. Also as a result of the IFH acquisition, the Bank recorded equity of $9.0 million in connection with the Corporation’s stock issued to IFH shareholders as part of the acquisition consideration and assumed at acquisition date liabilities with a fair value of approximately $68.3 million, including a $67.6 million credit facility that was paid off in conjunction with the closing of the acquisition.

The fair values of the assets acquired and liabilities assumed were determined based on the requirements of FASB ASC Topic 820: Fair Value Measurements and Disclosures.

The acquisition of IFH has diversified our loan portfolio with commercial and industrial and owner-occupied commercial real estate loans, permitting us to deploy excess liquidity into higher yielding assets. The QSR franchisee lending business is a niche market that provides attractive growth opportunities for the Company in the future. IFH had no delinquent loans or adversely classified assets as of the acquisition date.

RESULTS OF OPERATIONS

In the first quarter of 2015, we reported net income of $1.8 million, or $0.09 per diluted share, compared with net income for the first quarter of 2014 of $2.6 million or $0.15 per diluted share. For the three months ended March 31, 2015, the Company’s return on average assets was 0.29% and return on average tangible common equity was 4.04%, compared with a return on average assets of 0.64% and a return on average tangible common equity of 7.22% for the three months ended March 31, 2014.

The Company’s first quarter 2015 financial results included merger-related expenses of $4.0 million associated with the IDPK acquisition. The Company’s first quarter 2014 financial results included merger-related expenses of $626,000 associated with the acquisition of IFH. Excluding non-recurring merger-related expenses, the Company reported adjusted net income of $4.3 million, or $0.21 per share on a diluted basis, for the first quarter of 2015, compared with $3.0 million, or $0.17 per share on a diluted basis, for the first quarter of 2014.

Excluding the non-recurring merger-related expenses, the Company’s adjusted return on average assets was 0.70% and adjusted return on average tangible common equity was 9.24% for the three months ended March 31, 2015, compared with an adjusted return on average assets of 0.73% and an adjusted return on average tangible common equity of 8.23% for the three months ended March 31, 2014.

Net Interest Income

Our earnings are derived predominately from net interest income, which is the difference between the interest income earned on interest-earning assets, primarily loans and securities, and the interest expense incurred on interest-bearing liabilities, primarily deposits and borrowings. The spread between the yield on interest-earning assets and the cost of interest-bearing liabilities and the relative dollar amounts of these assets and liabilities principally affect net interest income.

Net interest income for the first quarter of 2015 increased $6.5 million or 39.0% compared to the first quarter of 2014. The increase was primarily related to an increase in interest-earning assets of $779.1 million, primarily related to our organic loan growth since the end of the first quarter of 2014 and our acquisition of IDPK during the first quarter of 2015. The increase was partially offset by a lower net interest margin, which decreased 31 basis points from the first quarter of 2014 to the first quarter of 2015. The decrease in the net interest margin was primarily related to a 15 basis point decrease in the yield of interest-earning assets and 20 basis point increase in the cost of interest-bearing liabilities. The decrease in yield on interest-earning assets was primarily related to a higher mix of lower yielding cash and cash equivalents, partially offset by an increase in yield of loans by 2 basis points. The increase in cost of interest-bearing liabilities was primarily associated with the issuance of $60.0 million of subordinated debt and $50 million of fixed-term FHLB borrowings in the third quarter of 2014 and an increase in our cost of deposits of 2 basis points.

The following tables present for the periods indicated the average dollar amounts from selected balance sheet categories calculated from daily average balances and the total dollar amount, including adjustments to yields and costs, of:

·	Interest income earned from average interest-earning assets and the resultant yields; and

·	Interest expense incurred from average interest-bearing liabilities and resultant costs, expressed as rates.

The tables below set forth our net interest income, net interest rate spread and net interest rate margin for the periods indicated. The net interest rate margin reflects the relative level of interest-earning assets to interest-bearing liabilities and equals our net interest rate spread divided by average interest-earning assets for the periods indicated.

	Average Balance Sheet
	Three Months Ended							Three Months Ended							Three Months Ended
	March 31, 2015							December 31, 2014							March 31, 2014
	Average				Average			Average				Average			Average				Average
	Balance		Interest		Yield/Cost			Balance		Interest		Yield/Cost			Balance		Interest		Yield/Cost
Assets	(dollars in thousands)
Interest-earning assets:
Cash and cash equivalents	$	224,913	$	129		0.23	%	$	103,926	$	50		0.19	%	$	70,341	$	27		0.16	%
Federal funds sold		275		-		-			275		-		-			192		-		-
Investment securities		273,162		1,428		2.09			237,347		1,308		2.20			243,847		1,410		2.31
Loans receivable, net (1)		1,849,553		24,513		5.38			1,558,826		20,679		5.26			1,254,407		16,585		5.36
Total interest-earning assets		2,347,903		26,070		4.50	%		1,900,374		22,037		4.60	%		1,568,787		18,022		4.65	%
Noninterest-earning assets		114,132							89,322							87,095
Total assets	$	2,462,035						$	1,989,696						$	1,655,882
Liabilities and Equity
Interest-bearing deposits:
Interest checking	$	145,813	$	45		0.13	%	$	129,773	$	43		0.13	%	$	137,658	$	38		0.11	%
Money market		695,369		562		0.33			506,850		406		0.32			435,188		314		0.29
Savings		87,439		36		0.17			75,182		28		0.15			75,904		28		0.15
Time		472,534		963		0.83			438,711		971		0.88			329,026		689		0.85
Total interest-bearing deposits		1,401,155		1,606		0.46			1,150,516		1,448		0.50			977,776		1,069		0.44
FHLB advances and other borrowings		201,700		375		0.75			103,394		332		1.27			85,019		243		1.16
Subordinated debentures		70,310		971		5.60			70,310		990		5.59			10,310		75		2.95
Total borrowings		272,010		1,346		2.01			173,704		1,322		3.02			95,329		318		1.35
Total interest-bearing liabilities		1,673,165		2,952		0.72	%		1,324,220		2,770		0.83	%		1,073,105		1,387		0.52	%
Noninterest-bearing deposits		523,859							447,315							389,513
Other liabilities		23,367							20,541							10,951
Total liabilities		2,220,391							1,792,076							1,473,569
Stockholders' equity		241,644							197,620							182,313
Total liabilities and equity	$	2,462,035						$	1,989,696						$	1,655,882
Net interest income			$	23,118						$	19,267						$	16,635
Net interest rate spread (2)						3.78	%						3.77	%						4.13	%
Net interest margin (3)						3.99	%						4.02	%						4.30	%
Ratio of interest-earning assets to interest-bearing liabilities						140.33	%						143.51	%						146.19	%

(1) Average balance includes loans held for sale and nonperforming loans and is net of deferred loan origination fees, unamortized discounts and premiums, and allowance for loan losses.
(2) Represents the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities.
(3) Represents net interest income divided by average interest-earning assets.

Changes in our net interest income are a function of changes in both volumes and rates of interest-earning assets and interest-bearing liabilities. The following table presents the impact the volume and rate changes have had on our net interest income for the periods indicated. For each category of interest-earning assets and interest-bearing liabilities, we have provided information on changes to our net interest income with respect to:

·	Changes in interest rates (changes in interest rates multiplied by prior volume);

·	Changes in volume (changes in volume multiplied by prior rate); and

·	The net change or the combined impact of volume and rate changes allocated proportionately to changes in volume and changes in interest rates.

