Costa Mesa Bank Operator Swings to Loss

Costa Mesa-based bank operator Pacific Premier Bancorp Inc. reported a third-quarter loss Wednesday after setting aside more cash to cushion against bad loans and paying more to the Federal Deposit Insurance Corp. as part of its bid to rebuild its deposit insurance fund.

The bank, which caters to businesses and depositors with six branches in the county, posted a loss of $7,000 versus a profit of $1 million a year earlier.

Pacific Premier, which had assets of $848 million as of Sept. 30, said it set aside more money to cushion against loans going bad in the quarter.

The bank’s provision for loan losses was $2 million in the quarter, up from $1.3 million a year earlier.

The money was “in response to deteriorating economic conditions and constraints on the financial markets in which we lend,” the bank said. “These conditions adversely affected our borrowers, their businesses and the collateral securing our loans.”

Loans with payments late 30 days or more made up 1.4% or $7.9 million of Pacific Premier’s loans in the quarter.

It also saw $200,000 in higher expenses, driven by higher insurance premiums from the FDIC, which is leaning on banks to rebuild cash after closing 99 failed banks in the past year.

The FDIC has proposed that banks prepay their deposit insurance premiums for the next three years.

Net interest income, or revenue from loans and investments, was $5.8 million in the third quarter, up 3.7% from a year earlier at Pacific Premier.

Last week, Pacific Premier announced plans to sell up to $23 million worth of shares.