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What changed in First Foundation Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of First Foundation Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+426 added−380 removedSource: 10-K (2026-03-16) vs 10-K (2025-03-17)

Top changes in First Foundation Inc.'s 2025 10-K

426 paragraphs added · 380 removed · 296 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

92 edited+7 added−15 removed183 unchanged
Biggest changeWe compete with these much larger banks and investment advisory and wealth management firms primarily on the basis of the personal and “one-on-one” service that we provide to our clients, which many of these competitors are unwilling or unable to provide, other than to their wealthiest clients, due to costs involved or their “one size fits all” approaches to providing financial services.
Biggest changeIn addition, by virtue of their greater total capitalization, the large banks have substantially higher lending limits than we do, which enable them to make much larger loans and to offer loan products that we are not able to offer to our clients. 9 Table of Contents We compete with these much larger banks and investment advisory and wealth management firms primarily on the basis of the personal and “one on one” service that we provide to our clients, which many of these competitors are unwilling or unable to provide, other than to their wealthiest clients, due to costs involved or their “one size fits all” approaches to providing financial services.
FFB is a California state-chartered bank and is subject to regulation and examination by the Federal Deposit Insurance Corporation (“FDIC”) and the California Department of Financial Protection & Innovation (“DFPI”) and the Consumer Financial Protection Bureau (“CFPB”).
FFB is a California state-chartered bank and is subject to regulation and examination by the Federal Deposit Insurance Corporation (“FDIC”), the California Department of Financial Protection and Innovation (“DFPI”) and the Consumer Financial Protection Bureau (“CFPB”).
In addition, we perform stress testing for changes in interest rates, capitalization rates and other factors and review general economic trends such as lease rates, values and absorption rates. We typically require full recourse from the owners of the entities to which we make such loans.
In addition, we perform stress testing for changes in interest rates, capitalization rates and other factors and review general economic trends such as lease rates, values and absorption rates. We typically require full recourse from the owners of the entities to which we make such loans.
In addition, we perform stress testing for changes in interest rates, capitalization rates and other factors and review general economic trends such as lease rates, values and absorption rates. We typically require full recourse from the owners of the entities to which we make such loans.
In addition, we perform stress testing for changes in interest rates, capitalization rates and other factors and review general economic trends such as lease rates, values and absorption rates. We typically require full recourse from the owners of the entities to which we make such loans.
We handle substantially all of our loan processing, underwriting and servicing at our administrative office in Irvine, California. Deposit Products and Services Deposit Products : We offer a wide range of deposit products, including personal and business checking, savings accounts, interest-bearing demand deposit accounts, money market accounts and time certificates of deposit.
We handle substantially all our loan processing, underwriting and servicing at our administrative office in Irvine, California. Deposit Products and Services Deposit Products : We offer a wide range of deposit products, including personal and business checking, savings accounts, interest-bearing demand deposit accounts, money market accounts and time certificates of deposit.
Through FFA, we provide clients with personalized services designed to enable them to reach their personal and financial goals by coordinating our investment advisory and wealth management services with risk management and estate and tax planning services that are provided by outside service providers, for which we do not receive commissions or referral fees.
Through FFA, we provide clients with personalized services designed to enable them to reach their personal and financial goals by coordinating our investment advisory and wealth management services with risk management and estate and tax planning services that are provided by outside service providers, and for which we do not receive commissions or referral fees.
Bank Secrecy Act The Company and Bank are subject to the Bank Secrecy Act, as amended by the USA PATRIOT Act, which gives the federal government powers to address money laundering and terrorist threats through enhanced domestic security measures, expanded surveillance powers and mandatory transaction reporting obligations.
Bank Secrecy Act The Company and the Bank are subject to the Bank Secrecy Act, as amended by the USA PATRIOT Act, which gives the federal government powers to address money laundering and terrorist threats through enhanced domestic security measures, expanded surveillance powers and mandatory transaction reporting obligations.
Any failure to meet the requirements of the Bank Secrecy Act can result in the imposition of substantial penalties and in adverse regulatory action against the offending bank. The Company and Bank have each adopted policies and procedures to comply with the Bank Secrecy Act.
Any failure to meet the requirements of the Bank Secrecy Act can result in the imposition of substantial penalties and in adverse regulatory action against the offending bank. The Company and the Bank have each adopted policies and procedures to comply with the Bank Secrecy Act.
Through our Supporting our Communities program, employees can invite local nonprofit organizations with which they are involved with to apply for grants designed to impact the core mission of each nonprofit organization. We select community-based non-profit organizations that not only align with our philanthropic mission, but also have established a long-term connection to our Company through our employees.
Through our Supporting our Communities program, employees can invite local nonprofit organizations with which they are involved to apply for grants designed to impact the core mission of each nonprofit organization. We select community-based non-profit organizations that not only align with our philanthropic mission, but also have established a long-term connection to our Company through our employees.
Those laws and regulations include: ● The Home Ownership and Equity Protection Act of 1994, which requires additional disclosures and consumer protections to borrowers designed to protect them against certain lending practices, such as practices deemed to constitute “predatory lending.” ● The Fair Credit Reporting Act, as amended by the Fair and Accurate Credit Transactions Act, which requires banking institutions and financial services businesses to adopt practices and procedures designed to help deter identity theft, including developing appropriate fraud response programs, and provides consumers with greater control of their credit data. ● The Truth in Lending Act, which requires that credit terms be disclosed in a meaningful and consistent way so that consumers may compare credit terms more readily and knowledgeably. ● The Truth in Savings Act, which governs disclosure of account terms and costs to consumer depositors. ● The Equal Credit Opportunity Act, which generally prohibits, in connection with any consumer or business credit transactions, discrimination on the basis of race, color, religion, national origin, sex, marital status, age (except in limited circumstances), or the fact that a borrower is receiving income from public assistance programs. 18 Table of Contents ● The Fair Housing Act, which regulates many lending practices, including making it unlawful for any lender to discriminate in its housing-related lending activities against any person because of race, color, religion, national origin, sex, handicap or familial status. ● The Home Mortgage Disclosure Act, which includes a “fair lending” aspect that requires the collection and disclosure of data about applicant and borrower characteristics as a way of identifying possible discriminatory lending patterns and enforcing anti-discrimination statutes. ● The Real Estate Settlement Procedures Act, which requires lenders to provide borrowers with disclosures regarding the nature and cost of real estate settlements and prohibits certain abusive practices, such as kickbacks. ● The National Flood Insurance Act, which requires homes in flood-prone areas with mortgages from a federally regulated lender to have flood insurance. ● The Secure and Fair Enforcement for Mortgage Licensing Act of 2008, which requires mortgage loan originator employees of federally insured institutions to register with the Nationwide Mortgage Licensing System and Registry, a database created by the states to support the licensing of mortgage loan originators, prior to originating residential mortgage loans.
Those laws and regulations include: ● The Home Ownership and Equity Protection Act of 1994, which requires additional disclosures and consumer protections to borrowers designed to protect them against certain lending practices, such as practices deemed to constitute “predatory lending.” ● The Fair Credit Reporting Act, as amended by the Fair and Accurate Credit Transactions Act, which requires banking institutions and financial services businesses to adopt practices and procedures designed to help deter identity theft, including developing appropriate fraud response programs, and provides consumers with greater control of their credit data. ● The Truth in Lending Act, which requires that credit terms be disclosed in a meaningful and consistent way so that consumers may compare credit terms more readily and knowledgeably. ● The Truth in Savings Act, which governs disclosure of account terms and costs to consumer depositors. ● The Equal Credit Opportunity Act, which generally prohibits, in connection with any consumer or business credit transactions, discrimination on the basis of race, color, religion, national origin, sex, marital status, age (except in limited circumstances), or the fact that a borrower is receiving income from public assistance programs. ● The Fair Housing Act, which regulates many lending practices, including making it unlawful for any lender to discriminate in its housing-related lending activities against any person because of race, color, religion, national origin, sex, handicap or familial status. ● The Home Mortgage Disclosure Act, which includes a “fair lending” aspect that requires the collection and disclosure of data about applicant and borrower characteristics as a way of identifying possible discriminatory lending patterns and enforcing anti-discrimination statutes. ● The Real Estate Settlement Procedures Act, which requires lenders to provide borrowers with disclosures regarding the nature and cost of real estate settlements and prohibits certain abusive practices, such as kickbacks. ● The National Flood Insurance Act, which requires homes in flood-prone areas with mortgages from a federally regulated lender to have flood insurance. ● The Secure and Fair Enforcement for Mortgage Licensing Act of 2008, which requires mortgage loan originator employees of federally insured institutions to register with the Nationwide Mortgage Licensing System and Registry, a database created by the states to support the licensing of mortgage loan originators, prior to originating residential mortgage loans.
The majority of our single-family residential loan originations are collateralized by first mortgages on real properties located in Southern California and in southwest Florida. These loans are generally adjustable-rate loans with initial fixed-rate periods ranging from 3 to 10 years not exceeding 30 years. These loans generally have interest rate floors and payment caps.
The majority of our single-family residential loan originations are collateralized by first mortgages on real properties located in Southern California and in southwest Florida. These loans are generally adjustable-rate loans with initial fixed-rate periods ranging from 3 to 10 years not exceeding 30 years. These loans generally have interest rate floors and rate caps.
CRE Loans – Non-owner Occupied : Our commercial real estate loans are secured by first trust deeds on nonresidential real property with terms generally up to 10 years. We typically focus on multi-tenant industrial, office and retail real estate collateral with strong, stable tenancy, strong, stable historical cash flow and located in stable, submarket locations with strong demand.
