Financial Performance - For the quarter ended March 31, 2025, the Company reported net income of $6.9 million, compared to a net loss of $14.1 million for the quarter ended December 31, 2024[144]. - Combined net income for Q1 2025 was $6.9 million, a significant increase from $793 thousand in Q1 2024[150]. - The company experienced a $6.4 million increase in combined net income before taxes, primarily due to a $6.7 million increase in net income in the Banking segment[150]. - The provision for credit losses totaled $3.4 million for the quarter ended March 31, 2025, significantly lower than $20.6 million for the quarter ended December 31, 2024[144]. - The provision for credit losses for Q1 2025 was $3.4 million, significantly higher than $577 thousand in the same quarter last year, reflecting increased reserves for the commercial loan portfolio[160]. Income and Expenses - Net interest income after provision for credit losses totaled $48.4 million for the quarter ended March 31, 2025, an increase from $30.7 million and $37.8 million for the quarters ended December 31, 2024 and March 31, 2024, respectively[144]. - Noninterest income totaled $19.6 million for the quarter ended March 31, 2025, compared to $13.4 million and $12.7 million for the quarters ended December 31, 2024 and March 31, 2024, respectively[144]. - Noninterest expense in Banking was $55.1 million for Q1 2025, compared to $44.5 million in the prior year, largely due to a $5.7 million increase in compensation and benefits[165]. - Noninterest expense in Wealth Management increased to $7.5 million in Q1 2025 from $5.7 million in Q1 2024, primarily driven by a $1.6 million rise in compensation and benefits[168]. Assets and Liabilities - Total assets remained essentially unchanged at $12.6 billion as of March 31, 2025, with a $0.2 billion increase in total investment securities offset by a $0.2 billion decrease in total loans[145]. - At March 31, 2025, total liabilities were $11.5 billion, a decrease from $11.6 billion at December 31, 2024, primarily due to a $0.3 billion decrease in deposits[146]. - Total shareholders' equity increased to $1.06 billion at March 31, 2025, from $1.05 billion at December 31, 2024[147]. - The company reported a total of $9.561 billion in deposits as of March 31, 2025, reflecting a decrease from the previous quarter[171]. - The company’s total loans held for investment amounted to $7.649 billion as of March 31, 2025[170]. Loan and Deposit Metrics - The loan to deposit ratio was 94.1% as of March 31, 2025, compared to 93.5% as of December 31, 2024[146]. - The allowance for credit losses on the loan portfolio was $35.2 million, or 0.46% of total loans held for investment, up from $32.3 million and 0.41% at the end of 2024[160]. - Total deposits decreased by approximately $309 million to $9.56 billion at March 31, 2025, largely due to a $400 million decrease in higher-cost brokered deposits[186]. - The weighted average rate for all interest-bearing deposits decreased to 2.93% at March 31, 2025, down from 3.09% at December 31, 2024[187]. Capital and Ratios - As of March 31, 2025, FFI's Common Equity Tier 1 ratio was 10.63%, exceeding the required 4.50%[225]. - FFB's Common Equity Tier 1 ratio was 13.29% as of March 31, 2025, significantly above the 4.50% minimum requirement[225]. - FFB had $594 million in excess capital above the well-capitalized requirement for the Common Equity Tier 1 ratio as of March 31, 2025[226]. - The Total Risk-Based Capital Ratio for FFB was 13.74% as of March 31, 2025, exceeding the 8.00% requirement[225]. - FFB's Tier 1 Leverage Ratio was 9.28% as of March 31, 2025, above the required 4.00%[225]. Strategic Initiatives - The company intends to explore opportunities for growth, including opening additional offices or acquiring complementary businesses[229]. - The company may seek additional borrowings or sell shares to raise funds for future growth opportunities[229].

