The following is a summary of the First Foundation Inc. (FFWM) Q3 2024 Earnings Call Transcript:
Financial Performance:
First Foundation reported a net loss of $82.2 million, or $1.23 per share.
Net interest income improved to $157.2 million in Q3.
Business Progress:
Focused on C&I lending and raised $228 million in capital early in Q3.
Moved $1.9 billion in multifamily loans to available for sale to lessen fixed rate asset exposure.
Opportunity:
Recent Fed's 50 basis points rate cut could lower interest costs, boosting future profitability.
Plans to securitize $500 million of loans to enhance financial flexibility.
Risk:
Recorded a substantial net loss of $82.2 million and a paper loss adjustment of $117.5 million.
Economic instability and market volatility could hinder efforts to reduce high-cost funding.
Financial Performance:
First Foundation reported a net loss of $82.2 million or $1.23 per share.
Net interest income totaled $157.2 million for Q3, which is an improvement over the previous quarter.
Tangible book value was reported at $15.71, decreasing from $16.43 in Q2 2024.
Interest-bearing liabilities cost declined to 4.29% in Q3, compared to 4.30% in Q2.
Total deposits decreased from $10.8 billion in Q2 to $10.3 billion in Q3, with a loan to deposit ratio of 95.9%.
Adjusted return on average assets was 0.08, from 0.10 as of June 30, 2024.
Business Progress:
Continued focus on C&I lending led to significant spreads over funding costs. Completed a $228 million capital raise early in the quarter.
Moved $1.9 billion of multifamily loans to available for sale, taking steps towards reducing exposure to fixed rate assets.
Proceeds from planned loan securitization will be used to reduce reliance on high-cost wholesale funding and broker deposits.
Opportunities:
The positive impact of the Fed's recent 50 basis points rate cut, reducing interest costs and potentially increasing profitability in the coming quarters.
Strong assets under management in First Foundation Advisors at $5.5 billion are expected to support future profitability.
Plan to securitize approximately $500 million of loans which can enhance financial flexibility and reduce wholesale funding reliance.
Growing C&I lending and reducing fixed rate exposure aligns with market movements and opportunities for improved interest margin.
Risks:
Net loss of $82.2 million and paper loss adjustment of $117.5 million due to realignment actions of loan portfolios may impact short-term profitability.
Economic fluctuations and market volatility could affect future earnings and the company's ability to reduce its high-cost funding efficiently.
Tips: For more comprehensive details, please refer to the IR website. The article is only for investors' reference without any guidance or recommendation suggestions.