	Three Months Ended March 31, 2015
	Compared to
	Three Months Ended March 31, 2014
	Increase (decrease) due to

	Rate			Volume		Net
	(in thousands)
Interest-earning assets
Cash and cash equivalents	$	20		$	82	$	102
Investment securities		(142	)		160		18
Loans receivable, net		31			7,897		7,928
Total interest-earning assets	$	(91	)	$	8,139	$	8,048
Interest-bearing liabilities
Interest checking	$	4		$	3	$	7
Money market		37			211		248
Savings		4			4		8
Time		(17	)		291		274
FHLB advances and other borrowings		(109	)		241		132
Subordinated debentures		119			777		896
Total interest-bearing liabilities	$	38		$	1,527	$	1,565
Change in net interest income	$	(129	)	$	6,612	$	6,483

Provision for Loan Losses

We recorded a $1.8 million provision for loan losses during the first quarter of 2015, up from $949,000 from the first quarter of 2014. The increase in the provision for loan losses was mainly attributable to the organic growth in our loan portfolio. Net loan charge-offs amounted to $384,000 in the first quarter of 2015, compared to net loan charge-offs of $464,000 from the first quarter of 2014.

For purchased credit impaired loans, charge-offs are recorded when there is a decrease in the estimated cash flows of the credit from original cash flow estimates. Purchased credit impaired loans were recorded at their estimated fair value, which incorporated our estimated expected cash flows until the ultimate resolution of these credits. To the extent actual or projected cash flows are less than originally estimated, additional provisions for loan losses or charge-offs will be recognized into earnings or against the allowance, if applicable. To the extent actual or projected cash flows are more than originally estimated, the increase in cash flows is prospectively recognized in loan interest income. Due to the accounting rules associated with our purchased credit impaired loans, each quarter we are required to re-estimate cash flows which could cause volatility in our reported net interest margin and provision for loans losses. During the first quarter of 2015, there were no charge-offs associated with purchased credit impaired loans.

Our Loss Mitigation Department continues collection efforts on loans previously written down and/or charged-off to maximize potential recoveries. See “Allowance for Loan Losses” discussed below in this Quarterly Report on Form 10-Q.

Noninterest Income

Noninterest income totaled $2.0 million for the first quarter of 2015, down $26,000 or 1.3% from the first quarter of 2014. The decrease was primarily related to a decrease in gain on sale of loans of $548,000 because there were no loan sales in the current quarter, partially offset by higher other income of $308,000 and deposit fees of $128,000, primarily related to our growth. The absence of loan gains during the first quarter of 2015 resulted from a decision to hold SBA loans for a slightly longer period of time to optimize their overall return.

Noninterest Expense

Noninterest expense totaled $20.5 million for the first quarter of 2015, up $6.9 million or 51.2%, compared with the first quarter of 2014. The increase in expense was primarily related to higher non-recurring merger-related expense of $3.4 million, compensation and benefits costs of $2.6 million, other expense of $469,000 and marketing expense of $427,000, primarily related to our organic growth and acquisition of IDPK. Partially offsetting these increases was lower data processing and communications expense of $429,000 primarily related to lower negotiated core system provider costs.

The Company’s efficiency ratio was 64.63% for the first quarter of 2015, compared to 67.96% for the first quarter of 2014.

Income Taxes

For the first quarter of 2015, our effective tax rate was 37.1%, compared with 37.3% for the first quarter of 2014.

FINANCIAL CONDITION

At March 31, 2015, assets totaled $2.8 billion, up $714.1 million or 35.0% from December 31, 2014 and $1.0 billion or 57.7% from March 31, 2014.

The increases were principally impacted by the acquisition of IDPK, which at closing added $449.6 million in assets including $332.9 million in loans, $56.1 million in investment securities, $28.1 million in goodwill and $11.3 million in bank owned life insurance. Additionally, organic loan growth, an increase in cash and cash equivalents and investment security and FHLB stock purchases contributed to the increase in assets during the first quarter of 2015. Cash and cash equivalents increased $67.4 million during the first quarter of 2015 as management opted to increase liquidity temporarily by increasing FHLB advances and investing the proceeds in short-term holdings. This was done in consideration of the largest loan pipeline in the Bank’s history, increased activity on the Bank’s warehouse lines of credit, the announcement of the closure and consolidation of three IDPK branches, and the intentional run-off of a large amount of higher-cost certificates of deposit that matured during the quarter. Management does not expect to operate the Bank at the high levels of cash balances going forward.

The increase in assets since the end of the first quarter of 2014 was primarily related to organic and acquisitive loan growth of $806.0 million, investment securities and FHLB stock growth of $94.8 million and an increase in cash and cash equivalents of $54.0 million, goodwill of $28.1 million and bank owned life insurance of $12.1 million.

Loans

Net loans held for investment totaled $2.1 billion at March 31, 2015, an increase of $502.8 million or 30.9% from December 31, 2014, and an increase of $806.0 million or 60.8% from March 31, 2014.

The increase during the first quarter of 2015 was primarily related to loans acquired from IDPK of $332.9 million at acquisition date, as well as our organic loan originations. The increase included increases in multifamily of $134.2 million, commercial owner occupied loans of $141.4 million, warehouse facilities of $102.8 million, commercial non-owner occupied of $93.2 million, construction of $22.0 million and SBA of $21.5 million.

The increase in loans from March 31, 2014 included loans acquired from IDPK as well as organic loan growth in real estate loans of $354.2 million, C&I loans of $148.3 million, warehouse facilities loans of $135.5 million, commercial owner occupied loans of $128.5 million and SBA loans of $38.8 million.

The total end of period weighted average interest rate on loans at March 31, 2015 was 4.90%, compared to 4.91% at December 31, 2014 and 5.00% at March 31, 2014.

The following table sets forth the composition of our loan portfolio in dollar amounts, as a percentage of the portfolio and gives the weighted average interest rate by loan category at the dates indicated:

	March 31, 2015									December 31, 2014									March 31, 2014
							Weighted									Weighted									Weighted
				Percent			Average						Percent			Average						Percent			Average
	Amount			of Total			Interest Rate			Amount			of Total			Interest Rate			Amount			of Total			Interest Rate
	(dollars in thousands)
Business loans:
Commercial and industrial	$	420,218			19.7	%		5.24	%	$	428,207			26.3	%		5.25	%	$	271,877			20.5	%		5.33	%
Commercial owner occupied (1)		352,351			16.5	%		5.28	%		210,995			13.0	%		5.09	%		223,848			16.9	%		5.39	%
SBA		49,855			2.3	%		5.71	%		28,404			1.7	%		5.63	%		11,045			0.8	%		5.85	%
Warehouse facilities		216,554			10.2	%		3.97	%		113,798			7.0	%		4.21	%		81,033			6.1	%		3.91	%
Real estate loans:
Commercial non-owner occupied		452,422			21.2	%		4.96	%		359,213			22.1	%		4.97	%		333,490			25.2	%		5.33	%
Multi-family		397,130			18.6	%		4.60	%		262,965			16.1	%		4.55	%		223,200			16.8	%		4.73	%
One-to-four family (2)		116,735			5.5	%		4.35	%		122,795			7.5	%		4.35	%		141,469			10.7	%		4.41	%
Construction		111,704			5.2	%		5.16	%		89,682			5.5	%		5.15	%		29,857			2.2	%		5.19	%
Land		7,243			0.3	%		5.07	%		9,088			0.6	%		4.78	%		6,170			0.5	%		4.59	%
Other loans		6,641			0.5	%		5.81	%		3,298			0.2	%		6.06	%		3,480			0.3	%		5.78	%
Total gross loans (3)		2,130,853			100.0	%		4.90	%		1,628,445			100.0	%		4.91	%		1,325,469			100.0	%		5.00	%
Less loans held for sale		-									-									-
Total gross loans held for investment		2,130,853									1,628,445									1,325,469
Deferred loan origination costs/(fees) and premiums/(discounts), net		534									177									(97	)
Allowance for loan losses		(13,646	)								(12,200	)								(8,685	)
Loans held for investment, net	$	2,117,741								$	1,616,422								$	1,316,687

(1) Majority secured by real estate.
(2) Includes second trust deeds.
(3) Total gross loans for March 31, 2015 are net of (i) the unaccreted mark-to-market discounts on Canyon National loans of $1.2 million, on Palm Desert National loans of $1.3 million, on SDTB loans of $151,000, and on IB loans of $6.9 million and (ii) the mark-to-market premium on FAB loans of $28,000.