Financial Data and Key Metrics Changes - Net income for the first quarter was $6.9 million or $0.08 per share, a recovery from a net loss of $14.1 million in the previous quarter [4] - Net interest margin expanded by nine basis points to 1.67%, with a significant reduction in provision expense and a $5 million decrease in non-interest expense compared to the fourth quarter [5][12] - Pre-provision net revenue increased to $9.7 million or $0.11 per share, up from a loss of $2.3 million in the fourth quarter [12] Business Line Data and Key Metrics Changes - Funded $180 million in new loan balances at an average yield of 7.09%, with approximately 78% being commercial and industrial (C and I) loans [5] - Loans held for investment decreased primarily due to $354 million in payoffs, while loans held for sale remained stable at $1.3 billion [5] - Total non-interest income for the quarter was $19.6 million, including a $4.7 million gain on the sale of securities [15] Market Data and Key Metrics Changes - Assets under management decreased to $5.1 billion from $5.4 billion at the end of the previous year, while trust assets under advisement increased to $1.2 billion from $1.1 billion [9] - Overall deposits declined slightly to $9.6 billion, primarily due to a $400 million decrease in high-cost brokered deposits [9] Company Strategy and Development Direction - The company is focused on reducing its commercial real estate concentration and selectively exiting lower-yielding multifamily loans [5] - A five-point strategic plan is in place, emphasizing remixing the loan portfolio, improving interest rate risk management, and enhancing non-interest income through various services [8] - The company aims to build long-term value through a renewed focus on private banking and attractive demographic markets [9] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the financial future over the next 12 to 36 months, anticipating modest asset reductions and continued margin expansion [19] - The company expects to see a net interest margin exit run rate between 1.8% and 1.9% by the fourth quarter of 2025, with further improvements anticipated by the end of 2026 [19][20] - Management remains cautious about the economic backdrop but believes in the strength of the credit portfolio [57] Other Important Information - The company remains well-capitalized with a common equity Tier 1 ratio of 10.6% and a Tier 1 leverage ratio of 8.1% [10][18] - The tangible book value per share increased to $9.42 from $9.36 in the prior quarter [18] Q&A Session Summary Question: How have utilization rates trended thus far in 2025? - Management noted some hesitancy among clients regarding capital expenditures, but some clients have accelerated inventory purchases due to trade uncertainties [27] Question: Did you invest in any particular markets in 1Q? - The company added personnel in the Florida market and remains optimistic about that area, with most production expected from California [30] Question: Is the decline in AUM due to fluctuations in customer account balances? - Management acknowledged some terminations and turnover but remains optimistic about the pipeline going forward [31] Question: What rate environment does the NIM outlook assume? - The company is assuming two rate cuts in 2025, with a total of six cuts anticipated through the end of 2027 [36] Question: Any expense impact from internal control remediation? - Management indicated there would be some professional service expenses but nothing significant, as they aim to improve internal controls [43] Question: How do you expect overall loan balances to trend going forward? - The company expects modest growth in loan balances over time, focusing on reducing CRE concentration and increasing higher-yielding loans [72]

Financial Data and Key Metrics Changes - The company reported a net income of $6.9 million or $0.08 per share, returning to profitability after a net loss of $14.1 million in the previous quarter [4] - Net interest margin expanded by nine basis points to 1.67%, with a significant reduction in provision expense and a $5 million decrease in non-interest expense compared to the fourth quarter [5][10] - Pre-provision net revenue increased to $9.7 million or $0.11 per share, compared to a loss of $2.3 million in the previous quarter [12] Business Line Data and Key Metrics Changes - The company funded $180 million in new loan balances at an average yield of 7.09%, with approximately 78% being commercial and industrial (C and I) loans [5] - Loans held for investment decreased primarily due to $354 million in payoffs, while loans held for sale remained unchanged at $1.3 billion [5] - Total non-interest income was $19.6 million, including a $4.7 million gain on the sale of securities [15] Market Data and Key Metrics Changes - Assets under management decreased to $5.1 billion from $5.4 billion at the end of the previous year, while trust assets under advisement increased to $1.2 billion from $1.1 billion [9] - Overall deposits declined to $9.6 billion, primarily due to a $400 million decrease in high-cost brokered deposits [9] Company Strategy and Development Direction - The company is focused on reducing its commercial real estate concentration and selectively exiting lower-yielding multifamily loans [5] - A strategic plan is in place to remix the loan portfolio, improve interest rate risk management, and grow non-interest income through various channels [8] - The company aims to improve sustainable profitability over the intermediate term, with expectations for net interest margin to reach between 1.8% and 2.2% by the end of 2026 [20] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the financial future, highlighting strong capitalization, ample liquidity, and a focus on unlocking embedded value in the franchise [21] - The company anticipates a modest reduction in total assets as it works to reduce loans held for sale to zero and improve its deposit mix [20] - Management noted that while there is some hesitancy in capital expenditures among clients, there are also opportunities for growth in certain markets [27] Other Important Information - The company remains well-capitalized with a common equity Tier one ratio of 10.6% and a Tier one leverage ratio of 8.1% [19] - The tangible book value per share increased to $9.42 from $9.36 in the prior quarter [19] Q&A Session Summary Question: How have utilization rates trended thus far in 2025? - Management noted some hesitancy among clients regarding capital expenditures, but some clients have accelerated inventory purchases due to trade uncertainties [27] Question: Did you invest in any particular markets in 1Q? - The company added personnel in the Florida market and remains optimistic about that area, while most production is expected to come from California [29] Question: Is the decline in AUM due to fluctuations in customer account balances? - Management acknowledged some terminations and turnover but remains optimistic about the pipeline going forward [31] Question: What rate environment does the NIM outlook assume? - The company is assuming two rate cuts in 2025 and a total of six cuts through the end of 2027, remaining conservative in its outlook [36] Question: Any expense impact from internal control remediation? - Management indicated there will be some professional service expenses as they bring in expertise to accelerate the transition [43] Question: How do you expect overall loan balances to trend going forward? - The company expects modest growth in loan balances over time, focusing on reducing CRE concentration and increasing higher-yielding loans [70]

Core Insights - First Foundation (FFWM) reported revenue of $71.4 million for Q1 2025, a year-over-year increase of 39.8% and exceeding the Zacks Consensus Estimate of $63.8 million by 11.91% [1] - The company achieved an EPS of $0.09, significantly higher than the $0.02 reported a year ago, resulting in an EPS surprise of 350% [1] Financial Performance Metrics - Efficiency Ratio (non-GAAP) was reported at 86%, better than the average estimate of 90.4% from two analysts [4] - Net Interest Margin stood at 1.7%, matching the average estimate of 1.7% [4] - Average Balances for total interest-earning assets were $12.31 billion, consistent with the average estimate of $12.31 billion [4] - Total nonperforming assets were $44.94 million, lower than the average estimate of $52.29 million [4] - Net charge-offs (recoveries) to average loans were 0%, better than the estimated 0.1% [4] - Total Noninterest income reached $19.60 million, exceeding the average estimate of $12.27 million [4] - Net interest income was reported at $51.80 million, slightly above the average estimate of $51.54 million [4] Stock Performance - Shares of First Foundation have returned -4.8% over the past month, compared to a -0.2% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 5 (Strong Sell), indicating potential underperformance relative to the broader market in the near term [3]

INVESTOR PRESENTATION | FIRST QUARTER 2025 April 30, 2025 BANKING ● PRIVATE WEALTH MANAGEMENT ● TRUST SERVICES Safe Harbor Statement This report includes forward-looking statements within the meaning of the "Safe-Harbor" provisions of the Private Securities Litigation Reform Act of 1995, including forward-looking statements regarding our expectations and beliefs about our future financial performance and financial condition, potential loan sales, as well as trends in our business and markets. Forward-lookin ...

