Grandpoint Capital, Inc., Reports First Quarter 2018 Earnings - Pacific Premier Bancorp (NASDAQ:PPBI)

Grandpoint Capital, Inc., the holding company for Grandpoint Bank and its divisions, Bank of Tucson, Regents Bank and The Biltmore Bank of Arizona, reported net income of $8.9 million and total assets of $3.3 billion for the quarter ended March 31, 2018. In addition, the board of directors declared its tenth consecutive quarterly cash dividend. The cash dividend of $0.15 per share will be payable on or about May 10, 2018, to shareholders of record as of April 30, 2018.

"We continued to demonstrate the sustained financial strength of Grandpoint Capital in the first quarter," said Don M. Griffith, Chairman and CEO of Grandpoint Capital, Inc., and Grandpoint Bank. "Our key performance measures remain strong with a return on average assets of 1.13% and a return on average tangible equity of 12.51% at the end of the first quarter. At March 31, 2018, we reported basic earnings per share of $0.27, and we achieved tangible book value per share of $8.83."

At March 31, 2018, deposits totaled $2.4 billion, of which 46% is comprised of core business demand deposits, signaling the strength and depth of the Bank's long-standing client relationships. Total loans were $2.4 billion, and asset quality remained strong during the quarter as the Bank continued to maintain a prudent and disciplined risk strategy. Grandpoint Bank's capital ratios remain in excess of the regulatory minimums, with a Leverage Ratio of 9.29% and Total Risk-Based Capital Ratio of 11.63% at March 31, 2018.

In March 2018, Grandpoint Bank received a superior 5-star rating from independent rating and research firm BauerFinancial for the nineteenth consecutive quarter. The latest rating was based on December 31, 2017, financial data. The 5-star rating, for strength, stability and soundness, is only awarded to the nation's strongest banks.

Grandpoint Capital, Inc. and Grandpoint Bank are headquartered in Los Angeles. Calif. Grandpoint Bank and its divisions operate in southern California, Arizona and Vancouver, Wash. In February 2018, Grandpoint Capital and Pacific Premier Bancorp, Inc. PPBI announced a definitive agreement under which Pacific Premier will acquire Grandpoint in an all-stock transaction. The transaction is expected to close in the third quarter of 2018.

More information about Grandpoint is available at www.grandpointbank.com.


Grandpoint Capital, Inc. and Subsidiaries
Consolidated Balance Sheets
Dollars in $1,000's

	June 30,			December 31,																								March 31,
		2010			2010			2011			2012			2013			2014			2015			2016			2017			2018

Cash and due from banks	$	3,501		$	27,791		$	22,324		$	43,714		$	41,177		$	37,688		$	25,113		$	28,919		$	32,238		$	51,427
Interest-bearing deposits in banks		72,825			33,604			127,803			291,545			171,408			314,005			171,625			213,365			151,556			197,737
Cash and Cash Equivalents		76,326			61,395			150,127			335,259			212,585			351,693			196,738			242,284			183,794			249,164
Investment Securities		3,284			97,399			208,939			318,501			230,591			266,479			573,260			579,275			502,615			499,098
Loans:
Construction		481			18,327			20,324			54,315			79,588			110,286			130,801			194,471			137,165			143,659
Single family residential		-			32,753			86,257			193,913			248,727			281,678			269,823			220,519			171,360			142,090
Multifamily loans		2,513			26,097			60,718			135,966			215,956			397,712			599,470			715,786			719,698			709,206
Commercial real estate		7,792			248,343			429,224			738,540			777,875			814,430			862,014			905,534			946,072			962,430
Commercial and industrial		2,005			83,847			136,492			295,199			371,341			375,607			412,051			322,419			345,475			358,753
Consumer		-			3,673			6,226			21,984			23,289			12,846			9,138			7,876			43,712			49,801
Total Loans		12,791			413,040			739,241			1,439,917			1,716,776			1,992,559			2,283,297			2,366,605			2,363,482			2,365,939
Deferred loan fees, costs and discounts		(137	)		(13,861	)		(15,580	)		(25,373	)		(18,410	)		(4,543	)		3,550			3,199			65			(850	)
Allowance for loan losses		-			(1,050	)		(5,722	)		(8,867	)		(12,087	)		(14,018	)		(17,245	)		(18,552	)		(18,939	)		(18,710	)
Net Loans		12,654			398,129			717,939			1,405,677			1,686,279			1,973,998			2,269,602			2,351,252			2,344,608			2,346,379
Goodwill		2,563			17,923			37,863			51,432			53,101			53,323			53,323			53,323			53,323			53,323
Core deposit and other intangibles		133			2,724			6,857			11,822			12,765			11,063			9,209			7,493			5,865			5,480
Deferred Tax Assets		-			4,056			12,011			30,997			30,981			30,206			24,749			23,818			15,686			16,292
Other assets		2,981			19,005			24,959			50,195			48,987			79,210			70,107			69,491			88,043			88,531
Total Assets	$	97,941		$	600,631		$	1,158,695		$	2,203,883		$	2,275,289		$	2,765,972		$	3,196,988		$	3,326,936		$	3,193,934		$	3,258,267
Deposits:
Demand deposits	$	3,664		$	136,024		$	327,638		$	736,831		$	764,936		$	792,896		$	852,263		$	926,594		$	1,090,900		$	1,099,105
NOW accounts		547			22,651			57,302			88,994			132,743			136,003			139,660			148,071			145,591			164,550
Money market accounts		7,984			246,043			473,107			723,125			689,318			1,029,519			1,165,748			1,106,229			843,920			843,700
Savings accounts		1,353			4,703			9,403			20,587			36,914			35,505			39,979			47,426			44,837			47,320
Time deposits		5,618			78,353			112,407			298,226			313,788			411,908			348,068			347,775			251,681			259,886
Total Deposits		19,166			487,774			979,857			1,867,763			1,937,699			2,405,831			2,545,718			2,576,095			2,376,929			2,414,561
Other liabilities		2,840			10,400			14,084			18,596			15,496			27,233			10,594			12,696			12,353			11,707
Other Borrowings		-			-			3,000			10,500			11,000			-			275,000			350,000			450,000			475,000
Subordinated debenture payable		-			5,155			5,155			5,155			5,155			5,155			5,155			5,155			5,155			5,155
Shareholders' Equity:
Common stock, par value		95			116			181			323			324			324			329			330			332			332
Additional Paid-In Capital		88,729			108,628			171,236			306,060			308,882			310,860			316,623			318,904			320,935			320,949
Unrealized gain (loss) on investment securities		23			(52	)		150			1,410			(3,756	)		(1,090	)		(3,834	)		(1,009	)		(788	)		(2,409	)
Retained earnings (deficit)		(12,912	)		(16,073	)		(21,233	)		(5,924	)		489			17,659			47,403			64,765			29,018			32,972
Total Grandpoint Capital Shareholders' Equity		75,935			92,619			150,334			301,869			305,939			327,753			360,521			382,990			349,497			351,844
Noncontrolling interest		-			4,683			6,265			-			-			-			-			-			-			-
Total Shareholders' Equity		75,935			97,302			156,599			301,869			305,939			327,753			360,521			382,990			349,497			351,844
Total Liabilities and Shareholders' Equity	$	97,941		$	600,631		$	1,158,695		$	2,203,883		$	2,275,289		$	2,765,972		$	3,196,988		$	3,326,936		$	3,193,934		$	3,258,267