Loan activity during the first quarter of 2015 included loans acquired from IDPK, organic loan originations of $206.3 million and loan purchases of $30.3 million and a decrease in undisbursed loan funds of $39.4 million, partially offset by loan repayments of $106.4 million. During the first quarter of 2015, our organic loan originations were well diversified across loan type and included $46.4 million in warehouse facilities loans, $43.5 million in construction loans, $38.9 million in C&I loans, including $16.4 million in franchise loans, $24.4 million in multifamily loans, $23.4 million in commercial owner occupied loans, $20.4 million in SBA loans and $8.6 million in commercial non-owner occupied loans.

The following table sets forth loan originations, purchases, sales and principal repayments relating to our gross loans for the periods indicated:

	Three Months Ended
	March 31, 2015			March 31, 2014
	(in thousands)
Beginning balance gross loans	$	1,628,445		$	1,243,252
Loans originated:
Business loans:
Commercial and industrial		38,906			46,786
Commercial owner occupied (1)		23,380			1,800
SBA		20,405			5,199
Warehouse facilities		46,380			1,150
Real estate loans:
Commercial non-owner occupied		8,589			22,806
Multi-family		24,366			7,574
One-to-four family (2)		762			450
Construction loans		43,466			20,428
Other loans		12			12
Total loans originated		206,266			106,205
Loans purchased/acquired:
Business loans:
Commercial and industrial		53,840			69,543
Commercial owner occupied		51,608			11,105
SBA		5,431			-
Real estate loans:
Commercial non-owner occupied		126,410			-
Multi-family		118,802			-
One-to-four family		2,158			-
Construction		2,024			-
Land		880			-
Other loans		2,028			-
Total loans purchased		363,181			80,648
Total loan production		569,447			186,853
Principal repayments		(106,409	)		(77,555	)
Sales of loans		-			(9,508	)
Change in undisbursed loan funds, net		39,395			(17,651	)
Charge-offs		(396	)		(501	)
Change in mark-to-market discounts from acquisitions		371			579
Net increase in gross loans		502,408			82,217
Ending balance gross loans	$	2,130,853		$	1,325,469

(1) Majority secured by real estate.
(2) Includes second trust deeds.

The following table sets forth the weighted average interest rates, weighted average number of months to reprice and the periods to repricing for our gross loan portfolio at the date indicated:

	March 31, 2015
					Weighted			Weighted
	Number				Average			Average Months
Periods to Repricing	of Loans		Amount		Interest Rate			to Reprice
	(dollars in thousands)
1 Year and less		1,838	$	1,015,478		4.95	%		10.05
Over 1 Year to 3 Years		212		237,457		4.55	%		27.23
Over 3 Years to 5 Years		348		443,794		4.76	%		49.21
Over 5 Years to 7 Years		57		125,913		4.56	%		66.63
Over 7 Years to 10 Years		20		21,533		4.82	%		106.84
Total adjustable		2,475		1,844,175		4.83	%		23.06
Fixed		895		286,678		5.45	%
Total		3,370	$	2,130,853		4.90	%

Delinquent Loans. When a borrower fails to make required payments on a loan and does not cure the delinquency within 30 days, we normally record a notice of default and, after providing the required notices to the borrower, commence foreclosure proceedings. If the loan is not reinstated within the time permitted by law, we may sell the property at a foreclosure sale. At these foreclosure sales, we generally acquire title to the property. At March 31, 2015, loans delinquent 30 or more days as a percentage of total gross loans was 0.15%, up from 0.01% at December 31, 2014 and 0.12% at March 31, 2014.

The following table sets forth delinquencies in the Company's loan portfolio at the dates indicated:

	30 - 59 Days					60 - 89 Days					90 Days or More (1)					Total
	# of Loans		Principal Balance of Loans			# of Loans		Principal Balance of Loans			# of Loans		Principal Balance of Loans			# of Loans		Principal Balance of Loans
	(dollars in thousands)
At March 31, 2015
Business loans:
Commercial and industrial		1	$	146			-	$	-			3	$	2,178			4	$	2,324
Commercial owner occupied		1		349			1		375			1		27			3		751
Real estate loans:
One-to-four family		3		149			-		-			3		53			6		202
Other		1		1			-		-			-		-			1		1
Total		6	$	645			1	$	375			7	$	2,258			14	$	3,278
Delinquent loans to total gross loans				0.03	%				0.02	%				0.11	%				0.15	%

At December 31, 2014
Business loans:
Commercial and industrial		-	$	-			1	$	24			-	$	-			1	$	24
Real estate loans:
One-to-four family		1		19			-		-			3		54			4		73
Other		1		1			-		-			-		-			1		1
Total		2	$	20			1	$	24			3	$	54			6	$	98
Delinquent loans to total gross loans				0.00	%				0.00	%				0.00	%				0.01	%

At March 31, 2014
Business loans:
Commercial and industrial		-	$	-			1	$	32			-	$	-			1	$	32
Commercial owner occupied		-		-			-		-			2		446			2		446
SBA		1		46			-		-			1		14			2		60
Real estate loans:
Commercial non-owner occupied		-		-			-		-			2		918			2		918
One-to-four family		3		72			-		-			3		49			6		121
Total		4	$	118			1	$	32			8	$	1,427			13	$	1,577
Delinquent loans to total gross loans				0.01	%				0.00	%				0.11	%				0.12	%

(1) All loans that are delinquent 90 days or more are on nonaccrual status and reported as part of nonperforming loans.

Allowance for Loan Losses. The ALLL represents an estimate of probable losses inherent in our loan portfolio and is determined by applying a systematically derived loss factor to individual segments of the loan portfolio. The adequacy and appropriateness of the ALLL and the individual loss factors are reviewed each quarter by management.

The loss factor for each segment of our loan portfolio is generally based on our actual historical loss rate experience supplemented by management judgment for certain segments where we lack loss history experience. We also consider historical charge-off rates for the last 10 and 15 years for commercial banks and savings institutions headquartered in California as collected and reported by the FDIC. The loss factor is adjusted by qualitative adjustment factors to arrive at a final loss factor for each loan portfolio segment. For additional information regarding the qualitative adjustments, please see “Allowances for Loan Losses” as discussed in our 2014 Annual Report. The qualitative factors allow management to assess current trends within our loan portfolio and the economic environment to incorporate their effect when calculating the ALLL. The final loss factors are applied to pass graded loans within our loan portfolio. Higher factors are applied to loans graded below pass, including classified and criticized assets.

