News Column

First Foundation Announces First Quarter Results

May 30, 2014

IRVINE, Calif.--(BUSINESS WIRE)-- First Foundation Inc., a financial services company that provides investment management, wealth planning, consulting, trust, banking and insurance services primarily to high-net-worth individuals and businesses, today announced its financial results for the first quarter of 2014.

Net income for the first quarter of 2014 for First Foundation, which has two wholly-owned operating subsidiaries, First Foundation Advisors and First Foundation Bank, was $1.5 million, an increase of 38% from the first quarter of 2013. For the first quarter of 2014, total revenues were 20% higher as compared to the first quarter of 2013 and the provision for loan losses was $0.4 million lower. During the first quarter of 2014, assets under management at First Foundation Advisors increased 31% on an annualized basis, and consolidated loans and deposits increased 20% and 26%, respectively, on an annualized basis.

“We are extremely pleased with our results for the first quarter of 2014,” stated Scott Kavanaugh, Chief Executive Officer of First Foundation. “These results demonstrate our ability to increase earnings even as we continue to make significant investments in the growth of our operations. We look forward to our continued growth and we anticipate that future increases in revenues will be in excess of future increases in noninterest expenses, resulting in increasing returns to our shareholders,” Mr. Kavanaugh added.

A summary of the financial results for the first quarter of 2014 is included with this press release. Our Quarterly Report on Form 10-Q for the First Quarter of 2014 and our 2013 Annual Report on Form 10-K have been filed with the SEC and are available on our website (“ff-inc.com”) under the investor relations tab and are also available at the SEC website at www.sec.gov/edgar/searchedgar/companysearch.html.

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 Irvine, 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

This press release contains “forward-looking statements” including statements expressing our expectations and beliefs about our business, our future financial performance and our future plans. Those statements are based on current information and on assumptions that we make about future events and circumstances and are subject to risks and uncertainties that are often difficult to predict and beyond the Company’s control. Moreover, our business and our markets are subject to a number of risks and uncertainties which could cause our actual financial results in the future to differ, possibly materially, from those expressed in 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 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. Additional information regarding these and other risks and uncertainties to which our business and future financial performance are subject is contained in our 2013 Annual Report on Form 10-K that we filed with the SEC on March 25, 2014, and readers of this news release are urged to review the additional information contained in that Annual Report.

 

FIRST FOUNDATION INC

CONSOLIDATED BALANCE SHEETS

 
   

March 31,

2014

   

December 31,

2013

(unaudited)
ASSETS
 
Cash and cash equivalents $ 50,287 $ 56,954
Securities available-for-sale (“AFS”)   73,257   59,111
 

Loans, net of deferred fees

948,844 903,645
Allowance for loan and lease losses (“ALLL”)  

(10,150)

 

  (9,915)
Net loans   938,694   893,730
 

Premises and equipment, net

2,978 3,249
Investment in FHLB stock 6,580 6,721
Deferred taxes 11,200 12,052
Real estate owned (“REO”) 1,875 375
Other assets   5,477   5,168
Total Assets $ 1,090,348 $ 1,037,360
 
LIABILITIES AND SHAREHOLDERS’ EQUITY
 
Liabilities:
Deposits $ 854,684 $ 802,037
Borrowings 140,875 141,063
Accounts payable and other liabilities   5,948   7,498
Total Liabilities   1,001,507   950,598
 
Commitments and contingencies - -
 

Shareholders’ Equity

Common Stock, par value $.001: 20,000,000 shares authorized; 7,733,514 shares issued and outstanding at March 31, 2014 and December 31, 2013, respectively 8 8
Additional paid-in-capital 76,480 76,334
Retained earnings 13,452 11,990
Accumulated other comprehensive income (loss), net of tax  

(1,099)

 

  (1,570)
Total Shareholders’ Equity   88,841   86,762
 
Total Liabilities and Shareholders’ Equity $ 1,090,348 $ 1,037,360
 
   

FIRST FOUNDATION INC

CONSOLIDATED INCOME STATEMENT - Unaudited

 

