First Foundation Announces Another Strong Quarter of Growth; Year Over Year Increase of 78% in EPS

IRVINE, Calif.--()--First Foundation Inc. (NASDAQ: FFWM), a financial services company with two wholly-owned operating subsidiaries, First Foundation Advisors and First Foundation Bank, provides investment management, wealth planning, consulting, trust and banking services primarily to high net-worth individuals and businesses, today reported its financial results for the quarter ended March 31, 2015.

“We have established a reputation for trusted financial advice and we are witnessing high demand for all of our solutions. The First Foundation business model is working and we are thrilled to see how it is positively impacting the financial well-being of our clients.”

“The strength of our comprehensive financial platform is evidenced by our continued growth,” said CEO Scott F. Kavanaugh. “We have established a reputation for trusted financial advice and we are witnessing high demand for all of our solutions. The First Foundation business model is working and we are thrilled to see how it is positively impacting the financial well-being of our clients.”

Financial Highlights

  • Net income for the quarter ended March 31, 2015 was $2.6 million, or $0.32 per fully diluted share, as compared to $1.5 million, or $0.18 per fully diluted share for the quarter ended March 31, 2014, an increase of 78% in fully diluted earnings per share.
  • Income before taxes increased by 81% to $4.6 million for the quarter ended March 31, 2015, as compared to $2.5 million for the quarter ended March 31, 2014.
  • Total revenues, which consist of net interest income and noninterest income, increased by 18% for the quarter ended March 31, 2015 as compared to the corresponding period in 2014.
  • Assets under management (“AUM”) at First Foundation Advisors increased at an annualized rate of 18% during the quarter ending March 31, 2015 to $3.4 billion as of March 31, 2015.
  • Strong demand for our banking products and services occurred in the first quarter of 2015 as evidenced by the growth of our loans which increased by $103 million in the first quarter of 2015, equivalent to an annualized growth rate of 35%.
  • Tangible book value increased from $12.66 per share at December 31, 2014 to $13.11 per share at March 31, 2015.

About First Foundation

First Foundation, a financial institution founded in 1990, provides integrated investment management, wealth planning, consulting, trust and banking services. The Company is headquartered in Irvine with offices in Newport Beach, Pasadena, West Los Angeles, San Diego, Palm Desert and the Imperial Valley in California, and Las Vegas, Nevada. For more information, please visit our website at www.ff-inc.com.

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 the economic recovery in the United States will stall or will be adversely affected by domestic or international economic conditions and the risk that the Federal Reserve Board will continue to keep interest rates low, any of which could adversely affect our interest income and interest rate margins and, therefore, our future operating results; and 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 the risk that the approvals required for our pending merger with Pacific Rim Bank will not be obtained, in which event the merger would have to be abandoned. 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 2014 Annual Report on Form 10-K for the fiscal year ended December 31, 2014 that we filed with the SEC on March 16, 2015. We urge readers of this news release to review the Risk Factors section of that Annual Report. 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 2014 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.

 

FIRST FOUNDATION INC.

CONSOLIDATED BALANCE SHEETS - Unaudited

(in thousands, except share and per share amounts)

 
       

March 31,
2015

 

December 31,
2014

ASSETS
 
Cash and cash equivalents $ 35,318 $ 29,692
Securities available-for-sale (“AFS”)   136,640     138,270  
 
Loans, net of deferred fees 1,269,129 1,166,392
Allowance for loan and lease losses (“ALLL”)   (10,300 )   (10,150 )
Net loans   1,258,829     1,156,242  
 
Investment in FHLB stock 17,061 12,361
Deferred taxes 9,413 9,748
Premises and equipment, net 2,484 2,187
Real estate owned (“REO”) 334 334
Other assets   6,522     6,590  
Total Assets $ 1,466,601   $ 1,355,424  
 
LIABILITIES AND SHAREHOLDERS’ EQUITY
 
Liabilities:
Deposits $ 961,157 $ 962,954
Borrowings 393,000 282,886
Accounts payable and other liabilities   8,922     10,088  
Total Liabilities   1,363,079     1,255,928  
 
Commitments and contingencies -
 

Shareholders’ Equity

Common Stock, par value $.001: 20,000,000 shares authorized; 7,880,339
and 7,845,182 shares issued and outstanding at March 31, 2015 and
December 31, 2014, respectively

8 8
Additional paid-in-capital 78,859 78,204
Retained earnings 23,010 20,384
Accumulated other comprehensive income, net of tax   1,645     900  
Total Shareholders’ Equity   103,522     99,496  
 
Total Liabilities and Shareholders’ Equity $ 1,466,601   $ 1,355,424  
 

FIRST FOUNDATION INC.

