Strategic Insights into Banking & Fintech

First Foundation posts 2Q loss after selling CRE loans

First Foundation in Dallas posted a quarterly loss as new management attempts a turnaround.

The $11.6 billion-asset company lost $7.7 million in the second quarter after selling about $858 million of commercial real estate loans held for sale in two transactions at a 6% discount. The move reduced the company’s CRE concentration to roughly 365% of regulatory capital.

Proceeds from the loan sales were used to reduce about $865 million in high-cost deposits.

First Foundation also recorded a $2.4 million loan-loss provision.

The company raised $228 million a year ago to help it purge problematic loans. After hiring banking veteran Thomas Shafer as its CEO, the company lost money in the fourth quarter after selling $489 million of multifamily loans at a 4.9% discount.

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