10-Q 1 ffwm-20220630x10q.htm 10-Q
http://fasb.org/us-gaap/2021-01-31#InvestmentAdvisoryManagementAndAdministrativeServiceMemberhttp://fasb.org/us-gaap/2021-01-31#InvestmentAdvisoryManagementAndAdministrativeServiceMemberhttp://fasb.org/us-gaap/2021-01-31#InvestmentAdvisoryManagementAndAdministrativeServiceMember0001413837--12-312022Q2falsehttp://fasb.org/us-gaap/2021-01-31#InvestmentAdvisoryManagementAndAdministrativeServiceMember0001413837srt:MinimumMember2022-06-300001413837srt:MaximumMember2022-06-300001413837srt:ParentCompanyMemberffwm:SubordinatedNotesDue2030Member2022-06-300001413837srt:ParentCompanyMemberffwm:SubordinatedNotesDue2030Member2021-12-310001413837us-gaap:RetainedEarningsMember2022-06-300001413837us-gaap:AdditionalPaidInCapitalMember2022-06-300001413837us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-06-300001413837us-gaap:RetainedEarningsMember2022-03-310001413837us-gaap:AdditionalPaidInCapitalMember2022-03-310001413837us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-03-310001413837us-gaap:RetainedEarningsMember2021-12-310001413837us-gaap:AdditionalPaidInCapitalMember2021-12-310001413837us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-12-310001413837us-gaap:RetainedEarningsMember2021-06-300001413837us-gaap:AdditionalPaidInCapitalMember2021-06-300001413837us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-06-300001413837us-gaap:RetainedEarningsMember2021-03-310001413837us-gaap:AdditionalPaidInCapitalMember2021-03-310001413837us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-03-3100014138372021-03-310001413837us-gaap:RetainedEarningsMember2020-12-310001413837us-gaap:AdditionalPaidInCapitalMember2020-12-310001413837us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-12-310001413837us-gaap:CommonStockMember2022-06-300001413837us-gaap:CommonStockMember2022-03-310001413837us-gaap:CommonStockMember2021-12-310001413837us-gaap:CommonStockMember2021-06-300001413837us-gaap:CommonStockMember2021-03-310001413837us-gaap:CommonStockMember2020-12-310001413837ffwm:FhlbAdvancesMaturingInOctober2020Member2022-06-300001413837us-gaap:FairValueInputsLevel3Member2022-01-012022-06-300001413837us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-04-012022-06-300001413837us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-01-012022-06-300001413837us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-04-012021-06-300001413837us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-01-012021-06-300001413837us-gaap:ResidentialPortfolioSegmentMemberus-gaap:RealEstateLoanMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2022-06-300001413837us-gaap:ResidentialPortfolioSegmentMemberus-gaap:RealEstateLoanMemberus-gaap:FinancialAssetPastDueMember2022-06-300001413837us-gaap:ResidentialPortfolioSegmentMemberus-gaap:RealEstateLoanMemberus-gaap:FinancialAssetNotPastDueMember2022-06-300001413837us-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:RealEstateLoanMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2022-06-300001413837us-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:RealEstateLoanMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2022-06-300001413837us-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:RealEstateLoanMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2022-06-300001413837us-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:RealEstateLoanMemberus-gaap:FinancialAssetPastDueMember2022-06-300001413837us-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:RealEstateLoanMemberus-gaap:FinancialAssetNotPastDueMember2022-06-300001413837ffwm:LandAndConstructionMemberus-gaap:RealEstateLoanMemberus-gaap:FinancialAssetNotPastDueMember2022-06-300001413837us-gaap:ConsumerPortfolioSegmentMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2022-06-300001413837us-gaap:ConsumerPortfolioSegmentMemberus-gaap:FinancialAssetPastDueMember2022-06-300001413837us-gaap:ConsumerPortfolioSegmentMemberus-gaap:FinancialAssetNotPastDueMember2022-06-300001413837us-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2022-06-300001413837us-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2022-06-300001413837us-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancialAssetPastDueMember2022-06-300001413837us-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancialAssetNotPastDueMember2022-06-300001413837us-gaap:FinancialAssetNotPastDueMember2022-06-300001413837us-gaap:ResidentialPortfolioSegmentMemberus-gaap:RealEstateLoanMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2021-12-310001413837us-gaap:ResidentialPortfolioSegmentMemberus-gaap:RealEstateLoanMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2021-12-310001413837us-gaap:ResidentialPortfolioSegmentMemberus-gaap:RealEstateLoanMemberus-gaap:FinancialAssetPastDueMember2021-12-310001413837us-gaap:ResidentialPortfolioSegmentMemberus-gaap:RealEstateLoanMemberus-gaap:FinancialAssetNotPastDueMember2021-12-310001413837us-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:RealEstateLoanMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2021-12-310001413837us-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:RealEstateLoanMemberus-gaap:FinancialAssetPastDueMember2021-12-310001413837us-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:RealEstateLoanMemberus-gaap:FinancialAssetNotPastDueMember2021-12-310001413837ffwm:LandAndConstructionMemberus-gaap:RealEstateLoanMemberus-gaap:FinancialAssetNotPastDueMember2021-12-310001413837us-gaap:ConsumerPortfolioSegmentMemberus-gaap:FinancialAssetNotPastDueMember2021-12-310001413837us-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancingReceivables60To89DaysPastDueMember2021-12-310001413837us-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancingReceivables30To59DaysPastDueMember2021-12-310001413837us-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancialAssetPastDueMember2021-12-310001413837us-gaap:CommercialPortfolioSegmentMemberus-gaap:FinancialAssetNotPastDueMember2021-12-310001413837us-gaap:FinancialAssetNotPastDueMember2021-12-310001413837ffwm:ResidentialSingleFamilyMemberus-gaap:RealEstateLoanMember2022-06-300001413837ffwm:ResidentialMultifamilyMemberus-gaap:RealEstateLoanMember2022-06-300001413837ffwm:LandAndConstructionMemberus-gaap:RealEstateLoanMember2022-06-300001413837us-gaap:RealEstateLoanMember2022-06-300001413837ffwm:ResidentialSingleFamilyMemberus-gaap:RealEstateLoanMember2021-12-310001413837ffwm:ResidentialMultifamilyMemberus-gaap:RealEstateLoanMember2021-12-310001413837ffwm:LandAndConstructionMemberus-gaap:RealEstateLoanMember2021-12-310001413837us-gaap:RealEstateLoanMember2021-12-310001413837us-gaap:ResidentialPortfolioSegmentMember2022-03-310001413837us-gaap:ConsumerPortfolioSegmentMember2022-03-310001413837us-gaap:CommercialRealEstatePortfolioSegmentMember2022-03-310001413837us-gaap:CommercialPortfolioSegmentMember2022-03-310001413837ffwm:LandAndConstructionMember2022-03-310001413837us-gaap:ResidentialPortfolioSegmentMember2020-12-310001413837us-gaap:ConsumerPortfolioSegmentMember2020-12-310001413837us-gaap:CommercialRealEstatePortfolioSegmentMember2020-12-310001413837us-gaap:CommercialPortfolioSegmentMember2020-12-310001413837ffwm:LandAndConstructionMember2020-12-310001413837us-gaap:RevolvingCreditFacilityMember2017-12-310001413837ffwm:SubordinatedNotesDue2030Member2022-06-300001413837srt:ParentCompanyMember2021-12-310001413837us-gaap:OperatingSegmentsMemberffwm:WealthManagementMember2022-04-012022-06-300001413837us-gaap:OperatingSegmentsMemberffwm:BankingSegmentMember2022-04-012022-06-300001413837us-gaap:MaterialReconcilingItemsMember2022-04-012022-06-300001413837us-gaap:OperatingSegmentsMemberffwm:WealthManagementMember2022-01-012022-06-300001413837us-gaap:OperatingSegmentsMemberffwm:BankingSegmentMember2022-01-012022-06-300001413837us-gaap:MaterialReconcilingItemsMember2022-01-012022-06-300001413837us-gaap:OperatingSegmentsMemberffwm:WealthManagementMember2021-04-012021-06-300001413837us-gaap:OperatingSegmentsMemberffwm:BankingSegmentMember2021-04-012021-06-300001413837us-gaap:MaterialReconcilingItemsMember2021-04-012021-06-300001413837us-gaap:OperatingSegmentsMemberffwm:WealthManagementMember2021-01-012021-06-300001413837us-gaap:OperatingSegmentsMemberffwm:BankingSegmentMember2021-01-012021-06-300001413837us-gaap:MaterialReconcilingItemsMember2021-01-012021-06-300001413837ffwm:FirstFoundationBankMember2021-01-012021-12-310001413837ffwm:ResidentialSingleFamilyMemberus-gaap:SpecialMentionMember2022-06-300001413837ffwm:ResidentialSingleFamilyMemberus-gaap:SpecialMentionMember2021-12-310001413837us-gaap:ResidentialPortfolioSegmentMemberus-gaap:SpecialMentionMember2021-12-310001413837us-gaap:ConsumerPortfolioSegmentMemberus-gaap:SubstandardMember2022-06-300001413837us-gaap:CommercialPortfolioSegmentMemberus-gaap:SpecialMentionMember2022-06-300001413837ffwm:LandAndConstructionMemberus-gaap:SpecialMentionMember2022-06-300001413837us-gaap:ConsumerPortfolioSegmentMemberus-gaap:PassMember2022-06-300001413837us-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:SubstandardMember2022-06-300001413837us-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:SpecialMentionMember2022-06-300001413837us-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:PassMember2022-06-300001413837us-gaap:CommercialPortfolioSegmentMemberus-gaap:SubstandardMember2022-06-300001413837us-gaap:CommercialPortfolioSegmentMemberus-gaap:PassMember2022-06-300001413837ffwm:ResidentialSingleFamilyMemberus-gaap:SubstandardMember2022-06-300001413837ffwm:ResidentialSingleFamilyMemberus-gaap:PassMember2022-06-300001413837ffwm:ResidentialMultifamilyMemberus-gaap:PassMember2022-06-300001413837ffwm:LandAndConstructionMemberus-gaap:PassMember2022-06-300001413837us-gaap:SubstandardMember2022-06-300001413837us-gaap:SpecialMentionMember2022-06-300001413837us-gaap:PassMember2022-06-300001413837ffwm:ResidentialSingleFamilyMember2022-06-300001413837ffwm:ResidentialMultifamilyMember2022-06-300001413837us-gaap:ResidentialPortfolioSegmentMemberus-gaap:PassMember2021-12-310001413837us-gaap:ConsumerPortfolioSegmentMemberus-gaap:PassMember2021-12-310001413837us-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:SubstandardMember2021-12-310001413837us-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:SpecialMentionMember2021-12-310001413837us-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:PassMember2021-12-310001413837us-gaap:CommercialPortfolioSegmentMemberus-gaap:SubstandardMember2021-12-310001413837us-gaap:CommercialPortfolioSegmentMemberus-gaap:SpecialMentionMember2021-12-310001413837us-gaap:CommercialPortfolioSegmentMemberus-gaap:PassMember2021-12-310001413837ffwm:ResidentialSingleFamilyMemberus-gaap:SubstandardMember2021-12-310001413837ffwm:ResidentialSingleFamilyMemberus-gaap:PassMember2021-12-310001413837ffwm:LandAndConstructionMemberus-gaap:SpecialMentionMember2021-12-310001413837ffwm:LandAndConstructionMemberus-gaap:PassMember2021-12-310001413837us-gaap:SubstandardMember2021-12-310001413837us-gaap:SpecialMentionMember2021-12-310001413837us-gaap:PassMember2021-12-310001413837ffwm:ResidentialSingleFamilyMember2021-12-310001413837us-gaap:ResidentialPortfolioSegmentMemberus-gaap:RealEstateLoanMember2022-06-300001413837us-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:RealEstateLoanMember2022-06-300001413837us-gaap:ResidentialPortfolioSegmentMemberus-gaap:RealEstateLoanMember2021-12-310001413837us-gaap:CommercialRealEstatePortfolioSegmentMemberus-gaap:RealEstateLoanMember2021-12-310001413837us-gaap:SubsequentEventMember2022-07-250001413837us-gaap:RetainedEarningsMember2022-04-012022-06-300001413837us-gaap:RetainedEarningsMember2022-01-012022-06-300001413837us-gaap:RetainedEarningsMember2021-04-012021-06-300001413837us-gaap:RetainedEarningsMember2021-01-012021-06-300001413837us-gaap:SubsequentEventMember2022-07-252022-07-2500014138372022-03-310001413837ffwm:SubordinatedNotesDue2032Member2022-06-300001413837ffwm:SubordinatedNotesDue2030Memberus-gaap:SecuredOvernightFinancingRateSofrOvernightIndexSwapRateMember2022-01-012022-06-300001413837ffwm:SubordinatedNotesDue2030Memberus-gaap:SecuredOvernightFinancingRateSofrOvernightIndexSwapRateMember2021-01-012021-12-310001413837us-gaap:RevolvingCreditFacilityMemberus-gaap:LondonInterbankOfferedRateLIBORMember2017-01-012017-12-310001413837ffwm:FirstFoundationBankMember2022-01-012022-06-300001413837ffwm:FirstFoundationBankMember2021-01-012021-06-300001413837ffwm:TgrFinancialIncMemberus-gaap:FinancialAssetAcquiredAndNoCreditDeteriorationMember2022-01-012022-06-3000014138372020-12-310001413837ffwm:TgrFinancialIncMemberus-gaap:EstimateOfFairValueFairValueDisclosureMember2021-12-172021-12-170001413837ffwm:TgrFinancialIncMember2021-12-170001413837ffwm:TgrFinancialIncMember2021-12-172021-12-170001413837us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberffwm:BeneficialInterestFederalHomeLoanMortgageCorporationSecuritizationMember2022-06-300001413837us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MunicipalBondsMember2022-06-300001413837us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MortgageBackedSecuritiesIssuedByUSGovernmentSponsoredEnterprisesMember2022-06-300001413837us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateBondSecuritiesMember2022-06-300001413837us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CollateralizedMortgageObligationsMember2022-06-300001413837us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberffwm:SbaSecuritiesMember2022-06-300001413837us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasurySecuritiesMember2022-06-300001413837us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasurySecuritiesMember2022-06-300001413837us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MunicipalBondsMember2022-06-300001413837us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MortgageBackedSecuritiesIssuedByUSGovernmentSponsoredEnterprisesMember2022-06-300001413837us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateBondSecuritiesMember2022-06-300001413837us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CollateralizedMortgageObligationsMember2022-06-300001413837us-gaap:FairValueMeasurementsRecurringMemberffwm:SbaSecuritiesMember2022-06-300001413837us-gaap:FairValueMeasurementsRecurringMemberffwm:BeneficialInterestFederalHomeLoanMortgageCorporationSecuritizationMember2022-06-300001413837us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberffwm:BeneficialInterestFederalHomeLoanMortgageCorporationSecuritizationMember2021-12-310001413837us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MunicipalBondsMember2021-12-310001413837us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MortgageBackedSecuritiesIssuedByUSGovernmentSponsoredEnterprisesMember2021-12-310001413837us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateBondSecuritiesMember2021-12-310001413837us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CollateralizedMortgageObligationsMember2021-12-310001413837us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberffwm:SbaSecuritiesMember2021-12-310001413837us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasurySecuritiesMember2021-12-310001413837us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasurySecuritiesMember2021-12-310001413837us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MunicipalBondsMember2021-12-310001413837us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MortgageBackedSecuritiesIssuedByUSGovernmentSponsoredEnterprisesMember2021-12-310001413837us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateBondSecuritiesMember2021-12-310001413837us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CollateralizedMortgageObligationsMember2021-12-310001413837us-gaap:FairValueMeasurementsRecurringMemberffwm:SbaSecuritiesMember2021-12-310001413837us-gaap:FairValueMeasurementsRecurringMemberffwm:BeneficialInterestFederalHomeLoanMortgageCorporationSecuritizationMember2021-12-310001413837us-gaap:USTreasurySecuritiesMember2022-06-300001413837us-gaap:MunicipalBondsMember2022-06-300001413837us-gaap:MortgageBackedSecuritiesIssuedByUSGovernmentSponsoredEnterprisesMember2022-06-300001413837us-gaap:CollateralizedMortgageObligationsMember2022-06-300001413837us-gaap:USTreasurySecuritiesMember2021-12-310001413837us-gaap:CollateralizedMortgageObligationsMember2021-12-310001413837us-gaap:CorporateBondSecuritiesMember2022-06-300001413837ffwm:SbaSecuritiesMember2022-06-300001413837ffwm:BeneficialInterestFederalHomeLoanMortgageCorporationSecuritizationMember2022-06-300001413837us-gaap:MunicipalBondsMember2021-12-310001413837us-gaap:MortgageBackedSecuritiesIssuedByUSGovernmentSponsoredEnterprisesMember2021-12-310001413837us-gaap:CorporateBondSecuritiesMember2021-12-310001413837ffwm:SbaSecuritiesMember2021-12-310001413837ffwm:BeneficialInterestFederalHomeLoanMortgageCorporationSecuritizationMember2021-12-310001413837us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2022-06-300001413837us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2022-06-300001413837us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2022-06-300001413837us-gaap:FairValueMeasurementsRecurringMember2022-06-300001413837us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2021-12-310001413837us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2021-12-310001413837us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2021-12-310001413837us-gaap:FairValueMeasurementsRecurringMember2021-12-310001413837us-gaap:RestrictedStockUnitsRSUMember2021-04-012021-06-300001413837us-gaap:RestrictedStockUnitsRSUMember2021-01-012021-06-300001413837srt:MinimumMemberus-gaap:FairValueInputsLevel3Memberus-gaap:AvailableforsaleSecuritiesMemberus-gaap:MeasurementInputDiscountRateMember2022-06-300001413837srt:MinimumMemberus-gaap:FairValueInputsLevel3Memberus-gaap:AvailableforsaleSecuritiesMemberus-gaap:MeasurementInputConstantPrepaymentRateMember2022-06-300001413837srt:MinimumMemberus-gaap:FairValueInputsLevel3Memberffwm:MortgageServicingRightsMemberus-gaap:MeasurementInputDiscountRateMember2022-06-300001413837srt:MinimumMemberus-gaap:FairValueInputsLevel3Memberffwm:MortgageServicingRightsMemberus-gaap:MeasurementInputConstantPrepaymentRateMember2022-06-300001413837srt:MaximumMemberus-gaap:FairValueInputsLevel3Memberus-gaap:AvailableforsaleSecuritiesMemberus-gaap:MeasurementInputDiscountRateMember2022-06-300001413837srt:MaximumMemberus-gaap:FairValueInputsLevel3Memberus-gaap:AvailableforsaleSecuritiesMemberus-gaap:MeasurementInputConstantPrepaymentRateMember2022-06-300001413837srt:MaximumMemberus-gaap:FairValueInputsLevel3Memberffwm:MortgageServicingRightsMemberus-gaap:MeasurementInputDiscountRateMember2022-06-300001413837srt:MaximumMemberus-gaap:FairValueInputsLevel3Memberffwm:MortgageServicingRightsMemberus-gaap:MeasurementInputConstantPrepaymentRateMember2022-06-300001413837srt:MinimumMemberus-gaap:FairValueInputsLevel3Memberus-gaap:AvailableforsaleSecuritiesMemberus-gaap:MeasurementInputDiscountRateMember2021-12-310001413837srt:MinimumMemberus-gaap:FairValueInputsLevel3Memberus-gaap:AvailableforsaleSecuritiesMemberus-gaap:MeasurementInputConstantPrepaymentRateMember2021-12-310001413837srt:MaximumMemberus-gaap:FairValueInputsLevel3Memberus-gaap:AvailableforsaleSecuritiesMemberus-gaap:MeasurementInputDiscountRateMember2021-12-310001413837srt:MaximumMemberus-gaap:FairValueInputsLevel3Memberus-gaap:AvailableforsaleSecuritiesMemberus-gaap:MeasurementInputConstantPrepaymentRateMember2021-12-310001413837us-gaap:AdditionalPaidInCapitalMember2022-04-012022-06-300001413837us-gaap:CommonStockMember2022-04-012022-06-300001413837us-gaap:CommonStockMember2022-01-012022-06-300001413837us-gaap:CommonStockMember2021-04-012021-06-300001413837us-gaap:CommonStockMember2021-01-012021-06-300001413837us-gaap:AdditionalPaidInCapitalMember2022-01-012022-06-300001413837us-gaap:AdditionalPaidInCapitalMember2021-04-012021-06-300001413837us-gaap:AdditionalPaidInCapitalMember2021-01-012021-06-300001413837us-gaap:ResidentialPortfolioSegmentMember2022-04-012022-06-300001413837us-gaap:ConsumerPortfolioSegmentMember2022-04-012022-06-300001413837us-gaap:CommercialRealEstatePortfolioSegmentMember2022-04-012022-06-300001413837us-gaap:CommercialPortfolioSegmentMember2022-04-012022-06-300001413837ffwm:LandAndConstructionMember2022-04-012022-06-300001413837us-gaap:ResidentialPortfolioSegmentMember2022-01-012022-06-300001413837us-gaap:ConsumerPortfolioSegmentMember2022-01-012022-06-300001413837us-gaap:CommercialRealEstatePortfolioSegmentMember2022-01-012022-06-300001413837us-gaap:CommercialPortfolioSegmentMember2022-01-012022-06-300001413837us-gaap:ResidentialPortfolioSegmentMember2021-01-012021-12-310001413837us-gaap:ConsumerPortfolioSegmentMember2021-01-012021-12-310001413837us-gaap:CommercialRealEstatePortfolioSegmentMember2021-01-012021-12-310001413837us-gaap:CommercialPortfolioSegmentMember2021-01-012021-12-310001413837ffwm:LandAndConstructionMember2021-01-012021-12-3100014138372021-01-012021-12-310001413837us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2022-06-300001413837us-gaap:FinancingReceivables60To89DaysPastDueMember2022-06-300001413837us-gaap:FinancingReceivables60To89DaysPastDueMember2021-12-310001413837us-gaap:FinancingReceivables30To59DaysPastDueMember2022-06-300001413837us-gaap:FinancingReceivables30To59DaysPastDueMember2021-12-310001413837us-gaap:FinancialAssetPastDueMember2022-06-300001413837us-gaap:FinancialAssetPastDueMember2021-12-3100014138372022-01-012022-01-010001413837ffwm:FirstFoundationBankMember2022-06-300001413837ffwm:FirstFoundationBankMember2021-12-310001413837us-gaap:ResidentialPortfolioSegmentMember2022-06-300001413837us-gaap:ConsumerPortfolioSegmentMember2022-06-300001413837us-gaap:CommercialRealEstatePortfolioSegmentMember2022-06-300001413837ffwm:LandAndConstructionMember2022-06-300001413837us-gaap:ResidentialPortfolioSegmentMember2021-12-310001413837us-gaap:ConsumerPortfolioSegmentMember2021-12-310001413837us-gaap:CommercialRealEstatePortfolioSegmentMember2021-12-310001413837ffwm:LandAndConstructionMember2021-12-3100014138372021-06-300001413837ffwm:LandAndConstructionMemberus-gaap:PassMember2022-01-012022-06-300001413837ffwm:LandAndConstructionMember2022-01-012022-06-300001413837us-gaap:CommercialPortfolioSegmentMember2022-06-300001413837us-gaap:CommercialPortfolioSegmentMember2021-12-310001413837us-gaap:CommercialRealEstatePortfolioSegmentMemberffwm:PrincipalReductionAndExtendedMaturityMember2022-06-300001413837us-gaap:CommercialPortfolioSegmentMemberffwm:PrincipalReductionAndExtendedMaturityMember2022-06-300001413837ffwm:PrincipalReductionAndExtendedMaturityMember2022-06-300001413837us-gaap:ResidentialPortfolioSegmentMemberffwm:PrincipalReductionAndExtendedMaturityMember2021-12-310001413837us-gaap:CommercialRealEstatePortfolioSegmentMemberffwm:PrincipalReductionAndExtendedMaturityMember2021-12-310001413837us-gaap:CommercialPortfolioSegmentMemberffwm:PrincipalReductionAndExtendedMaturityMember2021-12-310001413837ffwm:PrincipalReductionAndExtendedMaturityMember2021-12-310001413837us-gaap:RealEstateMemberffwm:CollateralDependentLoansMemberus-gaap:CommercialRealEstatePortfolioSegmentMember2022-06-300001413837us-gaap:RealEstateMemberffwm:CollateralDependentLoansMemberffwm:ResidentialSingleFamilyMember2022-06-300001413837us-gaap:CashMemberffwm:CollateralDependentLoansMemberus-gaap:CommercialPortfolioSegmentMember2022-06-300001413837ffwm:EquipmentAndReceivablesMemberffwm:CollateralDependentLoansMemberus-gaap:CommercialPortfolioSegmentMember2022-06-300001413837us-gaap:RealEstateMemberffwm:CollateralDependentLoansMember2022-06-300001413837us-gaap:CashMemberffwm:CollateralDependentLoansMember2022-06-300001413837ffwm:EquipmentAndReceivablesMemberffwm:CollateralDependentLoansMember2022-06-300001413837ffwm:CollateralDependentLoansMemberus-gaap:CommercialRealEstatePortfolioSegmentMember2022-06-300001413837ffwm:CollateralDependentLoansMemberus-gaap:CommercialPortfolioSegmentMember2022-06-300001413837ffwm:CollateralDependentLoansMemberffwm:ResidentialSingleFamilyMember2022-06-300001413837ffwm:CollateralDependentLoansMember2022-06-300001413837us-gaap:RealEstateMemberffwm:CollateralDependentLoansMemberffwm:ResidentialSingleFamilyMember2021-12-310001413837us-gaap:CashMemberffwm:CollateralDependentLoansMemberus-gaap:CommercialPortfolioSegmentMember2021-12-310001413837us-gaap:RealEstateMemberffwm:CollateralDependentLoansMember2021-12-310001413837us-gaap:CashMemberffwm:CollateralDependentLoansMember2021-12-310001413837ffwm:CollateralDependentLoansMemberus-gaap:CommercialPortfolioSegmentMember2021-12-310001413837ffwm:CollateralDependentLoansMemberffwm:ResidentialSingleFamilyMember2021-12-310001413837ffwm:CollateralDependentLoansMember2021-12-3100014138372022-04-012022-06-3000014138372021-04-012021-06-300001413837ffwm:TgrFinancialIncMemberus-gaap:EstimateOfFairValueFairValueDisclosureMember2021-12-170001413837ffwm:TgrFinancialIncMemberus-gaap:ChangeDuringPeriodFairValueDisclosureMember2021-12-170001413837ffwm:TgrFinancialIncMemberus-gaap:CarryingReportedAmountFairValueDisclosureMember2021-12-170001413837ffwm:TgrFinancialIncMember2021-01-012021-06-300001413837us-gaap:FairValueInputsLevel3Member2022-06-300001413837us-gaap:FairValueInputsLevel2Member2022-06-300001413837us-gaap:FairValueInputsLevel1Member2022-06-300001413837us-gaap:FairValueInputsLevel3Member2021-12-310001413837us-gaap:FairValueInputsLevel2Member2021-12-310001413837us-gaap:FairValueInputsLevel1Member2021-12-3100014138372022-06-3000014138372021-12-3100014138372021-01-012021-06-3000014138372022-08-0300014138372022-01-012022-06-30xbrli:sharesiso4217:USDxbrli:pureffwm:Institutionffwm:subsidiaryiso4217:USDxbrli:sharesffwm:loanffwm:segment

