- Earnings per diluted share of $0.27 for the third quarter, $0.73 for the first nine months
- Strong growth in year-to-date revenues 20% and income 51%
- Another quarter of strong loan and deposit growth
IRVINE, Calif.--(BUSINESS WIRE)--First Foundation Inc. (NASDAQ: FFWM), a financial services company with two wholly-owned operating subsidiaries, First Foundation Advisors (“FFA”) and First Foundation Bank (“FFB”), announced today its financial results for the quarter and nine months ended September 30, 2017.
“We delivered another solid quarter of financial results as we continue to experience growth in AUM, deposits, and loans," said Scott F. Kavanaugh, CEO. “We expect our efficiencies to continue to improve as we implement new operating processes and continue to focus on cost management.”
As an update to the previously announced acquisition of Community 1st Bancorp, we have received all required regulatory approvals and the closing of the acquisition is expected to occur in November 2017, subject to the receipt of Community 1st Bancorp shareholder approval.
- 2017 first nine months compared to 2016 first nine months:
- Earnings were $25.3 million, an increase of 51%
- Earnings per fully diluted share were $0.73, compared to $0.50 in 2016
- Total revenues (net interest income and noninterest income) were $109.7 million, an increase of 20%
- Net interest income was $82.4 million, an increase of 28%
- 2017 third quarter compared to 2016 third quarter:
- Earnings were $9.6 million, an increase of 6%
- Earnings per fully diluted share were $0.27 in 2017 and 2016
- Total revenues were $38.3 million in 2017 and 2016
- Net interest income was $28.4 million, an increase of 23%
- 2017 Financial ratios:
- Return on average equity of 11.0% for the third quarter and 11.7% for the first nine months
- Return on average assets of 0.96% for the third quarter and 0.89% for the first nine months
- Efficiency ratio of 61.1% for the third quarter and 64.1% for the first nine months
- Total shareholders’ equity of $340 million, tangible book value of $9.62 per share, and tangible common equity to tangible assets of 8.36%, in each case, as of September 30, 2017
- Assets under management (“AUM”) at FFA increased by $585 million in the first nine months of 2017 and totaled $4.2 billion at September 30, 2017
- Deposits increased by $842 million in the first nine months of 2017
- Loan originations totaled $1.23 billion in the first nine months of 2017
- $286 million of loans were sold in the first nine months, with a gain of $4.3 million realized
“We have continued to experience strong loan originations while maintaining excellent credit metrics,” said David DePillo, President of FFB. “Our growth in deposits has continued at levels to support our balance sheet growth and we anticipate additional benefits with respect to deposits from our acquisition of Community 1st once the transaction has closed. ”
Details of Growth
- The $585 million growth in AUM during the first nine months of 2017 was the result of $355 million of new accounts and $321 million of portfolio gains which were partially offset by terminations and net withdrawals of $91 million.
- Total loans, including loans held for sale, increased $604 million during the first nine months of 2017 as a result of $1.23 billion of originations and $8 million of purchases which were partially offset by the sale of $286 million of multifamily loans and payoffs or scheduled payments of $344 million.
- The $842 million growth in deposits during the first nine months of 2017 is broken down as follows: $435 million increase in noninterest bearing demand deposits; $85 million increase in interest bearing demand deposits; $69 million increase in money market and savings accounts; and $254 million increase in certificate of deposit accounts. Specialty deposits increased by $444 million, or 48%, while branch deposits increased by $229 million or 21%.
“This year we have grown our AUM by $585 million, as we continue to attract new clients to the firm and benefit from market appreciation,” said John Hakopian, President of FFA. “As a result, we experienced an increase in year-to-date revenues of 9% and a 133% increase in our pretax margin in wealth management.”
About First Foundation
First Foundation, a financial institution founded in 1990, provides personal banking, business banking and private wealth management. The Company has offices in California, Nevada and Hawaii with headquarters in Irvine, California. For more information, please visit www.ff-inc.com.
We have two business segments, “Banking” and “Investment Management and Wealth Planning” (“Wealth Management”). Banking includes the operations of FFB and First Foundation Insurance Services, and Wealth Management includes the operations of FFA. The financial position and operating results of the stand-alone holding company, FFI, are included under the caption “Other” in certain of the tables that follow, along with any consolidation elimination entries.
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 that shareholders of Community 1st Bancorp may fail to approve the consummation of the acquisition, or that other conditions to the closing of the acquisition may not be satisfied on a timely basis or at all; the risk that the costs associated with the Community 1st Bancorp acquisition, which will be incurred whether or not the acquisition successfully closes, may be higher than we expect; the risk of incurring loan losses, which is an inherent risk of the banking business; the risk that we will not be able to continue our internal growth rate; the risk that we will not be able to access the securitization market on favorable terms or at all; the risk that the economic recovery in the United States will stall or will be adversely affected by domestic or international economic conditions and risks associated with the Federal Reserve Board taking actions with respect to interest rates, any of which could adversely affect our interest income and interest rate margins and, therefore, our future operating results; the risk that the performance of our investment management business or of the equity and bond markets could lead clients to move their funds from or close their investment accounts with us, which would reduce our assets under management and adversely affect our operating results; and risks associated with seeking new client relationships and maintaining existing client relationships. Additional information regarding these and other risks and uncertainties to which our business and future financial performance are subject is contained in Item 1A, entitled “Risk Factors” in our 2016 Annual Report on Form 10-K for the fiscal year ended December 31, 2016 that we filed with the SEC on March 15, 2017, and other documents we file with the SEC from time to time. We urge readers of this news release to review the Risk Factors section of that Annual Report and the Risk Factors section of other documents we file with the SEC from time to time. Also, our actual financial results in the future may differ from those currently expected due to additional risks and uncertainties of which we are not currently aware or which we do not currently view as, but in the future may become, material to our business or operating results. Due to these and other possible uncertainties and risks, readers are cautioned not to place undue reliance on the forward-looking statements contained in this news release, which speak only as of today's date, or to make predictions based solely on historical financial performance. We also disclaim any obligation to update forward-looking statements contained in this news release or in the above-referenced 2016 Annual Report on Form 10-K, whether as a result of new information, future events or otherwise, except as may be required by law or NASDAQ rules.
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