First Foundation in Dallas plans to unload more than $1 billion of multifamily loans as part of its overhaul.
The $13.7 billion-asset company shared more details on how it plans to leverage the $228 million it raised earlier this month by selling securities to a group led by Fortress Investment Group.
First Foundation, which plans to move about a fifth of its multifamily loans to held-for-sale status, will “put in the time and work” to obtain the best price for the loans, Christopher Naghibi, the company’s chief operating officer, said during a conference call to discuss quarterly results.
The company’s plan also involves a more concerted shift to commercial-and-industrial lending. C&I has made up nearly 90% of the company’s loan fundings this year.
“A more-robust C&I team was built out nearly 10 years ago in order to help balance out the concentration risk in the underlying loan portfolio,” Naghibi said. “First Foundation is not a real estate lender growing into the C&I business – C&I lending has been a long-standing and important part of the underlying franchise value.”
First Foundation, which moved its headquarters to Dallas and bought a bank in Florida in the past five years, wants to push more into North Texas and Southwest Florida. Those market currently comprise just 11% of the company’s loan book.
The company earned $3.1 million in the second quarter, or more than triple its net income from a quarter earlier.