F

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2022

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from           to          

Commission File Number 001-36461

FIRST FOUNDATION INC.

(Exact name of Registrant as specified in its charter)

Delaware

20-8639702

(State or other jurisdiction
of incorporation or organization)

(I.R.S. Employer
Identification Number)

200 Crescent Court, Suite 1400 Dallas, Texas

75201

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (469) 638-9636

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

  

Trading Symbol(s)

  

Name of each exchange on which registered

Common Stock

FFWM

NASDAQ Global Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days.   Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).   Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes      No   ☒

As of August 3, 2022, the registrant had 56,387,671 shares of common stock, $0.001 par value per share, outstanding.

PART I — FINANCIAL INFORMATION

ITEM 1.FINANCIAL STATEMENTS

FIRST FOUNDATION INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share amounts)

June 30, 

December 31, 

2022

2021

(unaudited)

ASSETS

    

  

    

  

Cash and cash equivalents

$

173,524

$

1,121,757

Securities available-for-sale ("AFS")

 

251,496

 

1,201,777

Securities held-to-maturity ("HTM")

930,562

Allowance for credit losses - investments

(11,226)

(10,399)

Net securities

1,170,832

1,191,378

Loans held for sale

 

485,296

 

501,436

Loans held for investment

 

8,938,841

 

6,906,728

Allowance for credit losses - loans

 

(33,165)

 

(33,776)

Net loans

 

8,905,676

 

6,872,952

Investment in FHLB stock

17,250

 

18,249

Deferred taxes

 

21,471

 

20,835

Premises and equipment, net

 

37,160

 

37,920

Real estate owned ("REO")

6,210

6,210

Goodwill and intangibles

 

222,749

 

222,125

Other assets

 

209,072

 

203,342

Total Assets

$

11,249,240

$

10,196,204

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

  

 

Liabilities:

 

  

 

Deposits

$

9,538,744

$

8,811,960

Borrowings

 

493,728

 

210,127

Accounts payable and other liabilities

 

113,859

 

110,066

Total Liabilities

 

10,146,331

 

9,132,153

Shareholders’ Equity

 

  

 

Common Stock

 

56

 

56

Additional paid-in-capital

 

719,222

 

720,744

Retained earnings

 

392,704

 

340,976

Accumulated other comprehensive (loss) income

 

(9,073)

 

2,275

Total Shareholders’ Equity

 

1,102,909

 

1,064,051

Total Liabilities and Shareholders’ Equity

$

11,249,240

$

10,196,204

(See accompanying notes to the consolidated financial statements)

1

FIRST FOUNDATION INC.

CONSOLIDATED INCOME STATEMENTS - UNAUDITED

(In thousands, except share and per share amounts)

Quarter Ended

Six Months Ended

June 30, 

June 30, 

2022

2021

2022

2021

Interest income:

    

  

    

  

  

    

  

Loans

$

82,032

$

55,979

$

154,059

$

109,510

Securities

 

6,621

 

4,927

 

12,981

 

10,133

FHLB Stock, fed funds sold and interest-bearing deposits

 

1,318

 

497

 

2,075

 

898

Total interest income

 

89,971

 

61,403

 

169,115

 

120,541

Interest expense:

 

  

 

  

 

Deposits

 

6,340

 

3,387

 

9,698

 

8,010

Borrowings

 

1,826

 

106

 

3,118

 

392

Total interest expense

 

8,166

3,493

 

12,816

 

8,402

Net interest income

 

81,805

 

57,910

 

156,299

 

112,139

Provision for credit losses

173

 

44

 

(619)

 

404

Net interest income after provision for credit losses

 

81,632

 

57,866

 

156,918

 

111,735

Noninterest income:

 

Asset management, consulting and other fees

 

9,893

 

8,748

 

20,090

 

17,097

Gain on sale of loans

3,324

3,324

Other income

 

3,507

 

1,963

 

8,737

 

5,522

Total noninterest income

 

13,400

 

14,035

 

28,827

 

25,943

  

Noninterest expense:

 

 

  

 

  

 

Compensation and benefits

 

27,634

 

20,203

 

57,455

 

41,729

Occupancy and depreciation

 

8,814

 

5,710

 

17,381

 

11,870

Professional services and marketing costs

 

3,030

 

3,907

 

6,447

 

6,029

Customer service costs

 

4,611

 

2,353

 

6,399

 

4,123

Other expenses

 

4,716

 

3,444

 

8,741

 

6,377

Total noninterest expense

 

48,805

 

35,617

 

96,423

 

70,128

Income before taxes on income

 

46,227

 

36,284

 

89,322

 

67,550

Taxes on income

 

12,911

 

10,230

 

25,170

 

19,141

Net income

$

33,316

$

26,054

$

64,152

$

48,409

Net income per share:

 

  

 

  

 

 

Basic

$

0.59

$

0.58

$

1.14

$

1.08

Diluted

$

0.59

$

0.58

$

1.13

$

1.07

Shares used in computation:

 

 

  

 

 

  

Basic

 

56,471,470

 

44,792,358

 

56,468,678

 

44,750,272

Diluted

 

56,519,669

 

45,101,958

 

56,543,492

 

45,057,330

(See accompanying notes to the consolidated financial statements)

2

FIRST FOUNDATION INC.

CONSOLIDATED STATEMENT OF CHANGES

IN SHAREHOLDERS’ EQUITY - UNAUDITED

(In thousands, except share amounts)

   

Common Stock

   

Additional

   

   

Accumulated Other

   

Number 

Paid-in

 Retained

Comprehensive

   

of Shares

   

Amount

   

Capital

   

Earnings

   

Income (Loss)

   

Total

Balance: December 31, 2021

56,432,070

$

56

$

720,744

$

340,976

$

2,275

$

1,064,051

Net income

 

 

 

 

64,152

 

 

64,152

Other comprehensive loss

 

 

 

 

 

(11,348)

 

(11,348)

Stock based compensation

 

 

 

2,037

 

 

 

2,037

Cash dividend

 

 

 

(12,424)

 

 

(12,424)

Issuance of common stock:

 

  

 

  

 

  

 

  

 

  

 

  

Exercise of options

 

2,000

 

 

18

 

 

 

18

Stock grants – vesting of restricted stock units

 

