First Foundation Inc. - FORM 8-K - EX-99.1

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8-K - 8-K - First Foundation Inc.	ffwm-8k_20150723.htm

Exhibit 99.1

First Foundation Announces 2015 Second Quarter Earnings

Earnings report illustrates another quarter of strong, consistent growth

Earnings per share achieve year over year increase of 119%

IRVINE, CA – July 23, 2015 – First Foundation Inc. (NASDAQ: FFWM), a financial services company with two wholly-owned operating subsidiaries, First Foundation Advisors and First Foundation Bank, which collectively provide investment management, wealth planning, consulting, insurance, trust and banking services primarily to high net-worth individuals and businesses, today reported its financial results for the quarter ended June 30, 2015.

“Driven by the high demand for all of our solutions, First Foundation saw another quarter of strong growth,” said CEO Scott F. Kavanaugh. “The banking, wealth management, and trust divisions are all contributing to the success of the company in meaningful ways. Our consistent results reflect a continued focus on serving the complex and evolving needs of our clients, while enhancing profitability and returns for our shareholders.”

Financial Highlights

·	Net income for the quarter ended June 30, 2015 was $2.9 million, or $0.35 per fully diluted share, as compared to $1.3 million, or $0.16 per fully diluted share for the quarter ended June 30, 2014, an increase of 119% in fully diluted earnings per share.

·	For the six months ended June 30, 2015, net income was $5.6 million, or $0.67 per fully diluted share, as compared to $2.7 million, or $0.34 per fully diluted share for the six months ended June 30, 2014, an increase of 104% in fully diluted earnings per share.

·	Income before taxes increased by 117%, or $2.8 million, and 98%, or $4.8 million, for the quarter and six months ended June 30, 2015, respectively as compared to the corresponding periods in 2014.

·	Total revenues, which consist of net interest income and noninterest income, increased by 22% and 20%, respectively, for the quarter and six months ended June 30, 2015 as compared to the corresponding periods in 2014.

·	Strong demand for our banking products and services occurred in the first six months of 2015 as evidenced by the growth of our loans which increased by $240 million in the first six months of 2015, equivalent to an annualized growth rate of 41%.

·	Tangible book value increased from $12.66 per share at December 31, 2014 to $13.62 per share at June 30, 2015.

In addition, First Foundation Bank completed the acquisition of Pacific Rim Bank and announced the hiring of David DePillo as its President during the second quarter of 2015. The acquisition of Pacific Rim Bank was accretive to tangible book value. First Foundation Bank also designated $113.3 million of its multifamily loans as held for sale for use in a structured loan sale and securitization it is currently working on with one of the federal agencies.

About First Foundation

First Foundation, a financial institution founded in 1990, provides integrated investment management, wealth planning, consulting, insurance, trust and banking services. The Company is headquartered in Irvine, California with offices in Newport Beach, Pasadena, West Los Angeles, San Diego, Palm Desert and the Imperial Valley in California, in Las Vegas, Nevada and in Honolulu, Hawaii. 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.

Contact:

John Michel

Chief Financial Officer

First Foundation Inc.

949-202-4160

Email: jmichel@ff-inc.com

FIRST FOUNDATION INC.

CONSOLIDATED BALANCE SHEETS - Unaudited

(in thousands, except share and per share amounts)


	June 30, 2015			December 31, 2014
ASSETS

Cash and cash equivalents	$	172,844		$	29,692
Securities available-for-sale (“AFS”)		144,250			138,270

Loans, net of deferred fees		1,405,918			1,166,392
Allowance for loan and lease losses (“ALLL”)		(10,800	)		(10,150	)
Net loans		1,395,118			1,156,242

Loans held for sale		113,325			-
Investment in FHLB stock		13,290			12,361
Deferred taxes		12,518			9,748
Premises and equipment, net		2,349			2,187
Real estate owned (“REO”)		4,492			334
Goodwill and intangibles		2,375			-
Other assets		8,704			6,590
Total Assets	$	1,869,265		$	1,355,424

LIABILITIES AND SHAREHOLDERS’ EQUITY

Liabilities:
Deposits	$	1,266,318		$	962,954
Borrowings		472,250			282,886
Accounts payable and other liabilities		8,695			10,088
Total Liabilities		1,747,263			1,255,928

Commitments and contingencies		-			-
Shareholders’ Equity
Common Stock, par value $.001: 20,000,000 shares authorized; 8,785,533 and 7,845,182 shares issued and outstanding at June 30, 2015 and December 31, 2014, respectively		9			8
Additional paid-in-capital		95,854			78,204
Retained earnings		25,952			20,384
Accumulated other comprehensive income, net of tax		187			900
Total Shareholders’ Equity		122,002			99,496
Total Liabilities and Shareholders’ Equity	$	1,869,265		$	1,355,424

FIRST FOUNDATION INC.

