8-K
First Foundation Inc. (FFWM)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 29, 2026
FIRST FOUNDATION INC.
(Exact name of registrant as specified in its charter)
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| Delaware | | 001-36461 | | 20-8639702 |
| (State or other jurisdiction<br><br>of incorporation) | | (Commission<br><br>File Number) | | (IRS Employer<br><br>Identification Number) |
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| 5221 N. O’Connor Blvd. #1378 | | |
| Irving , Texas | | 75201 |
| (Address of Principal Executive Offices) | | (Zip Code) |
( 469 ) 638-9636
(Registrant’s Telephone Number, Including Area Code)
N/A
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
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| Title of each class | | Trading Symbol(s) | | Name of each exchange on which registered |
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| Common Stock | | FFWM | | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
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| Item 2.02 | Results of Operations and Financial Condition |
On January 29, 2026, First Foundation Inc. (“the Company”) issued an earnings release reporting its consolidated financial results as of and for the quarter and year ended December 31, 2025. A copy of that earnings release is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.
In accordance with General Instruction B.2 of Form 8-K, the information contained in this Current Report on Form 8-K, including Exhibit 99.1, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section, and such information and that Exhibit shall not be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended.
| Item 9.01 | Financial Statements and Exhibits |
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| Exhibit No. | | Description |
| 99.1 | Earnings Release dated January 29, 2026 announcing the consolidated financial results of First Foundation Inc. as of and for the quarter and year ended December 31, 2025. | |
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| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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| | | FIRST FOUNDATION INC. | |
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| Date: January 29, 2026 | | By: | /s/ JAMIE BRITTON |
| | | | Jamie Britton |
| | | | Executive Vice President and<br><br>Chief Financial Officer |
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First Foundation Inc.<br>(NYSE: FFWM)<br><br>January 29, 2026 |
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Exhibit 99.1
FIRST FOUNDATION INC. REPORTS FOURTH QUARTER AND FULL YEAR 2025 RESULTS
| ● | Net loss of $8.0 million for the quarter or loss per share of $0.10 (basic and diluted) was reflective of hedging and merger-related costs ($8.5 million and $6.1 million) taken through net interest income, noninterest income and noninterest expense. |
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| ● | Total net interest income of $39.4 million for the quarter, compared to $46.1 million in the prior quarter, declined primarily due to $6.1 million in costs for hedging the balance sheet’s interest rate risk position in anticipation of the pending merger with FirstSun. Coupled with a $2.1 million quarter-over-quarter decline in customer service costs, core balance sheet contribution excluding these costs remained stable. |
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| ● | Completed $204.8 million multifamily loan securitization, substantially completing the planned $1.9 billion reduction in the multifamily loan portfolio. The held-for-sale loan portfolio ended the year at $261.4 million. |
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| ● | The ratio of the allowance for credit losses to loans held for investment was 1.39% and total risk-based capital increased to 15.51% at year end, demonstrating our continued commitment to strengthening our risk-capital balance. |
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| 4Q25 Key Financial Data | Highlights |
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| Profitability Metrics | | 4Q25 | | 3Q25 | | 4Q24 |
| Return on average assets (%) | (0.27) | | (4.90) | | (0.42) | |
| Adjusted return on average assets (%)^(a)^ | | (0.12) | | (4.90) | | (0.42) |
| Return on average common equity (%) | (3.9) | | (60.6) | | (5.8) | |
| Return on average tangible common equity (%)^(a)^ | (1.7) | | (60.7) | | (5.7) | |
| Net interest margin (%) | 1.36 | | 1.60 | | 1.58 | |
| Efficiency ratio (%)^(a)^ | 116.9 | | 90.0 | | 103.1 | |
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| Income Statement ^(b)^ **** | **** | 4Q25 | | 3Q25 | | 4Q24 |
| Net interest income | $ 39,444 | | $ 46,078 | | $ 51,310 | |
| Noninterest income | $ 8,914 | | $ 17,519 | | $ 13,367 | |
| Net loss attributable to common shareholders | ($ 8,040) | | ($ 146,323) | | ($ 14,111) | |
| Adjusted net (loss) income attributable to common shareholders^(a)^ | | ($ 3,470) | | ($ 146,125) | | ($ 13,873) |
| Loss per share | ($ 0.10) | | ($ 1.78) | | ($ 0.17) | |
| Adjusted (loss) earnings per share (basic) ^(a)^ | | ($ 0.04) | | ($ 1.77) | | ($ 0.17) |
| Adjusted (loss) earnings per share (diluted) ^(a)^ | ($ 0.04) | | ($ 1.77) | | ($ 0.17) | |
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| Balance Sheet ^(b)^ | **** | 4Q25 | | 3Q25 | | 4Q24 |
| Total loans | $ 6,990,626 | | $ 7,769,691 | | $ 9,227,212 | |
| Total deposits | $ 9,284,570 | | $ 9,293,071 | | $ 9,870,279 | |
| Loan to deposit ratio | | 75.3% | | 83.6% | | 93.5% |
| Net charge-off ratio | 0.01% | | 0.03% | | 0.70% | |
| Book value per common share | | $ 11.01 | | $ 11.10 | | $ 12.79 |
| Tangible book value per common share^(a)^ | $ 9.93 | | $ 10.02 | | $ 11.68 | |
| Tangible book value per common share (adjusted) ^(a)^ | | $ 8.10 | | $ 8.16 | | $ 9.36 |
| Total risk-based capital ratio | 15.51% | | 14.65% | | 13.34% | |
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| ●<br><br>Planning for the announced merger with FirstSun Capital Bancorp is well underway and ready for close early in the second quarter, subject to the receipt of necessary regulatory and shareholder approvals. Teams from both sides are partnering to plan for important balance sheet re-positioning and a smooth transition to a higher profitability business model and mix. We remain confident in the combined entity’s ability to deliver EPS accretion and improved return metrics.<br><br>●<br><br>Continued strong credit performance with net charge-offs of only $0.2 million in the quarter.<br><br>●<br><br>Nonperforming assets to total assets of 0.37% for the quarter, compared to 0.33% for the prior quarter and 0.37% for the year-ago quarter.<br><br>●<br><br>Due to targeted reductions in our shared national credit portfolio, execution of our latest securitization, ongoing efforts to reduce high-cost deposits, and our on-balance sheet hedging strategy, the loan to deposit ratio was 75.3% as of December 31, 2025, compared to 83.6% as of September 30, 2025, and 93.5% as of December 31, 2024.<br><br>●<br><br>Our focus on improving the balance sheet also resulted in strengthened liquidity and capital positions:<br><br>-<br><br>Total liquidity of $5.1 billion as of December 31, 2025.<br><br>-<br><br>Liquidity to uninsured and uncollateralized deposits ratio of 3.99x<br><br>-<br><br>Total risk-based capital ratio of 15.51%<br><br>●<br><br>Net interest margin of 1.36% for the quarter, compared to 1.60% for the prior quarter, but core balance sheet contribution remained stable quarter over quarter. |
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| (a)<br><br>Non-GAAP measure. See “Non-GAAP Financial Measures” below<br><br>(b)<br><br>Dollars in thousands, except per share data and ratios<br><br>(c)<br><br>Capital ratios for 12/31/25 are preliminary |
DALLAS, TX – First Foundation Inc. (NYSE: FFWM), a financial services company with two wholly-owned operating subsidiaries, First Foundation Advisors (“FFA”) and First Foundation Bank (“FFB”), reported a net loss of $8.0 million, or ($0.10) per share (basic and diluted) for the fourth quarter of 2025.