133,374

 

 

 

 

 

Repurchase of shares from restricted shares vesting

 

(42,947)

 

 

(1,120)

 

 

 

(1,120)

Stock repurchase

(137,583)

(2,457)

(2,457)

Balance: June 30, 2022

 

56,386,914

$

56

$

719,222

$

392,704

$

(9,073)

$

1,102,909

Balance: March 31, 2022

 

56,514,168

$

57

$

720,846

$

365,604

$

(3,932)

$

1,082,575

Net income

 

 

 

 

33,316

 

 

33,316

Other comprehensive loss

 

 

 

 

 

(5,141)

 

(5,141)

Stock based compensation

 

 

 

833

 

 

 

833

Cash dividend

 

 

 

 

(6,216)

 

 

(6,216)

Issuance of common stock:

 

  

 

  

 

  

 

  

 

  

 

  

Exercise of options

 

 

 

 

 

 

Stock grants – vesting of restricted stock units

 

10,674

 

(1)

 

 

 

 

(1)

Repurchase of shares from restricted shares vesting

 

(345)

 

 

 

 

 

Stock repurchase

(137,583)

(2,457)

(2,457)

Balance: June 30, 2022

 

56,386,914

$

56

$

719,222

$

392,704

$

(9,073)

$

1,102,909

Balance: December 31, 2020

 

44,667,650

$

45

$

433,941

$

247,638

$

14,087

$

695,711

Net income

 

 

 

 

48,409

 

 

48,409

Other comprehensive loss

 

 

 

 

 

(3,312)

 

(3,312)

Stock based compensation

 

 

 

1,629

 

 

 

1,629

Cash dividend

 

 

 

 

(8,050)

 

 

(8,050)

Issuance of common stock:

 

  

 

  

 

  

 

  

 

  

 

  

Exercise of options

 

75,807

 

 

819

 

 

 

819

Stock grants – vesting of restricted stock units

 

117,223

 

 

 

 

 

Repurchase of shares from restricted shares vesting

 

(40,937)

 

 

(1,188)

 

 

 

(1,188)

Balance: June 30, 2021

 

44,819,743

$

45

$

435,201

$

287,997

$

10,775

$

734,018

Balance: March 31, 2021

 

44,782,155

$

45

$

434,346

$

265,970

$

14,069

$

714,430

Net income

 

 

 

 

26,054

 

 

26,054

Other comprehensive loss

 

 

 

 

 

(3,294)

 

(3,294)

Stock based compensation

 

 

 

634

 

 

 

634

Cash dividend

 

 

 

 

(4,027)

 

 

(4,027)

Issuance of common stock:

 

  

 

  

 

  

 

  

 

  

 

  

Exercise of options

 

28,807

 

 

465

 

 

 

465

Stock grants – vesting of restricted stock units

 

9,138

 

 

 

 

 

Repurchase of shares from restricted shares vesting

 

(357)

 

 

(244)

 

 

 

(244)

Balance: June 30, 2021

 

44,819,743

$

45

$

435,201

$

287,997

$

10,775

$

734,018

(See accompanying notes to the consolidated financial statements)

3

FIRST FOUNDATION INC.

CONSOLIDATED STATEMENTS OF

COMPREHENSIVE INCOME - UNAUDITED

(In thousands)

Quarter Ended June 30, 

Six Months Ended June 30, 

2022

2021

2022

2021

Net income

    

$

33,316

$

26,054

    

$

64,152

$

48,409

Other comprehensive income (loss):

 

  

 

  

 

  

 

  

Unrealized holding gains (losses) on securities arising during the period

 

(6,612)

 

(4,657)

 

(14,343)

 

(4,682)

Other comprehensive income (loss) before tax

 

(6,612)

 

(4,657)

 

(14,343)

 

(4,682)

Income tax benefit (expense) related to items of other comprehensive income

 

1,471

 

1,363

 

2,995

 

1,370

Other comprehensive income (loss)

 

(5,141)

 

(3,294)

 

(11,348)

 

(3,312)

Total comprehensive income

$

28,175

$

22,760

$

52,804

$

45,097

(See accompanying notes to the consolidated financial statements)

4

FIRST FOUNDATION INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED

(In thousands)

For the Six Months Ended

June 30, 

2022

2021

Cash Flows from Operating Activities:

    

  

    

  

Net income

$

64,152

$

48,409

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

Provision for credit losses - loans

 

(1,446)

 

(1,467)

Provision for credit losses - securities AFS

827

1,871

Stock–based compensation expense

 

2,037

 

1,629

Depreciation and amortization

 

2,019

 

1,655

Deferred tax expense

 

1,941

 

355

Amortization of premium (discount) on securities

1,677

399

Amortization of core deposit intangible

 

999

 

842

Amortization of mortgage servicing rights - net

 

1,070

 

935

Gain on sale of loans

 

 

(3,324)

Amortization of OCI - securities transfer to HTM

(591)

Valuation allowance on mortgage servicing rights - net

(319)

1,309

Increase in other assets

 

(6,482)

 

(10,695)

Increase (decrease) in accounts payable and other liabilities

 

4,476

 

(1,264)

Net cash provided by operating activities

 

70,360

 

40,654

Cash Flows from Investing Activities:

 

  

 

  

Net increase in loans

 

(2,016,119)

 

(841,088)

Proceeds from sale of loans

 

 

142,000

Purchase of premises and equipment

 

(3,523)

 

(1,826)

Disposals of premises and equipment

3,388

Recovery of allowance for credit losses

 

298

 

509

Purchases of securities AFS

 

(398)

 

(83,372)

Purchases of securities HTM

(171,852)

Proceeds from sale of securities

 

 

3,400

Maturities of securities AFS

 

18,524

 

143,712

Maturities of securities HTM

156,811

Sale of FHLB and FRB stock, net

 

