IRVINE, Calif.--(BUSINESS WIRE)--First Foundation Inc. (NASDAQ: FFWM), a financial services company with two wholly-owned operating subsidiaries, First Foundation Advisors (“FFA”) and First Foundation Bank (“FFB”), announced today its financial results for the quarter and six months ended June 30, 2018. As we present certain non-GAAP measures in this release, the reader should refer to the non-GAAP reconciliations set forth below under the section “Use of Non-GAAP Financial Measures.”

Earnings for the second quarter of 2018 were impacted by $3.8 million of acquisition costs related to the closing of the acquisition of PBB Bancorp (“PBB”), $1.5 million of balance sheet restructuring costs and $3.5 million of loan chargeoffs.

“We have been able to maintain strong growth in both our loan production and revenues while we continue to work through a challenging interest rate environment,” said Scott F. Kavanaugh, CEO. “We used this quarter as an opportunity to start a process to restructure our balance sheet to better position us for 2019 and beyond.”

Highlights

Financial Results:

• 2018 second quarter compared to 2017 second quarter:
  • Net interest income was $36.2 million, an increase of 30%
  • Total revenues were $43.2 million, an increase of 15%
  • Income before taxes was $6.8 million as compared to $14.3 million
  • Earnings were $5.1 million as compared to $9.6 million
  • Earnings per fully diluted share were $0.12 as compared to $0.28
• 2018 year to date compared to 2017 year to date:
  • Net interest income was $70.5 million, an increase of 31%
  • Total revenues were $86.5 million, an increase of 21%
  • Income before taxes was $19.4 million as compared to $23.4 million
  • Earnings were $14.1 million as compared to $15.7 million
  • Earnings per fully diluted share were $0.35 as compared to $0.46
• 2018 Financial ratios:
  • Return on average tangible equity of 7.5% for the first six months
  • Return on average assets of 0.57% for the first six months
  • Efficiency ratio of 68.4% for the first six months
  • Total tangible shareholders’ equity of $418 million, tangible book value of $9.41 per share, and tangible common equity to tangible assets of 7.12%, in each case, as of June 30, 2018

Other Activity:

• Loan originations totaled $551 million for the second quarter and $971 million for the first six months of 2018.
• Deposits increased by $1.2 billion during the first six months of 2018, including $478 million of deposits added from the PBB acquisition.
• Assets under management (“AUM”) at FFA decreased by $86 million during the first six months as new accounts were offset by fund withdrawals and account terminations.

“We had a record quarter of loan production and our balance sheet restructuring will allow us to maintain a high level of loan originations as it reduces our loan concentrations,” said David DePillo, President of First Foundation Bank. “The $3.5 million in chargeoffs relate to a legacy commercial relationship and a relationship from one of our acquisitions. As a result, we do not believe there are any significant credit issues in our portfolio.”

Details

• Total loans, including loans held for sale, increased $1.1 billion in the first six months of 2018 as a result of $971 million of originations and $522 million of loans added from the PBB acquisition, which were partially offset by the sale of $52 million of multifamily loans and payoffs or scheduled payments of $323 million.
• The $711 million growth in deposits during the first six months of 2018 (excluding the deposits acquired in the PBB acquisition) included specialty deposits growth of $218 million, branch deposits growth of $48 million and wholesale deposits growth of $445 million.
• The $86 million decrease in AUM during the first six months of 2018 was the net result of $135 million of new accounts and terminations and net withdrawals of $220 million.

About First Foundation

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