MPB - First Foundation: Taking A More Cautious Approach Due To Deterioration

2024-05-29 12:50:17 ET

Summary

• First Foundation has faced challenges including a decline in profitability, rising debt, and declining deposits.
• The institution's net interest income and net income have both significantly decreased as well.
• Shares of First Foundation are trading at a cheap valuation relative to net asset value, but the company's overall health and profitability metrics are concerning.

One of the more interesting banks on the market at this point in time has got to be First Foundation ( FFWM ). Over the past couple of years now, the institution has faced some difficulties. A contraction in its net interest margin, combined with high costs, has resulted in a decline in profitability. Debt has risen while deposits have recently declined. Normally, all of this would be a recipe for disaster. However, one thing that the institution does have going for it is that shares are dirt cheap relative to the firm’s net asset value....

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