CRE Loans – Non-owner Occupied : Our non-owner occupied real estate loans are secured by first trust deeds on nonresidential real property with terms generally up to 10 years. We typically focus on multi-tenant industrial, office and retail real estate collateral with strong, stable tenancy, strong, stable historical cash flow and located in stable, submarket locations with strong demand.
The table below summarizes the minimum capital ratios plus the applicable increment of the capital conservation buffer that are applicable to the Company and the Bank: ​ ​ ​ ​ ​ ​ Tier 1 leverage capital ratio 4.00 % Common equity tier 1 capital ratio ​ 7.00 % Tier 1 risk-based capital ratio 8.50 % Total risk-based capital ratio 10.50 % ​ The Capital Rules required that trust preferred securities be phased out from Tier 1 capital by January 1, 2016, except in the case of banking organizations with total consolidated assets of less than $15 billion, which will be permitted to include trust preferred securities issued prior to May 19, 2010 in Tier 1 capital, subject to a limit of 25% of tier 1 capital elements.
The table below summarizes the minimum capital ratios plus the applicable increment of the capital conservation buffer that are applicable to the Company and the Bank: ​ ​ ​ ​ Tier 1 leverage capital ratio ​ ​ ​ 4.00 % Common equity tier 1 capital ratio ​ 7.00 % Tier 1 risk-based capital ratio 8.50 % Total risk-based capital ratio 10.50 % ​ The Capital Rules required that trust preferred securities be phased out from Tier 1 capital by January 1, 2016, except in the case of banking organizations with total consolidated assets of less than $15 billion, which were permitted to include trust preferred securities issued prior to May 19, 2010 in Tier 1 capital, subject to a limit of 25% of tier 1 capital elements.
Federal Home Loan Bank System FFB is a member of the Federal Home Loan Bank (“FHLB”). Among other benefits, each regional Federal Home Loan Bank serves as a reserve or central bank for its members within its assigned region and makes available loans or advances to its member banks.
Federal Home Loan Bank System FFB is a member of the Federal Home Loan Bank. Among other benefits, each regional Federal Home Loan Bank serves as a reserve or central bank for its members within its assigned region and makes available loans or advances to its member banks.
These actions include the power to enjoin any “unsafe or unsound” banking practices; to require that affirmative action be taken to correct any conditions resulting from any violation of law or unsafe or unsound practice; to issue an administrative order 13 Table of Contents that can be judicially enforced; to require that it increase its capital; to restrict its growth; to assess civil monetary penalties against it or its officers or directors; to remove officers and directors of the bank; and if the federal agency concludes that such conditions at the bank cannot be corrected or there is an imminent risk of loss to depositors, to terminate a bank’s deposit insurance, which in the case of a California state-chartered bank would result in revocation of its charter and the mandatory cessation of its banking operations.
These actions include the power to enjoin any “unsafe or unsound” banking practices; to require that affirmative action be taken to correct any conditions resulting from any violation of law or unsafe or unsound practice; to issue an administrative order that can be judicially enforced; to require that it increase its capital; to restrict its growth; to assess civil monetary penalties against it or its officers or directors; to remove officers and directors of the bank; and if the federal agency concludes that such conditions at the bank cannot be corrected or there is an imminent risk of loss to depositors, to terminate a bank’s deposit insurance, which in the case of a California state-chartered bank would result in revocation of its charter and the mandatory cessation of its banking operations.
Regulatory authorities have imposed cease and desist orders and civil money penalties against institutions found to be violating these obligations. 19 Table of Contents ​ Volcker Rule In December 2013, the federal bank regulatory agencies adopted final rules that implement a part of the Dodd-Frank Act commonly referred to as the “Volcker Rule.” Under these rules and subject to certain exceptions, banking entities are restricted from engaging in activities that are considered proprietary trading and from sponsoring or investing in certain entities, including hedge or private equity funds that are considered “covered funds.” These rules became effective on April 1, 2014, although certain provisions are subject to delayed effectiveness under rules promulgated by the FRB.
Regulatory authorities have imposed cease and desist orders and civil money penalties against institutions found to be violating these obligations. ​ Volcker Rule In December 2013, the federal bank regulatory agencies adopted final rules that implement a part of the Dodd-Frank Act commonly referred to as the “Volcker Rule.” Under these rules and subject to certain exceptions, banking entities are restricted from engaging in activities that are considered proprietary trading and from sponsoring or investing in certain entities, including hedge funds or private equity funds that are considered “covered funds.” These rules became effective on April 1, 2014, although certain provisions are subject to delayed effectiveness under rules promulgated by the FRB.
We will consider special-purpose lending on a limited basis for our existing client base. These loans generally are adjustable-rate loans with interest rates tied to a variety of independent indexes; although in many cases these loans have initial fixed-rate periods ranging from 3 to 10 years and adjust thereafter based on an 3 Table of Contents applicable index.
We will consider special-purpose lending on a limited basis for our existing client base. These loans generally are adjustable-rate loans with interest rates tied to a variety of independent indexes; although in many cases these loans have initial fixed-rate periods ranging from 3 to 10 years and adjust thereafter based on an applicable index.
This team consists of bankers with industry expertise in our targeted specialty niches, which include, but are not limited to escrow, title, 1031 exchange accommodators, contractor retention escrows, commercial property management and homeowners associations as well as financial institutions and mortgage servicers, commercial borrowers, EB-5 projects, and political treasurers.
This team consists of bankers with industry expertise in our targeted specialty niches, which include, but are not limited to escrow, title, 1031 exchange accommodators, contractor retention escrows, commercial property management and homeowners’ associations, as well as financial institutions and mortgage servicers, commercial borrowers, EB-5 projects, and political treasurers.
Commercial lines of credit are adjustable-rate loans with interest rates usually tied to the Wall Street Journal prime rate, are made for terms ranging from one to two years, and contain various covenants, including possible requirements that the borrower reduces its credit line borrowings to zero for specified time periods during the term of the line of credit, maintains liquidity 4 Table of Contents requirements with advances tied to periodic reviews and approved based upon a percentage of accounts receivable, and inventory or unmonitored lines for very small lines of credit or those with significant financial strength and liquidity.
Commercial lines of credit are adjustable-rate loans with interest rates usually tied to the Wall Street Journal prime rate, are made for terms ranging from one to two years, and contain various covenants, including possible requirements that the borrower reduces its credit line borrowings to zero for specified time periods during the term of the line of credit, maintains liquidity requirements with advances tied to periodic reviews and approved based upon a percentage of accounts receivable, and inventory or unmonitored lines for very small lines of credit or those with significant financial strength and liquidity.
We have also established a small balance portfolio loan program, up to a maximum loan amount of $250,000, to meet the requirements of our small business clients through a streamlined underwriting process. Consumer Loan Channel: The consumer channel for FFB offers single-family residential loans, home equity lines of credit, personal lines of credit and other consumer related products.
We have also established a small balance portfolio loan program, up to a maximum loan amount of $250,000, to meet the requirements of our small business clients through a streamlined underwriting process. Consumer Loan Channel: The consumer channel for FFB includes single-family residential loans, home equity lines of credit, personal lines of credit and other consumer related products.
Our regulators regularly examine us for compliance with applicable laws, and adherence to industry best practices, with respect to these topics. ​ On November 18, 2021, the federal banking agencies announced the adoption of a final rule providing for new notification requirements for banking organizations and their service providers for significant cybersecurity incidents.
Our regulators regularly examine us for compliance with applicable laws, and adherence to industry best practices, with respect to these topics. ​ 18 Table of Contents On November 18, 2021, the federal banking agencies announced the adoption of a final rule providing for new notification requirements for banking organizations and their service providers for significant cybersecurity incidents.
The Dodd-Frank Act’s creation of the CFPB has and is expected to continue to lead to, enhanced and greater enforcement of federal financial consumer protection laws.
The Dodd-Frank Act’s creation of the CFPB has led to and is expected to continue to lead to, enhanced and greater enforcement of federal financial consumer protection laws.
We also cannot predict whether or when regulatory requirements may be reduced or eliminated and the overall affect such reduction or elimination may have on the Company and the Bank. Bank Holding Company Regulation First Foundation Inc. is a registered bank holding company subject to regulation under the Bank Holding Company Act of 1956, as amended (the “Holding Company Act”).
We also cannot predict whether or when regulatory requirements may be reduced or eliminated and the overall effect such reduction or elimination may have on the Company and the Bank. Bank Holding Company Regulation First Foundation Inc. is a registered bank holding company subject to regulation under the Bank Holding Company Act of 1956, as amended (the “Holding Company Act”).
An insured depository institution’s capital category depends upon whether its capital levels meet these capital thresholds shown in the table below. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Well- ​ Adequately ​ ​ ​ ​ Significantly Capital Measure Capitalized Capitalized Undercapitalized Undercapitalized ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Tier 1 leverage capital ratio ​ ​ 5% or greater ​ ​ 4% or greater ​ ​ Less than 4% ​ ​ Less than 3% Common equity tier 1 capital ratio ​ 6.5% or greater ​ 4.5% or greater ​ Less than 4.5% ​ Less than 3% Tier 1 risk-based capital ratio ​ 8% or greater ​ 6% or greater ​ Less than 6% ​ Less than 4% Total risk-based capital ratio ​ 10% or greater ​ 8% or greater ​ Less than 8% ​ Less than 6% A bank that is classified as “critically undercapitalized” if its tangible equity were equal to or less than 2% of its average quarterly tangible assets.
