First Foundation Q4 Revenue Flat, CEO Emphasizes Merger Plans
Reports Q4 revenue $64.68M vs. $64.68M a year ago. Adjusted tangible book value per common share was $8.10 vs. $8.16 last quarter and $9.36 a year ago. Q4 et interest margin was 1.36% vs. 1.60% for the prior quarter. CEO Thomas Shafer said, "Q4 was shaped by our announcement in October of the pending merger with FirstSun Capital Bancorp. Our entire team has been focused on integration planning and preparing to make this next chapter an outstanding experience for our clients, team members, and shareholders. The announcement gave us the ability to accelerate actions we have previously discussed for our balance sheet transformation. These actions have significantly reduced our reliance on high-cost funding and reduced our loan-to-deposit ratio to 75.3%. We are confident as we look forward in our ability to deliver first-quartile performance as we continue serving some of the best markets in the country with a full suite of complimentary products and services." CFO Jamie Britton said, "2025 brought significant change to First Foundation's balance sheet and risk profile. Meaningful progress towards selling $1.9B of our multifamily loan portfolio reduced our CRE concentration below 350%; continued focus on reducing our high-dollar, rate-sensitive deposit balances improved our funding profile and in conjunction with targeted hedging strategies brought our structural interest rate risk positioning in line with our peers; our ACL improved to 1.39% of loans; and total risk-based capital ended the year at 15.51%..."
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First Foundation Reports Q4 Losses and Declining Metrics
- Earnings Miss: First Foundation's Q4 non-GAAP EPS of -$0.04 missed expectations by $0.07, indicating a significant decline in profitability that may undermine investor confidence.
- Revenue Decline: The company reported Q4 revenue of $48.4 million, a 25.2% year-over-year drop, missing expectations by $9.95 million, reflecting weakened market demand and intensified competition pressures.
- Decreased Net Interest Income: Net interest income for the quarter was $39.4 million, down from $46.1 million in the prior quarter and $51.3 million year-over-year, highlighting challenges faced by the company in a changing interest rate environment.
- Rising Nonperforming Assets: As of December 31, 2025, nonperforming assets to total assets ratio increased to 0.37% from 0.33% in the prior quarter, indicating a deterioration in asset quality that could impact future lending capabilities.
Investor Rights Investigation: Multiple Company Transactions
- Legal Investigation Launched: Halper Sadeh LLC is investigating First Foundation Inc. (NYSE:FFWM) regarding its sale to FirstSun Capital Bancorp, which involves an exchange of 0.16083 shares of FirstSun common stock per share of First Foundation, potentially indicating breaches of fiduciary duties to shareholders.
- Cash Acquisition Scrutiny: Clearwater Analytics Holdings, Inc. (NYSE:CWAN) is being sold to Permira and Warburg Pincus for $24.55 per share in cash, with Halper Sadeh LLC possibly seeking increased consideration for shareholders in this transaction.
- Shareholder Rights Protection: The sale of Flushing Financial Corp. (NASDAQ:FFIC) to OceanFirst Financial Corp. involves an exchange of 0.85 shares of OceanFirst common stock for each share of Flushing, prompting Halper Sadeh LLC to encourage shareholders to contact them to learn about their legal rights and options.
- Legal Fee Arrangement: Halper Sadeh LLC will handle these cases on a contingent fee basis, ensuring that shareholders are not responsible for any out-of-pocket legal fees or expenses, aiming to provide support for affected investors.
