First Foundation Inc. reported a significant net loss of $146.3 million for the third quarter of 2025, compared to a loss of $82.2 million in the same quarter of the previous year. The company's total revenue for the quarter was $63.6 million, a notable increase from $51.4 million in the prior quarter and a recovery from a loss of $56.5 million in the year-ago quarter. The net interest income for the quarter was $46.1 million, down from $49.1 million in the previous year, while the provision for credit losses surged to $65 million, reflecting a substantial increase in the allowance for credit losses (ACL) due to revised assumptions in response to economic conditions.
In terms of operational metrics, First Foundation's total assets decreased to $11.9 billion as of September 30, 2025, down from $12.6 billion at the end of 2024. This decline was primarily driven by a $1.5 billion reduction in total loans, which was partially offset by a $710 million increase in cash and cash equivalents. The decrease in loans was attributed to the sale of $858 million in multifamily loans and ongoing loan payoffs that exceeded new loan fundings. The company's loan-to-deposit ratio stood at 83.6%, a decrease from 93.4% at the end of 2024, indicating a tighter liquidity position.
Strategically, First Foundation has been focusing on reducing its exposure to low-coupon fixed-rate loans and high-cost deposits. The company has also seen a shift in its deposit base, with total deposits decreasing to $9.3 billion, down from $9.9 billion at the end of 2024. This reduction was largely due to a decrease in higher-cost specialty deposits, although retail and digital banking deposits saw increases. The company’s average interest-bearing liabilities decreased, contributing to a slight improvement in net interest margin, which was reported at 1.60% for the quarter.
Looking ahead, First Foundation announced a merger agreement with FirstSun Capital Bancorp, expected to close in early 2026, pending regulatory and shareholder approvals. This merger is anticipated to create a combined entity with a more robust capital structure and enhanced market presence. The transaction is valued at approximately $785 million, with FirstSun shareholders expected to hold 59.5% of the combined company. The merger reflects First Foundation's strategic intent to strengthen its market position and operational capabilities in the financial services sector.
Overall, First Foundation's financial performance in the third quarter of 2025 reflects ongoing challenges, particularly in managing credit losses and loan portfolio adjustments, while also positioning itself for future growth through strategic mergers and a focus on liquidity management.
About First Foundation Inc.
First Foundation Inc. is a financial services company offering banking, investment advisory, wealth management, and trust services. It operates through a platform providing personal and business banking, mortgage, commercial loans, and digital banking across select U.S. markets. The firm emphasizes personalized service, integrated financial solutions, and fee-based revenue streams, serving individuals, families, and small to moderate-sized businesses with a focus on long-term client relationships.
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