First Foundation Inc. (FFWM) Bundle
A Brief History of First Foundation Inc.
First Foundation Inc. (NYSE: FFWM), a financial services company, has undergone significant developments leading up to 2024. As of September 30, 2024, the company reported a net loss of $82.2 million, or $1.23 per share, due to a $117.5 million LOCOM adjustment related to the reclassification of $1.9 billion in multifamily loans from loans held for investment to loans held for sale.
Financial Performance Overview
In the third quarter of 2024, First Foundation achieved the following:
- Net Interest Income: $49.1 million, compared to $43.8 million in the previous quarter and $52.1 million in Q3 2023.
- Noninterest Income: $(105.6) million, significantly impacted by the aforementioned LOCOM adjustment.
- Total Deposits: $10.3 billion, down from $10.8 billion in the prior quarter.
- Total Loans: $9.9 billion, compared to $10.1 billion in the previous quarter.
Capital and Equity
As of September 30, 2024, First Foundation reported:
- Shareholders' Equity: $1,069.8 million, an increase from $933.2 million in the prior quarter.
- Tangible Book Value per Share: $15.71, down from $16.43 the previous quarter.
- Total Risk-Based Capital Ratio: 14.21%, an increase from 12.60% in the prior quarter.
Loan Portfolio Details
The company's loan portfolio as of September 30, 2024, included:
- Multifamily Loans: $1.9 billion transferred to loans held for sale, with a LOCOM adjustment of $117.5 million.
- Commercial and Industrial Loans: 90% of total fundings for the quarter.
Key Financial Ratios
| Metric | Q3 2024 | Q2 2024 | Q3 2023 |
|---|---|---|---|
| Return on Average Assets (%) | (2.44) | 0.09 | 0.07 |
| Return on Average Common Equity (%) | (33.9) | 1.3 | 1.0 |
| Net Interest Margin (%) | 1.50 | 1.36 | 1.66 |
| Efficiency Ratio (%) | 98.1 | 96.1 | 99.7 |
As of September 30, 2024, First Foundation's liquidity position remained robust, with cash and cash equivalents totaling $1.1 billion, representing 8.3% of total assets.
Market Position
First Foundation continues to navigate the challenges of the financial landscape while focusing on strategic initiatives to improve its balance sheet and operational performance. The company aims to enhance its profitability and shareholder value through careful management of its assets and liabilities.
A Who Owns First Foundation Inc. (FFWM)
Ownership Structure
As of September 30, 2024, First Foundation Inc. (NYSE: FFWM) had a total shareholders' equity of $1,069.8 million. The company underwent a capital raise in July 2024, which generated net proceeds of $214.5 million. The company's common equity tier 1 ratio was reported at 10.31%.
Shareholder Breakdown
| Shareholder Type | Number of Shares | Percentage Ownership |
|---|---|---|
| Common Stockholders | 67,855,084 | 60.5% |
| Series A Preferred Shares | 29,811,000 | 26.6% |
| Series B Preferred Shares | 14,490,000 | 12.9% |
| Total Outstanding Shares (Adjusted) | 112,156,084 | 100% |
Key Financial Metrics
The tangible book value per common share was reported at $15.71 as of September 30, 2024. The company reported a net loss of $82.2 million for the third quarter of 2024, equating to a loss per share of $1.23. In terms of asset quality, the allowance for credit losses was $29.3 million, representing 0.36% of total loans held for investment.
Capital Ratios
| Capital Ratio | September 30, 2024 | June 30, 2024 | September 30, 2023 |
|---|---|---|---|
| Common Equity Tier 1 Ratio | 10.31% | 10.30% | 9.70% |
| Leverage Ratio | 7.64% | 7.08% | 7.18% |
| Tier 1 Risk-Based Capital Ratio | 11.81% | 10.30% | 9.70% |
| Total Risk-Based Capital Ratio | 14.21% | 12.60% | 11.89% |
Investor Relations
First Foundation Inc. continues to position itself strategically in the financial services sector through its subsidiaries—First Foundation Advisors and First Foundation Bank. The company aims to enhance its shareholder value and improve operational performance amid changing market conditions.
First Foundation Inc. (FFWM) Mission Statement
Company Overview
First Foundation Inc. (FFWM) operates through its subsidiaries, providing a range of financial services including personal banking, business banking, and private wealth management. The mission of First Foundation is to deliver comprehensive financial solutions with a high level of personalized service.
