Pacific Premier Bancorp (PPBI) Q1 2025 & Merger earnings summary

Executive summary

• Columbia Banking System announced the all-stock acquisition of Pacific Premier Bancorp, valued at $2.0 billion, creating a $70 billion asset regional bank with a strong presence in Southern California and the broader Western U.S.

• Pacific Premier stockholders will receive 0.9150 Columbia shares per Pacific Premier share and will own about 30% of the combined company; three Pacific Premier directors, including CEO Steve Gardner, will join Columbia's board.

• Q1 2025 net income was $87 million (Columbia) and $36 million (Pacific Premier), with Columbia reporting operating EPS of $0.67 and Pacific Premier reporting $0.37 per diluted share.

• Columbia opened its first retail branch in Colorado and executed successful deposit campaigns, while Pacific Premier saw sequential deposit growth and maintained strong asset quality.

• The merger accelerates Columbia's Southern California expansion by about a decade and brings complementary products, services, and talent.

Financial highlights

• Columbia's Q1 2025 operating EPS was $0.67, excluding a $55 million legal settlement and $15 million in severance; Pacific Premier's net interest income was $123.4 million, with a net interest margin of 3.06%.

• Columbia's net interest margin contracted by 4 bps to 3.60%; Pacific Premier's noninterest income was $21.5 million, up $1.5 million sequentially.

• Columbia's operating return on tangible equity reached 15%; Pacific Premier's tangible common equity to tangible assets ratio was 11.87%.

• Columbia's non-interest expense was $340 million (reported), including a $55 million legal settlement; Pacific Premier's noninterest expense was $100.3 million.

• Allowance for credit losses was 1.17% of loans for Columbia and 1.46% for Pacific Premier.

Outlook and guidance

• The Pacific Premier acquisition is expected to be accretive to Columbia's EPS by 14% in 2026 and 15% in 2027, with tangible book value earnback in three years.

• The combined company targets top-quartile profitability, with an anticipated 20% ROATCE and 1.4% ROAA in 2026, assuming full cost synergies.

• Operating expense guidance for 2025 (excluding CDI amortization) remains $1.0–$1.01 billion for Columbia.

• No additional capital is needed to support the deal; capital ratios are expected to remain strong.

• The transaction is expected to close in the second half of 2025, pending regulatory and shareholder approvals.