| Thomas C. Shafer CEO | “The fourth quarter 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.”<br><br> |
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| Jamie Britton CFO | “2025 brought significant change to First Foundation’s balance sheet and risk profile. Meaningful progress towards selling $1.9 billion 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%. I am proud of our teammates and thankful for their continued focus on strengthening our institution. Their efforts are critical to ensuring a smooth integration with FirstSun and will accelerate realization of the opportunities ahead.”<br><br> |
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| Investor contact: Jamie Britton, jbritton@ff-inc.com | 949-476-0300 | |  |
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First Foundation Inc.<br>(NYSE: FFWM)<br><br>January 29, 2026 |
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| 4Q25 Highlights | |||
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| Financial Results: | |||
| ●<br><br>Total revenue of $48.4 million for the quarter, compared to $63.6 million in the prior quarter, and $64.7 million in the year-ago quarter.<br><br>●<br><br>Net interest income of $39.4 million for the quarter, compared to $46.1 million in the prior quarter, and $51.3 million in the year-ago quarter. The decrease in net interest income from the prior quarter was due largely to a 29 basis point decrease in average interest-earning asset yields, offset partially by a 14 basis point decrease in average interest-bearing liability rates.<br><br>●<br><br>Net interest margin (“NIM”) decreased to 1.36% for the quarter, down from 1.60% in the prior quarter.<br><br>●<br><br>The allowance for credit losses (“ACL”) on loans held for investment totaled $93.9 million as of December 31, 2025, compared to $101.9 million at prior quarter-end. The ratio of ACL to total loans held for investment was 1.39% as of December 31, 2025 and 1.40% as of September 30, 2025.<br><br>●<br><br>Income tax expense was $32 thousand for the quarter, compared to $87.4 million for the prior quarter. The prior quarter expense included the impact of recording a deferred tax asset valuation allowance against the entire net deferred tax assets balance of $98.7 million.<br><br>●<br><br>Noninterest expense to average total assets (annualized) of 2.10% for the quarter, compared to 1.93% for the prior quarter and compared to 2.02% for the year-ago quarter. Noninterest expense totaled $62.9 million for the quarter, compared to $57.5 million in the prior quarter, and $67.0 million in the year-ago quarter.<br><br>●<br><br>Customer service costs decreased to $7.0 million during the quarter, compared to $9.1 million in the prior quarter, and $17.8 million in the year-ago quarter. The decrease was in part due to a meaningful reduction of a portion of the deposits ($0.5 billion) associated with these costs in the second quarter of 2025 in conjunction with a final loan sale transaction.<br><br>●<br><br>Noninterest income was $8.9 million for the quarter, compared to $17.5 million in the prior quarter. The decrease was primarily due in part to $4.7 million income on capital market activities during the prior quarter, compared to a $1.1 million loss on such activities during the current quarter.<br><br>●<br><br>Asset management and trust income totaled $8.2 million during the quarter, compared to $8.6 million in the prior quarter, and $9.3 million in the year-ago quarter.<br><br>●<br><br>Nonperforming assets (“NPAs”) to total assets were 0.37%, compared to 0.33% in the prior quarter.<br><br>●<br><br>Cash and cash equivalents totaled $1.6 billion, representing 13.6% of total assets at December 31, 2025, compared to $1.7 billion or 14.5% of total assets at September 30, 2025.<br><br>●<br><br>Combined available credit facilities from the Federal Home Loan Bank and the Federal Reserve Bank’s discount window totaled $3.2 billion. An additional $240 million is available in uncommitted federal funds credit lines.<br><br>●<br><br>Tangible book value per common share as converted (non-GAAP measure) was $8.10 as of December 31, 2025, compared to $8.16 as of September 30, 2025.<br><br>●<br><br>Total tangible common equity of $823 million and tangible book value per common share of $9.93 (non-GAAP measures) as of December 31, 2025, compared to $828 million and $10.02 per common share, respectively as of September 30, 2025.<br><br>●<br><br>$32.5 million (tax-effected) in combined unrealized/unrecognized losses on our combined investment securities portfolio (available-for-sale and held-to-maturity portfolios), compared to $36.8 million in the prior quarter.<br><br>●<br><br>Deposits totaled $9.3 billion as of December 31, 2025, and September 30, 2025. Core and wholesale deposits totaled $6.1 billion and $3.2 billion respectively as of December 31, 2025, compared to $6.8 billion and $2.5 billion respectively as of September 30, 2025. Cost of deposits totaled 3.03% for the quarter compared to 3.11% for the prior quarter.<br><br>●<br><br>Loan to deposit ratio totaled 75.3% as of December 31, 2025, compared to 83.6% as of September 30, 2025.<br><br><br><br> | |||
| Other Activity: | |||
| ●<br><br>Loan fundings totaled $183 million at an average yield of 6.65% for the current quarter compared to $265 million at an average yield of 7.00% in the prior quarter.<br><br>●<br><br>Average assets totaled $12.0 billion for the current quarter, compared to $11.9 billion for the prior quarter.<br><br>●<br><br>Average assets under management (“AUM”) balances at FFA were $5.1 billion for the quarter, relatively unchanged from the prior quarter. Trust assets under advisement (“AUA”) at FFB were $1.2 billion, relatively unchanged from the prior quarter.<br><br> | |||
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| Investor contact: Jamie Britton, jbritton@ff-inc.com | 949-476-0300 | | |
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FIRST FOUNDATION INC. <br>FOURTH QUARTER 2025 RESULTS |
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| Spotlight | |
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| First Foundation Advisors Recognized as a Top Registered Advisory Firm by Barron’s | First Foundation Advisors Named to CNBC FA100 List |
| <br><br>First Foundation Advisors made Barron’s list of the top 100 registered investment advisory firms in 2024. The annual list evaluates financial advisors based on a proprietary set of criteria, including type of assets under management, growth of advisors’ practice, client retention, and quantitative factors such as the advisors’ experience, their advanced degrees, industry designations, philanthropic efforts, and other metrics. | <br><br>First Foundation Advisors was recognized as one of 2024’s top registered investment advisory firms on the CNBC FA100 list. First Foundation Advisors ranked #55 on the national list and marks the third consecutive year that it has been recognized on the list. The rankings were based on a number of factors, including total assets under management, years in business, and accounts managed.<br><br> |
| Please Note: Limitations. Neither rankings nor recognitions by unaffiliated rating services, publications, media, or other organizations, nor the achievement of any professional designation, certification, degree or license, membership in any professional organization, or any amount of prior experience or success, should be construed by a client or prospective client as a guarantee that the client will experience a certain level of results if the firm is engaged, or continues to be engaged, to provide investment advisory services. A fee was not paid by the firm to receive the ranking. The ranking is based upon specific criteria and methodology (see ranking criteria/methodology). No ranking or recognition should be construed as an endorsement by any past or current client of the firm.<br><br> | |
| Details |
Loans
Loan balances totaled $7.0 billion as of December 31, 2025, compared to $7.8 billion and $9.2 billion as of September 30, 2025, and December 31, 2024, respectively. Loan balances consisted of $6.7 billion in loans held for investment and $0.3 billion in loans held for sale at December 31, 2025, compared to $7.3 billion in loans held for investment and $0.5 billion in loans held for sale at September 30, 2025.
Loan fundings in the quarter totaled $183 million, offset by loan payments and payoffs of $766 million. This compares to loan fundings totaling $265 million, offset by loan payments and payoffs of $525 million, in the prior quarter and loan fundings totaling $364 million, offset by loan payments and payoffs of $589 million in the year-ago quarter. Commercial and industrial (“C&I”) loans accounted for 88% of total fundings for the quarter. C&I loans consist primarily of commercial revolving lines of credit and term loans.
Loan sales were $205 million in the quarter, resulting in a gain of $0.3 million. The fair value adjustment of the remaining $0.3 billion in loans held for sale at December 31, 2025 was 95.2%, compared to 95.7% at September 30, 2025.
Loan portfolio average yield was 4.70% in the quarter, a decrease of 2 basis points compared to 4.72% in the prior quarter, and a decrease of 1 basis points compared to 4.71% in the year-ago quarter. Average yields on new loan fundings were 6.65% in the quarter, compared to 7.00% in the prior quarter and 7.51% for the year-ago quarter.
Investment Securities
Investment securities were $3.1 billion as of December 31, 2025, compared to $2.2 billion and $2.0 billion as of September 30, 2025, and December 31, 2024, respectively. During the quarter, $1.0 billion in investment securities were purchased, offset by $151 million in principal paydowns.
The allowance for credit losses for investments was $0.6 million as of December 31, 2025 and September 30, 2025. Unrealized gains (tax-effected) on the available-for-sale portfolio totaled $0.8 million as of December 31, 2025, compared to unrealized losses $1.2 million as of September 30, 2025. Unrecognized losses (tax-effected) on the held-to-maturity portfolio totaled $33.3 million as of December 31, 2025, compared to $35.6 million as of Page 3 of 20
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FIRST FOUNDATION INC. <br>FOURTH QUARTER 2025 RESULTS |
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September 30, 2025. Combined unrealized and unrecognized losses (tax-effected) on the available-for-sale and held-to-maturity portfolios totaled $32.5 million, or 1.06% of the combined portfolios as of December 31, 2025, compared to $36.8 million, or 1.67% of the combined portfolios as of September 30, 2025. The decrease in unrealized and unrecognized losses (tax-effected) was largely driven by the decrease in treasury rates during the quarter.
Investment securities portfolio average yield was 4.29% in the quarter, compared to 4.41% in the prior quarter and in the year-ago quarter.
Deposits and Borrowings
Deposits were $9.3 billion as of December 31, 2025, compared to $9.3 billion as of September 30, 2025, and $9.9 billion as of December 31, 2024.
Noninterest-bearing deposits accounted for 13% of total deposits, down from 16% in the prior quarter and 20% in the year-ago quarter. The decrease in the percentage of noninterest-bearing deposits from the prior and year-ago quarters reflects the decrease in specialty deposits in 2025, mostly consisting of higher-cost MSR deposit relationships which are subject to customer service costs. As a result of the decrease in specialty deposit balances, the current quarter’s customer service cost expense decreased to $7.0 million compared to $9.1 million in the prior quarter. Core deposits accounted for 61% of total deposits as of December 31, 2025, compared to 66% in the prior quarter and 67% in the year-ago quarter. Brokered deposits accounted for 34% of total deposits as of December 31, 2025, compared to 34% in the prior quarter and 33% in the year-ago quarter.
Cost of deposits was 3.03% for the quarter, compared to 3.11% for the prior quarter and 3.19% for the year-ago quarter.
Insured and collateralized deposits accounted for approximately 86% of total deposits as of December 31, 2025, relatively unchanged from the prior quarter.
Our loan to deposit ratio measured 75.3% as of December 31, 2025, compared to 83.6% and 93.5% as of September 30, 2025, and December 31, 2024, respectively.
Borrowings were $1.4 billion as of December 31, 2025, and September 30, 2025. Average borrowings outstanding were $1.4 billion or 11.9% of average assets for the quarter, compared to $1.4 billion or 12.0% of average assets for the prior quarter and $1.5 billion or 11.5% for the year-ago quarter. The weighted average rate paid on borrowings was 4.08% for the quarter, compared to 4.07% for the prior quarter and 4.14% for the year-ago quarter.
As of December 31, 2025, our total unused borrowing capacity was $3.5 billion, which consists of $3.3 billion in available lines of credit with the Federal Home Loan Bank and the Federal Reserve Bank’s discount window as well as an additional $240 million in available lines of credit with other correspondent banks.
