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 ...

Financial Performance - First Foundation Inc. reported a net loss of $14.1 million, or $0.17 per share, for Q4 2024, compared to a net loss of $82.2 million in Q3 2024[2]. - The company recorded an income tax benefit of $8.8 million for the quarter, with an annual effective tax rate of 32.7%[33]. - The net loss for Q4 2024 was $(14,111,000), compared to a net loss of $(82,174,000) in Q3 2024 and a net income of $2,548,000 in Q4 2023[49]. - Adjusted net loss attributable to common shareholders for Q4 2024 was $(13,873) thousand, compared to $2,679 thousand in Q3 2024 and $2,828 thousand in Q4 2023[62]. - Return on average assets for Q4 2024 was (2.44)%, compared to (0.42)% in Q3 2024 and 0.08% in Q4 2023[51]. - Return on average common equity for Q4 2024 was (5.8)%, down from (33.9)% in Q3 2024 and up from 1.1% in Q4 2023[63]. Income and Expenses - Net interest income for Q4 2024 was $51.3 million, an increase from $49.1 million in Q3 2024, with a net interest margin of 1.58%[8]. - Noninterest income totaled $13.4 million for the quarter, significantly impacted by a $117.5 million LOCOM adjustment in the previous quarter[26]. - Noninterest expense increased to $67.0 million from $60.2 million in the prior quarter, with a notable rise in compensation and benefits expense[28]. - Total noninterest expense for Q4 2024 was $66,989 thousand, an increase from $60,225 thousand in Q3 2024 and $55,892 thousand in Q4 2023[67]. - The efficiency ratio (non-GAAP) for the quarter was 103.1%, compared to 98.1% in the prior quarter, indicating increased operational costs relative to revenue[32]. Loans and Deposits - Total deposits decreased to $9.9 billion as of December 31, 2024, down from $10.3 billion at the end of Q3 2024[8]. - The loan to deposit ratio was 93.5% as of December 31, 2024, compared to 95.9% in the prior quarter[4]. - Loans held for investment decreased to $7,941.4 million as of December 31, 2024, from $10,177.8 million a year earlier[47]. - Total loans outstanding as of December 31, 2024, were $7,936,215, a decrease of 1.8% from $8,083,756 in the previous quarter[54]. - Loan originations for Q4 2024 were $364,475,000, slightly down from $366,313,000 in Q3 2024 but up from $338,829,000 in Q4 2023[51]. Capital and Assets - Total risk-based capital ratio improved to 13.87%, an increase of 160 basis points from the year-ago quarter[4]. - As of December 31, 2024, shareholders' equity totaled $1,053.4 million, a decrease from $1,069.8 million as of September 30, 2024, and $925.3 million as of December 31, 2023[39]. - Total assets as of December 31, 2024, were $12,645.3 million, down from $13,376.6 million as of September 30, 2024[47]. - Total liabilities decreased to $11,591.9 million as of December 31, 2024, from $12,306.8 million as of September 30, 2024[48]. - The tangible book value per common share decreased to $11.68 as of December 31, 2024, from $13.79 as of September 30, 2024[39]. Credit Quality - The allowance for credit losses to total loans held for investment increased to 0.41% as of December 31, 2024, following a $20.1 million provision for loan losses recorded during the quarter[8]. - Total nonperforming assets rose to $46.7 million, representing 0.37% of total assets, compared to 0.33% in the prior quarter[34]. - The allowance for credit losses for loans was $32.3 million, or 0.41% of total loans held for investment, up from 0.36% in the prior quarter[35]. - The provision for credit losses was $20,647,000 in Q4 2024, compared to a reversal of $282,000 in Q3 2024 and a provision of $229,000 in Q4 2023[49]. Market Recognition - First Foundation Advisors was recognized as a top registered advisory firm by Barron's and ranked seventeenth on CNBC's FA100 list[9].

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]