An insured depository institution’s capital category depends upon whether its capital levels meet these capital thresholds shown in the table below. 13 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Well- ​ Adequately ​ ​ ​ ​ Significantly Capital Measure ​ ​ ​ Capitalized ​ ​ ​ Capitalized ​ ​ ​ Undercapitalized ​ ​ ​ Undercapitalized ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Tier 1 leverage capital ratio ​ ​ 5% or greater ​ ​ 4% or greater ​ ​ Less than 4% ​ ​ Less than 3% Common equity tier 1 capital ratio ​ 6.5% or greater ​ 4.5% or greater ​ Less than 4.5% ​ Less than 3% Tier 1 risk-based capital ratio ​ 8% or greater ​ 6% or greater ​ Less than 6% ​ Less than 4% Total risk-based capital ratio ​ 10% or greater ​ 8% or greater ​ Less than 8% ​ Less than 6% A bank is classified as “critically undercapitalized” if its tangible equity were equal to or less than 2% of its average quarterly tangible assets.
Each regional Federal Home Loan Bank is financed primarily from the sale of consolidated obligations of the overall Federal Home Loan Bank system. As an FHLB member, FFB is required to own a certain amount of capital stock in the FHLB. At December 31, 2024, FFB was in compliance with the FHLB’s stock ownership requirement.
Each regional Federal Home Loan Bank is financed primarily from the sale of consolidated obligations of the overall Federal Home Loan Bank system. As an FHLB member, FFB is required to own a certain amount of capital stock in the FHLB. At December 31, 2025, FFB was in compliance with the FHLB’s stock ownership requirement.
Residential Mortgage Loans – Single-family: We offer single-family residential mortgage loans that in most cases take the form of non-conforming jumbo and super-jumbo loans. We do not currently sell or securitize any of our single-family residential mortgage loan originations. We do not originate loans defined as high-cost by state or federal banking regulators.
Residential Mortgage Loans – Single-family: We have single-family residential mortgage loans that in most cases take the form of non-conforming jumbo and super-jumbo loans. We do not currently sell or securitize any of our single-family residential mortgage loan originations. We do not originate loans defined as high-cost by state or federal banking regulators.
The risk-based capital ratios are determined by classifying assets and certain off-balance sheet financial instruments into risk-weighted categories, with higher levels of capital being required for those categories perceived as representing greater risks, and with the applicable ratios calculated by dividing qualifying capital by total risk-weighted assets and off-balance sheet items.
The risk-based capital ratios are determined by classifying assets and certain off-balance sheet financial instruments into risk-weighted categories, with higher levels of capital being required for those categories perceived as representing greater risks, and with the applicable ratios calculated by dividing qualifying capital by total risk-weighted assets from on- and off-balance sheet items.
Business Overview Unless we state otherwise or the context otherwise requires, references in this Annual Report on Form 10-K to “we,” “our,” and “us” refer to First Foundation Inc., a Delaware corporation, (“FFI” or the “Company”) and its consolidated subsidiaries, First Foundation Advisors (“FFA”) and First Foundation Bank (“FFB” or “Bank”), and FFB’s wholly owned subsidiaries, First Foundation Insurance Services (“FFIS”), First Foundation Public Finance (“FFPF”), and Blue Moon Management, LLC.
Business Overview Unless we state otherwise or the context otherwise requires, references in this Annual Report on Form 10-K to “we,” “our,” and “us” refer to First Foundation Inc., a Delaware corporation, (“FFI” or the “Company”) and its consolidated subsidiaries, First Foundation Advisors (“FFA”) and First Foundation Bank (“FFB” or “Bank”), and FFB’s wholly owned subsidiaries, First Foundation Public Finance (“FFPF”), and Blue Moon Management, LLC.
In addition, it is the Federal Reserve’s policy that a bank holding company, in serving as a source of strength to its subsidiary bank(s), should stand ready to use available resources to provide adequate capital funds to its subsidiary bank(s) during 9 Table of Contents periods of financial stress or adversity and should maintain the financial flexibility and capital-raising capacity to obtain additional resources for assisting its subsidiary bank(s).
In addition, it is the Federal Reserve’s policy that a bank holding company, in serving as a source of strength to its subsidiary bank(s), should stand ready to use available resources to provide adequate capital funds to its subsidiary bank(s) during periods of financial stress or adversity and should maintain the financial flexibility and capital-raising capacity to obtain additional resources for assisting its subsidiary bank(s).
Acquisition of Control of a Bank Holding Company or a Bank As a bank holding company, we must obtain the prior approval of the Federal Reserve to acquire more than five percent of the outstanding shares of voting securities or substantially all of the assets, by merger or purchase, of (i) any 10 Table of Contents bank or other bank holding company or (ii) any other entities engaged in banking-related businesses or that provide banking-related services.
Acquisition of Control of a Bank Holding Company or a Bank As a bank holding company, we must obtain the prior approval of the Federal Reserve to acquire more than five percent of the outstanding shares of voting securities or substantially all of the assets, by merger or purchase, of (i) any bank or other bank holding company or (ii) any other entities engaged in banking-related businesses or that provide banking-related services.
GLBA also requires banking organizations to provide each of 16 Table of Contents their customers with a notice of their privacy policies and practices and prohibits a banking organization from disclosing nonpublic personal information about a customer to nonaffiliated third parties unless the banking organization satisfies various notice and “opt-out” requirements and the customer has not chosen to opt out of the disclosure.
GLBA also requires banking organizations to provide each of their customers with a notice of their privacy policies and practices and prohibits a banking organization from disclosing nonpublic personal information about a customer to nonaffiliated third parties unless the banking organization satisfies various notice and “opt-out” requirements and the customer has not chosen to opt out of the disclosure.
C&I Loan Channel: Loans originated under the C&I loan channel are generally supported by the cash flows generated from the business operations of the entity to which the loan is made, and, except for loans secured by owner occupied CRE, are generally secured by non-real estate assets, such as equipment, inventories or accounts receivable.
C&I Loan Channel: Loans originated under the C&I loan channel are generally supported by the cash flows generated from the business operations of the entity to which the loan is made, and, except for loans secured by owner 5 Table of Contents occupied CRE, are generally secured by non-real estate assets, such as equipment, inventories or accounts receivable.
This fee for the referral is either a percentage of the fees we charge to the client or a percentage of the AUM of the client. The asset custodial firms are entitled to continue to receive these fees for as long as we continue to provide services to the referral client.
This fee for the referral is either a percentage of the fees we charge to the client or a percentage of the AUM of the client. The asset custodial firms are entitled to continue receiving these fees for as long as we continue to provide services to the referral client.
Securities Exchange Act of 1934 FFI’s common stock is publicly held and listed on the New York Stock Exchange (“NYSE”), and FFI is subject to the periodic reporting, information, proxy solicitation, insider trading, corporate governance and other requirements and restrictions of the Securities Exchange Act of 1934 and the regulations of the Securities and Exchange Commission (“SEC”) promulgated thereunder as well as listing requirements of NYSE.
Securities Exchange Act of 1934 FFI’s common stock is publicly held and listed on the New York Stock Exchange (“NYSE”), and FFI is subject to the periodic reporting, information, proxy solicitation, insider trading, corporate governance and other requirements and 21 Table of Contents restrictions of the Securities Exchange Act of 1934 and the regulations of the Securities and Exchange Commission (“SEC”) promulgated thereunder as well as NYSE listing requirements.
The impact of any changes to capital requirements and calculations and the implementation of Basel IV on us will depend on the manner in which it is implemented by the federal bank regulators with respect to smaller-sized institutions. ​ Prompt Corrective Action The Federal Deposit Insurance Corporation Improvement Act of 1991 (“FDICIA”), established a framework for regulation of federally insured depository institutions, including banks, and their parent holding companies and other affiliates, by their federal banking regulators.
The impact of any changes to capital requirements and calculations and the implementation of Basel IV on us will depend on the manner in which it is implemented by the federal bank regulators. ​ Prompt Corrective Action The Federal Deposit Insurance Corporation Improvement Act of 1991 (“FDICIA”), established a framework for regulation of federally insured depository institutions, including banks, and their parent holding companies and other affiliates, by their federal banking regulators.
The yields we realize on our loans and other interest-earning assets and the interest rates we 1 Table of Contents pay to attract and retain deposits, along with the balances on those products, are the principal determinants of our banking revenues. We also provide trust services to clients using our California, Hawaii, Nevada, Florida, and Texas trust powers.
The yields we realize on our loans and other interest-earning assets and the interest rates we pay to attract and retain deposits, along with the balances on those products, are the principal determinants of our banking revenues. We also provide trust services to clients using our California, Hawaii, Nevada, Florida, and Texas trust powers.
This regulation is intended primarily for the protection of depositors, customers, the FDIC’s deposit insurance fund and the banking system as a whole, not for the protection of our other creditors or stockholders. Set forth below are summary descriptions of the material laws and regulations that affect or bear on our operations.
This regulation is intended primarily for the protection of depositors, customers, the FDIC’s deposit insurance fund and the banking system as a whole, not for the protection of our other creditors or stockholders. Set forth below are summary descriptions of the 10 Table of Contents material laws and regulations that affect or bear on our operations.
The actions of the Federal Reserve in these areas influence the growth and performance of bank loans, investments, and deposits and also affect interest earned on interest-earning assets and paid on interest-bearing liabilities. Government fiscal and budgetary policies, including deficit spending, can also have a significant impact on the capital markets and interest rates.
The actions of the Federal Reserve in these areas influence the growth and performance of bank loans, investments, and deposits, while also affecting interest earned on interest-earning assets and paid on interest-bearing liabilities. Government fiscal and budgetary policies, including deficit spending, can also have a significant impact on the capital markets and interest rates.
The CFPB has broad rulemaking, supervisory and enforcement powers under various federal consumer financial protection laws, including the Equal Credit Opportunity Act, Truth in Lending Act, Real Estate Settlement Procedures Act, Fair Credit Reporting Act, Fair Debt Collection Act, the Consumer Financial Privacy provisions of the GLBA and certain other statutes.
