• Earnings per diluted share of $0.28 for the second quarter, $0.46 for the first six months
  • Strong growth in revenues 40% and income 146%
  • Another quarter of strong loan and deposit growth

 

IRVINE, Calif.--(BUSINESS WIRE)--First Foundation Inc. (NASDAQ: FFWM), a financial services company with two wholly-owned operating subsidiaries, First Foundation Advisors (“FFA”) and First Foundation Bank (“FFB”), announced today its financial results for the quarter and six months ended June 30, 2017.

“We generated another strong quarter of results with revenue growth of 40% and income growth of 146%. These results are a continued validation of the strength of our platform and our outstanding team,” said Scott F. Kavanaugh, CEO. “We are excited about expanding our existing footprint in the Sacramento community upon the acquisition of Community 1st Bank, which is expected to close later this year.”

Highlights

Financial Results:

  • 2017 second quarter compared to 2016 second quarter:
    • Earnings were $9.6 million, an increase of 146%
    • Earnings per fully diluted share were $0.28, compared to $0.10 in 2016
    • Total revenues (net interest income and noninterest income) were $37.6 million, an increase of 40%
    • Net interest income was $27.9 million, an increase of 27%
  • 2017 first six months compared to 2016 first six months:
    • Earnings were $15.7 million, an increase of 104%
    • Earnings per fully diluted share were $0.46, compared to $0.21 in 2016
    • Total revenues were $71.4 million, an increase of 34%
    • Net interest income was $54.0 million, an increase of 31%
  • 2017 Financial ratios:
    • Return on average equity of 12.6% for the second quarter and 10.6% for the first six months
    • Return on average assets of 1.00% for the second quarter and 0.85% for the first six months
    • Efficiency ratio of 59.1% for the second quarter and 65.7% for the first six months
    • Total shareholders’ equity of $317 million, tangible book value of $9.22 per share, and tangible common equity to tangible assets of 8.07%, in each case, as of June 30, 2017

Other Activity:

  • Assets under management (“AUM”) at FFA increased by $418 million in the first six months of 2017
  • Deposits increased by $681 million in the first six months of 2017
  • Loan originations totaled $816 million in first six months of 2017
  • $153 million of loans were sold in the second quarter, with a gain of $2.1 million realized

“In the second quarter, FFA reached the milestone of $4 billion in assets under management which was accomplished by new account activity and gains in our portfolios,” said John Hakopian, President of FFA. “As we look forward to the remainder of the year, we anticipate continued growth in our AUM from our strong pipeline of new business.”

Details of Growth

  • The $418 million growth in AUM during the first six months of 2017 was the result of $245 million of new accounts and $251 million of portfolio gains which were partially offset by terminations and net withdrawals of $79 million.
  • Total loans, including loans held for sale, increased $435 million during the first six months of 2017 as a result of $816 million of originations and $8 million of purchases which were partially offset by the sale of $174 million of multifamily loans and payoffs or scheduled payments of $215 million.
  • The $681 million growth in deposits during the first six months of 2017 is broken down as follows: $262 million increase in noninterest bearing demand deposits; $38 million increase in interest bearing demand deposits; $162 million increase in money market and savings accounts; and $218 million increase in certificate of deposit accounts. Specialty deposits increased by $358 million or 39% while branch deposits increased by $146 million or 13%.

“The success of our deposit platform is evidenced by the strong growth in both our specialty and branch deposits,” said David DePillo, President of FFB. “We also continued to grow our loan portfolio and have been successful in managing our portfolio levels through loan sales.”

About First Foundation

First Foundation, a financial institution founded in 1990, provides personal banking, business banking and private wealth management. The Company has offices in California, Nevada and Hawaii with headquarters in Irvine, California. For more information, please visit www.ff-inc.com .

We have two business segments, “Banking” and “Investment Management and Wealth Planning” (“Wealth Management”). Banking includes the operations of FFB and First Foundation Insurance Services, and Wealth Management includes the operations of FFA. The financial position and operating results of the stand-alone holding company, FFI, are included under the caption “Other” in certain of the tables that follow, along with any consolidation elimination entries.

Forward-Looking Statements

Statements in this news release regarding our expectations and beliefs about our future financial performance and financial condition, as well as trends in our business and markets are "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements often include words such as "believe," "expect," "anticipate," "intend," "plan," "estimate," "project," or words of similar meaning, or future or conditional verbs such as "will," "would," "should," "could," or "may." The forward looking statements in this news release are based on current information and on assumptions that we make about future events and circumstances that are subject to a number of risks and uncertainties that are often difficult to predict and beyond our control. As a result of those risks and uncertainties, our actual financial results in the future could differ, possibly materially, from those expressed in or implied by the forward looking statements contained in this news release and could cause us to make changes to our future plans. Those risks and uncertainties include, but are not limited to, the risk of incurring loan losses, which is an inherent risk of the banking business; the risk that we will not be able to continue our internal growth rate; the risk that we will not be able to access the securitization market on favorable terms or at all; the risk that the economic recovery in the United States will stall or will be adversely affected by domestic or international economic conditions and risks associated with the Federal Reserve Board taking actions with respect to interest rates, any of which could adversely affect our interest income and interest rate margins and, therefore, our future operating results; the risk that the performance of our investment management business or of the equity and bond markets could lead clients to move their funds from or close their investment accounts with us, which would reduce our assets under management and adversely affect our operating results; and risks associated with seeking new client relationships and maintaining existing client relationships. Additional information regarding these and other risks and uncertainties to which our business and future financial performance are subject is contained in Item 1A, entitled “Risk Factors” in our 2016 Annual Report on Form 10-K for the fiscal year ended December 31, 2016 that we filed with the SEC on March 15, 2017, and other documents we file with the SEC from time to time. We urge readers of this news release to review the Risk Factors section of that Annual Report and the Risk Factors section of other documents we file with the SEC from time to time. Also, our actual financial results in the future may differ from those currently expected due to additional risks and uncertainties of which we are not currently aware or which we do not currently view as, but in the future may become, material to our business or operating results. Due to these and other possible uncertainties and risks, readers are cautioned not to place undue reliance on the forward-looking statements contained in this news release, which speak only as of today's date, or to make predictions based solely on historical financial performance. We also disclaim any obligation to update forward-looking statements contained in this news release or in the above-referenced 2016 Annual Report on Form 10-K, whether as a result of new information, future events or otherwise, except as may be required by law or NASDAQ rules.

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