Jefferies analyst David Chiaverini has begun coverage on First Foundation (FFWM, Financial) with a Buy rating, setting a target price of $7. This move is part of the firm's broader coverage of 32 regional and mid-cap banks, reflecting an optimistic perspective despite existing tariff uncertainties.
Chiaverini highlights several factors that could benefit banks like First Foundation (FFWM, Financial), such as potential rebounds in loan growth as the U.S. economy avoids a recession, the widening of net interest margins as the yield curve steepens, and robust credit metrics. Additionally, the analyst points out the advantage of excess capital, which banks can deploy strategically, as well as the appealing valuations currently present in the market.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 3 analysts, the average target price for First Foundation Inc (FFWM, Financial) is $6.83 with a high estimate of $8.50 and a low estimate of $6.00. The average target implies an upside of 28.93% from the current price of $5.30. More detailed estimate data can be found on the First Foundation Inc (FFWM) Forecast page.
Based on the consensus recommendation from 4 brokerage firms, First Foundation Inc's (FFWM, Financial) average brokerage recommendation is currently 2.8, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for First Foundation Inc (FFWM, Financial) in one year is $1.63, suggesting a downside of 69.25% from the current price of $5.3. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the First Foundation Inc (FFWM) Summary page.
FFWM Key Business Developments
Release Date: April 30, 2025
- Net Income: $6.9 million or $0.08 per share, marking a return to profitability.
- Net Interest Margin: Expanded by 9 basis points to 1.67%.
- New Loan Balances: $180 million funded, with an average yield of 7.09%.
- Loans Held for Sale: Unchanged at $1.3 billion.
- Allowance for Credit Losses (ACL): Increased by 5 basis points to 46 basis points, totaling $35.2 million.
- Assets Under Management: $5.1 billion, down from $5.4 billion at the end of the previous year.
- Deposits: Declined to $9.6 billion, with a $400 million decrease in high-cost brokered deposits.
- Total Cost of Deposits: Decreased to 3.04% from 3.19% in the prior quarter.
- Common Equity Tier 1 Ratio: 10.6%.
- Tier 1 Leverage Ratio: 8.1%.
- Pre-Provision Net Revenue (PPNR): $9.7 million or $0.11 per share.
- Non-Interest Income: $19.6 million, including a $4.7 million gain on sale of securities.
- Non-Interest Expense: $46.7 million, a 5% reduction from the previous quarter.
- Provision for Credit Losses: $3.4 million, significantly lower than the previous quarter's $20.6 million.
- Tangible Book Value: Increased to $9.42 per share from $9.36 per share in the prior quarter.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- First Foundation Inc (FFWM, Financial) returned to profitability with a net income of $6.9 million, reversing previous quarters' losses.
- Net interest margin expanded by 9 basis points to 1.67%, indicating improved financial performance.
- The company successfully reduced non-interest expenses by $5 million compared to the previous quarter.
- Asset migration trends were positive, with past due and non-accrual loans falling by 22% to $54.8 million.
- First Foundation Inc (FFWM) remains strongly capitalized with a common equity Tier 1 ratio of 10.6% and a Tier 1 leverage ratio of 8.1%.
Negative Points
- Loans held for investment decreased due to $354 million in payoffs, indicating a reduction in loan portfolio size.
- Assets under management declined to $5.1 billion from $5.4 billion at the end of the previous year.
- Overall deposits declined modestly to $9.6 billion, partly due to a $400 million decrease in high-cost brokered deposits.
- Provision for credit losses, although lower than the previous quarter, still amounted to $3.4 million.
- The company faces competition in the C&I loan market, which may impact pricing and growth opportunities.