No assurance can be given that we will not, in any particular period, sustain loan losses that exceed the amount reserved, or that subsequent evaluation of our loan portfolio, in light of the prevailing factors, including economic conditions which may adversely affect our market area or other circumstances, will not require significant increases in the loan loss allowance. In addition, regulatory agencies, as an integral part of their examination process, periodically review our ALLL and may require us to recognize additional provisions to increase the allowance or take charge-offs in anticipation of future losses.

At March 31, 2015, our ALLL was $13.6 million, up $1.4 million from December 31, 2014 and $5.0 million from March 31, 2014. The increase in the allowance for loan losses at March 31, 2015 was mainly attributable to the growth in our loan portfolio. At March 31, 2015, given the composition of our loan portfolio, the ALLL was considered adequate to cover estimated losses inherent in the loan portfolio. Should any of the factors considered by management in evaluating the appropriate level of the ALLL change, the Company’s estimate of probable loan losses could also change, which could affect the level of future provisions for loan losses.

The following table sets forth the Company’s ALLL and its corresponding percentage of the loan category balance and the percent of loan balance to total gross loans in each of the loan categories listed for the periods indicated:

	March 31, 2015								December 31, 2014								March 31, 2014
			Allowance			% of Loans					Allowance			% of Loans					Allowance			% of Loans
Balance at End of			as a % of			in Category to					as a % of			in Category to					as a % of			in Category to
Period Applicable to	Amount		Category Total			Total Loans			Amount		Category Total			Total Loans			Amount		Category Total			Total Loans
	(dollars in thousands)
Business loans:
Commercial and industrial	$	4,932		1.17	%		19.7	%	$	4,200		0.98	%		26.3	%	$	2,365		0.87	%		20.5	%
Commercial owner occupied		1,853		0.53	%		16.5	%		1,757		0.83	%		13.0	%		1,754		0.78	%		16.9	%
SBA		547		1.10	%		2.3	%		568		2.00	%		1.7	%		179		1.62	%		0.8	%
Warehouse facilities		889		0.41	%		10.2	%		546		0.48	%		7.0	%		376		0.46	%		6.1	%
Real estate loans:
Commercial non-owner occupied		2,131		0.47	%		21.2	%		2,007		0.56	%		22.1	%		1,857		0.56	%		25.2	%
Multi-family		1,303		0.33	%		18.6	%		1,060		0.40	%		16.1	%		805		0.36	%		16.8	%
One-to-four family		674		0.58	%		5.5	%		842		0.69	%		7.5	%		919		0.65	%		10.7	%
Construction		1,210		1.08	%		5.2	%		1,088		1.21	%		5.5	%		323		1.08	%		2.2	%
Land		78		1.08	%		0.3	%		108		1.19	%		0.6	%		81		1.31	%		0.5	%
Other Loans		29		0.44	%		0.5	%		24		0.73	%		0.2	%		26		0.75	%		0.3	%
Total	$	13,646		0.64	%		100.0	%	$	12,200		0.75	%		100.0	%	$	8,685		0.66	%		100.0	%

The ALLL as a percent of nonaccrual loans was 291.3% at March 31, 2015, down from 844.9% at December 31, 2014, and 324.8% at March 31, 2014. At March 31, 2015, the ratio of ALLL to total gross loans was 0.64%, down from 0.75% at December 31, 2014 and 0.66% at March 31, 2014. The decrease in this ratio at March 31, 2015 is attributable to the loans acquired from IDPK, recorded at fair value, which did not necessitate an allowance against them. Our ratio of ALLL plus the remaining unamortized credit discount on the loans acquired to total gross loans was 0.90% at March 31, 2015, up from 0.87% at December 31, 2014 and 0.88% at March 31, 2014.

The following table sets forth the activity within the Company’s ALLL in each of the loan categories listed for the periods indicated:

	Three Months Ended
	March 31,
	2015			2014
	(dollars in thousands)
Balance, beginning of period	$	12,200		$	8,200
Provision for loan losses		1,830			949
Charge-offs:
Business loans:
Commercial and industrial		(396	)		(124	)
Real estate:
Commercial non-owner occupied		-			(365	)
One-to-four family		-			(12	)
Total charge-offs		(396	)		(501	)
Recoveries :
Business loans:
Commercial and industrial		12			5
SBA		-			2
Real estate:
One-to-four family		-			30
Total recoveries		12			37
Net loan charge-offs		(384	)		(464	)
Balance at end of period	$	13,646		$	8,685

Ratios:
Net charge-offs (recoveries) to average total loans, net		0.08	%		0.15	%
Allowance for loan losses to gross loans at end of period		0.64	%		0.66	%

Investment Securities

We primarily use our investment portfolio for liquidity purposes and to support our interest rate risk management strategies. Investment securities available for sale totaled $280.5 million at March 31, 2015, up $78.8 million or 39.1% from December 31, 2014, and $78.3 million or 38.7% from March 31, 2014. The increase in investment securities during the first quarter of 2015 was primarily due to the acquisition of IDPK, which added $56.1 million in investment securities at the acquisition date, along with our purchases of $40.1 million, partially offset by sales of $8.7 million and principal paydowns of $6.9 million. The increase in investment securities since March 31, 2014 was primarily due to purchase and acquired securities of $223.8 million, partially offset by sales of $117.4 million and principal pay downs of $29.3 million. In general, the purchase of investment securities primarily related to investing excess liquidity from our banking operations and to maintain a certain level of securities to our overall asset size, while the sales were made to help fund loan production and improve our interest-earning asset mix.

The following tables set forth the amortized cost, unrealized gains and losses, and estimated fair value of our investment securities portfolio at the dates indicated:

	March 31, 2015
	Amortized Cost		Unrealized Gain		Unrealized Loss			Estimated Fair Value
	(in thousands)
Investment securities available for sale:
Municipal bonds	$	103,997	$	1,718	$	(192	)	$	105,523
Mortgage-backed securities		174,281		1,097		(440	)		174,938
Total securities available for sale	$	278,278	$	2,815	$	(632	)	$	280,461

	December 31, 2014
	Amortized Cost		Unrealized Gain		Unrealized Loss			Estimated Fair Value
	(in thousands)
Investment securities available for sale:
Municipal bonds	$	88,599	$	1,235	$	(173	)	$	89,661
Mortgage-backed securities		112,159		432		(614	)		111,977
Total securities available for sale	$	200,758	$	1,667	$	(787	)	$	201,638

	March 31, 2014
	Amortized Cost		Unrealized Gain		Unrealized Loss			Estimated Fair Value
	(in thousands)
Investment securities available for sale:
Municipal bonds	$	77,062	$	848	$	(586	)		77,324
Mortgage-backed securities		126,921		65		(2,168	)		124,818
Total securities available for sale	$	203,983	$	913	$	(2,754	)	$	202,142

The following table sets forth the fair values and weighted average yields on our investment securities available for sale portfolio by contractual maturity at the date indicated:

	March 31, 2015
	One Year					More than One					More than Five Years					More than
	or Less					to Five Years					to Ten Years					Ten Years					Total
	Fair Value		Weighted Average Yield			Fair Value		Weighted Average Yield			Fair Value		Weighted Average Yield			Fair Value		Weighted Average Yield			Fair Value		Weighted Average Yield
	(dollars in thousands)
Investment securities available for sale:
Municipal bonds	$	470		1.14	%	$	21,076		1.41	%	$	36,539		1.96	%	$	47,438		2.20	%	$	105,523		1.95	%
Mortgage-backed securities		-		0.00	%		255		2.05	%		28,208		1.72	%		146,475		1.91	%		174,938		1.88	%
Total investment securities available for sale		470		1.14	%		21,331		1.42	%		64,747		1.86	%		193,913		1.98	%		280,461		1.91	%
Stock:
FHLB		21,855		6.00	%		-		0.00	%		-		0.00	%		-		0.00	%		21,855		6.00	%
Federal Reserve Bank and other		8,731		4.88	%		-		0.00	%		-		0.00	%		-		0.00	%		8,731		4.88	%
Total stock		30,586		5.68	%		-		0.00	%		-		0.00	%		-		0.00	%		30,586		5.68	%
Total securities	$	31,056		5.61	%	$	21,331		1.42	%	$	64,747		1.86	%	$	193,913		1.98	%	$	311,047		2.28	%

Each quarter, we review individual securities classified as available for sale to determine whether a decline in fair value below the amortized cost basis is other-than-temporary. If it is probable that we will be unable to collect all amounts due according to the contractual terms of the debt security, an OTTI write down is recorded against the security and a loss recognized.

