First Foundation in Dallas is raising $228 million in a deal that will allow it to lower its concentration of multifamily loans.
The $13.6 billion-asset company said in a press release that the investors include Fortress Investment Group affiliates ($115 million); Canyon Partners ($46 million), Strategic Value Bank Partners and North Reef Capital ($22 million each). The transaction is expected to close on July 8.
Simone Lagomarsino, who recently served as Luther Burbank CEO, was named president of First Foundation Bank and joined its board. Henchy Enden, Sam Edelson and Ben Mackovak also joined the bank’s board.
The bank directors are expected to join the company’s board after receiving regulatory approval. The company’s board will be reduced to nine directors.
“With this meaningful strategic equity raise, I am confident we will be able to refocus our balance sheet, reduce multifamily concentrations over time, grow C&I platforms, increase ACL and materially strengthen earnings,” Scott Kavanaugh, First Foundation’s president and CEO, said in the release.
First Foundation is selling 11.3 million shares of common stock and 29,811 shares of Series A preferred stock and 14,490 shares of Series B preferred stock. Investors will also receive seven-year warrants to buy a new series of preferred stock.
Shareholder approval is required to increase the amount of authorized shares.