First Foundation Reports $8M Q4 Loss

By Chris Stiles • Thursday, January 29 12:50 • Permanent Link

First Foundation Inc. (NYSE: FFWM) has reported its fourth quarter and full year 2025 results, revealing that the net loss for the quarter was $8.0 million, leading to a loss per share of $0.10. The total net interest income for the quarter was $39.4 million, representing a decline from the prior quarter's $46.1 million. This decrease was primarily due to $6.1 million in costs for hedging the balance sheet’s interest rate risk position in anticipation of the pending merger with FirstSun.

The ratio of the allowance for credit losses to loans held for investment was 1.39%, showing an improvement compared to the prior quarter. Additionally, the total risk-based capital increased to 15.51% at year end, indicating the company's commitment to strengthening its risk-capital balance.

In terms of profitability metrics, the return on average assets and the adjusted return on average assets for the quarter showed improvement compared to the prior quarter. However, the return on average common equity and the return on average tangible common equity remained negative, although they did show improvement from the prior quarter.

The company's total loans decreased to $6,990,626 from $7,769,691 in the prior quarter, while total deposits remained relatively stable. The loan to deposit ratio decreased to 75.3% as of December 31, 2025, from 83.6% as of September 30, 2025, demonstrating a significant reduction in reliance on high-cost funding.

Furthermore, First Foundation Inc. completed a $204.8 million multifamily loan securitization, substantially completing the planned $1.9 billion reduction in the multifamily loan portfolio. The company's focus on improving the balance sheet also resulted in strengthened liquidity and capital positions, with total liquidity of $5.1 billion as of December 31, 2025, and a total risk-based capital ratio of 15.51%.

The company's noninterest expense totaled $62.9 million for the quarter, compared to $57.5 million in the prior quarter, and $67.0 million in the year-ago quarter. Notably, customer service costs decreased to $7.0 million during the quarter, compared to $9.1 million in the prior quarter.

Lastly, loan fundings totaled $183 million at an average yield of 6.65% for the current quarter, representing a decrease from the prior quarter. Investment securities were $3.1 billion as of December 31, 2025, compared to $2.2 billion as of September 30, 2025. Additionally, deposits were $9.3 billion as of December 31, 2025, remaining relatively stable from the prior quarter.

As a result of these announcements, the company's shares have moved -0.95% on the market, and are now trading at a price of $6.23. For the full picture, make sure to review First Foundation's 8-K report.

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