Pacific Premier Bancorp Q2 Revenue and EPS Miss Estimates, Asset Quality Improves

Pacific Premier Bancorp reported a Q2 2025 profit drop, with revenue down 7.1% YoY and GAAP earnings per share declining 23.3% YoY. However, the bank showed improvements in asset quality, with nonperforming assets dropping to 0.15% of total assets. Net interest margin was 3.12%, down from 3.26% in the prior year period, while noninterest expense rose mainly due to $6.7 million in merger-related costs.

Pacific Premier Bancorp (NASDAQ: PPBI), a commercial bank focused on business and specialty lending across the western United States, released its Q2 2025 financial results on July 24, 2025. The company reported GAAP earnings per share of $0.33, slightly below the $0.34 GAAP analyst consensus, and revenue of $126.8 million, which also missed the $147.7 million estimate. Both metrics were lower than the prior year's results [1].

The quarter highlighted persistent revenue and efficiency challenges, but showcased improvements in asset quality and capital strength, along with active merger preparations. Key metrics for Q2 2025 included a 23.3% year-over-year (YoY) decline in GAAP earnings per share, a 7.1% YoY drop in revenue, a net interest margin of 3.12%, and nonperforming assets dropping to 0.15% of total assets [1].

The company's net interest margin was 3.12%, down from the prior year period's 3.26%. This occurred even as deposit costs improved slightly. Mainly due to $6.7 million in merger-related costs, noninterest expense rose. On an underlying basis, excluding these costs, expenses declined, showing early efforts to control operating spending [1].

Pacific Premier Bancorp emphasized loan growth activity, with new loan commitments rising sharply to $578.5 million, almost doubling from Q1 2025 levels. However, loan balances continued to shrink year over year, falling 4.7%. The company's major loan segments remain multifamily real estate loans and commercial real estate loans secured by non-owner-occupied properties [1].

Asset quality showed notable improvement. Nonperforming assets -- loans and properties with repayment difficulties -- dropped to 0.15% of total assets from 0.28% in Q2 2024. Delinquencies remained extremely low. This strong credit profile was further supported by net recoveries, meaning loan repayments exceeded charge-offs. The allowance for credit losses, which is the amount reserved to cover potential future loan losses, decreased to 1.43% of loans held for investment, tracking with improvements in overall asset quality [1].

The company’s leadership stated its commitment to prudent management ahead of its upcoming merger with Columbia Banking System, anticipated to close as soon as September 1, 2025. No specific guidance was provided on expected future earnings, revenue, or other financial performance targets, either for the combined entity or Pacific Premier Bancorp on a standalone basis [1].

The board of directors maintained the regular quarterly dividend at $0.33 per share, consistent with recent quarters. As the company moves toward integration, investors are likely to focus on merger-related updates, cost savings, and continued performance on credit quality and loan growth trends [1].

References:
[1] https://www.mitrade.com/au/insights/news/live-news/article-8-987969-20250725
[2] https://www.nasdaq.com/articles/pacific-premier-posts-q2-profit-drop