First Foundation (FFWM) AI Stock Analysis

• Market Cap: $520.51M
• Dividend Yield: N/A
• Average Volume (3M): 662.19K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.60
• Revenue Growth: -6.47%
• EPS Growth: -75.82%
• Country: US
• Employees: 561
• Sector: Financial
• Sector Strength: 70
• Industry: Banks - Regional
• EPS (TTM): -0.04
• Shares Outstanding: 82,884,400
• 10 Day Avg. Volume: 774,924
• 30 Day Avg. Volume: 662,190
• PEG Ratio: 0.07
• Price to Book (P/B): 0.39
• Price to Sales (P/S): 0.85
• P/FCF Ratio: -35.39
• Enterprise Value/Market Cap: 0.96
• Enterprise Value/Revenue: 0.89
• Enterprise Value/Gross Profit: 4.77
• Enterprise Value/Ebitda: -6.52
• 1Y Price Target: $7.50
• Price Target Upside: 19.43% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 49 Neutral
• Price Target: $6.00 ▼(-4.46% Downside)

The score is held down primarily by weak financial quality (ongoing losses, negative operating cash flow, and elevated leverage). Technicals provide partial offset with the stock trading above key moving averages and neutral-to-positive momentum, but valuation remains constrained by a negative P/E.

Positive Factors

Merger with FirstSun Capital

The merger with FirstSun Capital is expected to create a stronger regional bank with $17B in assets, enhancing market position and service offerings.

Executive Appointments

New leadership in credit strategy and operations is likely to improve risk management and support disciplined growth, strengthening the company's operational framework.

Free Cash Flow Growth

Positive free cash flow growth indicates improving liquidity and financial flexibility, which can support future investments and debt management.

Negative Factors

Declining Revenue

Declining revenue growth reflects operational challenges and could hinder the company's ability to invest in growth initiatives and maintain competitive positioning.

Rising Debt Levels

Increased leverage poses a risk to financial stability, potentially limiting the company's ability to navigate economic downturns and invest in growth.

Negative Profitability

Negative profitability indicates operational inefficiencies and financial strain, which may impact the company's ability to sustain long-term growth and shareholder value.

First Foundation Business Overview & Revenue Model

Company Description

First Foundation Inc., through its subsidiaries, provides personal banking, business banking, and private wealth management services in the United States. It operates through two segments, Banking and Wealth Management. The company offers a range of bank deposit products, including personal and business checking accounts, savings accounts, interest-bearing negotiable order of withdrawal accounts, money market accounts, and time certificate of deposits; and loan products consisting of multifamily and single family residential real estate loans, commercial real estate loans, and commercial term loans and line of credits, as well as consumer loans, such as personal installment loans and line of credits, and home equity line of credits. It also provides various specialized services comprising trust services, internet and mobile banking, remote deposit capture services, merchant credit card services, ATM cards, Visa debit cards, and business sweep accounts, as well as insurance brokerage services and equipment financing solutions. In addition, the company offers investment management and financial planning services; treasury management services; advisory and coordination services in the areas of estate planning, retirement planning, and charitable and business ownership issues; and financial, investment, and economic advisory and related services. Further, it provides support services, including the processing and transmission of financial and economic data for charitable organizations. The company operates through a network of 28 branch offices and 3 loan production offices in California, Nevada, Texas, and Hawaii. First Foundation Inc. was founded in 1985 and is headquartered in Dallas, Texas.

How the Company Makes Money

First Foundation generates revenue through multiple key streams, primarily from interest income on loans, fees for investment management services, and commissions from financial planning and consulting. The company's commercial and residential lending operations contribute significantly to its earnings, as it charges interest on loans provided to clients. Additionally, FFWM earns fees from managing client investments and providing trust services, which are typically structured as a percentage of assets under management. Strategic partnerships with financial institutions and service providers also enhance its revenue potential, enabling the company to expand its service offerings and reach a broader client base.