The CFPB has broad rulemaking, supervisory and enforcement powers under various federal consumer financial protection laws, including the Equal Credit Opportunity 20 Table of Contents Act, Truth in Lending Act, Real Estate Settlement Procedures Act, Fair Credit Reporting Act, Fair Debt Collection Act, the Consumer Financial Privacy provisions of the GLBA and certain other statutes.
Our loan products are designed to meet the credit needs of our clients in a manner that, at the 2 Table of Contents same time, enables us to effectively manage the credit and interest rate risks inherent in our lending activities. Historically, our lending products are the primary drivers of revenues and earnings for the consolidated entity.
Our loan products are designed to meet the credit needs of our clients in a manner that, at the same time, enables us to effectively manage the credit and interest rate risks inherent in our lending activities. Historically, our lending products are the primary drivers of revenues and earnings for the consolidated entity.
Those services, which consist primarily of the management of trust assets, complement the investment advisory and wealth management services that FFA offers to our clients and, as a result, provide us with cross-selling opportunities. As of December 31, 2024, trust AUA totaled $1.1 billion.
Those services, which consist primarily of the management of trust assets, complement the investment advisory and wealth management services that FFA offers to our clients and, as a result, provide us with cross-selling opportunities. As of December 31, 2025, trust AUA totaled $1.2 billion.
As of December 31, 2024, FFI and FFB did not have any trust preferred securities. In December 2017, the Basel Committee published standards that it described as the finalization of the Basel III post-crisis regulatory reforms (the standards are commonly referred to as “Basel IV”).
As of December 31, 2025, FFI and FFB did not have any trust preferred securities outstanding. In December 2017, the Basel Committee published standards that it described as the finalization of the Basel III post-crisis regulatory reforms (the standards are commonly referred to as “Basel IV”).
In addition, we perform stress testing for changes in interest rates and other factors and review general economic trends in the client’s industry. We typically do not require full recourse from the owners of the entities to which we make such loans.
In addition, we perform stress testing for changes in interest rates and other factors and review 6 Table of Contents general economic trends in the client’s industry. We typically do not require full recourse from the owners of the entities to which we make such loans.
These digital bank products are offered to consumers across all 50 states and enable FFB to target Millennial, Gen Z, and more digitally savvy prospects with increased efficiency and are supported by a dedicated digital bank operations team. Trust Services FFB is licensed to provide trust services to clients in California, Florida, Hawaii, Nevada, and Texas.
Supported by a dedicated digital bank operations team, these digital bank products are offered to consumers across all 50 states and enable FFB to target Millennial, Gen Z, and more digitally savvy prospects with increased efficiency. 8 Table of Contents Trust Services FFB is licensed to provide trust services to clients in California, Florida, Hawaii, Nevada, and Texas.
If an undercapitalized bank is a subsidiary of a bank holding company, then, for 12 Table of Contents its capital restoration plan to be approved, the bank’s parent holding company must guarantee that the bank will comply with, and provide assurances of the performance by the bank of, its capital restoration plan.
If an undercapitalized bank is a subsidiary of a bank holding company, then, for its capital restoration plan to be approved, the bank’s parent holding company must guarantee that the bank will comply with, and provide assurances of the performance by the bank of, its capital restoration plan.
As of December 31, 2024, FFB exceeded the minimum regulatory capital requirements necessary to be considered “well-capitalized” under the prompt corrective action requirements.
As of December 31, 2025, FFB exceeded the minimum regulatory capital requirements necessary to be considered “well-capitalized” under the prompt corrective action requirements.
Wealth Management Products and Services FFA is a fee-based investment advisor which provides investment advisory and wealth management services primarily for individuals and their families, family businesses and other affiliated organizations (including public and closely-held corporations, family foundations and private charitable organizations).
Wealth Management Products and Services FFA is a fee-based investment advisor providing investment advisory and wealth management services primarily for individuals and their families, family businesses and other affiliated organizations (including public and closely-held corporations, family foundations and private charitable organizations).
In October 2022, the FDIC adopted a final rule to increase initial base deposit insurance assessment rates for insured depository institutions by 2 basis points, beginning with the first quarterly assessment period of 2023.
In October 2022, the FDIC adopted a final rule to increase initial base deposit insurance assessment rates for insured depository institutions by 2 basis points, which began with the first quarterly assessment period of 2023.
These rates are highly sensitive to many factors that are beyond our control, such as inflation, recession and unemployment, government fiscal and 8 Table of Contents monetary and other policies, and the impact which future changes in domestic and foreign economic conditions might have on us cannot be predicted.
These rates are highly sensitive to many factors that are beyond our control, such as inflation, recession and unemployment, government fiscal and monetary and other policies, and the impact which future changes in domestic and foreign economic conditions might have on us cannot be predicted.
The FDIC may terminate deposit insurance upon a finding that the institution has engaged in unsafe and unsound practices, is in an unsafe or unsound condition to continue operations, or has violated any applicable law, regulation, rule, order or condition imposed by the FDIC.
The FDIC may terminate deposit insurance upon a finding that the institution has engaged in unsafe and unsound practices, is in an unsafe or unsound condition to continue operations, or has violated any applicable law, regulation, rule, 16 Table of Contents order or condition imposed by the FDIC.
All website addresses given in this report are for information only and are not intended to be an active link or to incorporate any website information into this report. Reports, proxy and information statements, and other information filed with the SEC is also available at www.sec.gov. ​
All website addresses given in this report are for information only and are not intended to be active links or to incorporate any website information into this report. Reports, proxy and information statements, and other information filed with the SEC are also available at www.sec.gov. ​
We attempt to place our banking offices in strategic locations to establish a presence in our target markets, rather than saturating a market with numerous banking offices. The sales activities at our 6 Table of Contents banking offices are led by the bankers and branch managers located at the offices.
We attempt to place our banking offices in strategic locations to establish a presence in our target markets, rather than saturating a market with numerous banking offices. The sales activities at our banking offices are led by the bankers and branch managers located at the offices.
Our pricing strategy is intended to complement our other products and services so that we can attract and retain clients without always paying the highest rates.
Our 7 Table of Contents pricing strategy is intended to complement our other products and services so that we can attract and retain clients without always paying the highest rates.
Historically, the FHLB has paid dividends on its capital stock to its members. 15 Table of Contents Restrictions on Transactions between FFB and the Company and its other Affiliates FFB is subject to Sections 23A and 23B of, and Federal Reserve Regulation W under, the Federal Reserve Act, which impose restrictions on (i) any extensions of credit to, or the issuance of a guarantee or letter of credit on behalf of, the Company or any of its other subsidiaries; (ii) the purchase of or investments in Company stock or other Company securities; (iii) the taking of Company securities as collateral for the loans that FFB makes; (iv) the purchase of assets from the Company or any of its other subsidiaries and (v) transactions between a bank and its financial subsidiaries, as well as other affiliates.
Restrictions on Transactions between FFB and the Company and its other Affiliates FFB is subject to Sections 23A and 23B of, and Federal Reserve Regulation W under, the Federal Reserve Act, which impose restrictions on (i) any extensions of credit to, or the issuance of a guarantee or letter of credit on behalf of, the Company or any of its other subsidiaries; (ii) the purchase of or investments in Company stock or other Company securities; (iii) the taking of Company securities as collateral for the loans that FFB makes; (iv) the purchase of assets from the Company or any of its other subsidiaries and (v) transactions between a bank and its financial subsidiaries, as well as other affiliates.
Additionally, the FDIC will collect the special assessment an annual rate of 13.4 basis points beginning with the first quarterly assessment period of 2024 and will continue to collect special assessments for an anticipated total of eight quarterly assessment periods. As of June 30, 2024, which is the most recent information available, the DIF reserve ratio was at 1.21%.
The FDIC began collecting the special assessment an annual rate of 13.4 basis points beginning with the first quarterly assessment period of 2024 and will continue to collect special assessments for an anticipated total of eight quarterly assessment periods. As of September 30, 2025, which is the most recent information available, the DIF reserve ratio was at 1.40%.
The C&I loan channel is focused on developing quality full-service business banking relationships, including loans and deposits, by offering commercial products for small to moderate-sized businesses across the banking platform. This allows us to provide support for small to mid-sized businesses in our market areas.
The C&I loan channel is focused on developing quality full-service business banking relationships, including loans, deposits, and treasury management service products for small to moderate-sized businesses across the regional footprint. This allows us to provide support for small to mid-sized businesses in our market areas.
Capital Rules, operational risk capital requirements and a capital floor apply only to advanced approaches institutions, and not to the Company and the Bank. 11 Table of Contents In July 2023, the FRB, Office of the Comptroller of the Currency (“OCC”) and FDIC proposed significant changes to the Basel III capital rules which replaces the advanced approaches risk-weighted assets framework with a new enhanced risk-based framework and requires banking organizations with generally more than $100 billion in assets to calculate their regulatory capital using more enhanced requirements applicable to even larger organizations.
In July 2023, the FRB, Office of the Comptroller of the Currency (“OCC”) and FDIC proposed significant changes to the Basel III capital rules which replaces the advanced approaches risk-weighted assets framework with a new enhanced risk-based framework and requires banking organizations with generally more than $100 billion in assets to calculate their regulatory capital using more enhanced requirements applicable to even larger organizations.
As of December 31, 2024, we had $12.6 billion of total assets, $9.2 billion of loans, $9.9 billion of deposits, $5.4 billion of assets under management (“AUM”), and $1.2 billion of trust assets under advisement (“AUA”). Our investment advisory and wealth management and trust services provide us with a stable source of diversified, fee-based, recurring revenues.
As of December 31, 2025, we had $11.9 billion of total assets, $7.0 billion of loans, $9.3 billion of deposits, $5.1 billion of assets under management (“AUM”), and $1.2 billion of trust assets under advisement (“AUA”). Our investment advisory and wealth management and trust services provide us with a stable source of diversified, fee-based, recurring revenues.