In determining if a security has an OTTI loss, we review downgrades in credit ratings and the length of time and extent that the fair value has been less than the cost of the security. We estimate OTTI losses on a security primarily through:

·	An evaluation of the present value of estimated cash flows from the security using the current yield to accrete beneficial interest and including assumptions in the prepayment rate, default rate, delinquencies, loss severity and percentage of nonperforming assets;

·	An evaluation of the estimated payback period to recover principal;

·	An analysis of the credit support available in the underlying security to absorb losses; and

·	A review of the financial condition and near term prospects of the issuer.

During the quarter ended March 31, 2015, there were no OTTI recoveries, compared to $13,000 in OTTI recoveries during the quarter ended March 31, 2014.

Nonperforming Assets

Nonperforming assets consist of loans on which we have ceased accruing interest (nonaccrual loans), restructured loans and OREO. It is our general policy to account for a loan as nonaccrual when the loan becomes 90 days delinquent or when collection of interest appears doubtful.

Nonperforming assets totaled $5.7 million or 0.21% of total assets at March 31, 2015, up from $2.5 million or 0.12% of total assets at December 31, 2014 and $3.4 million or 0.20% of total assets at March 31, 2014. During the first quarter of 2015, nonperforming loans increased $3.2 million to total $4.7 million while other real estate owned decreased $40,000 to $997,000. The increase in nonperforming loans primarily was attributable to acquired loans.

The following table sets forth our composition of nonperforming assets at the dates indicated:

	March 31,			December 31,			March 31,
	2015			2014			2014
	(dollars in thousands)
Nonperforming assets
Business loans:
Commercial and industrial	$	2,455		$	-		$	31
Commercial owner occupied		527			514			864
SBA		-			-			14
Real estate:
Commercial non-owner occupied		1,602			848			1,327
One-to-four family		79			82			438
Total nonaccrual loans		4,663			1,444			2,674
Other real estate owned:
One-to-four family		286			285			-
Land		711			752			752
Total other real estate owned		997			1,037			752
Total nonperforming assets, net	$	5,660		$	2,481		$	3,426

Allowance for loan losses	$	13,646		$	12,200		$	8,685
Allowance for loan losses as a percent of total nonperforming loans		292.64	%		844.88	%		324.79	%
Nonperforming loans as a percent of gross loans		0.22	%		0.09	%		0.20	%
Nonperforming assets as a percent of total assets		0.21	%		0.12	%		0.20	%

Liabilities and Stockholders’ Equity

Total liabilities were $2.5 billion at March 31, 2015, compared to $1.8 billion at December 31, 2014 and $1.6 billion at March 31, 2014. The increase of $640.4 million or 34.8% from the year ended December 31, 2014 and the increase of $923.3 million or 59.3% from March 31, 2014 was related to the acquisition of IDPK, which added $371.1 million in assumed liabilities at the acquisition date, organic growth in deposits and an increase in borrowings to fund loan growth and increase liquidity.

Deposits. At March 31, 2015, deposits totaled $2.0 billion, up $412.3 million or 25.3% from December 31, 2014 and $608.0 million or 42.4% from March 31, 2014.

During the first quarter of 2015, deposit increases included money market accounts of $194.3 million, noninterest bearing checking of $163.0 million, certificates of deposit of $41.5 million and savings of $14.4 million. The increase in deposits during the first quarter of 2015 was primarily due to the acquisition of IDPK, which added $336.0 million in deposits with a cost of 0.41% at the acquisition date, along with organic transaction account increases of $71.9 million related to seasonal increases in existing HOA management accounts attributed to annual billings and the receipt of homeowner’s dues.

The increase in deposits since the end of the first quarter of 2014 was likewise attributable to organic growth and the IDPK acquisition and included increases in money market of $267.2 million, noninterest bearing checking of $206.9 million, wholesale/brokered certificates of deposit of $71.5 million, retail certificates of deposit of $56.0 million and savings of $12.8 million. Additionally, brokered deposits of $70.0 million were raised in the third quarter of 2014 to extend the overall maturity of our liabilities and support our interest rate risk management strategies.

The total end of period weighted average cost of deposits at March 31, 2015 was 0.33%, down from 0.36% at December 31, 2014 and 0.34% at March 31, 2014.

At March 31, 2015, our gross loan to deposit ratio was 104.3%, up from 99.9% at December 31, 2014 and 92.4% at March 31, 2014.

The following table sets forth the distribution of the Company’s deposit accounts at the dates indicated and the weighted average interest rates on each category of deposits presented:

	March 31, 2015								December 31, 2014								March 31, 2014
	Balance		% of Total Deposits			Weighted Average Rate			Balance		% of Total Deposits			Weighted Average Rate			Balance		% of Total Deposits			Weighted Average Rate
	(dollars in thousands)
Noninterest bearing checking	$	619,763		30.3	%		0.00	%	$	456,754		28.0	%		0.00	%	$	412,871		28.8	%		0.00	%
Interest-bearing deposits:
Checking		130,869		6.4	%		0.11	%		131,635		8.1	%		0.11	%		137,285		9.5	%		0.11	%
Money market		720,510		35.3	%		0.36	%		526,256		32.3	%		0.32	%		453,261		31.6	%		0.30	%
Savings		88,898		4.4	%		0.17	%		74,508		4.5	%		0.14	%		76,087		5.3	%		0.14	%
Time deposit accounts:
Less than 1.00%		301,611		14.8	%		0.61	%		232,043		14.2	%		0.62	%		131,274		9.1	%		0.51	%
1.00 - 1.99		173,860		8.5	%		1.11	%		197,410		12.1	%		1.08	%		211,725		14.8	%		1.06	%
2.00 - 2.99		6,314		0.3	%		2.80	%		10,771		0.7	%		2.86	%		11,266		0.8	%		2.85	%
3.00 - 3.99		613		0.0	%		3.23	%		714		0.0	%		3.20	%		694		0.0	%		3.20	%
4.00 - 4.99		3		0.0	%		4.93	%		2		0.0	%		4.93	%		3		0.0	%		4.93	%
5.00 and greater		725		0.0	%		5.22	%		733		0.1	%		5.24	%		737		0.1	%		5.25	%
Total time deposit accounts		483,126		23.6	%		0.83	%		441,673		27.1	%		0.89	%		355,699		24.8	%		0.92	%
Total interest-bearing deposits		1,423,403		69.7	%		0.48	%		1,174,072		72.0	%		0.50	%		1,022,332		71.2	%		0.48	%
Total deposits	$	2,043,166		100.0	%		0.33	%	$	1,630,826		100.0	%		0.36	%	$	1,435,203		100.0	%		0.34	%

Borrowings. At March 31, 2015, total borrowings amounted to $413.7 million, up $226.8 million or 121.3% from December 31, 2014 and $307.9 million or 291.0% from March 31, 2014. The increase in borrowings was primarily to fund loan growth and to provide cash for liquidity purposes.