First Foundation Financial Statement Overview

Summary

Despite a strong TTM revenue rebound (+24.4% YoY), profitability and cash generation are still weak with a sizable net loss (~$161M), negative operating profit, and negative operating cash flow (~-$29M). Balance-sheet risk is elevated with higher leverage (debt-to-equity ~1.76) and negative ROE in recent periods.

Income Statement

TTM (Trailing-Twelve-Months) revenue rebounded strongly (+24.4% vs. the prior year), but profitability remains pressured with a net loss of about $161M and negative operating profit. Margins are still negative in TTM (Trailing-Twelve-Months), although they improved versus 2024 (less negative operating margin and better gross margin). The key weakness is the multi-year swing from solid profitability in 2020–2022 to sizable losses in 2023–TTM (Trailing-Twelve-Months), suggesting earnings instability despite the recent top-line recovery.

Balance Sheet

Leverage is elevated for the recent periods, with debt running around $1.6B and debt-to-equity about 1.76 in TTM (Trailing-Twelve-Months) (up from 1.52 in 2024), while equity has declined from 2024 to TTM (Trailing-Twelve-Months). Returns on equity are negative in 2023–TTM (Trailing-Twelve-Months), reflecting the loss-making profile. A positive offset is that total debt has been relatively stable year-to-year, but the combination of higher leverage and negative returns reduces balance-sheet strength.

Cash Flow

Cash generation has weakened materially: operating cash flow is negative in TTM (Trailing-Twelve-Months) (about -$29M) and was also negative in 2024, with free cash flow likewise negative in both periods. This contrasts with 2020–2022 when operating cash flow was strongly positive and free cash flow was consistently positive. While the free-cash-flow-to-net-income figure is positive in TTM (Trailing-Twelve-Months), that is largely a function of net losses rather than strong cash conversion, and the core concern remains the recent negative operating cash flow.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	563.01M	481.54M	546.24M	413.93M	308.90M	291.09M
Gross Profit	104.73M	32.49M	175.33M	328.21M	291.10M	237.10M
EBITDA	-76.69M	-129.41M	-191.87M	158.51M	158.63M	125.40M
Net Income	-161.23M	-92.41M	-199.06M	110.51M	109.51M	84.37M
Balance Sheet
Total Assets	11.91B	12.65B	13.33B	13.01B	10.20B	6.96B
Cash, Cash Equivalents and Short-Term Investments	3.28B	2.33B	2.03B	882.65M	2.31B	1.44B
Total Debt	1.60B	1.60B	1.58B	1.37B	210.13M	269.00M
Total Liabilities	10.99B	11.59B	12.40B	11.88B	9.13B	6.26B
Stockholders Equity	917.91M	1.05B	925.34M	1.13B	1.06B	695.71M
Cash Flow
Free Cash Flow	-32.09M	-11.51M	-287.00K	96.91M	93.73M	64.58M
Operating Cash Flow	-28.72M	-8.78M	7.92M	101.49M	96.94M	67.44M
Investing Cash Flow	1.93B	287.36M	132.78M	-3.25B	-79.37M	-24.90M
Financing Cash Flow	-1.28B	-589.08M	529.44M	2.68B	474.49M	521.77M

First Foundation Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 6.28
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FFWM, the sentiment is Positive. The current price of 6.28 is above the 20-day moving average (MA) of 6.18, above the 50-day MA of 5.94, and above the 200-day MA of 5.52, indicating a bullish trend. The MACD of 0.04 indicates Positive momentum. The RSI at 55.23 is Neutral, neither overbought nor oversold. The STOCH value of 38.72 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FFWM.

First Foundation Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AROW	75 Outperform	$555.92M	12.76	8.49%	3.59%	6.86%	6.11%
FBIZ	74 Outperform	$477.15M	9.46	15.02%	2.08%	8.21%	29.65%
HBCP	73 Outperform	$467.26M	10.17	10.86%	1.92%	6.25%	24.92%
BWB	71 Outperform	$529.90M	12.91	8.63%	―	13.96%	25.74%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
COFS	67 Neutral	$431.03M	14.27	6.16%	3.69%	50.36%	-56.64%
FFWM	49 Neutral	$520.51M	-3.34	-16.22%	―	-6.47%	-75.82%