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First Foundation (FFWM)
NYSE:FFWM

First Foundation (FFWM) AI Stock Analysis

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First Foundation

(NYSE:FFWM)

49Neutral
First Foundation's stock reflects a challenging financial backdrop with negative profitability and liquidity concerns. While the earnings call provides hope for future improvements, ongoing risks in asset management and valuation concerns suggest caution. Technical indicators offer some stability, but not enough to offset fundamental issues.

First Foundation (FFWM) vs. S&P 500 (SPY)

First Foundation Business Overview & Revenue Model

Company DescriptionFirst Foundation Inc. (FFWM) is a financial services company that operates primarily in the banking and wealth management sectors. The company provides a wide range of services, including personal and business banking, trust services, investment management, and financial advisory services. With a focus on delivering personalized solutions, First Foundation aims to cater to the diverse financial needs of its clientele, which includes individuals, families, and businesses.
How the Company Makes MoneyFirst Foundation Inc. makes money through a combination of interest income, fees, and service charges. Its banking operations generate revenue from interest earned on loans and advances given to customers, while simultaneously managing the cost of deposits from which these funds are sourced. The company also earns non-interest income through its wealth management and advisory services, which include fees from investment management, financial planning, and trust services. Additionally, First Foundation benefits from partnerships with other financial institutions to enhance its service offerings and generate additional fee-based income. The company's diversified revenue streams help it manage risk and sustain profitability across various economic cycles.

First Foundation Financial Statement Overview

Summary
First Foundation faces profitability and cash flow challenges despite maintaining a stable equity base. While the balance sheet shows improvement in debt management, negative trends in income and cash flow statements highlight the need for strategic interventions to boost revenue and manage expenses effectively.
Income Statement
40
Negative
The company's income statement shows a mixed performance with declining total revenue from $328.7 million in 2022 to $174.9 million in 2023, and a further decline to $610.9 million in 2024. Net income has been negative in the last two years, indicating profitability challenges. Gross profit margins remained stable, but negative EBIT and EBITDA in 2023 further highlight operational challenges.
Balance Sheet
55
Neutral
First Foundation's balance sheet reflects a stable equity base with stockholders' equity of $1.05 billion in 2024. The company has managed to reduce total debt to zero in 2024, improving its debt-to-equity ratio substantially. However, total assets have slightly decreased over the years, and the equity ratio remains moderate, indicating room for improved asset management.
Cash Flow
30
Negative
Cash flow analysis reveals significant challenges, with operating cash flow turning negative in 2024 at -$8.78 million. Free cash flow also declined to -$8.78 million, indicating liquidity and cash management issues. The company needs to address these cash flow deficits to ensure financial stability.
Breakdown
Dec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
611.00M174.85M328.75M294.96M243.85M
Gross Profit
611.00M573.69M328.75M294.96M243.85M
EBIT
593.00M-191.87M226.28M151.78M118.77M
EBITDA
0.00-191.87M158.51M158.63M125.40M
Net Income Common Stockholders
-92.41M-199.06M110.51M109.51M84.37M
Balance SheetCash, Cash Equivalents and Short-Term Investments
2.33B2.04B882.65M2.31B1.44B
Total Assets
12.65B13.33B13.01B10.20B6.96B
Total Debt
1.60B1.58B1.37B210.13M269.00M
Net Debt
582.70M255.82M713.44M-911.63M-360.71M
Total Liabilities
11.59B12.40B11.88B9.13B6.26B
Stockholders Equity
1.05B925.34M1.13B1.06B695.71M
Cash FlowFree Cash Flow
-8.78M-2.39M96.47M93.73M64.58M
Operating Cash Flow
-8.78M5.82M101.05M96.94M67.44M
Investing Cash Flow
287.36M134.88M-3.25B-79.37M-24.90M
Financing Cash Flow
-589.08M529.44M2.68B474.49M521.77M

First Foundation Technical Analysis

Technical Analysis Sentiment
Positive
Last Price5.12
Price Trends
50DMA
4.91
Positive
100DMA
5.52
Negative
200DMA
6.23
Negative
Market Momentum
MACD
0.02
Negative
RSI
55.95
Neutral
STOCH
55.70
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 5.12 is above the 20-day moving average (MA) of 4.88, above the 50-day MA of 4.91, and below the 200-day MA of 6.23, indicating a neutral trend. The MACD of 0.02 indicates Negative momentum. The RSI at 55.95 is Neutral, neither overbought nor oversold. The STOCH value of 55.70 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FFWM.

