Oct. 3 at 11:08 AM
$FFWM First Foundation announces reclassification of
$1.9B of multifamily portfolio
First Foundation announced the reclassification of a portion of its multifamily portfolio totaling
$1.9B principal balance from loans held to maturity to loans held for sale. "Our decision to transfer these multifamily loans to held for sale marks an important next step in the Company's strategic roadmap to fortify the balance sheet and embrace a more offensive-minded posture," said Scott Kavanaugh, CEO. "We believe this move will position the Company for a return to its historical profitability and performance levels. Based on recent Southern California-focused multifamily transactions and renewed optimism for lower rates, we expect third quarter-end fair-value pricing to surpass 92% of the
$1.9 billion principal balance.
While the resulting write-down to fair value will meaningfully impact third-quarter earnings and will reduce our 'as converted' tangible book value per share, we expect the move to provide the flexibility needed to work with credit-minded counterparties in exploring a variety of options for securitizing or selling the loans and maximizing final execution pricing. Given the relatively short time to repricing for this pool of loans, which is between two and a half and three years, we expect final pricing to exceed currently estimated fair values."
The Company also announced that, following its Special Meeting of Stockholders held on September 30, 2024, all of the issued and outstanding shares of the Company's Series B Noncumulative Convertible Preferred Stock issued by the Company on July 8, 2024 in connection with its previously announced capital raise automatically converted into an aggregate of 14,490,000 shares of common stock, par value
$0.001 per share, of the Company as of the close of business on October 2, 2024.