On August 29, 2014, the Corporation completed the issuance of $60 million in aggregate principal amount of 5.75% subordinated notes due September 3, 2024 in a private placement transaction. The net proceeds of the offering were approximately $59 million and are to be used for general corporate purposes, including, but not limited to, contribution of capital to the Bank to support both organic growth as well as opportunistic acquisitions, should appropriate opportunities arise. At the beginning of the third quarter of 2014, we locked in borrowings from the FHLB of $25.0 million at 60 basis points for 18 months and $25.0 million at 84 basis points for 2 years. These borrowings replaced our FHLB overnight borrowings and also extended the overall maturity of our liabilities and support our interest rate risk management strategies as well as leverage our balance sheet for future growth. Additionally, during the first quarter of 2015, repurchase agreement debt related to our HOA business decreased $1.7 million to $14.9 million. This repurchase agreement debt was offered as a service to certain HOA depositors as added protection for deposit amounts above FDIC insurance levels. At March 31, 2015, total borrowings represented 15.0% of total assets and had an end of period weighted average cost of 1.37%, compared with 9.2% of total assets at a weighted average cost of 2.74% at December 31, 2014 and 6.1% of total assets at a weighted average cost of 1.22% at March 31, 2014.

At March 31, 2015, total borrowings were comprised of the following:

·	Overnight FHLB advances of $250.0 million at 0.24%;

·	Subordinated notes of $60 million at 5.75% due September 3, 2024. For additional information about the Subordinated notes, see Note 8 to the Consolidated Financial Statements in this report;

·	One 18 month fixed FHLB advance of $25.0 million at 0.60% due March 16, 2016, and one 24 month fixed FHLB advance of $25.0 million at 0.84% due September 15, 2016;

Three reverse repurchase agreements totaling $28.5 million at a weighted average rate of 3.26% with $10.0 million due in February 2018 and $18.5 million due in September 2018. These agreements are secured by government sponsored entity MBS securities with a par value of $32.7 million and a fair value of $33.9 million;

·	HOA reverse repurchase agreements totaling $14.9 million at a weighted average rate of 0.02% and secured by of government sponsored entity MBS securities with a par value of $26.9 million and a fair value of $27.8 million; and

·	Subordinated debentures used to fund the issuance of Trust Preferred Securities in 2004 of $10.3 million at 3.00% due April 7, 2034. For additional information about the Subordinated Debentures and Trust Preferred Securities, see Note 8 to the Consolidated Financial Statements in this report.

The following table sets forth certain information regarding the Company's borrowed funds at the dates indicated:

	March 31, 2015						December 31, 2014						March 31, 2014
	Balance			Weighted Average Rate			Balance			Weighted Average Rate			Balance			Weighted Average Rate
	(dollars in thousands)
FHLB advances	$	300,000			0.32	%	$	70,000			0.59	%	$	50,000			0.11	%
Reverse repurchase agreements		43,434			2.15	%		46,643			2.03	%		45,506			2.05	%
Subordinated debentures		70,310			5.34	%		70,310			5.34	%		10,310			2.99	%
Total borrowings	$	413,744			1.37	%	$	186,953			2.74	%	$	105,816			1.22	%

Weighted average cost of borrowings during the quarter		2.01	%					3.02	%					1.35	%
Borrowings as a percent of total assets		15.0	%					9.2	%					6.1	%

Stockholders’ Equity. Total stockholders’ equity was $273.2 million as of March 31, 2015, up from $199.6 million at December 31, 2014 and $188.9 million at March 31, 2014. The current year increase of $73.7 million in stockholders’ equity was primarily related to equity consideration of $70.9 million associated with the acquisition of IDPK, net income for the first three months of 2015 of $1.8 million and favorable change in accumulated other comprehensive income of $767,000. The increase of $84.4 million from March 31, 2014 was primarily related to equity consideration of $70.9 million associated with the acquisition of IDPK, net income over the period of $15.8 million and a favorable change in accumulated other comprehensive income of $2.4 million, partially offset by the repurchase of the Company’s common stock of $4.8 million.

Our book value per share increased to $12.78 at March 31, 2015, up from $11.81 at December 31, 2014 and $10.96 at March 31, 2014. At March 31, 2015, the Company’s tangible common equity to tangible assets ratio was 7.95%, down from 8.51% at December 31, 2014, and 9.30% at March 31, 2014.

Tangible common equity to tangible assets (the "tangible common equity ratio") is a non-GAAP financial measure derived from GAAP-based amounts. We calculate the tangible common equity ratio by excluding the balance of intangible assets from common shareholders' equity and dividing by tangible assets. We believe that this information is important to shareholders as tangible equity is a measure that is consistent with the calculation of capital for bank regulatory purposes, which excludes intangible assets from the calculation of risk-based ratios.

PACIFIC PREMIER BANCORP, INC. AND SUBSIDIARIES
GAAP Reconciliation
(dollars in thousands)

	March 31,			December 31,			March 31,
	2015			2014			2014

Total stockholders' equity	$	273,247		$	199,592		$	188,860
Less: Intangible assets		(59,213	)		(28,564	)		(29,324	)
Tangible common equity	$	214,034		$	171,028		$	159,536

Total assets	$	2,753,000		$	2,038,897		$	1,745,282
Less: Intangible assets		(59,213	)		(28,564	)		(29,324	)
Tangible assets	$	2,693,787		$	2,010,333		$	1,715,958

Tangible common equity ratio		7.95	%		8.51	%		9.30	%

CAPITAL RESOURCES AND LIQUIDITY

Our primary sources of funds are deposits, advances from the FHLB and other borrowings, principal and interest payments on loans, and income from investments. While maturities and scheduled amortization of loans are a predictable source of funds, deposit inflows and outflows as well as loan prepayments are greatly influenced by general interest rates, economic conditions, and competition.

Our primary sources of funds generated during the first three months of 2015 were from:

·	Proceeds of $193.5 from FHLB advances

·	Proceeds of $106.4 million from the sale and principal payments on loans held for investment; and

·	Net increase of $76.3 million in deposit accounts.

We used these funds to:

·	Purchase and originate loans held for investment of $236.6 million;

·	Purchase securities available for sale of $40.1 million;

·	Net change of $39.4 million of undisbursed loan funds; and

·	Purchase FHLB stock of $11.7 million.

Our most liquid assets are unrestricted cash and short-term investments. The levels of these assets are dependent on our operating, lending and investing activities during any given period. Our liquidity position is continuously monitored and adjustments are made to the balance between sources and uses of funds as deemed appropriate. At March 31, 2015, cash and cash equivalents totaled $178.4 million and the market value of our investment securities available for sale totaled $280.5 million. If additional funds are needed, we have additional sources of liquidity that can be accessed, including FHLB advances, federal fund lines, the Federal Reserve’s lending programs and loan sales. As of March 31, 2015, the maximum amount we could borrow through the FHLB was $915.2 million, of which $507.8 million was available for borrowing based on collateral pledged of $571.8 million in real estate loans. At March 31, 2015, we had $300.0 million in FHLB borrowings against that available balance. At March 31, 2015, we also had unsecured lines of credit aggregating $123.3 million, which consisted of $120.0 million with other financial institutions from which to draw funds and $3.3 million with the Federal Reserve Bank and one reverse repo line with a correspondent bank of $50.0 million. At March 31, 2015, there were no advances drawn against these unsecured lines of credit. For the quarter ended March 31, 2015, our average liquidity ratio was 19.10%. The Company regularly models liquidity stress scenarios to ensure that adequate liquidity is available and has contingency funding plans in place which are reviewed and tested on a regular basis.