CONSOLIDATED INCOME STATEMENTS - Unaudited

(in thousands, except share and per share amounts)


	For the Quarter Ended June 30,				For the Six Months Ended June 30,
	2015		2014		2015		2014

Interest income:
Loans	$	13,362	$	10,227	$	25,463	$	20,331
Securities		822		550		1,637		942
FHLB Stock, fed funds sold and deposits		809		154		1,051		333
Total interest income		14,993		10,931		28,151		21,606

Interest expense:
Deposits		1,115		838		2,038		1,642
Borrowings		454		277		818		398
Total interest expense		1,569		1,115		2,856		2,040

Net interest income		13,424		9,816		25,295		19,566

Provision for loan losses		753		-		903		235

Net interest income after provision for loan losses		12,671		9,816		24,392		19,331

Noninterest income:
Asset management, consulting and other fees		5,922		5,202		11,772		10,241
Other income		498		1,214		852		1,726
Total noninterest income		6,420		6,416		12,624		11,967

Noninterest expense:
Compensation and benefits		9,390		8,034		18,570		16,514
Occupancy and depreciation		1,968		1,804		3,925		3,632
Professional services and marketing costs		1,512		2,099		2,570		3,348
Other expenses		1,104		1,934		2,267		2,923
Total noninterest expense		13,974		13,871		27,332		26,417

Income before taxes on income		5,117		2,361		9,684		4,881
Taxes on income		2,175		1,094		4,116		2,152
Net income	$	2,942	$	1,267	$	5,568	$	2,729

Net income per share:
Basic	$	0.36	$	0.16	$	0.70	$	0.35
Diluted	$	0.35	$	0.16	$	0.67	$	0.34
Shares used in computation:
Basic		8,070,386		7,734,231		7,963,515		7,733,874
Diluted		8,425,029		8,145,097		8,318,227		8,141,641

FIRST FOUNDATION INC.

SELECTED FINANCIAL INFORMATION - Unaudited

(in thousands, except share and per share amounts)


	For the Quarter Ended June 30,						For the Six Months Ended June 30,
	2015			2014			2015			2014
Selected Income Statement Data:
Net interest income	$	13,424		$	9,816		$	25,295		$	19,566
Provision for loan losses		753			-			903			235
Noninterest Income:
Asset management, consulting and other fees		5,922			5,202			11,772			10,241
Other		498			1,214			852			1,726
Noninterest expense		13,974			13,871			27,332			26,417
Income before taxes		5,117			2,361			9,684			4,881
Net income		2,942			1,267			5,568			2,729
Net income per share:
Basic	$	0.36		$	0.16		$	0.70		$	0.35
Diluted		0.35			0.16			0.67			0.34

Selected Performance Ratios:
Return on average assets - annualized		0.74	%		0.45	%		0.74	%		0.50	%
Return on average equity - annualized		10.8	%		5.6	%		10.6	%		6.1	%
Net yield on interest-earning assets		3.46	%		3.57	%		3.47	%		3.66	%
Efficiency ratio ⁽²⁾		70.4	%		78.5	%		72.1	%		80.2	%
Noninterest income as a % of total revenues		32.4	%		39.5	%		33.3	%		38.0	%

Other Information:
Loan originations	$	249,968		$	147,697		$	412,639		$	239,504
Charge-offs to average loans - annualized		0.08	%		0.00	%		0.04	%		0.00	%


	June 30, 2015			December 31, 2014
Selected Balance Sheet Data:
Cash and cash equivalents	$	172,844		$	29,692
Loans, net of deferred fees		1,405,918			1,166,392
Allowance for loan and lease losses (“ALLL”)		(10,800	)		(10,150	)
Total assets		1,869,265			1,355,424
Noninterest-bearing deposits		272,405			246,137
Interest-bearing deposits		993,913			716,817
Borrowings - FHLB Advances		443,000			263,000
Borrowings – term note		29,250			19,886
Shareholders’ equity		122,002			99,496

Selected Capital Data:
Tangible common equity to tangible assets⁽¹⁾		6.41	%		7.33	%
Tangible book value per share⁽¹⁾	$	13.62		$	12.66
Shares outstanding at end of period		8,785,533			7,845,182

Other Information:
Assets under management (end of period)	$	3,380,999		$	3,221,674
Number of employees		252			211
Loan to deposit ratio		119.1	%		118.9	%
Nonperforming assets to total assets		0.36	%		0.11	%
Ratio of ALLL to loans⁽³⁾		0.80	%		0.87	%

(1)	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 June 30, 2015 and December 31, 2014.