Private Wealth Management and Trust Assets
Our AUM balance was $5.1 billion as of December 31, 2025 and September 30, 2025, and $5.4 billion as of December 31, 2024. Activity within the AUM balance during the quarter consisted of the following: $97 million of new accounts; $190 million of net withdrawals; and $36 million of performance gains. AUA at FFB’s Trust Department was $1.2 billion as of December 31, 2025, relatively unchanged from the prior quarter and compared to $1.1 billion from the year-ago quarter. Page 4 of 20
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FIRST FOUNDATION INC. <br>FOURTH QUARTER 2025 RESULTS |
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Net Interest Income and Net Interest Margin
Net interest income was $39.4 million for the quarter, compared to $46.1 million for the prior quarter and $51.3 million for the year-ago quarter. Interest income totaled $127.4 million for the quarter, compared to $134.7 million for the prior quarter and $152.5 million for the year-ago quarter. The decrease in interest income compared to the prior quarter was due to a decrease in average interest-earning asset yields. Yields on interest-earning assets averaged 4.35% for the quarter, compared to 4.64% for the prior quarter and 4.68% for the year-ago quarter. Average interest-earning asset balances totaled $11.7 billion for the quarter, compared to $11.6 billion for the prior quarter and $13.0 billion for the year-ago quarter.
Interest expense was $87.9 million for the quarter, compared to $88.7 million for the prior quarter and $101.2 million for the year-ago quarter. Average interest-bearing liability balances, consisting of interest-bearing deposits, borrowings, and subordinated debt, totaled $9.6 billion for the quarter, compared to $9.3 billion for the prior quarter and $9.9 billion for the year-ago quarter. Rates on interest-bearing liability balances averaged 3.64% for the quarter, compared to 3.78% for the prior quarter and 4.05% for the year-ago quarter. Rates on interest-bearing deposits averaged 3.55% for the quarter, compared to 3.71% for the prior quarter and 4.04% for the year-ago quarter. Rates on borrowings averaged 4.08% for the quarter, compared to 4.07% for the prior quarter and 4.14% for the year-ago quarter.
The decrease in average interest-earning asset yields largely contributed to a decrease in NIM during the quarter. NIM was 1.36% for the quarter, compared to 1.60% for the prior quarter and 1.58% for the year-ago quarter.
Noninterest Income
Noninterest income totaled $8.9 million for the quarter, compared to $17.5 million in the prior quarter and $13.4 million in the year-ago quarter. The decrease from the prior quarter is primarily due to capital markets activity. The prior quarter included gains on capital markets activity of $4.7 million that consisted of unrealized gains on the valuation of the loans held for sale portfolio, net of corresponding derivative losses. The current quarter included a $1.1 million loss on such activity. In the current quarter there were $0.3 million of gains on sale of loans during the quarter and the remaining loans held for sale balance totaled $261.4 million as of December 31, 2025.
Asset management, consulting and other fees totaled $8.2 million for the quarter, compared to $8.6 million in the prior quarter and $9.3 million for the year-ago quarter. Deposit charges and service fees, loan and servicing fees, and other noninterest income totaled $0.9 million for the quarter, compared to $3.0 million for the prior quarter and $3.0 million for the year-ago quarter.
Noninterest Expense
Noninterest expense was $62.9 million in the quarter, compared to $57.5 million in the prior quarter and $67.0 million in the year-ago quarter. Noninterest expense to average total assets was 2.10% in the quarter, compared to 1.93% in the prior quarter and compared to 2.02% in the year-ago quarter.
Compensation and benefits expense totaled $24.9 million for the quarter, compared to $23.7 million for the prior quarter and $25.4 million for the year-ago quarter. Headcount averaged 562 FTEs for the quarter, relatively unchanged from the prior quarter, and 555 for the year-ago quarter. The increase in compensation and benefits expense is largely the result of a $1.4 million increase in commissions expense compared to the prior quarter. Occupancy and depreciation expense totaled $9.0 million for the quarter, compared to $8.9 million for the prior quarter and $10.4 million for the year-ago quarter. Professional services and marketing costs totaled $13.2 million for the quarter, compared to $6.8 million for the prior quarter and $5.8 million for the year-ago quarter. The increase in the fourth quarter was due primarily to one-time merger-related activity. Page 5 of 20
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FIRST FOUNDATION INC. <br>FOURTH QUARTER 2025 RESULTS |
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Customer service costs totaled $7.0 million for the quarter, compared to $9.1 million in the prior quarter, and $17.8 million in the year-ago quarter. The current quarter’s customer service cost expense benefitted from a $784 million reduction in higher-cost specialty deposits in the second quarter of 2025, $540 million of which consisted of MSR deposits subject to customer service costs.
Our efficiency ratio (non-GAAP) for the quarter was 116.9%, compared to 90% for the prior quarter and 103.1% for the year-ago quarter. The increase from the prior quarter was due primarily to the decrease in noninterest income. The efficiency ratio is a measure of noninterest expense to revenue (net interest income plus noninterest income) on an adjusted basis.
Income Tax Expense
We recorded income tax expense of $32 thousand in the quarter, compared to $87.4 million in the prior quarter and a tax benefit of $8.8 million in the year-ago quarter. During the prior quarter, a deferred tax asset valuation allowance which fully reserves for the deferred tax asset balance was recorded. The prior quarter’s loss, as well as cumulative losses over the past three years and estimates of our future taxable income and projected tax positions were assessed by management which concluded that the deferred tax assets were not more likely than not to be realized, thereby requiring the valuation allowance.
Asset Quality
Total nonperforming assets were $43.9 million as of December 31, 2025, compared to $39.7 million and $46.7 million as of September 30, 2025, and December 31, 2024, respectively. Our ratio of nonperforming assets to total assets was 0.37% as of December 31, 2025, compared to 0.33% and 0.37% as of September 30, 2025, and December 31, 2024, respectively. Total delinquent and nonaccrual loans were $50.8 million or 0.75% of total loans held for investment as of December 31, 2025, compared to $44.6 million or 0.61% of total loans held for investment as of September 30, 2025, and $70.4 million or 0.89% of total loans held for investment as of December 31, 2024.
Our allowance for credit losses on loans held for investment was $93.9 million, or 1.39% of total loans held for investment as of December 31, 2025, compared to $101.9 million, or 1.40% of total loans held for investment as of the prior quarter, and $32.3 million, or 0.41% of total loans held for investment as of the year-ago quarter. The prior quarter included $65.0 million in provision for loan losses recorded (net of net charge-offs of $0.5 million) due to changes in ACL quantitative assumptions. In addition, $16.8 million of the prior quarter’s provision was associated with one large C&I loan which was moved from pooled evaluation to individually evaluated loans. Net charge-offs were $0.2 million or 0.01% (annualized) of average loan balances for the quarter, compared to $0.5 million or 0.03% (annualized) for the prior quarter, and net charge-offs of $17.1 million or 0.70% (annualized) of average loan balances for the year-ago quarter.
The ratio of the allowance for credit losses for loans to total past due and nonaccrual loans was 184.8% as of December 31, 2025, compared to 228.4% and 45.9% as of the prior and year-ago quarters, respectively. Page 6 of 20
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FIRST FOUNDATION INC. <br>FOURTH QUARTER 2025 RESULTS |
|---|---|
| | |
Capital
The following table sets forth our regulatory capital ratios as of the dates indicated:
| | | | | | | | |
|---|---|---|---|---|---|---|---|
| | | As of | | ||||
| (unaudited) | | December 31, | | September 30, | | December 31, | |
| First Foundation Inc. | | 2025 | | 2025 | | 2024 | |
| Common equity tier 1 risk-based capital ratio | | 10.84 | % | 10.21 | % | 10.09 | % |
| Tier 1 leverage ratio | | 7.61 | % | 7.68 | % | 7.59 | % |
| Tier 1 risk-based capital ratio | | 11.98 | % | 11.27 | % | 11.05 | % |
| Total risk-based capital ratio | | 15.51 | % | 14.65 | % | 13.34 | % |
| | | | | | | | |
| First Foundation Bank | | | | | | | |
| Common equity tier 1 risk-based capital ratio | | 14.09 | % | 13.14 | % | 12.64 | % |
| Tier 1 leverage ratio | | 8.94 | % | 8.94 | % | 8.67 | % |
| Tier 1 risk-based capital ratio | | 14.09 | % | 13.14 | % | 12.64 | % |
| Total risk-based capital ratio | | 15.42 | % | 14.39 | % | 13.03 | % |
| (1) | The minimum regulatory requirements for classification as a well-capitalized institution are a common equity tier 1 risk-based capital ratio of 6.5%; a tier 1 leverage ratio of 5.00%; a tier 1 risk-based capital ratio of 8.00%; and a total risk-based capital ratio of 10.00%. The December 31, 2025 ratios are preliminary and subject to change until the filings of our FR Y-9C report (First Foundation Inc.) and Call Report (First Foundation Bank) for December 31, 2025 are completed. |
|---|
Shareholders' equity totaled $912.6 million as of December 31, 2025, compared to $917.9 million and $1,053.4 million as of September 30, 2025, and December 31, 2024, respectively. The change from the prior quarter consists primarily of the net loss of $8.0 million for the quarter, offset by a $2.3 million change in the quarter in the net loss in accumulated other comprehensive income (“AOCI”), to a net gain in AOCI at December 31, 2025. The change in the AOCI was due to a $2.6 million increase in unrealized holding gains on the securities portfolio, and a reduction in unrealized holding losses of $0.3 million associated with the cash flow hedge. At December 31, 2025, there were no declared dividends outstanding with respect to preferred or common stock. Our tangible book value per common share (non-GAAP measure) was $9.93 as of December 31, 2025, compared to $10.02 as of September 30, 2025, and $11.68 as of December 31, 2024. Our tangible book value per common share as converted (non-GAAP measure) was $8.10 as of December 31, 2025, compared to $8.16 as of September 30, 2025 and $9.36 as of December 31, 2024.
