First Foundation Inc. (NASDAQ:FFWM) ("First Foundation" or the "Company"), a financial services company with two wholly-owned operating subsidiaries, First Foundation Advisors and First Foundation Bank today issued the following updated financial information to reiterate its strong financial position as a regional bank.
First Foundation continues to have a resilient core business, with consolidated total assets valued at more than $13.9 billion as of 3/17/23.
First Foundation Bank remains in a strong liquidity position with available cash and cash equivalents held on balance sheet of approximately $1.3 billion as of 3/17/23. Importantly, the Company has not had to draw down on any of its available credit lines during the previous week, and current balances are as noted below:
- Fully collateralized credit facility from the Federal Home Loan Bank with $830 million available as of 3/17/23.
- Federal Reserve discount window availability of $866 million as of 3/17/23.
- Available uncommitted credit lines of $245 million as of 3/17/23.
- Market value of unpledged securities is $300 million as of 3/17/23, that could be liquidated or pledged to provide additional liquidity if needed.
- Loan balance of $10.7 billion as of 3/17/23.
Following the announcement of the industry's events including news about the closures of Silicon Valley Bank and Signature Bank, the Company experienced a temporary period of net deposit outflows, which were largely concentrated around clients paring their deposit balances, utilizing products such as the Insured Cash Sweep (ICS) accounts, and strategically repositioning accounts to ensure full FDIC coverage. Since 3/15/23, deposit balance fluctuations have normalized, and beginning late last week the Company has experienced inflows and new account openings.
As of March 17, 2023, insured deposits represent approximately 80% of total deposits, including accounts eligible for pass-through insurance. This figure improved from the previously reported 60% of total deposits as of the date of the Federal Financial Institutions Examination Council (FFIEC) 041 call report updated on 2/3/23. Notably, we conducted a reassessment of our deposit base and reclassified all collateralized deposits, such as municipal bonds, resulting in the reduction of uninsured deposits.
"First Foundation remains in a strong financial position," said Scott F. Kavanaugh, President and CEO. "Our liquidity position remains healthy and our prudent approach to risk management has enabled us to navigate recent industry dynamics. We experienced limited deposit outflows last week and have observed a stabilization in deposit trends. We want to thank our customers for their continued support as our management team is dedicated to meeting their needs no matter what shifts in the industry come. Additionally, we welcome the ongoing commitment that government officials, regulatory agencies, and industry leaders have pledged to ensure the resiliency of regional banks like First Foundation."
About First Foundation
First Foundation Inc. (NASDAQ:FFWM) and its subsidiaries offer personal banking, business banking, and private wealth management services, including investment, trust, insurance, and philanthropy services. This comprehensive platform of financial services is designed to help clients at any stage in their financial journey. The broad range of financial products and services offered by First Foundation are more consistent with those offered by larger financial institutions, while its high level of personalized service, accessibility, and responsiveness to clients is more aligned with community banks and boutique wealth management firms. This combination of an integrated platform of comprehensive financial products and personalized service differentiates First Foundation from many of its competitors and has contributed to the growth of its client base and business. Learn more at firstfoundationinc.com or connect with us on LinkedIn and Twitter.
Forward-Looking Statements
This report includes forward-looking statements within the meaning of the "Safe-Harbor" provisions of the Private Securities Litigation Reform Act of 1995, including forward-looking statements regarding our expectations and beliefs about our future financial performance and financial condition, as well as trends in our business and markets. Forward-looking statements often include words such as "believe," "expect," "anticipate," "intend," "plan," "estimate," "project," "outlook," or words of similar meaning, or future or conditional verbs such as "will," "would," "should," "could," or "may." The forward-looking statements in this report 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 report 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 credit losses, which is an inherent risk of the banking business; the negative impacts and disruptions resulting from the COVID-19 pandemic on our colleagues, clients, the communities we serve and the domestic and global economy, which may have an adverse effect on our business, financial position and results of operations; the risk that we will not be able to continue our internal growth rate; the performance of loans currently on deferral following the expiration of the respective deferral periods; the risk that we will not be able to access the securitization market on favorable terms or at all; changes in general economic conditions, either nationally or locally in the areas in which we conduct or will conduct our business; risks associated with changes in interest rates, 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; the risk that we may be unable or that our board of directors may determine that it is inadvisable to pay future dividends at historic levels or at all; risks associated with changes in income tax laws and regulations; 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 our 2022 Annual Report on Form 10-K for the fiscal year ended December 31, 2022, that we filed with the SEC on February 28, 2023, and other documents we file with the SEC from time to time. We urge readers of this report to review those reports and 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 report, 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 report or in the above-referenced reports, 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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