To the extent that 2015 deposit growth is not sufficient to satisfy our ongoing commitments to fund maturing and withdrawable deposits, repay maturing borrowings, fund existing and future loans, or make investments, we may access funds through our FHLB borrowing arrangement, unsecured lines of credit or other sources.

The Bank has a policy in place that permits the purchase of brokered funds, in an amount not to exceed 5% of total deposits, as a secondary source for funding. At March 31, 2015, we had $72.4 million in brokered time deposits, which constituted 3.5% of total deposits at that date.

The Corporation is a corporate entity separate and apart from the Bank that must provide for its own liquidity. The Corporation’s primary sources of liquidity are dividends from the Bank. There are statutory and regulatory provisions that limit the ability of the Bank to pay dividends to the Corporation. Management believes that such restrictions will not have a material impact on the ability of the Corporation to meet its ongoing cash obligations.

The Corporation has never declared or paid dividends on its common stock and does not anticipate declaring or paying any cash dividends in the foreseeable future. The Corporation’s board of directors authorized in June 2012 a stock repurchase plan, which allows the Corporation to proactively manage its capital position and return excess capital to its stockholders. The repurchase plan authorizes the repurchase of up to 1,000,000 shares of the Company’s common stock. Shares purchased under such plans also provide the Corporation with shares of common stock necessary to satisfy obligations related to stock compensation awards. For the three months ending March 31, 2015, the Company has repurchased 5,833 shares of its common stock for $93,000 under the repurchase plan. Also, please see Part II, Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds for additional information.

Contractual Obligations and Off-Balance Sheet Commitments

Contractual Obligations. The Company enters into contractual obligations in the normal course of business primarily as a source of funds for its asset growth and to meet required capital needs.

The following schedule summarizes maturities and payments due on our obligations and commitments, excluding accrued interest, as of the date indicated:

	March 31, 2015
	Less than 1 year		1 - 3 years		3 - 5 years		More than 5 years		Total
	(in thousands)
Contractual obligations
FHLB advances	$	250,000	$	50,000	$	-	$	-	$	300,000
Other borrowings		14,934		10,000		18,500		-		43,434
Subordinated debentures		-		-		-		70,310		70,310
Certificates of deposit		324,324		153,697		4,493		612		483,126
Operating leases		3,440		5,215		3,434		462		12,551
Total contractual cash obligations	$	592,698	$	218,912	$	26,427	$	71,384	$	909,421

Off-Balance Sheet Commitments. We utilize off-balance sheet commitments in the normal course of business to meet the financing needs of our customers and to reduce our own exposure to fluctuations in interest rates. These financial instruments include commitments to originate real estate, business and other loans held for investment, undisbursed loan funds, lines and letters of credit, and commitments to purchase loans and investment securities for portfolio. The contract or notional amounts of those instruments reflect the extent of involvement we have in particular classes of financial instruments.

Commitments to originate loans held for investment are agreements to lend to a customer as long as there is no violation of any condition established in the commitment. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since some commitments expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. Undisbursed loan funds and unused lines of credit on home equity and commercial loans include committed funds not disbursed. Letters of credit are conditional commitments we issue to guarantee the performance of a customer to a third party. As of March 31, 2015, we had commitments to extend credit on existing lines and letters of credit of $403.1 million, compared to $355.0 million at December 31, 2014 and $246.0 million at March 31, 2014.

The following table summarizes our contractual commitments with off-balance sheet risk by expiration period at the date indicated:

	March 31, 2015
	Less than 1 year		1 - 5 years		3 - 5 years		More than 5 years		Total
	(in thousands)
Other commitments
Commercial and industrial	$	103,047	$	32,738	$	10,034	$	11,666	$	157,485
Warehouse facilities		-		-		-		69,796		69,796
Construction		42,116		51,258		-		-		93,374
Home equity lines of credit		196		1,480		-		7,470		9,146
Standby letters of credit		11,897		-		-		20		11,917
All other		60,054		320		7		985		61,366
Total other commitments	$	217,310	$	85,796	$	10,041	$	89,937	$	403,084

Regulatory Capital Compliance (BASEL III)

On July 2, 2013, federal banking regulators issued a final rule (the “Basel III Rule”) implementing a revised regulatory capital framework for U.S. banks in accordance with the Basel III international accord and satisfying related mandates under the Dodd-Frank Act. The Basel III Rule includes a new common equity tier 1 minimum capital requirement of 4.5% of risk-weighted assets and increases the minimum tier 1 capital requirement from 4.0% to 6.0% of risk-weighted assets. The minimum total risk-based capital requirement remains unchanged at 8.0% of total risk-weighted assets. In addition to these minimum capital requirements, the Basel III Rule requires banking organizations to hold a buffer of common equity tier 1 capital in an amount above 2.5% of total risk-weighted assets to avoid restrictions on capital distributions and discretionary bonus payments to executive officers.

The minimum regulatory capital requirements and compliance with a standardized approach for determining risk-weighted assets of the final rule became effective for us on January 1, 2015. The capital conservation buffer framework transition period begins January 1, 2016, with full implementation effective January 1, 2019.

The Basel III Rule also establishes a standardized approach for determining risk-weighted assets. Under the Basel III Rule, risk weights for residential mortgage loans that apply under current capital rules will continue to apply and banking organizations with less than $15 billion in total assets may continue to include existing trust preferred securities as capital. The Basel III Rule allows banking organizations that are not subject to the advanced approaches rule, like us, to make a one-time election not to include most elements of accumulated other comprehensive income (“AOCI”) in regulatory capital and instead use the existing treatment under current capital rules. The Corporation and Bank, as permitted by the regulators for financial institutions that are not deemed to be “advanced approaches” institutions, has elected to opt out of the Basel III requirement to include accumulated other comprehensive income in risk-based capital.

The final rule also enhances the risk-sensitivity of the advanced approaches risk-based capital rule, including among others, revisions to better address counterparty credit risk and interconnectedness among financial institutions and incorporation of the Federal Reserve’s market risk rule into the integrated capital framework. These provisions of the final rule generally apply only to large, internationally active banking organizations or banking organizations with significant trading activity and are not expected to directly impact us.

For regulatory capital purposes, subject to applicable limitations, the issuance of $60 million of subordinated notes during the third quarter of 2014 qualifies as Tier 2 capital for the Company. During August 2014, the Company contributed $40 million of the proceeds from the offering to the Bank, which enhanced the Bank’s regulatory capital ratios.