Page 7 of 20
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FIRST FOUNDATION INC. <br>FOURTH QUARTER 2025 RESULTS |
|---|---|
| | |
| Earnings Call Info |
|---|
About First Foundation
First Foundation Inc. (NYSE: FFWM) and its subsidiaries offer personal banking, business banking, and private wealth management services, including investment, trust, and philanthropy services. This comprehensive platform of financial services is designed to help clients at any stage in their financial journey. The broad range of financial products and services offered by First Foundation are more consistent with those offered by larger financial institutions, while its high level of personalized service, accessibility, and responsiveness to clients is more aligned with those of community banks and boutique wealth management firms. This combination of an integrated platform of comprehensive financial products and personalized service differentiates First Foundation from many of its competitors and has contributed to the growth of its client base and business. Learn more at firstfoundationinc.com, or connect with us on LinkedIn and X (formerly Twitter).
Forward-Looking Statements
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 the timing and benefits of the pending merger with FirstSun Capital Bancorp (the “Merger”), our future financial performance and financial condition, including following consummation of the Merger, potential loan sales, as well as trends in our business and markets. Forward-looking statements often include words such as "believe," "expect," "anticipate," "intend," "plan," "estimate," "project," "outlook," or words of similar meaning, or future or conditional verbs such as "will," "would," "should," "could," or "may." The forward-looking statements in this report 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 report and could cause us to change our future plans. Those risks and uncertainties include, but are not limited to, our ability to successfully consummate the Merger with FirstSun Capital Bancorp (“FirstSun”); our ability and the ability of FirstSun to obtain required regulatory and shareholder approvals of the Merger; the failure by either party to satisfy the closing conditions in the Agreement and Plan of Merger, dated as of October 27, 2025, or any unexpected delay in closing the Merger; the ability to achieve expected cost savings, synergies and other financial benefits from the Merger within the expected time frames or at all, and costs or difficulties relating to integration matters being greater than expected; the diversion of management time from core banking functions due to Merger-related issues; potential difficulty in maintaining relationships with customers, employees or business partners as a result of the Merger; changes in our capital management and balance sheet strategies and our ability to successfully implement such strategies; changes in our strategic plan, and our ability to successfully implement such plan; turnover in our Board of Directors and our executive management team; the risk of incurring credit losses, which is an inherent risk of the banking business; the cost, quality and quantity of our deposits; adverse developments in the financial services industry generally such as bank failures and any related impact on depositor behavior or investor sentiment; risks related to the sufficiency of liquidity; the risk that we will not be able to grow at historic rates or at all; the risk that we will not be able to access the securitization market or otherwise sell loans on favorable terms or at all; changes in general economic conditions, either nationally or locally in the areas in which we conduct or will conduct our business; risks associated with changes in monetary policy and interest rates, which could adversely affect our interest income, interest rate margins, and the value of our interest-earning assets, 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; negative impacts of news or analyst reports about us or the financial services industry; the impacts of the federal government shutdown on us and our customers; the impacts of inflation on us and our customers; the impacts of tariffs and trade policies of the U.S. and its global trading partners and uncertainty regarding the same; results of examinations by regulatory authorities and the possibility that such regulatory authorities may, among other things, limit our business activities or our ability to pay dividends, or impose fines, penalties or sanctions; the risk that we may be unable or that our board of directors may determine that it is inadvisable to resume the payment of dividends; risks associated with changes in income tax laws and regulations; 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 (and after the Merger, our combined business and future financial performance) are subject is contained in our Definitive Proxy Statement filed with the SEC on January 15, 2026, our Quarterly Report on Form 10-Q for the quarter ended September 30, 2025, our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, and other documents we Page 8 of 20
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FIRST FOUNDATION INC. <br>FOURTH QUARTER 2025 RESULTS |
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file with the SEC from time to time. We urge readers of this report to review those filings, reports and 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 report, 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 report or in the above-referenced reports, whether as a result of new information, future events or otherwise, except as may be required by law or NYSE rules.
Additional Information About the Proposed Merger and Where to Find It
This document does not constitute an offer to sell or the solicitation of an offer to buy any securities, or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. In connection with the proposed merger, FirstSun has filed with the SEC a registration statement on Form S-4 that included a joint proxy statement of FirstSun and First Foundation and a prospectus of FirstSun, as well as other relevant documents concerning the proposed transaction. WE URGE INVESTORS AND SECURITY HOLDERS TO READ THE REGISTRATION STATEMENT ON FORM S-4, THE JOINT PROXY STATEMENT/PROSPECTUS INCLUDED WITHIN THE REGISTRATION STATEMENT ON FORM S-4 AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC IN CONNECTION WITH THE MERGER BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT FIRST FOUNDATION, FIRSTSUN AND THE MERGER. The joint proxy statement/prospectus was sent to the shareholders of First Foundation seeking the required shareholder approval. Investors and security holders may obtain free copies of the registration statement on Form S-4 and the related joint proxy statement/prospectus, as well as other documents filed with the SEC by First Foundation through the web site maintained by the SEC at www.sec.gov. Documents filed with the SEC by First Foundation are also available free of charge by directing a written request to First Foundation Inc., 5221 North O’Connor Boulevard, Suite 1375, Irving, Texas 75039, Attn: Jamie Britton and on First Foundation’s website, firstfoundationinc.com, under Investor Relations. First Foundation’s telephone number is (469) 638-9636.
Participants in the Transaction
First Foundation, FirstSun and certain of their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from the shareholders of First Foundation and FirstSun in connection with the Merger. Certain information regarding the interests of these participants and a description of their direct and indirect interests, by security holdings or otherwise, is included in the joint proxy statement/prospectus regarding the Merger. Additional information about First Foundation and its directors and officers may be found in the definitive proxy statement of First Foundation relating to its 2025 Annual Meeting of Shareholders filed with the SEC on April 17, 2025.
| | |
|---|---|
| Contact | |
| Investors | |
| Jamie Britton<br><br>EVP, Chief Financial Officer<br><br>949-476-0300<br><br>jbritton@ff-inc.com | |
Page 9 of 20
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FIRST FOUNDATION INC. <br>FOURTH QUARTER 2025 RESULTS |