We have entered into referral agreements with certain of the asset custodial firms that provide custodial services to our clients. Under these arrangements, the asset custodial firms provide referrals of prospective new clients whose wealth warrants the more personalized and expansive breadth of financial services that we are able to provide in exchange for a fee.
Under these arrangements, the asset custodial firms provide referrals of prospective new clients whose wealth warrants the more personalized and expansive breadth of financial services that we are able to provide in exchange for a fee.
As a result of the new rule, the FDIC insurance costs of insured depository institutions, including the Bank, have generally increased.
As a result of these increased assessments, the FDIC insurance costs of insured depository institutions, including the Bank, have generally increased.
Our lending platform is focused on three primary channels: 1) Commercial Real Estate (“CRE”), defined as multifamily residential, owner and non-owner occupied commercial real estate, land and construction; 2) Commercial and Industrial (“C&I”), defined as term and revolving credit/lines of credit for small to moderate-sized businesses, professional firms, and municipal agencies; and 3) Consumer defined as loan products to individuals, including single-family residential real estate loans and home equity lines of credit and other consumer-related loans focused on the current and prospective clients of our platform.
As a result, we have in our portfolio a variety of loan products consisting of multifamily and single-family residential real estate loans, commercial real estate loans, commercial term loans and lines of credit, and consumer loans. 4 Table of Contents Our lending platform has originated loans through three primary channels: 1) Commercial Real Estate (“CRE”), defined as multifamily residential, owner and non-owner occupied commercial real estate, land and construction; 2) Commercial and Industrial (“C&I”), defined as term and revolving credit/lines of credit for small to moderate-sized businesses, professional firms, and municipal agencies; and 3) Consumer defined as loan products to individuals, including single-family residential real estate loans and home equity lines of credit and other consumer-related loans focused on the current and prospective clients of our platform.
The substance or impact of pending or future legislation or regulations, or the application thereof, cannot be predicted, although enactment of the proposed legislation could impact the regulatory structure under which we operate and may significantly increase our costs, impede the efficiency of our internal business processes, require us to increase our regulatory capital or modify our business strategy, limit our ability to pursue business opportunities or activities or alter the competitive balance between banks and non-bank financial service providers. 20 Table of Contents Human Capital Resources As of December 31, 2024, the Company had approximately 551 full-time employees.
The substance or impact of pending or future legislation or regulations, or the application thereof, cannot be predicted, although enactment of the proposed legislation could impact the regulatory structure under which we operate and may significantly increase our costs, impede the efficiency of our internal business processes, require us to increase our regulatory capital or modify our business strategy, limit our ability to pursue business opportunities or activities or alter the competitive balance between banks and non-bank financial service providers.
The Dodd-Frank Act permanently increased the maximum deposit insurance amount for banks, savings institutions and credit unions to $250,000 per depositor. 14 Table of Contents The FDIC uses a risk-based assessment system that imposes insurance premiums based upon a risk matrix that takes into account a bank’s CAMELS supervisory rating.
The Dodd-Frank Act permanently increased the maximum deposit insurance amount for banks, savings institutions and credit unions to $250,000 per depositor. The FDIC uses a risk-based assessment system that imposes insurance premiums based upon a risk matrix that takes into account a bank’s CAMELS supervisory rating. The risk matrix utilizes different risk categories distinguished by capital levels and supervisory ratings.
The risk matrix utilizes different risk categories distinguished by capital levels and supervisory ratings. As a result of the Dodd-Frank Act, the base for insurance assessments is now consolidated average assets less average tangible equity. Assessment rates are calculated using formulas that take into account the risk of the institution being assessed.
As a result of the Dodd-Frank Act, the base for insurance assessments is now consolidated average assets less average tangible equity. Assessment rates are calculated using formulas that take into account the risk of the institution being assessed.
FFB has bankers in each location across the platform sourcing loan and deposit business to cultivate and develop quality banking relationships from existing and potential clients, as well as a digital bank platform that attracts new deposit clients across the country.
FFB has bankers in each location across the platform sourcing loan and deposit business to cultivate and develop quality banking relationships from existing and potential clients, as well as a digital bank platform that attracts new deposit clients across the country. FFB’s banking platform is focused on program-specific products and clients, with an emphasis on digital delivery.
Cash dividends from FFB are one of the principal sources of cash (in addition to any cash dividends that might be paid to the Company by FFA) that is available to the Company for its operations and to fund any cash dividends or stock repurchases that the Company’s Board of Directors might declare or approve in the future.
The Company has agreed not to pay any dividends to its stockholders without the FRB’s prior written approval. 15 Table of Contents Cash dividends from FFB are one of the principal sources of cash (in addition to any cash dividends that might be paid to the Company by FFA) that is available to the Company for its operations and to fund any cash dividends or stock repurchases that the Company’s Board of Directors might declare or approve in the future.
Under the FDIC regulations, a bank that is classified as less than “well-capitalized” faces restrictions on its ability to accept or renew brokered deposits. For example, a bank that is classified as “adequately capitalized” may only accept or renew brokered deposits with FDIC approval; a bank that is classified as “undercapitalized” may not accept or renew brokered deposits.
Under the FDIC regulations, a bank that is classified as less than “well-capitalized” faces restrictions on its ability to accept or renew brokered deposits.
Each of our office locations is focused on serving the businesses and clients within its market area. Our lending activities serve the credit needs of individuals, owners of multifamily and commercial real estate properties, small to moderate-sized businesses and professional firms in our market areas.
Our lending activities serve the credit needs of individuals, owners of multifamily and commercial real estate properties, small to moderate-sized businesses and professional firms in our market areas.
To a large degree, our success therefore depends on the personal relationships of our employees and the quality of service they provide. We strive to attract, develop and retain employees who can further our business strategy and build long-term stockholder value. To do so, we offer compensation, benefits, and training designed to attract, develop and retain quality employees.
To compete with other financial institutions, our business strategy emphasizes customer relationships and personalized service. To a large degree, our success therefore depends on the personal relationships of our employees and the quality of service they provide. We strive to attract, develop and retain employees who can further our business strategy and build long-term stockholder value.
Available Information The Company’s annual reports on Form 10-K, proxy statements, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act are accessible for free at the Investor Relations section of our website at www.firstfoundationinc.com as soon as reasonably practicable after the Company electronically files such material with, or furnishes it to, the SEC.
In 2025, the program resulted in approximately $500,000 of grants and donations distributed by the Company, 4,690 volunteer hours contributed by our employees, and a total of 231 organizations supported. 22 Table of Contents Available Information The Company’s annual reports on Form 10-K, proxy statements, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act are accessible for free at the Investor Relations section of our website at www.firstfoundationinc.com as soon as reasonably practicable after the Company electronically files such material with, or furnishes them to, the SEC.
It is the policy of the Company and each of its subsidiaries to conduct our business in accordance with the highest ethical standards of the financial industry and to comply with all applicable laws and regulations.
To do so, we offer compensation, benefits, and training designed to attract, develop and retain quality employees. It is the policy of the Company and each of its subsidiaries to conduct our business in accordance with the highest ethical standards of the financial industry and to comply with all applicable laws and regulations.
A lower CRA rating may be the basis for requiring the applicant’s bank subsidiary to take corrective actions to improve its CRA performance as a condition to the approval of the acquisition or as a basis for denying the application altogether. 17 Table of Contents In 2024, the federal banking regulators issued a final rule making comprehensive to the regulations implementing the CRA.
A lower CRA rating may be the basis for requiring the applicant’s bank subsidiary to take corrective actions to improve its CRA performance as a condition to the approval of the acquisition or as a basis for denying the application altogether.
Safety and Soundness Standards Banking institutions may be subject to potential enforcement actions by the federal banking regulators for unsafe or unsound practices or for violating any law, rule, regulation, or any condition imposed in writing by its primary federal banking regulatory agency or any written agreement with that agency.
For example, a bank that is classified as “adequately capitalized” may only accept or renew brokered deposits with FDIC approval; a bank that is classified as “undercapitalized” may not accept or renew brokered deposits. 14 Table of Contents Safety and Soundness Standards Banking institutions may be subject to potential enforcement actions by the federal banking regulators for unsafe or unsound practices or for violating any law, rule, regulation, or any condition imposed in writing by its primary federal banking regulatory agency or any written agreement with that agency.
Among other things, it codifies a risk-based approach to anti-money laundering compliance for financial institutions; requires the development of standards for evaluating technology and internal processes for Bank Secrecy Act compliance; and expands enforcement and investigative authority, including increasing available sanctions for certain Bank Secrecy Act violations and instituting Bank Secrecy Act whistleblower incentives and protections.
Among other things, it codifies a risk-based approach to anti-money laundering compliance for financial institutions; requires the development of standards for evaluating technology and internal processes for Bank Secrecy Act compliance; and expands enforcement and investigative authority, including increasing available sanctions for certain Bank Secrecy Act violations and instituting Bank Secrecy Act whistleblower incentives and protections. 19 Table of Contents Consumer Laws and Regulations The Company and the Bank are subject to a broad range of federal and state consumer protection laws and regulations prohibiting unfair or fraudulent business practices, untrue or misleading advertising and unfair competition.
Changes in our AUM reflect additions from new clients, the gains or losses recognized from investment results, additional funds received from existing clients, withdrawals of funds by clients, and terminations. 7 Table of Contents We do not provide custodial services for our clients through FFA.
Changes in our AUM reflect additions from new clients, the gains or losses recognized from investment results, additional funds received from existing clients, withdrawals of funds by clients, and terminations. We do not provide custodial services for our clients through FFA. Instead, client investment accounts are maintained under custodial arrangements with large, well-established brokerage firms, either directly or through FFB.