999

 

Net cash used in investing activities

 

(2,011,872)

 

(636,665)

Cash Flows from Financing Activities:

 

  

 

  

Increase in deposits

 

726,784

 

1,193,369

Net increase (decrease) in FHLB advances

 

149,000

 

(255,000)

Line of credit net change – borrowings, net

 

(18,500)

 

6,000

Net increase in subordinated debt

147,608

Net increase in repurchase agreements

5,493

Gain on sale leaseback

 

(1,123)

 

Dividends paid

 

(12,424)

 

(8,050)

Proceeds from exercise of stock options

 

18

 

819

Repurchase of stock

 

(3,577)

 

(1,188)

Net cash provided by financing activities

 

993,279

 

935,950

Increase (decrease) in cash and cash equivalents

 

(948,233)

 

339,939

Cash and cash equivalents at beginning of year

 

1,121,757

 

629,707

Cash and cash equivalents at end of period

$

173,524

$

969,646

Supplemental disclosures of cash flow information:

 

  

 

  

Cash paid during the period for:

 

  

 

  

Income taxes

$

22,500

$

17,424

Interest

10,563

10,019

Noncash transactions:

 

 

  

Transfer of loans to loans held for sale

$

$

132,521

Transfer of securities from available-for-sale to held-to-maturity

916,777

Goodwill acquisition adjustment

1,623

Operating lease liabilities recognized

5,428

(See accompanying notes to the consolidated financial statements)

5

Table of Contents

FIRST FOUNDATION INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the Six Months Ended June 30, 2022 - UNAUDITED

NOTE 1: BASIS OF PRESENTATION

The consolidated financial statements include First Foundation Inc. (“FFI”) and its wholly owned subsidiaries: First Foundation Advisors (“FFA”) and First Foundation Bank (“FFB” or the “Bank”) and the wholly owned subsidiaries of FFB, First Foundation Insurance Services (“FFIS”), Blue Moon Management, LLC, and First Foundation Public Finance (“FFPF”) (collectively referred to as the “Company”). FFI also has two inactive wholly owned subsidiaries, First Foundation Consulting and First Foundation Advisors, LLC. All intercompany balances and transactions have been eliminated in consolidation. The results of operations reflect any interim adjustments, all of which are of a normal recurring nature and which, in the opinion of management, are necessary for a fair presentation of the results for the interim period presented. The results for the 2022 interim periods are not necessarily indicative of the results expected for the full year.

The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America and prevailing practices within the banking industry. In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet and revenues and expenses for the period. Actual results could differ significantly from those estimates.

The accompanying unaudited consolidated financial statements include all information and footnotes required for interim financial statement presentation. These financial statements assume that readers have read the most recent Annual Report on Form 10-K which contains the latest available audited consolidated financial statements and notes thereto as of and for the year ended December 31, 2021.

Certain reclassifications have been made to the prior year consolidated financial statements to conform to the 2022 presentation.

New Accounting Pronouncements

In March 2022, the Financial Accounting Standards Board (“FASB”) issued ASU 2022-02, “Financial Instruments – Credit Losses (Topic 326), Troubled Debt Restructurings (“TDRs”) and Vintage Disclosures”. ASU 2022-02 eliminates the accounting guidance for TDRs by creditors in Subtopic 310-40, Receivables – Troubled Debt Restructurings by Creditors and provides amendments to ASU 2016-13, Financial Instruments – Credit Losses on Financial Instruments by enhancing existing disclosure requirements and introduces new requirements related to certain modifications of receivables made to borrowers experiencing financial difficulty. ASU 2022-02 also requires that entities disclose current-period gross write-offs by year of origination for financing receivables within the scope of Subtopic 326-20. For entities that have adopted the amendments in Update 2016-13, the amendments in this ASU are effective for fiscal years beginning after December 15, 2022. The adoption of ASU 2022-02 is not expected to have a significant impact on the Company’s consolidated financial statements.

In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848), Facilitation of the Effects of Reference Rate Reform on Financial Reporting”. ASU 2020-04 provides optional guidance for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments in this ASU apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The amendments in this ASU are effective as of March 12, 2020 through December 31, 2022. The adoption of ASU 2020-04 is not expected to have a significant impact on the Company’s consolidated financial statements.

6

Table of Contents

FIRST FOUNDATION INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the Six Months Ended June 30, 2022 - UNAUDITED

NOTE 2: ACQUISITIONS

On December 17, 2021, the Company completed the acquisition of TGR Financial, Inc. (“TGRF”) and its wholly owned subsidiary, First Florida Integrity Bank, through a merger of TGRF with and into FFI followed immediately by the merger of First Florida Integrity Bank with and into FFB, in exchange for 11,352,232 shares of FFI common stock with a fair value of $24.93 per share.

The acquisition was accounted for under the purchase method of accounting. The acquired assets, assumed liabilities and identifiable intangible assets are recorded at their respective acquisition date fair values. Goodwill arising from the acquisition consists largely of the synergies and economies of scale expected from combining TGRF into FFI. None of the goodwill recognized is expected to be deductible for income tax purposes.

The following table represents the assets acquired and liabilities assumed of TGRF as of December 17, 2021 and the fair value adjustments and amounts recorded by the Company in 2021 under the acquisition method of accounting:

    

TGRF Book

    

Fair Value

    

(dollars in thousands)

Value

Adjustments

Fair Value

Assets Acquired:

 

  

 

  

 

  

Cash and cash equivalents

$

1,145,335

$

5

$

1,145,340

Securities AFS

 

147,739

 

109

 

147,848

Securities held-to-maturity

71,790

2,115

73,905

Loans, net of deferred fees

 

1,045,193

 

(5,387)

 

1,039,806

Investment in FHLB stock