Beginning in the first quarter of 2015, we calculated our regulatory capital ratios under the Basel III Rule. Basel III had no significant effect on our capital ratios. Our capital ratios as of December 31, 2014 and March 31, 2014 are under the Basel I rules. The Bank’s and the Company’s capital amounts and ratios are presented in the following table along with the well capitalized requirement at the dates indicated:

	Actual					Minimum Required for Capital Adequacy Purposes					Required to be Well Capitalized Under Prompt Corrective Action Regulations
	Amount		Ratio			Amount		Ratio			Amount		Ratio
	(dollars in thousands)
At March 31, 2015 (1)

Leverage Ratio
Bank	$	226,917		11.03	%	$	96,407		4.00	%	$	120,509		5.00	%
Consolidated		226,917		9.43	%		96,280		4.00	%		120,350		5.00	%

Common Equity Tier 1 to Risk-Weighted Assets (2)
Bank		265,765		11.46	%		104,370		4.50	%		150,757		6.50	%
Consolidated		216,917		9.32	%		104,780		4.50	%		151,349		6.50	%

Tier 1 Capital to Risk-Weighted Assets
Bank		265,765		11.46	%		139,161		6.00	%		185,547		8.00	%
Consolidated		226,917		9.75	%		139,706		6.00	%		186,275		8.00	%

Total Capital to Risk-Weighted Assets
Bank		279,834		12.07	%		185,547		8.00	%		231,934		10.00	%
Consolidated		300,987		12.93	%		186,275		8.00	%		232,844		10.00	%

At December 31, 2014 (1)

Leverage Ratio
Bank	$	221,523		11.29	%	$	78,466		4.00	%	$	98,083		5.00	%
Consolidated		179,881		9.18	%		78,401		4.00	%		N/A		N/A

Tier 1 Capital to Risk-Weighted Assets
Bank		221,523		12.72	%		69,650		4.00	%		104,475		6.00	%
Consolidated		179,881		10.30	%		69,855		4.00	%		N/A		N/A

Total Capital to Risk-Weighted Assets
Bank		234,120		13.45	%		139,300		8.00	%		174,126		10.00	%
Consolidated		252,477		14.46	%		139,709		8.00	%		N/A		N/A

At March 31, 2014 (1)

Leverage Ratio
Bank	$	167,294		10.26	%	$	65,229		4.00	%	$	81,536		5.00	%
Consolidated		170,096		10.45	%		65,085		4.00	%		N/A		N/A

Tier 1 Capital to Risk-Weighted Assets
Bank		167,294		12.06	%		55,476		4.00	%		83,214		6.00	%
Consolidated		170,096		12.23	%		55,624		4.00	%		N/A		N/A

Total Capital to Risk-Weighted Assets
Bank		176,301		12.71	%		110,953		8.00	%		138,691		10.00	%
Consolidated		179,104		12.88	%		111,249		8.00	%		N/A		N/A

(1) The capital ratios as of March 31, 2015 reflect the adoption of the Basel III Rule in effect beginning January 1, 2015, while ratios for the prior periods represent the previous capital rules under Basel I.
(2) The common equity tier 1 ratio is a new ratio required under the Basel III Rule and represents common equity, less goodwill and intangible assets net of any deferred tax liabilities, divided by risk-weighted assets.

Item 3. Quantitative and Qualitative Disclosure About Market Risk

Management believes that there have been no material changes in our quantitative and qualitative information about market risk since December 31, 2014. For a complete discussion of our quantitative and qualitative market risk, see “Item 7A. Quantitative and Qualitative Disclosure About Market Risk” in our 2014 Annual Report.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this Quarterly Report on Form 10-Q, an evaluation was carried out by our management, with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended). Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures were effective as of the end of the period covered by this report.

Changes in Internal Controls

There have not been any changes in our internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) during the fiscal quarter to which this Quarterly Report on Form 10-Q relates that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

In February 2004, the Bank was named as a defendant in a class action lawsuit entitled “James Baker v. Century Financial, et al,” which alleged violations of the Missouri Second Mortgage Loan Act (the “MSMLA”) by the Bank’s predecessor, Life Bank. The lawsuit alleged that Missouri homeowners were charged closing costs and related fees exceeding the amount permitted by the MSMLA. While Life Bank did not originate these mortgages, it did ultimately own and service them for a period of time, which plaintiffs allege creates potential liability under the MSMLA. The class action lawsuit was filed in the Circuit Court of Clay County, Missouri in 2000.

After a lengthy period of inactivity, the Bank was contacted by plaintiffs’ counsel to schedule depositions and discovery, and prepare the case to go to trial in 2015. The Board of Directors of the Company determined to establish a $1.7 million reserve related to the lawsuit during the fourth quarter of 2014, which the Board of Directors believes to be a reasonable estimate of the Company’s exposure as of December 31, 2014. In March and April 2015, the Company entered into a proposed settlement agreement with plaintiffs to resolve the litigation as to the Company. The court granted preliminary approval for the settlement, and plaintiffs are currently in the process of notifying class members about the proposed settlement. A hearing is scheduled for June 2015 to seek final approval of the settlement from the court.

The Company is not involved in any other material pending legal proceedings other than legal proceedings occurring in the ordinary course of business. Management believes that none of these legal proceedings, individually or in the aggregate, will have a material adverse impact on the results of operations or financial condition of the Company.

Item 1A. Risk Factors

There were no material changes to the risk factors as previously disclosed under Item 1A of our 2014 Annual Report.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

On June 25, 2012, the board of directors authorized its second stock repurchase program. Under the repurchase program, management is authorized to repurchase up to 1,000,000 shares of the Company’s common stock. The program may be limited or terminated at any time without prior notice. The following table provides information with respect to purchases made by or on behalf of us or any “affiliated purchaser” (as defined in Rule 10b-18(a)(3) under the Exchange Act) of our common stock during the first quarter of 2015.

Month of Purchase	Total Number of shares purchased/ returned		Average price paid per share		Total number of shares repurchased as part of the publicly announced program		Maximum number of shares that may yet be purchased under the program at end of month

December-2014		--		--		--		769,710
January-2015		-	$	-		-		769,710
February-2015		-		-		-		769,710
March-2015		5,833		16.02		5,833		763,877
Total/Average		5,833	$	16.02		5,833		763,877

Item 3. Defaults Upon Senior Securities

None

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None

Item 6. Exhibits

Exhibit 31.1		Certification of Chief Executive Officer Pursuant to Rule 13a-14(a)/15(d)-14(a) under the Securities Exchange Act of 1934, as amended
Exhibit 31.2		Certification of Chief Financial Officer Pursuant to Rule 13a-14(a)/15(d)-14(a) under the Securities Exchange Act of 1934, as amended
Exhibit 32		Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002
Exhibit 101.INS		XBRL Instance Document
Exhibit 101.SCH		XBRL Taxonomy Extension Schema Document
Exhibit 101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document
Exhibit 101.DEF		XBRL Taxonomy Extension Definitions Linkbase Document
Exhibit 101.LAB		XBRL Taxonomy Extension Label Linkbase Document
Exhibit 101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

PACIFIC PREMIER BANCORP, INC.,

May 08, 2015	By:	/s/ Steve Gardner
Date		Steve Gardner
		President and Chief Executive Officer
		(principal executive officer)

May 08, 2015	By:	/s/ Kent J. Smith
Date		Kent J. Smith
		Executive Vice President and Chief Financial Officer
		(principal financial and accounting officer)

Index to Exhibits

Exhibit 31.1		Certification of Chief Executive Officer Pursuant to Rule 13a-14(a)/15(d)-14(a) under the Securities Exchange Act of 1934, as amended
Exhibit 31.2		Certification of Chief Financial Officer Pursuant to Rule 13a-14(a)/15(d)-14(a) under the Securities Exchange Act of 1934, as amended
Exhibit 32		Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002
Exhibit 101.INS		XBRL Instance Document
Exhibit 101.SCH		XBRL Taxonomy Extension Schema Document
Exhibit 101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document
Exhibit 101.DEF		XBRL Taxonomy Extension Definitions Linkbase Document
Exhibit 101.LAB		XBRL Taxonomy Extension Label Linkbase Document
Exhibit 101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document