See “Consumer Financial Protection Bureau.” Various requirements and restrictions under federal and California banking laws affect the operations of FFB. These laws and the implementing regulations can determine the extent of supervisory control to which a bank will be subject by its federal and state bank regulators.
These laws and the implementing regulations can determine the extent of supervisory control to which a bank will be subject by its federal and state bank regulators.
None of our employees are covered by a collective bargaining agreement. We believe relations with our employees are good and have not experienced interruptions of operations due to labor disagreements. We expect our human capital resources are adequate for our current needs. To compete with other financial institutions, our business strategy emphasizes customer relationships and personalized service.
Human Capital Resources As of December 31, 2025, the Company had approximately 570 full-time employees. None of our employees are covered by a collective bargaining agreement. We believe relations with our employees are good and have not experienced interruptions of operations due to labor disagreements. We expect our human capital resources are adequate for our current needs.
FFB’s banking platform is focused on program-specific products and clients, with an emphasis on digital delivery. ​ Loan Products and Services We have established a lending platform that provides financing solutions to our strong and stable client relationships, including individuals, businesses, and other entities.
Loan Products and Services We have established a lending platform that provides financing solutions to our strong and stable client relationships, including individuals, businesses, and other entities. Each of our office locations is focused on serving the businesses and clients within its market area.
Regulation of First Foundation Bank FFB is subject to primary supervision, periodic examination and regulation by the FDIC, which is its primary federal banking regulator, and the DFPI, because FFB is a California state-chartered bank. The CFPB has examination and supervision authority over FFB with respect to federal consumer laws with respect to FFB.
As such, we are subject to examination by, and may be required to file reports with, the DFPI. 11 Table of Contents Regulation of First Foundation Bank FFB is subject to primary supervision, periodic examination and regulation by the FDIC, which is its primary federal banking regulator, and the DFPI, because FFB is a California state-chartered bank.
Because FFB is a California state-chartered bank, the Company is deemed to be a bank holding company within the meaning of Section 1280 of the California Financial Code. As such, we are subject to examination by, and may be required to file reports with, the DFPI.
Because FFB is a California state-chartered bank, the Company is deemed to be a bank holding company within the meaning of Section 1280 of the California Financial Code.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThe banking laws, regulations and policies applicable to us govern matters ranging from the maintenance of adequate capital, safety and soundness, mergers and changes in control to the general business operations conducted by us, including permissible types, amounts and terms of loans and investments, the amount of reserves held against deposits, restrictions on dividends, imposition of specific accounting requirements, establishment of new offices and the maximum interest rate that may be charged on loans.
Biggest changeThe banking laws, regulations and policies applicable to us govern matters ranging from the maintenance of adequate capital, safety and soundness, mergers and changes in control to the general business operations conducted by us, including permissible types, amounts and terms of loans and investments, the amount of reserves held against deposits, restrictions on dividends, imposition of specific accounting requirements, establishment of new offices and the maximum interest rate that may be charged on loans. 39 Table of Contents Any changes in any federal or state banking statute, regulation or governmental policy, or the interpretation or implementation of any of them, could affect us in substantial and unpredictable ways, including ways that may adversely affect our business, results of operations, financial condition or prospects.
In August 2024, we reclassified a portion of our multifamily loan portfolio totaling $1.9 billion principal balance from loans held for investment to loans held for sale as a step aimed at reducing exposure to low coupon fixed rate loans and concentration in multifamily commercial real estate.
In August 2024, we reclassified a portion of our multifamily loan portfolio totaling $1.9 billion principal balance from loans held for investment to loans held for sale as a step aimed at reducing exposure to low-coupon fixed-rate loans and our concentration in multifamily commercial real estate.
These factors include, but are not limited to, rating agency actions in respect of the investment securities in our portfolio, defaults by the issuers of such securities, concerns with respect to the enforceability of the payment or other key terms of such securities, changes in market interest rates and continued instability in the capital markets.
These factors include, but are not limited to, rating agency actions in respect to the investment securities in our portfolio, defaults by the issuers of such securities, concerns with respect to the enforceability of the payment or other key terms of such securities, changes in market interest rates and continued instability in the capital markets.
This may also make it more difficult for us to retain and hire key management and other team members. Changes to strategic or operating goals, which can often times occur with the appointment of new directors and new executives, can create uncertainty, may negatively impact our ability to execute quickly and effectively, and may ultimately be unsuccessful.
This may also make it more difficult for us to retain and hire key management and other team members. Changes to strategic or operating goals, which can often occur with the appointment of new directors and new executives, can create uncertainty, may negatively impact our ability to execute quickly and effectively, and may ultimately be unsuccessful.
Any of these occurrences could have a material adverse effect on our business, financial condition, results of operations and prospects. Our banking, investment advisory and wealth management operations are geographically concentrated in California, Florida, Nevada, Texas, and Hawaii, leading to significant exposure to those markets.
Any of these occurrences could have a material adverse effect on our business, financial condition, results of operations or prospects. Our banking, investment advisory and wealth management operations are geographically concentrated in California, Florida, Nevada, Texas, and Hawaii, leading to significant exposure to those markets.
We determine the amount of our ACL in accordance with the Current Expected Credit Loss (“CECL”) model under the Financial Accounting Standards Board’s (“FASB”) ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which requires, among other things, that we determine periodic estimates of lifetime expected future credit losses on loans in the provision for credit losses in the period when the loans are booked, which considers reasonable and supportable forecasts of future economic conditions in addition to information about past events and current conditions.
We determine the amount of our ACL in accordance with the Current Expected Credit Loss (“CECL”) model under the Financial Accounting Standards Board’s (“FASB’s”) ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which requires, among other things, that we determine periodic estimates of lifetime expected future credit losses on loans in the provision for credit losses in the period when the loans are booked, which considers reasonable and supportable forecasts of future economic conditions in addition to information about past events and current conditions.
No hedging strategy can completely protect us, and the derivative financial instruments we elect to use may not have the effect of reducing our interest rate risk. Poorly designed strategies, inaccurate assumptions, improperly executed transactions, or the failure of the counterparty to fulfill its obligations could serve to increase our risks and losses.
No hedging strategy, including the Hedge Strategy, can completely protect us, and the derivative financial instruments we elect to use may not have the effect of reducing our interest rate risk. Poorly designed strategies, inaccurate assumptions, improperly executed transactions, or the failure of the counterparty to fulfill its obligations could serve to increase our risks and losses.
We face a risk of noncompliance and enforcement action with the Bank Secrecy Act and other anti-money laundering statutes and regulations.
We face the risk of noncompliance and enforcement action with the Bank Secrecy Act and other anti-money laundering statutes and regulations.
The level of uncertainty concerning economic conditions may adversely affect the accuracy of our estimates which may, in turn, impact the reliability of the process; and ● Our borrowers may be unable to make timely repayments of their loans, or the decrease in value of the collateral securing the payment of such loans could result in significant credit losses, increasing 22 Table of Contents delinquencies, foreclosures and customer bankruptcies, any of which could have a material adverse effect on our operating results.
The level of uncertainty concerning economic conditions may adversely affect the accuracy of our estimates which may, in turn, impact the reliability of the process; and ● Our borrowers may be unable to make timely repayments of their loans, or the decrease in value of the collateral securing the payment of such loans could result in significant credit losses, increasing delinquencies, foreclosures and customer bankruptcies, any of which could have a material adverse effect on our operating results.
As a result, a 25 Table of Contents material decrease in the volume of those deposits by a relatively small number of our depositors could reduce our liquidity, in which event it could become necessary for us to replace those deposits with higher-cost deposits, the sale of securities or borrowings, which would adversely affect our net interest income and, therefore, our results of operations.
As a result, a material decrease in the volume of those deposits by a relatively small number of our depositors could reduce our liquidity, in which event it could become necessary for us to replace those deposits with higher-cost deposits, the sale of securities or borrowings, which would adversely affect our net interest income and, therefore, our results of operations.
Failure to successfully manage these risks in the development and implementation of new lines of business or new products or services could have a material adverse effect on our business, results of operations, financial condition and prospects. We face intense competition from other banks and financial institutions and other wealth and investment management firms that could hurt our business.
Failure to successfully manage these risks in the development and implementation of new lines of business or new products or services could have a material adverse effect on our business, results of operations, financial condition and prospects. 35 Table of Contents We face intense competition from other banks and financial institutions and other wealth and investment management firms that could hurt our business.
Therefore, a decline in the estimated fair value of this portfolio will result in a decline in reported stockholders’ equity, book value per common share, and tangible book value per common share. The decrease will occur even though the securities are not sold.
Therefore, a decline in the estimated fair value of this portfolio will result in a decline in reported stockholders’ equity, book value per common share, and tangible book value per common share. The decrease will occur even though the securities are not sold and losses are not realized.
An adverse resolution of any regulatory proceeding or lawsuit against FFA could result in substantial costs or reputational harm to FFA and, therefore, could have an adverse effect on the ability of FFA to retain key relationship and wealth managers, and to retain existing clients or attract new clients, any of which could have a material adverse effect on our business, financial condition, results of operations and prospects.
An adverse resolution of any regulatory proceeding or lawsuit against FFA could result in substantial costs or reputational harm to FFA and, therefore, could have an adverse effect on the ability of 41 Table of Contents FFA to retain key relationship and wealth managers, and to retain existing clients or attract new clients, any of which could have a material adverse effect on our business, financial condition, results of operations and prospects.
As a result of an examination, regulatory agencies may determine that the financial condition, capital resources, asset quality, asset concentrations, earnings prospects, management, 32 Table of Contents liquidity, sensitivity to market risk, or other aspects of any of our operations are unsatisfactory, or that we or our management are in violation of any law, regulation or guideline in effect from time to time.