Group 1 - First Foundation (FFWM) reported quarterly earnings of $0.09 per share, exceeding the Zacks Consensus Estimate of $0.02 per share, representing an earnings surprise of 350% [1] - The company posted revenues of $71.4 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 11.91%, compared to year-ago revenues of $51.07 million [2] - Over the last four quarters, First Foundation has surpassed consensus EPS estimates three times and topped consensus revenue estimates three times [2] Group 2 - The stock has underperformed, losing about 20% since the beginning of the year, while the S&P 500 declined by 5.5% [3] - The current consensus EPS estimate for the coming quarter is $0.04 on $69.2 million in revenues, and $0.19 on $280.4 million in revenues for the current fiscal year [7] - The Zacks Industry Rank for Banks - Southwest is currently in the top 5% of over 250 Zacks industries, indicating a favorable outlook for the industry [8] Group 3 - The estimate revisions trend for First Foundation is currently unfavorable, resulting in a Zacks Rank 5 (Strong Sell) for the stock, suggesting expected underperformance in the near future [6] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Performance - Net income for Q1 2025 was $6.9 million, translating to earnings per share of $0.08 (basic and diluted) [2] - Total revenue for the quarter reached $71.4 million, an increase from $64.7 million in the prior quarter, driven by net interest margin expansion from 1.58% to 1.67% [7] - Noninterest income increased to $19.6 million for the quarter, compared to $13.4 million in the prior quarter, driven by a $4.7 million gain on the sale of securities [25] - Net interest income was $51.8 million for the quarter, up from $51.3 million in the prior quarter, while interest income decreased to $141.7 million [21] - The company reported a net income of $6,896 for Q1 2025, a significant recovery from a net loss of $14,111 in Q1 2024 [47] - Noninterest income for Q1 2025 was $19,602, an increase from $12,683 in Q1 2024, representing a growth of approximately 54.5% [47] - The company’s total noninterest expense for Q1 2025 was $61,721, compared to $50,609 in Q1 2024, reflecting an increase of approximately 21.9% [47] - Adjusted net income attributable to common shareholders for Q1 2025 was $7,121 thousand, compared to a loss of $13,873 thousand in Q4 2024 [59] Asset and Loan Management - Total loans amounted to $9.0 billion as of March 31, 2025, a decrease from $9.2 billion at the end of the previous quarter [9] - Total loans held for investment decreased to $7,684,580 as of March 31, 2025, down from $10,086,346 as of March 31, 2024, indicating a decline of approximately 23.9% [46] - Total loans outstanding decreased to $7,679,415,000 from $7,936,215,000 in the previous quarter [52] - Loan fundings totaled $180 million at an average yield of 7.09%, compared to $364 million at an average yield of 7.51% in the prior quarter [10] - Loan fundings significantly decreased to $179,614,000 from $364,475,000 in the previous quarter [53] Deposits and Funding - Total deposits decreased to $9.6 billion as of March 31, 2025, from $9.9 billion as of December 31, 2024, primarily due to a $400 million decrease in higher-cost brokered deposits [16] - Deposits decreased to $9,561,645 as of March 31, 2025, down from $10,638,970 as of March 31, 2024, a decline of approximately 10.1% [46] - Average deposits decreased to $9,775,877 thousand in Q1 2025 from $10,408,736 thousand in Q4 2024, a decline of 6.1% [54] Capital and Equity - Shareholders' equity totaled $1,060.6 million as of March 31, 2025, compared to $1,053.4 million as of December 31, 2024, reflecting a net income of $6.9 million for the quarter [38] - The common equity tier 1 risk-based capital ratio increased to 10.63% as of March 31, 2025, compared to 10.09% as of December 31, 2024 [37] - The total risk-based capital ratio improved to 14.04%, up from 13.34% in the prior quarter [4] - Tangible common equity increased to $969.717 million for the quarter ended March 31, 2025, compared to $962.156 million for December 31, 2024, reflecting a growth of 0.6% [63] - The equity to asset ratio improved to 8.43% for the quarter ended March 31, 2025, up from 8.33% in the previous quarter [63] Efficiency and Cost Management - The efficiency ratio improved to 86.0% for the quarter, compared to 103.1% for the prior quarter, indicating better cost management [31] - The efficiency ratio improved to 86.0% in Q1 2025 from 103.1% in Q4 2024, indicating better cost management [62] Credit Quality - Nonperforming assets to total