2024-07-25 18:18:08 ET
First Foundation Inc. (FFWM)
Q2 2024 Results Conference Call
July 25, 2024 11:00 AM ET
Company Participants
Scott Kavanaugh - CEO, President & Vice Chairman
James Britton - Executive VP & CFO
Chris Naghibi - Executive VP & COO
Simone Lagomarsino - President
Conference Call Participants
David Feaster - Raymond James
Gary Tenner - D.A. Davidson
Andrew Terrell - Stephens
Matthew Clark - Piper Sandler
Presentation
Operator
Greetings, and welcome to First Foundation's Second Quarter 2024 Earnings Conference Call. Today's call is being recorded. Speaking today will be Scott Kavanaugh, First Foundation's Chief Executive Officer; Jamie Britton, First Foundation's Chief Financial Officer; and Chris Naghibi, First Foundation's Chief Operating Officer. Also joining the call is Simone Lagomarsino, First Foundation Bank's President.
Before I hand the call over to Scott, please note that management will make certain predictive statements during today's call that reflect their current views and expectations about the company's performance and financial results. These forward-looking statements are made subject to the safe harbor statement included in today's earnings release. In addition, some of the discussion may include non-GAAP financial measures. For a more complete discussion of the risks and uncertainties that could cause actual results to differ materially from any forward-looking statements and reconciliations of non-GAAP financial measures, please see the company's filings with the Securities and Exchange Commission.
And now I would like to turn the call over to CEO, Scott Kavanaugh.
Scott Kavanaugh
Hey, good morning, and welcome. Thank you for joining us for today's second quarter 2024 earnings call. Once again, First Foundation was able to generate earnings that were above consensus and exit the quarter with positive momentum. As I had mentioned in previous calls, I believe our earnings troughed in the first quarter of 2024. This is significant when coupled with the backdrop of strengthening our balance sheet with the recently announced $228 million capital raise. I want to be clear, the Board sought the additional capital to support the growth of the company, not to satisfy any regulatory concerns. This raise allows us to accomplish that goal.
I also want to emphasize First Foundation has never had a credit problem. Our NPAs remained at remarkably low levels, unchanged from last quarter. Charge-offs were almost nonexistent at 0.01%. Our recent performance issues stemmed from an interest rate risk positioning of our balance sheet, which surfaced in 2022 when fixed rate lending surpassed historical levels while the Federal Reserve began aggressively raising rates. As you know, this put tremendous stress on our net income and reduced the flexibility we had to navigate the turbulent economic environment.
With this capital raise, we will take actions to solve this issue and to begin to expand into the desirous geographic markets we are already in and have a presence. This will be outlined in our discussion by both Jamie and Chris. I noted in the first quarter that we had taken great strides to increase recurring revenue and reduce core expenses to benefit future profitability. And those efforts continued in the second quarter....
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First Foundation Inc. (FFWM) Q2 2024 Earnings Call Transcript