Mission Statement
The mission statement of First Foundation Inc. emphasizes a commitment to enhancing the financial well-being of its clients by offering tailored financial services that meet their individual needs. The company aims to integrate a wide array of financial products and services while maintaining a focus on exceptional customer service.
Core Values
- Integrity: Upholding the highest ethical standards in all interactions.
- Client-Centric: Prioritizing the needs and goals of clients in every service.
- Innovation: Continuously improving and adapting services to meet client demands.
- Community Engagement: Actively contributing to the communities in which they operate.
Recent Financial Performance
As of September 30, 2024, First Foundation Inc. reported the following key financial metrics:
| Metric | Value |
|---|---|
| Net Interest Income | $49.1 million |
| Net Loss | ($82.2 million) |
| Adjusted Net Income | $2.7 million |
| Earnings per Share | ($1.23) |
| Total Loans | $9.9 billion |
| Total Deposits | $10.3 billion |
| Loan to Deposit Ratio | 95.9% |
| Total Shareholders' Equity | $1.069 billion |
| Total Risk-Based Capital Ratio | 14.21% |
Client Engagement and Services
First Foundation Inc. focuses on providing a broad spectrum of financial solutions that include:
- Investment management services.
- Trust and estate planning.
- Commercial banking services.
- Mortgage and residential lending.
Strategic Initiatives
In 2024, First Foundation has undertaken several strategic initiatives to enhance its service offerings and improve its financial performance:
- Reclassification of $1.9 billion in multifamily loans from held for investment to held for sale.
- Focus on expanding the client base through targeted marketing and personalized client service.
- Implementation of advanced technology solutions to streamline operations and improve client interactions.
Conclusion of Mission Statement Alignment
First Foundation Inc.'s mission statement is reflected in its commitment to providing personalized financial services while maintaining a strong focus on client satisfaction, ethical standards, and community involvement. The financial performance and strategic initiatives of the company illustrate its dedication to achieving these goals.
How First Foundation Inc. (FFWM) Works
Company Overview
First Foundation Inc. (NYSE: FFWM) operates as a financial services company with two wholly-owned subsidiaries: First Foundation Advisors (FFA) and First Foundation Bank (FFB). The company provides a wide range of services, including personal banking, business banking, and private wealth management, which encompasses investment, trust, insurance, and philanthropy services.
Financial Performance
For the third quarter of 2024, First Foundation reported a net loss of $82.2 million, or $1.23 per share (basic and diluted). This loss included a $117.5 million LOCOM adjustment related to the reclassification of $1.9 billion in multifamily loans from loans held for investment to loans held for sale.
Key Financial Metrics
| Metric | Q3 2024 | Q2 2024 | Q3 2023 |
|---|---|---|---|
| Net Interest Income | $49.1 million | $43.8 million | $52.1 million |
| Noninterest Income | ($105.6 million) | $13.7 million | $11.7 million |
| Adjusted Net Income | $2.7 million | $3.3 million | $2.6 million |
| Return on Average Assets | (2.44%) | 0.09% | 0.07% |
| Net Interest Margin | 1.50% | 1.36% | 1.66% |
| Efficiency Ratio | 98.1% | 96.1% | 99.7% |
Balance Sheet Highlights
As of September 30, 2024, First Foundation's total deposits were $10.3 billion, down from $10.8 billion in the previous quarter. The loan to deposit ratio stood at 95.9%.
Total shareholders' equity reached $1,069.8 million, reflecting a significant increase from $933.2 million as of June 30, 2024. This change was primarily due to net proceeds from a capital raise.
Asset Quality
The allowance for credit losses for loans was $29.3 million, representing 0.36% of total loans held for investment. Nonperforming assets totaled $44.4 million, equating to 0.33% of total assets as of September 30, 2024.
Investment Securities
First Foundation's investment securities portfolio totaled $2.0 billion as of September 30, 2024. The average yield on this portfolio was 4.06%.
Capital Ratios
| Capital Ratio | Q3 2024 | Q2 2024 | Q3 2023 |
|---|---|---|---|
| Common Equity Tier 1 Ratio | 10.31% | 10.30% | 9.70% |
| Tier 1 Risk-Based Capital Ratio | 11.81% | 10.30% | 9.70% |
| Total Risk-Based Capital Ratio | 14.21% | 12.60% | 11.89% |
Wealth Management Operations
As of September 30, 2024, First Foundation Advisors managed assets under management (AUM) totaling $5.5 billion. This figure remained stable compared to the previous quarter, with net withdrawals of $194 million during the quarter.