For the Quarter Ended

March 31,

2014     2013
Interest income:
Loans $ 10,104 $ 8,919
Securities 392 23
Fed funds sold and interest-bearing deposits   179   62
Total interest income   10,675   9,004
 
Interest expense:
Deposits 804 782
Borrowings   121   30
Total interest expense   925   812
 
Net interest income 9,750 8,192
 
Provision for loan losses 235 622
   
Net interest income after provision for loan losses   9,515   7,570
 
Noninterest income:
Asset management, consulting and other fees 5,039 4,286
Other income   512   247
Total noninterest income   5,551   4,533
 
Noninterest expense:
Compensation and benefits 8,480 7,252
Occupancy and depreciation 1,828 1,323
Professional services and marketing costs 1,249 1,045
Other expenses   989   776
Total noninterest expense   12,546   10,396
 
Income before taxes on income 2,520 1,707
Taxes on income   1,058   649
Net income $ 1,462 $ 1,058
 
Net income per share:
Basic $ 0.19 $ 0.14
Diluted $ 0.18 $ 0.14
Shares used in computation:
Basic 7,733,514 7,376,988
Diluted 8,094,814 7,613,234
 
           

FIRST FOUNDATION INC

SELECTED FINANCIAL INFORMATION

 
 

As of and for the

Year Ended

December 31,

2013

As of and for the Quarter Ended

March 31

2014   2013
(In thousands, except share and per share data)UnauditedUnaudited
 
Selected Income Statement Data:
Net interest income $ 9,750 $ 8,192 $ 35,674
Provision for loan losses 235 622 2,395
Noninterest Income:
Asset management, consulting and other fees 5,039 4,286 18,240
Other 512 247 1,584
Noninterest expense 12,546 10,396 43,622
Income before taxes 2,520 1,707 9,481
Net income 1,462 1,058 7,851
 
Share and Per Share Data:
Net income per share:
Basic $ 0.19 $ 0.14 $ 1.06
Diluted 0.18 0.14 1.01
Tangible book value per share(2) $ 11.46 $ 10.15 $ 11.18
Shares outstanding at end of period 7,733,514 7,409,860 7,733,514
 
Selected Balance Sheet Data:
Cash and cash equivalents $ 50,287 $ 42,443 $ 56,954
Loans, net of deferred fees 948,844 785,760 903,645
Allowance for loan and lease losses (“ALLL”) (10,150 ) (8,210 ) (9,915 )
Total assets 1,090,348

869,830

1,037,360
Noninterest-bearing deposits 225,473 181,251 217,782
Interest-bearing deposits 629,211 523,577 584,255
Borrowings - FHLB Advances 119,000 85,000 134,000
Borrowings – term note 21,875 - 7,063
Shareholders’ equity 88,841 75,499 86,762
 
Selected Performance and Capital Ratios:
Return on average assets - annualized 0.55 % 0.51 % 0.86 %
Return on average equity - annualized 6.6 % 5.7 % 10.2 %
Net yield on interest-earning assets 3.76 % 4.16 % 4.04 %
Efficiency ratio (3) 82.0 % 81.7 % 78.6 %
Noninterest income as a % of total revenues 36.3 % 35.6 % 35.7 %
Tangible common equity to tangible assets(2) 8.13 % 8.65 % 8.34 %
 
Other Information:
Assets under management (end of period) $ 2,797,562 $ 2,372,056 $ 2,594,961
NPAs to total assets

0.55

% 0.41 % 0.32 %
Charge-offs to average loans - annualized 0.00 % 0.40 % 0.10 %
Ratio of ALLL to loans(4) 1.08 % 1.15 % 1.16 %
 

(1)

Reflects an effective tax rate of 42.0%, 38.0% and 17.2% for the quarters ended March 31, 2014 and 2013, and the year ended December 31, 2013, 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, 2014, or less $0.3 million of intangible assets as of December 31, 2013 and March 31, 2013.

(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.

John Michel, 949-202-4160

Chief Financial Officer

jmichel@ff-inc.com

Source: First Foundation Inc.


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