As a result of an examination, regulatory agencies may determine that the financial condition, capital resources, asset quality, asset concentrations, earnings prospects, management, liquidity, sensitivity to market risk, or other aspects of any of our operations are unsatisfactory, or that we or our management are in violation of any law, regulation or guideline in effect from time to time.
Difficult economic conditions in any of the markets where we operate could, among other things, affect the volume of loan originations, increase the level of nonperforming assets, increase the rate of foreclosure losses on loans and reduce the 23 Table of Contents value of our loans and loan servicing portfolio, adversely affecting our business, financial condition, results of operations and future prospects.
Difficult economic conditions in any of the markets where we operate could, among other things, affect the volume of loan originations, increase the level of nonperforming assets, increase the rate of foreclosure losses on loans and reduce the value of our loans and loan servicing portfolio, adversely affecting our business, financial condition, results of operations and future prospects.
We rely heavily on third-party service providers for much of our communications, information, operating and financial control systems technology, including our internet banking services and data processing systems. Any failure or interruption of, or security breaches in, these systems could result in failures or interruptions in our operations or in the client services we provide.
We rely heavily on third-party service providers for much of our communications, information, operating and financial control systems technology, including our internet banking services and data processing systems. Any failure or interruption of, or security breaches in, these systems could result in failures or interruptions in our operations or in the 37 Table of Contents client services we provide.
Strategic, Operational and External Risks We have recently experienced turnover in our Board of Directors and executive management team and are embarking upon a new strategic plan, all of which create uncertainties and could harm our business. We have experienced significant changes to our Board of Directors and executive leadership during the second half of 2024.
Strategic, Operational and External Risks We have experienced turnover in our Board of Directors and executive management team and are embarking upon a new strategic plan, all of which create uncertainties and could harm our business. We have experienced significant changes to our Board of Directors and executive leadership since the second half of 2024.
Private parties may also have the ability to challenge an institution’s performance under fair lending laws in private class action litigation. Any such actions could have a material adverse effect on our business, financial condition, results of operations and prospects.
Private parties may also have the ability to challenge an institution’s performance under fair lending laws in private class action litigation. Any such actions could have a material adverse effect on our business, financial 40 Table of Contents condition, results of operations and prospects.
If we are not successful in retaining existing and attracting new investment management clients, our business, financial condition, results of operations and prospects may be materially and adversely affected. 28 Table of Contents We are required to make significant estimates and assumptions in the preparation of our financial statements and our estimates and assumptions may not be accurate.
If we are not successful in retaining existing and attracting new investment management clients, our business, financial condition, results of operations and prospects may be materially and adversely affected. We are required to make significant estimates and assumptions in the preparation of our financial statements and our estimates and assumptions may not be accurate.
We are subject to capital adequacy standards and liquidity, and a failure to meet these standards could adversely affect our financial condition. The Company and the Bank are each subject to capital adequacy and liquidity rules and other regulatory requirements specifying minimum amounts and types of capital that must be maintained.
We are subject to capital adequacy standards and liquidity, and a failure to meet these standards could adversely affect our financial condition. The Company and the Bank are each subject to capital adequacy and liquidity rules and other regulatory 33 Table of Contents requirements specifying minimum amounts and types of capital that must be maintained.
To the extent we are unable to successfully develop, implement, and execute a strategic plan, or if we experience delays in the development, planning, and implementation process, our business, financial condition, and results of operations may be adversely affected.
To the extent we are unable to successfully develop, implement, and execute a strategic plan, or if we 34 Table of Contents experience delays in the development, planning, and implementation process, our business, financial condition, and results of operations may be adversely affected.
The risks identified below are not intended to be a comprehensive list of all risks we face, 21 Table of Contents and additional risks that we may currently view as not material may also impair our financial condition and price performance of our common stock.
The risks identified below are not intended to be a comprehensive list of all risks we face, and additional risks that we may currently view as not material may also impair our financial condition and the price performance of our common stock.
The amount of the reimbursement and the impact of interest rate increases may vary by client. 24 Table of Contents We may incur significant losses as a result of ineffective hedging of interest rate risk. From time to time, we may utilize financial derivative instruments to limit our exposure to interest rate risk.
The amount of the reimbursement and the impact of interest rate increases may vary by client. We may incur significant losses as a result of ineffective hedging of interest rate risk. From time to time, we may utilize financial derivative instruments to limit our exposure to interest rate risk.
Our principal sources of liquidity include earnings, deposits, borrowings, sales of loans or investment securities held for sale, repayments by clients of loans we have made to them, and the proceeds from sales by us of our equity securities or from borrowings that we may obtain.
Our principal sources of liquidity include earnings, deposits, borrowings, sales of loans or investment securities held for sale, repayments by clients of loans we have made to them, and the proceeds from sales by us of our equity securities.
A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our financial statements will not be prevented or detected on a timely basis.
A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material 42 Table of Contents misstatement of our financial statements will not be prevented or detected on a timely basis.
In addition, regulators may impose additional capital buffers to absorb this volatility. While we believe our ACL is appropriate for the risk identified in our loan portfolio, we cannot provide assurance that we will not further increase the ACL, that it will be sufficient to address losses, or that regulators will not require us to increase this allowance.
In addition, regulators may impose additional capital buffers to absorb this volatility. While we believe our ACL is appropriate for the risk identified in our loan and securities portfolios, we cannot provide assurance that we will not further increase the ACL, that it will be sufficient to address losses, or that regulators will not require us to increase this allowance.
In addition, executive leadership transition periods are often difficult as the new executives 26 Table of Contents gain knowledge of the Company’s operations. If we do not integrate new executives and directors successfully, we may be unable to manage and grow our business, and our financial condition and profitability may suffer.
In addition, executive leadership transition periods are often difficult as the new executives gain knowledge of our operations. If we do not integrate new executives and directors successfully, we may be unable to manage and grow our business, and our financial condition and profitability may suffer.
Federal and state banking agencies periodically conduct examinations of our business, including compliance with laws and regulations. Such examinations may subject us to supervisory actions and our failure to comply with such actions may adversely affect us.
Federal and state banking agencies periodically conduct examinations of our business, including those focused on our compliance with laws and regulations. Such examinations may subject us to supervisory actions and our failure to comply with such actions may adversely affect us.
In addition, our results of operations also could be adversely affected by changes in the way in which existing statutes and 34 Table of Contents regulations are interpreted or applied by courts or governmental agencies.
In addition, our results of operations also could be adversely affected by changes in the way in which existing statutes and regulations are interpreted or applied by courts or governmental agencies.
If we were to become subject to significant environmental liabilities or costs, our business, financial condition, results of operations and prospects could be materially and adversely affected.
If we were to become subject to significant environmental liabilities or costs, our business, financial condition, results of operations and 38 Table of Contents prospects could be materially and adversely affected.
As of December 31, 2024, large depositor relationships, consisting of deposit relationships which individually exceed 2% of total deposits, accounted for, in the aggregate, approximately 19.7% of our total deposits.
As of December 31, 2025, large depositor relationships, consisting of deposit relationships which individually exceed 2% of total deposits, accounted for, in the aggregate, approximately 9.7% of our total deposits.
The fair value of our investment securities can fluctuate due to factors outside of our control. Factors beyond our control can significantly influence and cause adverse changes to occur in the fair values of securities in our investment securities portfolio.
Factors beyond our control can significantly influence and cause adverse changes to occur in the fair values of securities in our investment securities portfolio.
Loans secured by multifamily and commercial real estate represent a high percentage of the loans we make, making our results of operations vulnerable to downturns in the real estate market. At December 31, 2024, loans secured by multifamily and commercial real estate represented approximately 60.3% of our outstanding loans.
Loans secured by multifamily and commercial real estate represent a high percentage of the loans we make, making our results of operations vulnerable to downturns in the real estate market. At December 31, 2025, loans secured by multifamily and commercial real estate represented approximately 59.9% of our outstanding loans.
Our business activities and credit exposure, including real estate collateral for many of our loans, are concentrated in California, Florida, Nevada, Texas, and Hawaii. As of December 31, 2024, approximately 86.3% of the loans in our loan portfolio were made to borrowers who live and/or conduct business in California (72%), Florida (8%), Texas (5.1%), and Nevada (1.2%).
Our business activities and credit exposure, including real estate collateral for many of our loans, are concentrated in California, Florida, Nevada, Texas, and Hawaii. As of December 31, 2025, approximately 87.5% of the loans in our loan portfolio were made to borrowers who live and/or conduct business in California (73%), Florida (8%), Texas (5%), Nevada (1%), and Hawaii (0.5%).
If business and economic conditions weaken generally or specifically in the principal markets in which we do business, more of our borrowers may fail to perform in accordance with the terms of their loans, in which event loan charge-offs and asset write-downs could increase, which could have a material adverse effect on our business, financial condition, results of operations and prospects.
If business and economic conditions weaken generally or specifically in the principal markets in which we do business, more of our borrowers may fail to perform in accordance with the terms of their loans, in which event loan charge-offs and asset write-downs could increase, which could have a material adverse effect on our business, financial condition, results of operations and prospects. 30 Table of Contents Our allowance for credit losses may not be adequate to cover actual losses.
We seek to monitor and control our risk exposures through a risk and control framework encompassing a variety of separate but complementary financial, credit, operational and compliance systems, and internal control and management review processes.
We may incur significant losses due to ineffective risk management processes and strategies. We seek to monitor and control our risk exposures through a risk and control framework encompassing a variety of separate but complementary financial, credit, operational and compliance systems, and internal control and management review processes.
As a result, our operating results are more vulnerable to adverse changes in the real estate market than other financial institutions with more diversified loan portfolios and we could incur losses in the event of changes in economic conditions that disproportionately affect the real estate markets.