Tangible book value	$	73,239		$	76,655		$	107,764		$	238,615		$	240,073		$	263,367		$	297,989		$	322,174		$	290,309		$	293,041
Shares outstanding		9,543,057			11,660,098			18,183,867			32,353,019			32,424,261			32,445,179			32,894,185			33,022,742			33,174,924			33,174,924
Book value per share	$	7.96		$	7.94		$	8.27		$	9.33		$	9.44		$	10.10		$	10.96		$	11.60		$	10.53		$	10.61
Tangible book value per share	$	7.67		$	6.57		$	5.93		$	7.38		$	7.40		$	8.12		$	9.06		$	9.76		$	8.75		$	8.83


Grandpoint Capital, Inc. and Subsidiaries
Consolidated Income Statements
Dollars in $1,000's																									Three
																									Months Ended
	Year Ended December 31,																								March 31,
		2010			2011			2012			2013			2014			2015			2016			2017			2018

Interest Income	$	2,117		$	44,715		$	69,166		$	93,618		$	102,882		$	114,714		$	123,511		$	128,367		$	32,865
Interest Expense		204			4,174			4,109			4,248			4,826			5,883			8,256			12,242			3,861
Net Interest Income		1,913			40,541			65,057			89,370			98,056			108,831			115,255			116,125			29,004

Provision for Loan Losses		1,050			6,046			5,494			3,799			4,317			3,732			1,135			335			(5	)
Noninterest Income		5,927			4,726			8,074			7,061			6,049			6,660			5,946			7,955			1,244

Noninterest Expense:
Salaries and Benefits		6,898			22,343			34,891			44,292			40,270			38,719			40,462			47,406			11,322
Occupancy Expenses		1,021			3,102			4,591			5,380			5,569			5,186			5,405			5,439			1,352
Furniture and Equipment Expenses		883			2,077			2,991			3,352			3,610			3,288			3,283			3,435			921
Promotion Expenses		738			1,178			1,385			1,941			1,620			1,217			1,292			1,358			420
Data Processing Expenses		307			1,264			2,020			2,580			1,862			1,908			2,015			2,120			548
Professional Services		1,292			2,826			3,820			4,263			2,406			2,709			2,683			3,105			1,173
M&A, Conversion and Restructuring Costs		2,346			5,984			947			10,304			3,988			-			300			236			-
Office Supplies and Costs		293			787			1,284			1,481			1,755			1,422			1,358			1,390			348
Assessments and Insurance		215			1,428			1,880			2,195			2,377			2,464			2,388			1,859			508
Loan Expenses		-			-			1,785			1,703			3,108			1,849			1,499			1,227			363
Other Expenses		259			3,104			2,924			4,400			4,239			3,889			3,909			4,055			945
		14,252			44,093			58,518			81,891			70,804			62,651			64,594			71,630			17,900

Income before Income Taxes		(7,462	)		(4,872	)		9,119			10,741			28,984			49,108			55,472			52,115			12,353
Income Taxes		(374	)		-			(6,316	)		4,328			11,814			19,364			22,286			27,673			3,423

Net Income		(7,088	)		(4,872	)		15,435			6,413		$	17,170		$	29,744		$	33,186		$	24,442		$	8,930

EPS - basic	$	(1.19	)	$	(0.35	)	$	0.61		$	0.20		$	0.53		$	0.91		$	1.01		$	0.74		$	0.27
ROAA		-2.36	%		-0.53	%		0.96	%		0.29	%		0.70	%		1.00	%		1.03	%		0.76	%		1.13	%
ROATE		-11.29	%		-4.08	%		6.82	%		2.10	%		5.24	%		10.52	%		10.71	%		7.52	%		12.51	%
Efficiency Ratio		181.79	%		97.41	%		80.02	%		84.92	%		68.01	%		54.25	%		53.29	%		57.73	%		59.18	%

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