|---|---|
| | |
CONSOLIDATED BALANCE SHEETS
(unaudited)
| | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|
| (in thousands, except share and per share amounts) | | December 31, | | September 30, | | December 31, | |||
| | | 2025 | | 2025 | | 2024 | |||
| ASSETS | | | | | | | | ||
| | | | | | | | | | |
| Cash and cash equivalents | | $ | 1,624,870 | | $ | 1,726,969 | | $ | 1,016,132 |
| | | | | | | | | | |
| Securities available-for-sale ("AFS") | | 2,431,032 | | 1,555,773 | | 1,318,019 | |||
| Securities held-to-maturity ("HTM") | | 634,333 | | 647,619 | | 712,105 | |||
| Allowance for credit losses - investments | | | (557) | | | (634) | | | (4,134) |
| Total securities, net | | | 3,064,808 | | | 2,202,758 | | | 2,025,990 |
| | | | | | | | | | |
| Loans held for sale ("LHFS") | | 261,448 | | 467,277 | | 1,285,819 | |||
| | | | | | | | | | |
| Loans held for investment | | 6,729,178 | | 7,302,415 | | 7,941,393 | |||
| Less: Allowance for credit losses | | (93,850) | | (101,913) | | (32,302) | |||
| Total loans held for investment, net | | 6,635,328 | | 7,200,502 | | 7,909,091 | |||
| | | | | | | | | | |
| Investment in Federal Home Loan Bank ("FHLB") stock | | 43,616 | | 43,616 | | 37,869 | |||
| Accrued interest receivable | | | 45,822 | | | 45,103 | | | 54,804 |
| Deferred taxes, net | | - | | (0.00) | | 76,650 | |||
| Premises and equipment, net | | 34,663 | | 35,420 | | 35,806 | |||
| Real estate owned ("REO") | | | 6,210 | | | 6,210 | | | 6,210 |
| Bank owned life insurance | | | 51,405 | | | 51,044 | | | 49,993 |
| Core deposit intangibles | | | 2,400 | | | 2,672 | | | 3,558 |
| Derivative assets | | | 8,785 | | | - | | | 5,086 |
| Other assets | | 124,722 | | 128,473 | | 138,257 | |||
| Total Assets | | $ | 11,904,077 | | $ | 11,910,044 | | $ | 12,645,265 |
| | | | | | | | | | |
| LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | | | ||
| | | | | | | | | | |
| Liabilities: | | | | | | | |||
| Deposits | | $ | 9,284,570 | | $ | 9,293,071 | | $ | 9,870,279 |
| Borrowings | | 1,430,518 | | 1,422,063 | | 1,425,369 | |||
| Subordinated debt | | | 173,521 | | | 173,506 | | | 173,459 |
| Derivative liabilities | | | 6,938 | | | 9,081 | | | - |
| Accounts payable and other liabilities | | 95,943 | | 94,412 | | 122,795 | |||
| Total Liabilities | | 10,991,490 | | 10,992,133 | | 11,591,902 | |||
| | | | | | | | | | |
| Shareholders’ Equity: | | | | | | | |||
| Preferred stock | | | 86,797 | | 86,797 | | 87,649 | ||
| Common stock | | 83 | | 83 | | 82 | |||
| Additional paid-in-capital | | 855,270 | | 854,880 | | 849,509 | |||
| Retained (deficit) earnings | | (30,119) | | (22,079) | | 125,038 | |||
| Accumulated other comprehensive loss | | 556 | | (1,770) | | (8,915) | |||
| Total Shareholders’ Equity | | 912,587 | | 917,911 | | 1,053,363 | |||
| Total Liabilities and Shareholders’ Equity | | $ | 11,904,077 | | $ | 11,910,044 | | $ | 12,645,265 |
Page 10 of 20
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FIRST FOUNDATION INC. <br>FOURTH QUARTER 2025 RESULTS |
|---|---|
| | |
| | | | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| CONSOLIDATED STATEMENTS OF OPERATIONS | | | | | | | | | | | | | | | |
| (unaudited) | | | | | | | | | | | | | | | |
| | | For the Quarter Ended | | For the Year Ended | |||||||||||
| (in thousands, except share and | | December 31, | | September 30, | | December 31, | | December 31, | |||||||
| per share amounts) | | 2025 | | 2025 | | 2024 | | 2025 | | 2024 | |||||
| Interest income: | | | | | | | | | | | | | | | |
| Loans | | $ | 88,746 | | $ | 93,054 | | $ | 115,349 | | $ | 388,466 | | $ | 474,322 |
| Securities | | 23,939 | | 24,933 | | 22,825 | | 93,613 | | 81,949 | |||||
| Cash, FHLB Stock, and Fed Funds | | 14,700 | | 16,750 | | 14,299 | | 58,910 | | 54,725 | |||||
| Total interest income | | 127,385 | | 134,737 | | 152,473 | | 540,989 | | 610,996 | |||||
| | | | | | | | | | | | | | | | |
| Interest expense: | | | | | | | | | | | | ||||
| Deposits | | 71,347 | | 71,942 | | 83,500 | | 283,926 | | 358,515 | |||||
| Borrowings | | 14,615 | | 14,744 | | 15,943 | | 62,312 | | 62,988 | |||||
| Subordinated debt | | | 1,979 | | | 1,973 | | | 1,720 | | | 7,348 | | | 6,849 |
| Total interest expense | | 87,941 | | | 88,659 | | | 101,163 | | | 353,586 | | | 428,352 | |
| | | | | | | | | | | | | | | | |
| Net interest income | | 39,444 | | 46,078 | | 51,310 | | 187,403 | | 182,644 | |||||
| | | | | | | | | | | | | | | | |
| Provision for credit losses | | (6,522) | | 65,045 | | 20,647 | | 64,306 | | 20,700 | |||||
| | | | | | | | | | | | | | | | |
| Net interest income after provision for credit losses | | 45,966 | | | (18,967) | | | 30,663 | | | 123,097 | | | 161,944 | |
| | | | | | | | | | | | | | | | |
| Noninterest income: | | | | | | | | | | | |||||
| Asset management, consulting and other fees | | 8,215 | | 8,638 | | 9,270 | | 34,373 | | 36,229 | |||||
| (Loss) gain on sale of loans | | | 839 | | | - | | | 4,403 | | | (9,566) | | | 5,068 |
| Gain on sale of securities available-for-sale | | | - | | | 1,228 | | | - | | | 5,930 | | | 1,204 |
| Capital market activities | | | (1,055) | | | 4,738 | | | (3,294) | | | 6,185 | | | (119,138) |
| Gain on sale of REO | | | - | | | - | | | - | | | - | | | 679 |
| Other income | | 915 | | 2,915 | | 2,988 | | 10,452 | | 10,086 | |||||
| Total noninterest income | | 8,914 | | 17,519 | | 13,367 | | 47,374 | | (65,872) | |||||
| | | | | | | | | | | | | | | | |
| Noninterest expense: | | | | | | | | | | | |||||
| Compensation and benefits | | 24,941 | | 23,713 | | 25,406 | | 96,652 | | 83,917 | |||||
| Occupancy and depreciation | | 8,978 | | 8,939 | | 10,376 | | 34,695 | | 37,502 | |||||
| Professional services and marketing costs | | 13,204 | | 6,838 | | 5,845 | | 33,188 | | 17,997 | |||||
| Customer service costs | | 7,008 | | 9,068 | | 17,790 | | 44,110 | | 63,586 | |||||
| Other expenses | | 8,757 | | 8,924 | | 7,572 | | 33,371 | | 30,450 | |||||
| Total noninterest expense | | 62,888 | | 57,482 | | 66,989 | | 242,016 | | 233,452 | |||||
| | | | | | | | | | | | | | | | |
| Loss before income taxes | | (8,008) | | (58,930) | | (22,959) | | (71,545) | | (137,380) | |||||
| Income tax expense (benefit) | | 32 | | 87,393 | | (8,848) | | 83,612 | | (44,973) | |||||
| Net loss | | $ | (8,040) | | $ | (146,323) | | $ | (14,111) | | $ | (155,157) | | $ | (92,407) |
| | | | | | | | | | | | | | | | |
| Net loss per share: | | | | | | | | | | | |||||
| Basic | | $ | (0.10) | | $ | (1.78) | | $ | (0.17) | | $ | (1.88) | | $ | (1.41) |
| Diluted | | $ | (0.10) | | $ | (1.78) | | $ | (0.17) | | $ | (1.88) | | $ | (1.41) |
| Shares used in computation: | | | | | | | | | | | |||||
| Basic | | 82,835,307 | | 82,424,884 | | 82,195,021 | | 82,506,015 | | 65,598,430 | |||||
| Diluted | | 82,835,307 | | 82,424,884 | | 82,195,021 | | 82,506,015 | | 65,598,430 |
Page 11 of 20
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FIRST FOUNDATION INC. <br>FOURTH QUARTER 2025 RESULTS |
|---|---|
| | |
SELECTED CONSOLIDATED FINANCIAL DATA AND ASSET QUALITY
(unaudited)
| | | | | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | For the Quarter Ended | | For the Year Ended | ||||||||||||
| (in thousands, except share and per share amounts | | December 31, | | September 30, | | December 31, | | December 31, | | |||||||
| and percentages) | | 2025 | | 2025 | | 2024 | | 2025 | | 2024 | ||||||
| Selected Financial Data: | | | | | | | | | | | | | | | | |
| Return on average assets | | (0.27) | % | (4.90) | % | (0.42) | % | (1.27) | % | (0.69) | % | |||||
| Return on average common equity | | (3.9) | % | (60.6) | % | (5.8) | % | (16.7) | % | (9.7) | % | |||||
| Return on average tangible common equity ^(1)^ | | (1.7) | % | (60.7) | % | (5.7) | % | (16.2) | % | (0.7) | % | |||||
| Efficiency ratio ^(2)^ | | 116.9 | % | 90.0 | % | 103.1 | % | 100.0 | % | 99.0 | % | |||||
| Net interest margin | | 1.36 | % | 1.60 | % | 1.58 | % | 1.58 | % | 1.40 | % | |||||
| Cost of deposits | | | 3.03 | % | | 3.11 | % | | 3.19 | % | | 3.03 | % | | 3.43 | % |
| Loan to deposit ratio | | | 75.3 | % | | 83.6 | % | | 93.5 | % | | 75.3 | % | | 93.5 | % |
| Noninterest expense to average total assets | | | 2.10 | % | | 1.93 | % | | 2.02 | % | | 1.99 | % | | 1.76 | % |