Deposits and Borrowings
Deposits as of September 30, 2024, included $1.1 billion in cash and cash equivalents, representing 8.3% of total assets. The average cost of deposits was 3.41%.
Loan Portfolio
| Loan Type | Outstanding Principal Balance |
|---|---|
| Multifamily | $3.32 billion |
| Single Family | $889.6 million |
| Commercial Properties | $952.7 million |
| Commercial and Industrial Loans | $2.84 billion |
Market Position and Strategy
First Foundation aims to leverage its comprehensive suite of financial services to differentiate itself from competitors, focusing on personalized service and accessibility typical of community banks, while offering a breadth of products similar to larger financial institutions.
How First Foundation Inc. (FFWM) Makes Money
Revenue Sources
First Foundation Inc. generates revenue primarily through two segments: Banking and Wealth Management. In the third quarter of 2024, the company reported a net interest income of $49.1 million, compared to $43.8 million in the previous quarter and $52.1 million in the third quarter of 2023.
Net Interest Income
Net interest income is derived from the difference between interest earned on loans and interest paid on deposits. The company reported total interest income of $157.2 million for the quarter, an increase from $150.9 million in the prior quarter. The interest expense was $108 million, leading to a net interest margin (NIM) of 1.50%, up from 1.36% in the prior quarter.
Noninterest Income
First Foundation's noninterest income, which includes fees from asset management and other services, was impacted significantly in Q3 2024 by a loss of $117.5 million related to capital market activities. Total noninterest income for the quarter was reported at negative $105.6 million, a stark decline from $13.7 million in the prior quarter.
Loan Portfolio
The company’s total loans stood at approximately $9.9 billion as of September 30, 2024. The breakdown includes:
- Multifamily loans: $3.3 billion
- Single-family loans: $889.6 million
- Commercial loans: $2.8 billion
- Consumer loans: $0.8 million
During the quarter, First Foundation transferred a portion of its multifamily loan portfolio, totaling $1.9 billion, from loans held for investment to loans held for sale.
Deposits and Borrowings
Total deposits were reported at $10.3 billion, down from $10.8 billion in the previous quarter. The loan-to-deposit ratio was 95.9% as of September 30, 2024.
| Category | Q3 2024 Amount | Q2 2024 Amount | Q3 2023 Amount |
|---|---|---|---|
| Total Loans | $9.9 billion | $10.1 billion | $10.3 billion |
| Total Deposits | $10.3 billion | $10.8 billion | $10.8 billion |
| Net Interest Income | $49.1 million | $43.8 million | $52.1 million |
| Net Interest Margin | 1.50% | 1.36% | 1.66% |
| Noninterest Income | ($105.6 million) | $13.7 million | $11.7 million |
Expense Management
First Foundation reported a total noninterest expense of $60.2 million for the quarter. The increase in expenses was largely due to higher customer service costs, which amounted to $19 million.
Asset Management and Wealth Management Services
The company’s assets under management (AUM) totaled $5.5 billion as of September 30, 2024. The AUM experienced net withdrawals of $194 million but was offset by performance gains of $167 million during the quarter.
Capital Raising
In July 2024, First Foundation raised approximately $228 million in gross proceeds through an equity capital raise. This capital is intended to enhance the company’s balance sheet and facilitate future growth.
Profitability Metrics
Despite the challenges, First Foundation reported an adjusted net income of $2.7 million for Q3 2024, translating into an adjusted earnings per share of $0.04. The company recorded a net loss attributable to common shareholders of $82.2 million, or $1.23 per share.
| Metric | Q3 2024 | Q2 2024 | Q3 2023 |
|---|---|---|---|
| Net Income | ($82.2 million) | $3.1 million | $2.2 million |
| Adjusted Net Income | $2.7 million | $3.3 million | $2.6 million |
| Earnings per Share | ($1.23) | $0.05 | $0.04 |
| Adjusted Earnings per Share | $0.04 | $0.06 | $0.05 |
Regulatory Capital Ratios
As of September 30, 2024, First Foundation reported a total risk-based capital ratio of 14.21%, which is above the regulatory minimum requirements for classification as a well-capitalized institution.
Conclusion
First Foundation Inc. leverages a diversified business model encompassing banking and wealth management services. The company continues to adapt its strategies to navigate market conditions while focusing on enhancing its financial performance through effective capital management and operational efficiency.
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Article updated on 8 Nov 2024
Resources:
- First Foundation Inc. (FFWM) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of First Foundation Inc. (FFWM)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View First Foundation Inc. (FFWM)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.