Core Viewpoint - First Foundation (FFWM) has been upgraded to a Zacks Rank 2 (Buy), indicating a positive outlook based on rising earnings estimates, which significantly influence stock prices [1][2]. Earnings Estimates and Stock Price Movement - The Zacks rating system emphasizes the correlation between changes in earnings estimates and stock price movements, making it a valuable tool for investors [2][3]. - Institutional investors often rely on earnings estimates to determine a company's fair value, leading to stock price fluctuations based on their buying or selling actions [3]. Company Performance and Outlook - The upgrade for First Foundation reflects an improvement in its underlying business, suggesting that investor sentiment may drive the stock price higher [4]. - For the fiscal year ending December 2024, First Foundation is expected to earn $0.13 per share, which represents a decrease of 58.1% from the previous year [7]. Zacks Rank System - The Zacks Rank system categorizes stocks based on earnings estimate revisions, with a strong historical performance, particularly for Zacks Rank 1 stocks, which have averaged a +25% annual return since 1988 [6]. - The upgrade to Zacks Rank 2 places First Foundation in the top 20% of Zacks-covered stocks, indicating a strong potential for near-term price appreciation [9].

Financial Performance - For the quarter ended September 30, 2024, the Company reported a net loss of $82.2 million, compared to net income of $3.1 million for the prior quarter and net income of $2.2 million for the quarter ended September 30, 2023[151]. - For the nine months ended September 30, 2024, the company reported a net loss of $78.3 million, compared to a net loss of $201.6 million for the same period in 2023, indicating an improvement[162]. - The company recorded a combined net loss before income taxes of $114.4 million for the nine months ended September 30, 2024, compared to a loss of $200.3 million in the previous year[162]. Interest Income and Expenses - Net interest income after provision for credit losses increased by $4.2 million or 9.4% compared to the prior quarter, totaling $48.8 million for the quarter ended September 30, 2024[151]. - Interest income increased by $31.4 million or 7.4% year-over-year, reaching $458.5 million, but was offset by a $59.9 million or 22.4% increase in interest expense[162]. - The company reported a total interest expense of $108.037 million for Q3 2024, compared to $92.692 million in Q3 2023, an increase of approximately 16.5%[167]. Asset and Liability Management - Total assets at September 30, 2024, were $13.4 billion, including $8.1 billion of loans held for investment and $1.8 billion in loans held for sale[152]. - Total liabilities decreased by $95.1 million or 0.8% for the nine-month period ended September 30, 2024, primarily due to a $0.4 billion decrease in deposits[154]. - The loan to deposit ratio was 95.9% as of September 30, 2024, compared to 95.2% as of December 31, 2023[154]. Shareholders' Equity - As of September 30, 2024, total shareholders' equity increased to $1.1 billion, a rise of $144.5 million or 15.6% from $925.3 million at December 31, 2023, primarily due to a capital raise of $228 million[155]. - Shareholders' equity stood at $1,069,797 as of September 30, 2024[192]. Credit Losses and Provisions - The allowance for credit losses (ACL) related to loans held for investment totaled $29.3 million, with a coverage ratio of ACL to total loans held for investment increasing from 29 basis points to 36 basis points[151]. - The provision for credit losses for the nine months ended September 30, 2024, was $53 thousand, compared to a reversal of $0.7 million in the prior year[163]. - The allowance for credit losses on loans held for investment totaled $29.3 million as of September 30, 2024, slightly up from $29.2 million at December 31, 2023[164]. Noninterest Income - Noninterest income, excluding the LOCOM adjustment, totaled $11.9 million for the quarter ended September 30, 2024, compared to $13.7 million for the prior quarter[151]. - Noninterest income for the nine months ended September 30, 2024, was $38.3 million, an increase from $35.5 million in the prior year[162]. - Noninterest income for Banking was $(112.9) million in Q3 2024, significantly lower than $4.6 million in Q3 2023, impacted by a $117.5 million LHFS LOCOM adjustment[182]. Loan Portfolio - The multifamily loan portfolio totaling $1.9 billion was reclassified from loans held for investment to loans held for sale, with loans held for sale totaling $1.8 billion as of September 30, 2024[205]. - Total loans decreased by $300.5 million to $8.1 billion at September 30, 2024, compared to $10.2 billion at December 31, 2023, due to loan fundings of $1.2 billion offset by loan payments of $1.4 billion[206]. - The average current loan-to-value (LTV) ratio for multifamily loans was 53.2% as of September 30, 2024, compared to 54.9% at December 31, 2023[207]. Deposits and Borrowings - Total deposits decreased by approximately $384 million to $10.3 billion at September 30, 2024, compared to $10.7 billion at December 31, 2023[212]. - Brokered deposits totaled $3.7 billion at September 30, 2024, down from $4.2 billion at December 31, 2023, including insured cash sweep accounts[213]. - Total borrowings increased to $1.5 billion with a weighted average interest rate of 4.08% for the nine-month period ended September 30, 2024, compared to $1.2 billion and 4.67% for the year ended December 31, 2023[219]. Capital and Regulatory Ratios - The total risk-based capital ratio as of September 30, 2024, is 13.81%, exceeding the regulatory minimum of 8.00%[254]. - The Common Equity Tier 1 ratio as of September 30, 2024, is 13.41%, well above the required minimum of 4.50%[254]. - As of September 30, 2024, FFB has $598 million in excess capital above the well-capitalized requirements for the Common Equity Tier 1 ratio[262]. Operational Efficiency - Noninterest expense in Banking for Q3 2024 was $53.2 million, a decrease of $4.8 million from $58.0 million in Q3 2023, primarily due to a $5.7 million decrease in customer service costs[186]. - Average Banking FTEs decreased to 492.3 for the nine-month period ended September 30, 2024, from 551.2 in the prior year, reflecting staffing reductions aimed at maximizing efficiency[189]. - The increase in other expenses in Banking was largely due to a $6.2 million rise in FDIC insurance costs compared to the previous year[189]. Future Outlook - The company intends to explore opportunities for growth, including opening additional offices or acquiring complementary businesses[264]. - The modeled NII results indicate that the Bank is more sensitive to earnings in rising rate scenarios[249].

