The Bank Slate

INSIGHTS INTO THE BANKING INDUSTRY

First Foundation in Texas loses $14M as turnaround begins

First Foundation in Dallas is starting to use some of the capital it raised last year as part of its turnaround.

The $12.6 billion-asset company lost $14.1 million in the fourth quarter after selling $489 million of multifamily loans at a 4.9% discount.

The company also set aside $20.1 million in the quarter to cover potential problems in its equipment finance lease portfolio, reflecting higher chargeoffs and a rise in criticized assets, among other things. The quarter’s chargeoffs covered the full write-off of three commercial relationships and equipment finance loans with “little collateral value.”

First Foundation, which raised $228 million in July, still has $1.4 billion of loans held for sale.

“In the fourth quarter, we continued executing on the plan intended by our recapitalization earlier in the year with the sale of $489 million of our held-for-sale multifamily loan portfolio,” Thomas Shafer, the company’s new CEO, said in a press release.

Proceeds “were used directly to pay down high-cost funding, and we are focused on selling the remainder of the held-for-sale portfolio this year,” he added. “These transactions are supporting our goals of reducing our CRE exposure, improving our funding risk profile, and freeing up capacity to further develop other lines of business.”

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