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

(3)	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 June 30,						For the Six Months Ended June 30,
	2015			2014			2015			2014
Banking:
Interest income	$	14,993		$	10,931		$	28,151		$	21,606
Interest expense		1,273			888			2,320			1,739
Net interest income		13,720			10,043			25,831			19,867
Provision for loan losses		753			-			903			235
Noninterest income		1,384			1,887			2,662			2,929
Noninterest expense		8,566			7,615			16,485			14,557
Income before taxes on income	$	5,785		$	4,315		$	11,105		$	8,004

Wealth Management:
Noninterest income	$	5,188		$	4,662		$	10,255		$	9,287
Noninterest expense		4,550			4,383			9,265			9,225
Income before taxes on income	$	638		$	279		$	990		$	62

Other and Eliminations:
Interest income	$	-		$	-		$	-		$	-
Interest expense		296			227			536			301
Net interest income		(296	)		(227	)		(536	)		(301	)
Provision for loan losses		-			-			-			-
Noninterest income		(152	)		(133	)		(293	)		(249	)
Noninterest expense		858			1,873			1,582			2,635
Income before taxes on income	$	(1,306	)	$	(2,233	)	$	(2,411	)	$	(3,185	)

FIRST FOUNDATION INC.

ROLLING INCOME STATEMENTS - Unaudited

(in thousands)


	For the Quarter Ended
	June 30, 2014		September 30, 2014		December 31, 2014		March 31, 2015		June 30, 2015

Interest income:
Loans	$	10,227	$	11,404	$	12,405	$	12,101	$	13,362
Securities		550		799		804		815		822
FHLB Stock, fed funds sold and deposits		154		181		199		242		809
Total interest income		10,931		12,384		13,408		13,158		14,993

Interest expense:
Deposits		838		953		991		923		1,115
Borrowings		277		284		316		364		454
Total interest expense		1,115		1,237		1,307		1,287		1,569
Net interest income		9,816		11,147		12,101		11,871		13,424

Provision for loan losses		-		-		-		150		753
Net interest income after provision for loan losses		9,816		11,147		12,101		11,721		12,671

Noninterest income:
Asset management, consulting and other fees		5,202		5,812		5,745		5,850		5,922
Other income		1,214		925		300		354		498
Total noninterest income		6,416		6,737		6,045		6,204		6,420

Noninterest expense:
Compensation and benefits		8,034		8,764		8,272		9,180		9,390
Occupancy and depreciation		1,804		1,867		1,826		1,957		1,968
Professional services and marketing costs		2,099		1,192		1,455		1,058		1,512
Other expenses		1,934		1,272		1,442		1,163		1,104
Total noninterest expense		13,871		13,095		12,995		13,358		13,974

Income before taxes on income		2,361		4,789		5,151		4,567		5,117
Taxes on income		1,094		2,130		2,145		1,941		2,175
Net income	$	1,267	$	2,659		3,006		2,626	$	2,942

Net income per share:
Basic	$	0.16	$	0.34	$	0.39	$	0.33	$	0.36
Diluted	$	0.16	$	0.32	$	0.37	$	0.32	$	0.35
Shares used in computation:
Basic		7,734,231		7,735,350		7,744,940		7,855,457		8,070,386
Diluted		8,145,097		8,240,424		8,195,144		8,211,145		8,425,029

FIRST FOUNDATION INC.

SELECTED INFORMATION: INTEREST MARGIN - Unaudited

(in thousands)


	For the Quarter Ended June 30,						For the Six Months Ended June 30,
	2015			2014			2015			2014

Average Balances:
Loans	$	1,365,711		$	970,211		$	1,284,291		$	948,175
Securities		137,382			90,462			136,460			77,142
Deposits		1,103,150			846,594			1,045,455			831,809
Borrowings		362,544			177,622			334,381			164,674

Average Yield / Rate
Loans		3.92	%		4.22	%		3.97	%		4.29	%
Securities		2.39	%		2.44	%		2.40	%		2.44	%
Deposits		0.41	%		0.40	%		0.40	%		0.40	%
Borrowings		0.50	%		0.62	%		0.49	%		0.49	%

Net Interest Rate Spread		3.34	%		3.42	%		3.34	%		3.52	%

Net Yield on Interest-earning Assets		3.46	%		3.57	%		3.47	%		3.66	%

First Foundation Inc. - FORM 8-K - EX-99.1 - July 23, 2015

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