assets ratio improved to 0.36%, down from 0.37% in the prior quarter [4] - Total nonperforming assets were $44.9 million as of March 31, 2025, down from $46.7 million in the prior quarter [33] - The allowance for credit losses on loans held for investment increased to $35.2 million, with a ratio of 0.46% of total loans held for investment [7] - The allowance for credit losses for investments was $4.0 million as of March 31, 2025, down from $4.1 million in the prior quarter [14] - Provision for credit losses decreased to $3,417,000 from $20,647,000 in the previous quarter [51] Market Recognition - First Foundation Advisors was recognized as one of the top registered investment advisory firms on the CNBC FA100 list for 2024 [8] Future Outlook - The company anticipates continued focus on expanding its client base and enhancing service offerings to drive future growth [42]

Financial Position - As of December 31, 2024, First Foundation Inc. had total assets of $12.6 billion, total loans of $9.2 billion, and total deposits of $9.9 billion[20]. - The company reported $5.4 billion in assets under management (AUM) and $1.2 billion in trust assets under advisement (AUA) as of December 31, 2024[20]. - Trust assets under management (AUA) totaled $1.1 billion as of December 31, 2024, providing cross-selling opportunities with investment advisory services[60]. - As of December 31, 2024, the company's available-for-sale securities portfolio was valued at $1.3 billion, with a net unrealized loss of $12.6 million[204]. Capital and Funding - In July 2024, First Foundation Inc. raised approximately $228 million in an equity capital raise, issuing 11,308,676 shares of common stock at $4.10 per share[29]. - As of September 30, 2024, stockholders approved an increase in authorized shares of common stock from 100 million to 200 million[30]. - FFB is prohibited from paying cash dividends that would cause it to become undercapitalized, and must obtain prior written approval from the FDIC and DFPI for any dividend payments[111]. - The company has a deferred tax asset of $76.7 million, which may not be fully realized if sufficient future taxable income is not achieved[194]. Lending and Investment Services - The company focuses on three primary lending channels: Commercial Real Estate (CRE), Commercial and Industrial (C&I), and Consumer loans[36]. - The CRE loan channel includes multifamily residential and non-owner occupied commercial real estate loans, with terms generally up to 10 years[37]. - The C&I loan channel supports small to moderate-sized businesses, with a focus on developing quality full-service banking relationships[43]. - The company offers commercial real estate loans secured by first trust deeds on nonresidential properties, typically with adjustable rates tied to independent indexes[44]. - Commercial loans are available for terms ranging from one to seven years, with underwriting based on borrower creditworthiness and cash flow[45][47]. - The company participates in Shared National Credits, which are multi-bank transactions for large loans, typically with terms from one to seven years[48]. - The company is an approved SBA and USDA lender, offering small business loans with a maximum amount of $250,000 through a streamlined process[49]. - The wealth management division focuses on creating diversified investment portfolios tailored to clients' objectives and risk tolerance[62]. Revenue Sources - The company’s investment advisory and wealth management services generated a stable source of diversified, fee-based, recurring revenues[20]. - Trust service fees provide additional sources of noninterest income, complementing investment and wealth management services[27]. Regulatory Environment - The company is subject to capital requirements, including a minimum Tier 1 leverage capital ratio of 4.00% and a total risk-based capital ratio of 10.50%[89]. - The capital conservation buffer requires an additional 2.5% of common equity tier 1 capital on top of minimum risk-weighted asset ratios to avoid constraints on dividends and executive compensation[89]. - The company must obtain prior approval from the Federal Reserve for significant acquisitions or mergers, ensuring regulatory compliance[87]. - The company is classified based on capital adequacy standards, with thresholds determining its capital category, such as well-capitalized or undercapitalized[96]. - The company is subject to supervision and regulation by both federal and state agencies, including the FDIC and DFPI, impacting its operational framework[83]. - The Dodd-Frank Act permanently increased