| Loan fundings | | $ | 183,251 | | $ | 264,568 | | $ | 364,475 | | $ | 883,625 | | $ | 1,548,263 | |
| Assets under management | | $ | 5,069,481 | | $ | 5,126,254 | | $ | 5,445,880 | | $ | 5,069,481 | | $ | 5,445,880 | |
| Average shareholders' equity to average total assets | | | 7.64 | % | | 8.82 | % | | 8.00 | % | | 8.35 | % | | 7.53 | % |
| Tangible common equity to tangible assets ratio^(1)^ | | | 6.92 | % | | 6.96 | % | | 7.61 | % | | 6.92 | % | | 7.61 | % |
| Book value per common share | | $ | 11.01 | | $ | 11.10 | | $ | 12.79 | | $ | 11.01 | | $ | 12.79 | |
| Tangible book value per common share ^(1)^ | | $ | 9.93 | | $ | 10.02 | | $ | 11.68 | | $ | 9.93 | | $ | 11.68 | |
| | | | | | | | | | | | | | | | | |
| Asset Quality: | | | | | | | | | | | | |||||
| Nonperforming assets | | | | | | | | | | | | | | | | |
| Nonaccrual loans | | $ | 37,674 | | $ | 33,507 | | $ | 40,444 | | $ | 37,674 | | $ | 40,444 | |
| Other real estate owned | | | 6,210 | | | 6,210 | | | 6,210 | | | 6,210 | | | 6,210 | |
| Total nonperforming assets | | $ | 43,884 | | $ | 39,717 | | $ | 46,654 | | $ | 43,884 | | $ | 46,654 | |
| | | | | | | | | | | | | | | | | |
| Loans 30 - 89 days past due | | $ | 13,097 | | $ | 10,414 | | $ | 17,069 | | $ | 13,097 | | $ | 17,069 | |
| Accruing loans 90 days or more past due | | $ | — | | $ | 692 | | $ | 12,900 | | $ | — | | $ | 12,900 | |
| | | | | | | | | | | | | | | | | |
| Nonperforming assets to total assets | | | 0.37 | % | | 0.33 | % | | 0.37 | % | | 0.37 | % | | 0.37 | % |
| Loans 30 - 89 days past due to total loans held for investment | | | 0.19 | % | | 0.14 | % | | 0.21 | % | | 0.19 | % | | 0.21 | % |
| Allowance for credit losses to loans held for investment | | | 1.39 | % | | 1.40 | % | | 0.41 | % | | 1.39 | % | | 0.41 | % |
| Allowance for credit losses to past due and nonaccrual loans | | | 184.8 | % | | 228.4 | % | | 45.9 | % | | 184.8 | % | | 45.9 | % |
| Net charge-offs (recoveries) to average loans - annualized | | 0.01 | % | 0.03 | % | 0.70 | % | 0.02 | % | 0.18 | % |
| (1) | Return on average tangible equity, tangible common equity to tangible assets ratio, and tangible book value per share are non-GAAP financial measures. See disclosures regarding “Use of Non-GAAP Financial Measures” and reconciliations to the most comparable GAAP financial measures included as separate sections in this report. |
|---|---|
| (2) | Efficiency Ratio is a non-GAAP financial measure. See disclosures regarding “Use of Non-GAAP Financial Measures” and reconciliations to the most comparable GAAP financial measures included as separate sections in this report. |
| --- | --- |
Page 12 of 20
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FIRST FOUNDATION INC. <br>FOURTH QUARTER 2025 RESULTS |
|---|---|
| | |
SEGMENT REPORTING
(unaudited)
| | | | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | For the Quarter Ended | | For the Year Ended | |||||||||||
| | | December 31, | | September 30, | | December 31, | | December 31, | |||||||
| (in thousands) | | 2025 | | 2025 | | 2024 | | 2025 | | 2024 | |||||
| Banking: | | | | | | | | | | | | | | | |
| Interest income | | $ | 127,385 | | $ | 134,737 | | $ | 152,473 | | $ | 540,989 | | $ | 610,996 |
| Interest expense | | 85,882 | | 86,686 | | 99,444 | | 346,159 | | 421,503 | |||||
| Net interest income | | 41,503 | | 48,051 | | 53,029 | | 194,830 | | 189,493 | |||||
| Provision for credit losses | | (6,522) | | 65,045 | | 20,647 | | 64,306 | | 20,700 | |||||
| Noninterest income | | 2,520 | | 10,834 | | 5,996 | | 20,380 | | 22,518 | |||||
| LHFS LOCOM adjustment | | | — | | | — | | | — | | | — | | | (117,517) |
| Noninterest expense | | | 49,454 | | | 50,209 | | | 57,970 | | | 206,579 | | | 205,017 |
| Income (loss) before income taxes | | | 1,091 | | | (56,369) | | | (19,592) | | | (55,675) | | | (131,223) |
| Income tax expense (benefit) | | | 189 | | | 79,775 | | | (8,425) | | | 77,255 | | | (43,790) |
| Net income (loss) | | $ | 902 | | $ | (136,144) | | $ | (11,167) | | $ | (132,930) | | $ | (87,433) |
| | | | | | | | | | | | | | | | |
| Wealth Management: | | | | | | | | | | | |||||
| Noninterest income | | $ | 6,776 | | $ | 7,033 | | $ | 7,740 | | $ | 28,435 | | $ | 30,583 |
| Noninterest expense | | 6,942 | | 6,378 | | 5,904 | | 27,481 | | 23,033 | |||||
| Income (loss) before income taxes | | | (166) | | | 655 | | | 1,836 | | | 954 | | | 7,550 |
| Income tax expense | | | 218 | | | — | | | 497 | | | 364 | | | 2,129 |
| Net income (loss) | | $ | (384) | | $ | 655 | | $ | 1,339 | | $ | 590 | | $ | 5,421 |
| | | | | | | | | | | | | | | | |
| Other and Eliminations: | | | | | | | | | | | |||||
| Interest income | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — |
| Interest expense | | 2,059 | | 1,973 | | 1,719 | | 7,427 | | 6,849 | |||||
| Net interest expense | | (2,059) | | (1,973) | | (1,719) | | (7,427) | | (6,849) | |||||
| Noninterest income | | (383) | | (348) | | (369) | | (1,443) | | (1,456) | |||||
| Noninterest expense | | 6,491 | | 895 | | 3,115 | | 7,954 | | 5,402 | |||||
| Loss before income taxes | | | (8,933) | | | (3,216) | | | (5,203) | | | (16,824) | | | (13,707) |
| Income tax expense (benefit) | | | (375) | | | 7,618 | | | (920) | | | 5,993 | | | (3,312) |
| Net loss | | $ | (8,558) | | $ | (10,834) | | $ | (4,283) | | $ | (22,817) | | $ | (10,395) |
Page 13 of 20
|
FIRST FOUNDATION INC. <br>FOURTH QUARTER 2025 RESULTS |
|---|---|
| | |
LOAN AND DEPOSIT BALANCES
(unaudited)
| | | | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | For the Quarter Ended | |||||||||||||
| | | December 31, | | September 30, | | June 30 | | March 31 | | December 31, | |||||
| (in thousands) | | 2025 | | 2025 | | 2025 | | 2025 | | 2024 | |||||
| Loans: | | | | | | | | | | | | | | | |
| Outstanding principal balance: | | | | | | | | | | | |||||
| Loans secured by real estate: | | | | | | | | | | | | | | | |
| Residential properties: | | | | | | | | | | | |||||
| Multifamily | | $ | 3,239,609 | | $ | 3,271,998 | | $ | 3,288,093 | | $ | 3,301,295 | | $ | 3,341,823 |
| Single Family | | 784,420 | | 822,923 | | 822,508 | | 843,637 | | 873,491 | |||||
| Subtotal | | 4,024,029 | | 4,094,921 | | 4,110,601 | | 4,144,932 | | 4,215,314 | |||||
| Commercial properties | | 679,034 | | 746,028 | | 818,738 | | 852,006 | | 904,167 | |||||
| Land and construction | | | 9,400 | | | 37,734 | | | 43,361 | | | 44,741 | | | 69,246 |
| Total real estate loans | | 4,712,463 | | 4,878,683 | | 4,972,700 | | 5,041,679 | | 5,188,727 | |||||
| Commercial and industrial loans | | 2,008,445 | | 2,416,652 | | 2,568,621 | | 2,636,368 | | 2,746,351 | |||||
| Consumer loans | | 1,348 | | 1,560 | | 1,544 | | 1,368 | | 1,137 | |||||
| Total loans | | 6,722,256 | | 7,296,895 | | 7,542,865 | | 7,679,415 | | 7,936,215 | |||||
| Premiums, discounts and deferred fees and expenses | | | 6,922 | | 5,520 | | 5,458 | | 5,165 | | 5,178 | ||||
| Total | | $ | 6,729,178 | | $ | 7,302,415 | | $ | 7,548,323 | | $ | 7,684,580 | | $ | 7,941,393 |
| | | | | | | | | | | | | | | | |
| Loans held for sale | | $ | 274,750 | | $ | 489,770 | | $ | 503,959 | | $ | 1,389,593 | | $ | 1,376,491 |
| | | | | | | | | | | | | | | | |
| Deposits: | | | | | | | | | | | | | | | |
| Demand deposits: | | | | | | | | | | | | | | | |
| Noninterest-bearing | | $ | 1,235,589 | | $ | 1,456,375 | | $ | 1,467,203 | | $ | 2,037,299 | | $ | 1,956,628 |
| Interest-bearing | | | 1,677,461 | | | 1,713,408 | | | 1,672,287 | | | 1,900,022 | | | 1,995,397 |
| Money market and savings | | | 3,530,134 | | | 3,835,628 | | | 3,604,909 | | | 3,612,753 | | | 3,524,801 |
| Certificates of deposit | | | 2,841,386 | | | 2,287,660 | | | 1,849,294 | | | 2,011,571 | | | 2,393,453 |
| Total | | $ | 9,284,570 | | $ | 9,293,071 | | $ | 8,593,693 | | $ | 9,561,645 | | $ | 9,870,279 |
Page 14 of 20
|
FIRST FOUNDATION INC. <br>FOURTH QUARTER 2025 RESULTS |
|---|---|
| | |
CONSOLIDATED LOAN FUNDING AND YIELDS
(unaudited)
| | | | | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | For the Quarter Ended | | For the Year Ended | | |||||||||||
| | | December 31, | | September 30, | | December 31, | | December 31, | | |||||||
| (in thousands, except percentages) | | 2025 | | 2025 | | 2024 | | 2025 | | 2024 | | |||||
| Loan Funding Balances: | | | | | | | | | | | | | | | | |