CONSOLIDATED INCOME STATEMENTS - Unaudited

(in thousands, except share and per share amounts)

 
 
      For the Quarter Ended

March 31,

2015   2014
 
Interest income:
Loans $ 12,101 $ 10,104
Securities 815 392
FHLB Stock, fed funds sold and interest-bearing deposits   242     179
Total interest income   13,158     10,675
 
Interest expense:
Deposits 923 804
Borrowings   364     121
Total interest expense   1,287     925
 
Net interest income 11,871 9,750
 
Provision for loan losses 150 235
         
Net interest income after provision for loan losses   11,721     9,515
 
Noninterest income:
Asset management, consulting and other fees 5,850 5,039
Other income   354     512
Total noninterest income   6,204     5,551
 
Noninterest expense:
Compensation and benefits 9,180 8,480
Occupancy and depreciation 1,957 1,828
Professional services and marketing costs 1,058 1,249
Other expenses   1,163     989
Total noninterest expense   13,358     12,546
 
Income before taxes on income 4,567 2,520
Taxes on income   1,941     1,058
Net income $ 2,626   $ 1,462
 
Net income per share:
Basic $ 0.33 $ 0.19
Diluted $ 0.32 $ 0.18
Shares used in computation:
Basic 7,855,457 7,733,514
Diluted 8,211,145 8,094,814

FIRST FOUNDATION INC.

SELECTED FINANCIAL INFORMATION - Unaudited

(in thousands, except share and per share amounts)

 
 
        For the Quarter Ended

March 31,

2015     2014  
Selected Income Statement Data:
Net interest income $ 11,871 $ 9,750
Provision for loan losses 150 235
Noninterest Income:
Asset management, consulting and other fees 5,850 5,039
Other 354 512
Noninterest expense 13,358 12,546
Income before taxes 4,567 2,520
Net income(1) 2,626 1,462
Net income per share:
Basic $ 0.33 $ 0.19
Diluted 0.32 0.18
 
Selected Performance Ratios:
Return on average assets - annualized 0.75 % 0.55 %
Return on average equity - annualized 10.3 % 6.6 %
Net yield on interest-earning assets 3.48 % 3.76 %
Efficiency ratio (3) 73.9 % 82.0 %
Noninterest income as a % of total revenues 34.3 % 36.3 %
 
Other Information:
Charge-offs to average loans - annualized 0.00 % 0.00 %
 

March 31,
2015

 

December 31,
2014

 

Selected Balance Sheet Data:

Cash and cash equivalents $ 35,318 $ 29,692
Loans, net of deferred fees 1,269,129 1,166,392
Allowance for loan and lease losses (“ALLL”) (10,300 ) (10,150 )
Total assets 1,466,601 1,355,424
Noninterest-bearing deposits 252,397 246,137
Interest-bearing deposits 708,760 716,817
Borrowings - FHLB Advances 363,000 263,000
Borrowings – term note 30,000 19,886
Shareholders’ equity 103,522 99,496
 
Selected Capital Data:
Tangible common equity to tangible assets(2) 7.05 % 7.33 %
Tangible book value per share(2) 13.11 12.66
Shares outstanding at end of period 7,880,339 7,845,182
 
Other Information:
Assets under management (end of period) $ 3,369,336 $ 3,221,674
Number of employees 214 211
Nonperforming assets to total assets 0.11 % 0.11 %
Ratio of ALLL to loans(4) 0.81 % 0.87 %

(1) Reflects effective tax rates of 42.5% and 42.0% for the quarters ended March 31, 2015 and 2014, respectively.

(2) Tangible common equity, (also referred to as tangible book value) and tangible assets, are equal to common equity and assets, respectively, less $0.2 million of intangible assets as of March 31, 2015 and December 31, 2014.

(3) The efficiency ratio is the ratio of noninterest expense to the sum of net interest income and noninterest income.

(4) This ratio excludes loans acquired in an acquisition as GAAP requires estimated credit losses for acquired loans to be recorded as discounts to those loans.

FIRST FOUNDATION INC.

SEGMENT REPORTING - Unaudited

(in thousands)

 
     

For the Quarter
Ended March 31,

2015   2014
 
Banking:
Interest income $ 13,158 $ 10,675
Interest expense   1,047     851  
Net interest income 12,111 9,824
Provision for loan losses 150 235
Noninterest income 1,278 1,042
Noninterest expense   7,919     6,942  
Income before taxes on income $ 5,320   $ 3,689  
 
Wealth Management:
Noninterest income $ 5,067 $ 4,625
Noninterest expense   4,715     4,842  
Income before taxes on income $ 352   $ (217 )
 
Other and Eliminations:
Interest income $ - $ -
Interest expense   240     74  
Net interest income (240 ) (74 )
Provision for loan losses - -
Noninterest income (141 ) (116 )
Noninterest expense   724     762  
Income before taxes on income $ (1,105 ) $ (952 )

Contacts

First Foundation Inc.
John Michel
Chief Financial Officer
949-202-4160
jmichel@ff-inc.com

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