First Foundation Risk Analysis

First Foundation disclosed 46 risk factors in its most recent earnings report. First Foundation reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

First Foundation Peers Comparison

Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
81
Outperform
$398.14M8.7014.36%2.16%12.02%26.09%
77
Outperform
$420.31M9.8015.17%1.28%6.99%12.46%
69
Neutral
$378.85M13.2813.33%1.57%14.44%16.49%
63
Neutral
$12.46B9.568.14%17044.64%12.63%-4.25%
62
Neutral
$368.00M9.4111.58%3.63%1.99%17.65%
51
Neutral
$405.56M-8.86%7.03%7.93%-570.64%
49
Neutral
$413.58M-9.34%1.00%6.75%62.30%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
FFWM
First Foundation
5.12
-0.69
-11.88%
FBIZ
First Business Financial
47.86
13.39
38.85%
GCBC
Greene County Bancorp
22.08
-8.62
-28.08%
KRNY
Kearny Financial
6.28
0.90
16.73%
BSRR
Sierra Bancorp
26.61
6.27
30.83%
UNTY
Unity Bancorp
41.79
14.50
53.13%

First Foundation Earnings Call Summary

Earnings Call Date:Apr 30, 2025
(Q1-2025)
|
% Change Since: 3.02%|
Next Earnings Date:Jul 29, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted a significant return to profitability and improvements in net interest margin and credit portfolio, indicating strategic progress. However, there are challenges with asset management and deposits, alongside increased criticized assets. The sentiment is balanced with optimism about strategic initiatives.
Q1-2025 Updates
Positive Updates
Return to Profitability
First Foundation reported a net income of $6.9 million or $0.08 per share, a significant turnaround from a net loss of $14.1 million in the previous quarter.
Net Interest Margin Expansion
Net interest margin expanded by 9 basis points to 1.67%, alongside a reduction in non-interest expense by $5 million.
Loan Portfolio Strategy
Funded $180 million of new loan balances at an average yield of 7.09%, with 78% being C&I loans. Strategic focus remains on reducing commercial real estate concentration.
Credit Portfolio Improvement
Asset migration trends were positive, with past due and nonaccrual loans falling 22% to $54.8 million.
Capitalization and Liquidity
Strong capitalization with a common equity Tier 1 ratio of 10.6% and Tier 1 leverage ratio of 8.1%. Ample liquidity with $3.7 billion of borrowing capacity.
Negative Updates
Decline in Assets Under Management
Assets under management ended the quarter at $5.1 billion compared to $5.4 billion at the end of the year.
Deposit Decline
Overall deposits declined modestly to $9.6 billion, largely due to a $400 million decrease in high-cost brokered deposits.
Increased Criticized Assets
An increase in the level of criticized assets due to continued stress testing for higher interest rates and higher expenses potentially impacting CRE cash flows.
Company Guidance
In the First Foundation's First Quarter 2025 Earnings Conference Call, the company reported a return to profitability with a net income of $6.9 million or $0.08 per share, compared to a net loss of $14.1 million in the previous quarter. The net interest margin expanded by 9 basis points to 1.67%, aided by a $5 million reduction in non-interest expense. They funded $180 million of new loans at an average yield of 7.09%, with 78% being C&I loans. Despite a decline in overall deposits to $9.6 billion, the bank saw a reduction in high-cost brokered deposits and an increase in retail, specialty, and digital banking deposits. The provision for credit losses decreased significantly to $3.4 million from $20.6 million, and the allowance for credit losses (ACL) increased to 46 basis points. Assets under management were reported at $5.1 billion, and the bank remains well-capitalized with a common equity Tier 1 ratio of 10.6% and a Tier 1 leverage ratio of 8.1%. The company anticipates modest asset reductions and margin expansion, targeting a net interest margin between 1.8% and 1.9% by the fourth quarter of 2025, with further improvements expected by 2026.

First Foundation Corporate Events

Business Operations and StrategyFinancial Disclosures
First Foundation Returns to Profitability in Q1 2025
Positive
Apr 30, 2025

First Foundation Inc. reported a return to profitability in the first quarter of 2025, driven by an increase in net interest margin and normalized credit costs. The company achieved a fully diluted EPS of $0.08, a significant improvement from the previous quarter’s loss. Key strategic initiatives include reducing commercial real estate concentration, improving deposit quality, and building organic capital. The company also reported strong credit performance with negligible net charge-offs and a stable provision for credit losses.

Spark’s Take on FFWM Stock

According to Spark, TipRanks’ AI Analyst, FFWM is a Neutral.

First Foundation faces significant financial challenges with declining revenue and negative profitability. Despite improvements in debt management and strategic initiatives, the stock’s technical indicators and valuation reflect ongoing issues. The mixed earnings call and strategic focus offer some hope, but substantial risks remain.

To see Spark’s full report on FFWM stock, click here.

Executive/Board Changes
First Foundation Finalizes Executive Employment Agreements
Neutral
Feb 13, 2025

First Foundation Inc. and its subsidiary, First Foundation Bank, have finalized employment agreements with their top executives, Thomas C. Shafer and Simone Lagomarsino. Mr. Shafer was appointed CEO on November 21, 2024, and will earn an annual base salary of $1,090,000 with additional incentives, while Ms. Lagomarsino, appointed as President in 2024, will receive $800,000 annually. Both agreements include provisions for termination without cause and participation in executive benefit programs.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.