| Loans secured by real estate: | | | | | | | | | | | | | | | | |
| Residential properties: | | | | | | | | | | | | | | | | |
| Multifamily | | $ | 17,306 | | $ | 27,991 | | $ | 26,598 | | $ | 124,135 | | $ | 137,996 | |
| Single family | | | 3,414 | | | 19,177 | | | 5,792 | | | 28,440 | | | 18,994 | |
| Subtotal | | | 20,720 | | | 47,168 | | | 32,390 | | | 152,575 | | | 156,990 | |
| Commercial properties: | | | | | | | | | | | | | | | | |
| Non-owner occupied CRE | | | - | | | - | | | 1 | | | 444 | | | 257 | |
| Owner-occupied CRE | | | - | | | - | | | 1,361 | | | 1 | | | 3,721 | |
| Subtotal | | | - | | | - | | | 1,362 | | | 445 | | | 3,978 | |
| Land and construction | | | 563 | | | 2,128 | | | 4,778 | | | 7,091 | | | 27,993 | |
| Total real estate loans | | | 21,283 | | | 49,296 | | | 38,530 | | | 160,111 | | | 188,961 | |
| Commercial and industrial loans | | | 161,968 | | | 214,880 | | | 324,992 | | | 721,516 | | | 1,357,181 | |
| Consumer loans | | | - | | | 392 | | | 953 | | | 1,998 | | | 2,121 | |
| Total | | $ | 183,251 | | $ | 264,568 | | $ | 364,475 | | $ | 883,625 | | $ | 1,548,263 | |
| | | | | | | | | | | | | | | | | |
| Loan Funding Yields: | | | | | | | | | | | | | | | | |
| Loans secured by real estate: | | | | | | | | | | | | | | | | |
| Residential properties: | | | | | | | | | | | | | | | | |
| Multifamily | | | 5.99 | % | | 6.16 | % | | 6.12 | % | | 6.22 | % | | 6.38 | % |
| Single family | | | 7.40 | % | | 6.24 | % | | 6.47 | % | | 6.56 | % | | 7.67 | % |
| Subtotal | | | 6.22 | % | | 6.19 | % | | 6.18 | % | | 6.28 | % | | 6.54 | % |
| Commercial properties: | | | | | | | | | | | | | | | | |
| Non-owner occupied CRE | | | 0.00 | % | | 0.00 | % | | 5.82 | % | | 5.00 | % | | 5.36 | % |
| Owner-occupied CRE | | | 0.00 | % | | 0.00 | % | | 6.75 | % | | 4.63 | % | | 7.63 | % |
| Subtotal | | | 0.00 | % | | 0.00 | % | | 6.75 | % | | 5.00 | % | | 7.49 | % |
| Land and construction | | | 8.50 | % | | 8.69 | % | | 8.82 | % | | 8.70 | % | | 8.57 | % |
| Total real estate loans | | | 6.28 | % | | 6.30 | % | | 6.53 | % | | 6.39 | % | | 6.86 | % |
| Commercial and industrial loans | | | 6.70 | % | | 7.15 | % | | 7.63 | % | | 7.13 | % | | 8.25 | % |
| Consumer loans | | | 0.00 | % | | 7.10 | % | | 7.95 | % | | 7.39 | % | | 8.39 | % |
| Total | | | 6.65 | % | | 7.00 | % | | 7.51 | % | | 7.00 | % | | 8.08 | % |
Page 15 of 20
|
FIRST FOUNDATION INC. <br>FOURTH QUARTER 2025 RESULTS |
|---|---|
| | |
CONSOLIDATED AVERAGE BALANCE SHEET, INTEREST, YIELD AND RATES
(unaudited)
| | | | | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | For the Quarter Ended | | For the Year Ended | ||||||||||||
| | | December 31, | | September 30, | | December 31, | | December 31, | ||||||||
| (in thousands, except percentages) | | 2025 | | 2025 | | 2024 | | 2025 | | 2024 | ||||||
| Average Balances: | | | | | | | | | | | | | | | | |
| Cash, FHLB stock, and fed funds | | $ | 1,926,632 | $ | 1,471,792 | $ | 1,180,222 | | $ | 1,431,497 | $ | 1,054,515 | | |||
| Securities AFS | | 1,593,191 | | 1,609,301 | | 1,346,690 | | | 1,494,733 | | 1,207,223 | | ||||
| Securities HTM | | | 639,624 | | | 651,479 | | | 721,548 | | | 665,643 | | | 751,926 | |
| Loans, including LHFS | | 7,524,927 | | 7,855,183 | | 9,770,057 | | | 8,279,925 | | 10,005,219 | | ||||
| Total interest-earnings assets | | 11,684,374 | | 11,587,755 | | 13,018,517 | | | 11,871,798 | | 13,018,883 | | ||||
| Deposits: interest-bearing | | 7,977,461 | | 7,700,686 | | 8,219,987 | | | 7,684,317 | | 8,480,941 | | ||||
| Deposits: noninterest-bearing | | 1,366,897 | | 1,482,278 | | 2,183,749 | | | 1,679,340 | | 1,973,605 | | ||||
| Borrowings | | 1,422,088 | | 1,436,549 | | 1,532,653 | | | 1,519,801 | | 1,539,413 | | ||||
| Subordinated debt | | | 173,511 | | | 173,495 | | | 173,449 | | | 173,488 | | | 173,426 | |
| Total interest-bearing liabilities | | | 9,573,060 | | | 9,310,730 | | | 9,926,089 | | | 9,377,606 | | | 10,193,780 | |
| | | | | | | | | | | | | | | | | |
| Average Yield / Rate: | | | | | | | | | | | | | | | | |
| Cash, FHLB stock, and fed funds | | | 3.03 | % | | 4.51 | % | | 4.82 | % | | 4.12 | % | | 5.19 | % |
| Securities AFS | | 5.03 | % | | 5.22 | % | | 5.47 | % | | 5.18 | % | | 5.35 | % | |
| Securities HTM | | | 2.44 | % | | 2.42 | % | | 2.45 | % | | 2.44 | % | | 2.31 | % |
| Loans, including LHFS | | 4.70 | % | | 4.72 | % | | 4.71 | % | | 4.69 | % | | 4.74 | % | |
| Total interest-earnings assets | | 4.35 | % | | 4.64 | % | | 4.68 | % | | 4.56 | % | | 4.69 | % | |
| Deposits (interest-bearing only) | | 3.55 | % | | 3.71 | % | | 4.04 | % | | 3.69 | % | | 4.23 | % | |
| Deposits (noninterest and interest-bearing) | | 3.03 | % | | 3.11 | % | | 3.19 | % | | 3.03 | % | | 3.43 | % | |
| Borrowings | | 4.08 | % | | 4.07 | % | | 4.14 | % | | 4.10 | % | | 4.09 | % | |
| Subordinated debt | | | 4.53 | % | | 4.51 | % | | 3.94 | % | | 4.24 | % | | 3.95 | % |
| Total interest-bearing liabilities | | 3.64 | % | | 3.78 | % | | 4.05 | % | | 3.77 | % | | 4.20 | % | |
| | | | | | | | | | | | | | | | | |
| Net Interest Rate Spread | | 0.71 | % | | 0.86 | % | | 0.62 | % | | 0.79 | % | | 0.49 | % | |
| | | | | | | | | | | | | | | | | |
| Net Interest Margin | | 1.36 | % | | 1.60 | % | | 1.58 | % | | 1.58 | % | | 1.40 | % |
Page 16 of 20
|
FIRST FOUNDATION INC. <br>FOURTH QUARTER 2025 RESULTS |
|---|---|
| | |
Use of Non-GAAP Financial Measures
To supplement our unaudited condensed consolidated financial statements presented in accordance with GAAP, we use certain non-GAAP measures of financial performance including, but not limited to, adjusted return on average assets, efficiency ratio, adjusted net income (loss) attributable to common shareholders, adjusted earnings (loss) per common share, and tangible book value per share. These supplemental non-GAAP financial measures may vary from, and may not be comparable to, similarly titled measures of other companies in our industry. Non-GAAP financial measures are not in accordance with, or an alternative for, GAAP financial measures. Generally, a non-GAAP financial measure is a numerical measure of a company’s performance that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP. A non-GAAP financial measure may also be a financial metric that is not required by GAAP or other applicable requirement.
We believe that these non-GAAP financial measures, when taken together with the corresponding GAAP financial measures (as applicable), provide meaningful supplemental information regarding our performance by providing additional information used by management that is not otherwise required by GAAP or other applicable requirements. Our management uses, and believes that investors may benefit from referring to, these non-GAAP financial measures in assessing our operating results and when planning, forecasting and analyzing future periods. These non-GAAP financial measures also facilitate a comparison of our performance to prior periods. We believe these non-GAAP measures are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry. However, these non-GAAP financial measures should be considered in addition to, not as a substitute for or superior to, net income (loss) or other financial measures prepared in accordance with GAAP. In the information below, we have provided a reconciliation of, where applicable, the most comparable GAAP financial measures to the non-GAAP financial measures used in this report, or a reconciliation of the non-GAAP calculation of the financial measure.
Page 17 of 20
|
FIRST FOUNDATION INC. <br>FOURTH QUARTER 2025 RESULTS |
|---|---|
| | |
NON-GAAP RETURN ON AVERAGE TANGIBLE COMMON EQUITY; ADJUSTED RETURN ON AVERAGE ASSETS; AND ADJUSTED NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS (unaudited)
Return on average tangible common equity was calculated by excluding average intangible assets from the average common equity during the associated periods. Adjusted return on average assets represents adjusted net income (loss) attributable to common shareholders divided by average total assets. Adjusted net income (loss) attributable to common shareholders includes various adjustments to net income (loss), and any associated tax effect of those adjustments during the associated periods.