the maximum deposit insurance amount to $250,000 per depositor[115]. Market Competition - The banking and investment advisory markets are highly competitive, dominated by larger national and regional banks with greater financial resources[67]. - The company competes primarily on the basis of personal service, offering an integrated platform of financial services that few competitors provide[68]. - The company faces intense competition from larger financial institutions, which may adversely affect its ability to attract and retain clients[200]. Economic and Financial Risks - The company's profitability is highly dependent on interest rate spreads and noninterest income, which are influenced by factors such as inflation and government policies[70]. - The Federal Reserve's monetary policies significantly influence the growth and performance of bank loans, investments, and deposits[74]. - Changes in interest rates could reduce the company's net interest margin and net interest income, impacting overall earnings[173]. - The company faces risks from potential loan defaults, which could necessitate charge-offs and adversely affect net income and financial condition[165]. - The allowance for credit losses (ACL) may not be adequate to cover actual losses, which could materially affect operating results[166]. - The company is geographically concentrated in five states, which increases exposure to local economic downturns[169]. - The company continues to monitor inflation and overall economic conditions, adjusting strategies as necessary[164]. Operational Risks - The company is susceptible to fraudulent activities and cybersecurity breaches, which could lead to financial losses and increased operational costs[208]. - The reliance on third-party service providers for critical systems poses a risk of operational interruptions, potentially harming client services and the company's reputation[210]. - Ineffective risk management processes could lead to significant losses and increased regulatory scrutiny[213]. - Natural disasters in key operational areas could disrupt business operations and negatively impact loan collateral values[214]. - Environmental liabilities associated with acquired properties could result in substantial costs and adversely affect financial condition[215]. Community Engagement - The company distributed approximately $321,000 in grants and donations through its Supporting our Communities program in 2024, contributing 3,499 volunteer hours and supporting a total of 226 organizations[154].

Core Insights - First Foundation (FFWM) reported a revenue of $64.68 million for the quarter ended December 2024, reflecting a year-over-year increase of 14.7% [1] - The company's EPS was -$0.17, a decline from $0.05 in the same quarter last year, indicating a significant earnings surprise of -666.67% compared to the consensus estimate of $0.03 [1] Financial Performance Metrics - The Efficiency Ratio (non-GAAP) was reported at 103.1%, exceeding the average estimate of 91.5% by three analysts [4] - Total interest-earning assets averaged $13.02 billion, surpassing the estimated $12.86 billion [4] - Net charge-offs to average loans were annualized at 0.7%, compared to the estimated 0% [4] - The Net Interest Margin was reported at 1.6%, aligning with the average estimate [4] - Total nonperforming assets amounted to $46.65 million, higher than the average estimate of $44.18 million [4] - Net interest income was $51.31 million, below the average estimate of $52.54 million [4] - Total noninterest income reached $13.37 million, exceeding the average estimate of $11.86 million [4] - Asset management, consulting, and other fees were reported at $9.27 million, slightly above the average estimate of $9.22 million [4] - Other income was $2.99 million, surpassing the estimated $2.42 million [4] Stock Performance - Over the past month, shares of First Foundation have returned +0.8%, compared to a +1.2% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 2 (Buy), suggesting potential outperformance against the broader market in the near term [3]

INVESTOR PRESENTATION December 2024 BANKING ● PRIVATE WEALTH MANAGEMENT ● TRUST SERVICES Safe Harbor Statement This report includes forward-looking statements within the meaning of the "Safe-Harbor" provisions of the Private Securities Litigation Reform Act of 1995, including forward-looking statements regarding our expectations and beliefs about our future financial performance and financial condition, potential loan sales, as well as trends in our business and markets. Forward-looking statements often inc ...