Core Viewpoint - Momentum investing focuses on "buying high and selling higher" rather than traditional strategies of "buying low and selling high" [1] Group 1: Momentum Investing Strategy - Momentum investors often face challenges in determining the right entry point for fast-moving stocks, which can lose momentum if future growth does not justify high valuations [2] - Investing in bargain stocks that have recently shown price momentum can be a safer strategy, utilizing tools like the Zacks Momentum Style Score to identify potential opportunities [3] Group 2: First Foundation (FFWM) Stock Analysis - First Foundation (FFWM) has shown a price increase of 2.4% over the past four weeks, indicating growing investor interest [4] - Over the past 12 weeks, FFWM's stock gained 9.4%, demonstrating its ability to deliver positive returns over a longer timeframe [5] - FFWM has a Momentum Score of A, suggesting it is an opportune time to invest in the stock for potential success [6] Group 3: Earnings Estimates and Valuation - An upward trend in earnings estimate revisions has contributed to FFWM earning a Zacks Rank 2 (Buy), indicating strong momentum among stocks with similar rankings [7] - FFWM is currently trading at a Price-to-Sales ratio of 0.69, suggesting it is undervalued as investors pay only 69 cents for each dollar of sales [7] Group 4: Additional Investment Opportunities - Besides FFWM, there are other stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen, presenting additional investment opportunities [8] - The Zacks Premium Screens offer over 45 different strategies tailored to help investors find winning stock picks [9]

Financial Data and Key Metrics Changes - The company reported a net loss attributable to common shareholders of $82.2 million or $1.23 per share for both basic and diluted shares [11] - Tangible book value per share ended the quarter at $15.71, down from $16.43 in the previous quarter [11] - Net interest margin increased to 1.5% from 1.36% in the previous quarter [13] - Total deposits decreased to $10.3 billion from $10.8 billion in the previous quarter [15] - Non-performing assets to total assets ratio increased to 0.33% from 0.18% in the previous quarter [18] Business Line Data and Key Metrics Changes - Interest income totaled $157.2 million for the quarter, up from $150.9 million in the previous quarter [12] - C&I loans accounted for 90% of loan fundings during the quarter [19] - Loan balances ended the quarter at $9.9 billion, down from $10.1 billion in the previous quarter [19] - Wealth and trust-related fees remained stable at $9.2 million [41] Market Data and Key Metrics Changes - The company maintained a strong liquidity position of $4.3 billion [16] - Core non-brokered deposits increased to 64% from 62% in the previous quarter [15] - Non-interest-bearing demand deposits increased to 21% of total deposits from 20% in the previous quarter [15] Company Strategy and Development Direction - The company is focused on reducing exposure to low coupon fixed-rate loans and commercial real estate [7] - A balance sheet realignment involved moving $1.9 billion of multifamily loans from held for investment to available for sale [6] - The company plans to explore loan sales and securitizations in 2025 to unlock value [51][52] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the potential for reduced funding costs in the fourth quarter following the Federal Reserve's rate cut [10] - The company is committed to maintaining a disciplined approach to core expenses while pursuing strategic investments for future growth [47] - Management believes that the current economic environment presents opportunities for growth, particularly in C&I lending [60] Other Important Information - The company completed a $228 million capital raise during the quarter [6] - A $117.5 million charge related to the fair value adjustment on the multifamily loans was recorded [42] - The company is exploring direct private party loan sales to reduce fixed-rate asset exposure [55] Q&A Session Summary Question: Timeline for optimizing loans - Management indicated that there is no set timeline for optimizing loans but is willing to take time to ensure best execution [90][92] Question: Impact of ECR deposits on expenses - Management confirmed that ECR deposits are around $1.4 billion to $1.5 billion and will respond quickly to rate cuts [96] Question: Growth trajectory excluding multifamily move - Management plans to add bankers in key markets to enhance organic growth, particularly in C&I lending [99] Question: ACL methodology review - Management acknowledged a more pragmatic approach to ACL increases over time, balancing regulatory and accounting considerations [102] Question: Use of proceeds from securitization - Proceeds from securitization will be used to reduce exposure to wholesale funding [105]