The table below provides a reconciliation of the GAAP measure of return on average common equity to the non-GAAP measure of return on average tangible common equity. The table below also provides a reconciliation of the GAAP measure of net income (loss) to the non-GAAP measure of adjusted net income (loss) attributable to common shareholders. The table below also provides a reconciliation of the GAAP measure of return on average assets to the non-GAAP measure of adjusted return on average assets:
| | | | | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | For the Quarter Ended | | For the Year Ended | ||||||||||||
| | | December 31, | | September 30, | | December 31, | | December 31, | ||||||||
| (in thousands, except percentages) | | 2025 | | 2025 | | 2024 | | 2025 | | 2024 | | |||||
| Average shareholders' equity | | $ | 913,371 | $ | 1,052,891 | $ | 1,063,014 | $ | 1,016,884 | $ | 1,000,903 | | ||||
| Less: Average preferred stock | | | 86,797 | | | 87,538 | | | 88,113 | | | 87,407 | | | 52,480 | |
| Average common equity | | | 826,574 | | | 965,353 | | | 974,901 | | | 929,477 | | | 948,423 | |
| Less: Average intangible assets | | | 2,490 | | | 2,763 | | | 3,668 | | | 2,911 | | | 4,176 | |
| Average tangible common equity | | $ | 824,084 | | $ | 962,590 | | $ | 971,233 | | $ | 926,566 | | $ | 944,247 | |
| | | | | | | | | | | | | | | | | |
| Average assets | | $ | 11,954,410 | | $ | 11,935,171 | | $ | 13,295,249 | | $ | 12,180,957 | | $ | 13,297,682 | |
| | | | | | | | | | | | | | | | | |
| Net loss | | $ | (8,040) | | $ | (146,323) | | $ | (14,111) | | $ | (155,157) | | $ | (92,407) | |
| Adjustments: | | | | | | | | | | | | | | | | |
| Plus: LHFS LOCOM adjustment | | | — | | | — | | | — | | | — | | | 117,517 | |
| Plus: Amortization of intangible assets expense | | | 272 | | | 275 | | | 330 | | | 1,158 | | | 1,391 | |
| Plus: Merger related costs | | | 6,075 | | | — | | | — | | | 6,075 | | | — | |
| Total Adjustments | | | 6,347 | | | 275 | | | 330 | | | 7,233 | | | 118,908 | |
| Less: Tax impact of adjustments above | | | (1,777) | | | (77) | | | (92) | | | (2,025) | | | (33,294) | |
| Total after-tax adjustments to net income | | | 4,570 | | | 198 | | | 238 | | | 5,208 | | | 85,614 | |
| Adjusted net (loss) income attributable to common shareholders^(5)^ | | $ | (3,470) | | $ | (146,125) | | $ | (13,873) | | $ | (149,949) | | $ | (6,793) | |
| | | | | | | | | | | | | | | | | |
| Tax rate utilized for calculating tax effect on adjustments to net (loss) income | | | 28.0 | % | | 28.0 | % | | 28.0 | % | | 28.0 | % | | 28.0 | % |
| | | | | | | | | | | | | | | | | |
| Return on average common equity^(1)^ | | | (3.9) | % | | (60.6) | % | | (5.8) | % | | (16.7) | % | | (9.7) | % |
| Return on average tangible common equity^(2)^ ^(5)^ | | | (1.7) | % | | (60.7) | % | | (5.7) | % | | (16.2) | % | | (0.7) | % |
| | | | | | | | | | | | | | | | | |
| Return on average assets ^(3)^ | | | (0.27) | % | | (4.90) | % | | (0.42) | % | | (1.27) | % | | (0.69) | % |
| Adjusted return on average assets^(4)^ ^(5)^ | | | (0.12) | % | | (4.90) | % | | (0.42) | % | | (1.23) | % | | (0.05) | % |
| (1) | Annualized net (loss) income divided by average common equity. |
|---|---|
| (2) | Annualized adjusted net (loss) income attributable to common shareholders divided by average tangible common equity. |
| --- | --- |
| (3) | Annualized net (loss) income divided by average assets. |
| --- | --- |
| (4) | Annualized adjusted net (loss) income divided by average assets. |
| --- | --- |
| (5) | Non-GAAP measure. |
| --- | --- |
Page 18 of 20
|
FIRST FOUNDATION INC. <br>FOURTH QUARTER 2025 RESULTS |
|---|---|
| | |
NON-GAAP EFFICIENCY RATIO
(unaudited)
Efficiency ratio is a non-GAAP financial measurement determined by methods other than in accordance with U.S. GAAP. This figure represents the ratio of adjusted noninterest expense to adjusted revenue.
The table below provides a calculation of the non-GAAP measure of efficiency ratio:
| | | | | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | For the Quarter Ended | | For the Year Ended | ||||||||||||
| | | December 31, | | September 30, | | December 31, | | December 31, | ||||||||
| (in thousands, except percentages) | | 2025 | | 2025 | | 2024 | | 2025 | | 2024 | | |||||
| Total noninterest expense | | $ | 62,888 | $ | 57,482 | $ | 66,989 | $ | 242,016 | $ | 233,452 | | ||||
| Less: Amortization of intangible assets expense | | | (272) | | | (275) | | | (330) | | | (1,158) | | | (1,391) | |
| Less: Merger related costs | | | (6,075) | | | - | | | - | | | (6,075) | | | - | |
| Adjusted Noninterest expense | | $ | 56,541 | | $ | 57,207 | | $ | 66,659 | | $ | 234,783 | | $ | 232,061 | |
| | | | | | | | | | | | | | | | | |
| Net interest income | | $ | 39,444 | | $ | 46,078 | | $ | 51,310 | | $ | 187,403 | | $ | 182,644 | |
| Plus: Total noninterest income | | | 8,914 | | | 17,519 | | | 13,367 | | | 47,374 | | | (65,872) | |
| Plus: LHFS LOCOM adjustment | | | - | | | - | | | - | | | - | | | 117,517 | |
| Total Revenue | | $ | 48,358 | | $ | 63,597 | | $ | 64,677 | | $ | 234,777 | | $ | 234,289 | |
| | | | | | | | | | | | | | | | | |
| Efficiency Ratio^(1)^ | | | 116.9 | % | | 90.0 | % | | 103.1 | % | | 100.0 | % | | 99.0 | % |
| | | | | | | | | | | | | | | | | |
| (1) Non-GAAP measure | | | | | | | | | | | | | | | | |
Page 19 of 20
|
FIRST FOUNDATION INC. <br>FOURTH QUARTER 2025 RESULTS |
|---|---|
| | |
NON-GAAP TANGIBLE COMMON EQUITY, TANGIBLE COMMON EQUITY RATIO, TANGIBLE BOOK VALUE PER COMMON SHARE, AND ADJUSTED EARNINGS (LOSS) PER SHARE (BASIC AND DILUTED)
(unaudited)
Tangible shareholders’ equity, tangible common equity to tangible assets ratio, tangible common equity, tangible book value per common share, tangible book value per common share (adjusted), and adjusted earnings (loss) per share (basic and diluted) are non-GAAP financial measurements determined by methods other than in accordance with U.S. GAAP. Tangible common equity is calculated by taking shareholders’ equity and subtracting preferred stock and intangible assets. Tangible common equity to tangible assets ratio is calculated by taking tangible common equity and dividing by tangible assets which is total assets excluding the balance of intangible assets. Tangible book value per common share is calculated by dividing tangible common equity by basic common shares outstanding, as compared to book value per share, which is calculated by dividing shareholders’ equity by basic common shares outstanding. Adjusted earnings (loss) per share (basic and diluted) is calculated by dividing adjusted net income (loss) attributable to common shareholders by average common shares outstanding (basic and diluted). The reconciliation of GAAP net income (loss) to adjusted net income (loss) attributable to common shareholders is presented on page 18 in “Non-GAAP Return on Average Tangible Common Equity; Adjusted Return on Average Assets and Adjusted Net Income (loss) Attributable to Common Shareholders.”
The table below provides a reconciliation of the GAAP measure of shareholders’ equity to tangible shareholders’ equity and tangible common equity. The table below also provides a reconciliation of the GAAP measure of equity to asset ratio to the non-GAAP measure of tangible common equity to tangible assets ratio. The table below also provides a reconciliation of GAAP measure of book value per common share to the non-GAAP measure of tangible book value per common share. The table below also provides a reconciliation of the GAAP measure of net income (loss) per share (basic and diluted) to the non-GAAP measure of adjusted earnings (loss) per share (basic and diluted):
| | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|
| | | For the Quarter Ended | | |||||||
| | | December 31, | | September 30, | | December 31, | | |||
| (in thousands, except per share amounts) | | 2025 | | 2025 | | 2024 | | |||
| Shareholders' equity | $ | 912,587 | $ | 917,911 | $ | 1,053,363 | | |||
| Less: Preferred stock | | | 86,797 | | | 86,797 | | | 87,649 | |
| Total common equity | | | 825,790 | | | 831,114 | | | 965,714 | |
| Less: Intangible assets | | | 2,400 | | | 2,672 | | | 3,558 | |
| Tangible common equity | | $ | 823,390 | | $ | 828,442 | | $ | 962,156 | |
| | | | | | | | | | | |
| Total assets | | $ | 11,904,077 | | $ | 11,910,044 | | $ | 12,645,265 | |
| Less: Intangible assets | | | 2,400 | | | 2,672 | | | 3,558 | |
| Tangible assets^(1)^ | | $ | 11,901,677 | | $ | 11,907,372 | | $ | 12,641,707 | |
| | | | | | | | | | | |
| Equity to asset ratio | | | 7.67 | % | | 7.71 | % | | 8.33 | % |
| Tangible common equity to tangible assets ratio^(1)^ | | | 6.92 | % | | 6.96 | % | | 7.61 | % |
| | | | | | | | | | | |
| Book value per common share | | $ | 11.01 | | $ | 11.10 | | $ | 12.79 | |
| Tangible book value per common share^(1)^ | | $ | 9.93 | | $ | 10.02 | | $ | 11.68 | |
| Basic common shares outstanding | | | 82,884,401 | | | 82,679,097 | | | 82,365,388 | |
| Additional common shares issued in July 2024 Capital Raise | | | | | | | | | | |
| and upon conversion of preferred shares: | | | | | | | | | | |
| Common shares underlying the Series A preferred shares | | | 29,521,000 | | | 29,521,000 | | | 29,811,000 | |
| Basic common shares outstanding upon conversion (adjusted) | | | 112,405,401 | | | 112,200,097 | | | 112,176,388 | |
| | | | | | | | | | | |
| Book value per common share (adjusted) ^(1)^ | | $ | 8.12 | | | 8.18 | | | 9.39 | |
| Tangible book value per common share (adjusted) ^(1)^ | | $ | 8.10 | | | 8.16 | | | 9.36 | |
| | | | | | | | | | | |
| Adjusted net income (loss) attributable to common shareholders^(1)^ | | $ | (3,470) | | $ | (146,125) | | $ | (13,873) | |
| | | | | | | | | | | |
| Weighted average basic common shares outstanding | | | 82,835,307 | | | 82,424,884 | | | 82,195,021 | |
| Diluted common shares outstanding | | | 82,835,307 | | | 82,424,884 | | | 82,195,021 | |
| Net loss per share (basic) | | | ($ 0.10) | | | ($ 1.78) | | | ($ 0.17) | |
| Net loss per share (diluted) | | | ($ 0.10) | | | ($ 1.78) | | | ($ 0.17) | |
| Adjusted (loss) earnings per share (basic)^(1)^ | | | ($ 0.04) | | | ($ 1.77) | | | ($ 0.17) | |
| Adjusted (loss) earnings per share (diluted)^(1)^ | | | ($ 0.04) | | | ($ 1.77) | | | ($ 0.17) | |
| | | | | | | | | | | |
| ^(1)^ Non-GAAP financial measure | | | | | | | | | | |
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