| --- | --- | |----------------------------------------------------|-------| | | | | | | | | | | | | | | | | INVESTOR PRESENTATION FIRST October 2024 DUNDATION | | 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 forwar statements regarding our expectations and beliefs about our future financial performance and financial condition, potential loan sales, as well as strend ...

Core Viewpoint - First Foundation (FFWM) reported a revenue of $61.06 million for Q3 2024, reflecting a year-over-year decline of 4.3%, while EPS was $0.04 compared to $0.05 a year ago, indicating a significant EPS surprise of +113.79% against a consensus estimate of -$0.29 [1]. Financial Performance Metrics - Efficiency Ratio (non-GAAP) was reported at 98.1%, slightly above the average estimate of 97.2% from three analysts [3]. - Average Balances of total interest-earning assets reached $13.20 billion, exceeding the three-analyst average estimate of $13.01 billion [3]. - Net charge-offs to average loans were reported at 0%, matching the average estimate of 0% from three analysts [3]. - Net Interest Margin stood at 1.5%, consistent with the average estimate from three analysts [3]. - Total nonperforming assets amounted to $44.40 million, significantly higher than the two-analyst average estimate of $27.24 million [3]. - Net interest income was reported at $49.12 million, slightly above the average estimate of $48.68 million from three analysts [3]. - Total Noninterest income reached $11.94 million, marginally exceeding the average estimate of $11.91 million from three analysts [3]. - Asset management, consulting, and other fees were reported at $9.16 million, above the two-analyst average estimate of $9.09 million [3]. - Other income was $2.79 million, surpassing the two-analyst average estimate of $2.57 million [3]. Stock Performance - Shares of First Foundation have increased by +24.5% over the past month, outperforming the Zacks S&P 500 composite, which saw a change of +1.7% [4]. - The stock currently holds a Zacks Rank 2 (Buy), suggesting potential for outperformance in the near term [4].

Company Performance - First Foundation (FFWM) reported quarterly earnings of $0.04 per share, exceeding the Zacks Consensus Estimate of a loss of $0.29 per share, and compared to earnings of $0.05 per share a year ago, representing an earnings surprise of 113.79% [1] - The company posted revenues of $61.06 million for the quarter ended September 2024, surpassing the Zacks Consensus Estimate by 0.75%, although this is a decrease from year-ago revenues of $63.77 million [2] - Over the last four quarters, First Foundation has surpassed consensus EPS estimates four times and topped consensus revenue estimates two times [2] Stock Performance and Outlook - First Foundation shares have declined approximately 19.7% since the beginning of the year, while the S&P 500 has gained 22.1% [3] - The company's earnings outlook is crucial for investors, with current consensus EPS estimates at $0.06 on $66.33 million in revenues for the coming quarter and -$0.13 on $235.93 million in revenues for the current fiscal year [7] Industry Context - The Banks - Southwest industry, to which First Foundation belongs, is currently ranked in the top 6% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, suggesting that the industry outlook can significantly impact stock performance [5][8]

First Foundation Inc. (NYSE: FFWM) October 29, 2024 Graphic (a) Non-GAAP measure. See "Non-GAAP Financial Measures" below (b) Dollars in thousands, except per share data and ratios Exhibit 99.1 FIRST FOUNDATION INC. REPORTS THIRD QUARTER 2024 RESULTS ● Raised approximately $228 million of gross proceeds in an equity capital raise. ● Reclassified a portion of the multifamily loan portfolio totaling $1.9 billion in principal balance from loans held for investment to loans held for sale and recorded an associa ...

First Foundation (FFWM) is expected to deliver a year-over-year decline in earnings on lower revenues when it reports results for the quarter ended September 2024. This widely-known consensus outlook gives a good sense of the company's earnings picture, but how the actual results compare to these estimates is a powerful factor that could impact its near-term stock price.The earnings report, which is expected to be released on October 29, 2024, might help the stock move higher if these key numbers are better ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2024 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-36461 FIRST FOUNDATION INC. (Exact name of Registrant as specified in its charter) Delaware 20-8639702 (State o ...