As a result, our operating results are more vulnerable to adverse changes in the real estate market than other financial institutions with more diversified loan portfolios and we could incur losses in the event of changes in economic conditions that disproportionately affect the real estate markets. 31 Table of Contents Market Risks Changes in interest rates could reduce our net interest margin and net interest income.
Our allowance for credit losses may not be adequate to cover actual losses. In accordance with regulatory requirements and generally accepted accounting principles (“GAAP”) in the United States, we maintain an allowance for credit losses to provide for loan defaults and non-performance, and an ACL on securities.
In accordance with regulatory requirements and generally accepted accounting principles (“GAAP”) in the United States, we maintain an allowance for credit losses (“ACL”) to provide for loan defaults and non-performance, and an ACL on securities.
Our actions to maintain effective controls and remedy any weakness or deficiency may not be sufficient to result in an effective internal control environment and any future failure to maintain effective internal control over financial reporting could impair the reliability of our financial statements, which in turn could harm our business, impair investor confidence in the accuracy and completeness of our financial reports, impair our access to the capital markets, cause the price of our common stock to decline and subject us to increased regulatory scrutiny and/or penalties, and higher risk of shareholder litigation. 35 Table of Contents The exercise of our outstanding warrants would increase the number of shares of common stock eligible for future resale in the public market and result in dilution to our existing stockholders.
Our actions to maintain effective controls and remedy any weakness or deficiency may not be sufficient to result in an effective internal control environment and any future failure to maintain effective internal control over financial reporting could impair the reliability of our financial statements, which in turn could harm our business, impair investor confidence in the accuracy and completeness of our financial reports, impair our access to the capital markets, cause the price of our common stock to decline and subject us to increased regulatory scrutiny and/or penalties, and higher risk of shareholder litigation.
At December 31, 2024, $1.3 billion of our securities portfolio was classified as available-for-sale with an aggregate net unrealized loss of $12.6 million. A loss or material reduction of access to securitization markets for multifamily loans may adversely impact our business model, profitability and growth.
At December 31, 2025, $2.4 billion of our securities portfolio was classified as available-for-sale with an aggregate net unrealized gain of $4.0 million. 36 Table of Contents A loss or material reduction of access to securitization markets for multifamily loans may adversely impact our business model, profitability and growth.
Our management is responsible for establishing and maintaining adequate internal control over financial reporting and for evaluating and reporting on that system of internal control. In the current year, a material weakness has been identified in our internal controls over financial reporting.
Our management is responsible for establishing and maintaining adequate internal control over financial reporting and for evaluating and reporting on that system of internal control. We have identified a material weakness in our internal controls over financial reporting that has not yet been fully remediated.
Therefore, our operating results are heavily dependent on the financial performance of our investment portfolios and the investment strategies we employ in our investment advisory businesses and even short-term declines in the performance of the investment portfolios we manage for our clients, whatever the cause, could result in a decline in assets under management and a corresponding decline in investment management fees, which would adversely affect our results of operations. 31 Table of Contents The market for investment managers is extremely competitive and the loss of a key investment manager to a competitor could adversely affect our investment advisory and wealth management business.
Therefore, our operating results are heavily dependent on the financial performance of our investment portfolios and the investment strategies we employ in our investment advisory businesses and even short-term declines in the performance of the investment portfolios we manage for our clients, whatever the cause, could result in a decline in assets under management and a corresponding decline in investment management fees, which would adversely affect our results of operations.
From time to time, we may implement new lines of business or offer new products and services within existing lines of business. There are substantial risks and uncertainties associated with these efforts. We may invest significant time and resources in developing and marketing new lines of business and/or new products and services.
New lines of business or new products and services may subject us to additional risks. From time to time, we may implement new lines of business or offer new products and services within existing lines of business. There are substantial risks and uncertainties associated with these efforts.
Liquidity is essential to our banking business, as we use cash to make loans and purchase investment securities and other interest-earning assets and to fund deposit withdrawals that occur in the ordinary course of our business.
Liquidity and Capital Risks Liquidity risk could adversely affect our ability to fund operations and hurt our financial condition. Liquidity is essential to our banking business, as we use cash to make loans and purchase investment securities and other interest-earning assets and to fund deposit withdrawals that occur in the ordinary course of our business.
Lapses in integrity could cause reputational harm to our businesses that could lead to the loss of existing clients and make it more difficult for us to attract new clients and, therefore, could have a material adverse effect on our business, financial condition, results of operations and prospects. 30 Table of Contents We may incur significant losses due to ineffective risk management processes and strategies.
Lapses in integrity could cause reputational harm to our businesses that could lead to the loss of existing clients and make it more difficult for us to attract new clients and, therefore, could have a material adverse effect on our business, financial condition, results of operations and prospects.
In December 2024, we sold $489 million principal balance of the transferred loans at a price above the initial and year-end balance sheet fair-value pricing. We expect to complete additional loan sales in the first half of 2025.
In December 2024, we sold $489 million principal balance of the transferred loans at a price above the initial and year-end balance sheet fair-value pricing.
As of December 31, 2024, the Company had an interest rate swap agreement with a notional amount of $350 million outstanding which was designated as a cash flow hedge and carried at fair value on the balance sheet. We may incur significant losses from the balance sheet repositioning and future asset sales.
As of December 31, 2025, we had an interest rate swap agreement with a notional amount of $350 million outstanding which was designated as a cash flow hedge and carried at fair value on the balance sheet.
The costs of implementing technological changes, new product development and marketing costs may increase our operating expenses without a commensurate increase in our business or revenues, in which event our business, financial condition, results of operations and prospects could be materially and adversely affected. 29 Table of Contents Fraudulent activity, breaches of our information security systems, and cybersecurity attacks could have a material adverse effect on our business, financial condition, results of operations or future prospects.
The costs of implementing technological changes, new product development and marketing costs may increase our operating expenses without a commensurate increase in our business or revenues, in which event our business, financial condition, results of operations and prospects could be materially and adversely affected.
The Company continues to focus on serving its customers and communities, maintaining the well-being of its employees, and executing its strategic initiatives. The Company continues to monitor the inflation and overall economic environment and industry conditions and will make changes as appropriate. Credit Risks We could incur losses on the loans we make.
We continue to focus on serving our customers and communities and executing our strategic initiatives. We continue to monitor the inflation and overall economic environment and industry conditions and will make changes as appropriate. Credit Risks We could incur losses on the loans we make. Loan defaults and losses on loans are inherent risks in our business.
Our failure to maintain and implement adequate anti-money laundering programs could also have serious reputational consequences for us.
Our failure to maintain and implement adequate anti-money laundering programs could also have serious reputational consequences for us. Any of these results could materially and adversely affect our business, financial condition, results of operations and prospects.
We are subject to various privacy, information security and data protection laws, including requirements concerning security breach notification, and we could be negatively impacted by these laws.
Regulations relating to privacy, information security and data protection could increase our costs, affect or limit how we collect and use personal information and adversely affect our business opportunities. We are subject to various privacy, information security and data protection laws, including requirements concerning security breach notification, and we could be negatively impacted by these laws.
We have agreed that the Bank will not pay any dividends to the Company without the FDIC and DFPI’s prior written approval. During the year ended December 31, 2024, we paid one quarterly dividend totaling $0.01 per common share for the first quarter with no subsequent quarterly dividends thereafter.
We have agreed that the Bank will not pay any dividends to the Company without the FDIC and DFPI’s prior written approval. We have not paid a quarterly dividend since the first quarter of 2024.
Accordingly, our results of operations will be directly affected by the volume and timing of loan losses, which for a number of reasons can vary from period to period. The risks of loan losses are exacerbated by economic recessions and downturns, or by other events that can lead to local or regional business downturns.
The risks of loan losses are exacerbated by economic recessions and downturns, or by other events that can lead to local or regional business downturns.
If the United States economy weakens or does not improve, our growth and profitability from our lending, deposit and investment operations could be constrained. Uncertainty about the federal fiscal policymaking process, the fiscal outlook of the federal government, and future tax rates is a concern for businesses, consumers and investors in the United States.
If the United States economy weakens or does not improve, our growth and profitability from our lending, deposit and investment operations could be constrained.
Loan defaults and the incurrence of losses on loans are inherent risks in our business. Loan losses necessitate loan charge-offs and write-downs in the carrying values of our loans and, therefore, can reduce our net income and adversely affect our results of operations and financial condition.
Loan losses necessitate loan charge-offs and write-downs in the carrying values of our loans and, therefore, can reduce our net income and adversely affect our results of operations and financial condition. Accordingly, our results of operations will be directly affected by the volume and timing of loan losses, which for a number of reasons can vary from period to period.
Depending on the existence of various buyers and competitive prices, we may sell assets at a significant loss, which could affect our financial condition and results of operations. Liquidity and Capital Risks Liquidity risk could adversely affect our ability to fund operations and hurt our financial condition.
We do not expect to complete additional loan sales in the first quarter of 2026. Depending on the existence of various buyers and competitive prices, were we to sell any of the remaining transferred loans, we may sell them at a significant loss, which could affect our financial condition and results of operations.
On July 8, 2024, we raised approximately $228 million of gross proceeds in an equity capital raise with certain investors.
The exercise of our outstanding warrants would increase the number of shares of common stock eligible for future resale in the public market and result in dilution to our existing stockholders. On July 8, 2024, we raised approximately $228 million of gross proceeds in an equity capital raise with certain investors.
Removed
Our financial advisory business may also be adversely affected by economic conditions.
Added
Risk Factors Summary This section summarizes some of the risks potentially affecting our business, consolidated financial condition, consolidated results of operations and future prospects. These risks and others are discussed in more detail further below in this section. You should consider this summary together with the more detailed information provided below.
Removed
The U.S. economy has experienced inflationary pressures over the last several years, resulting in higher costs for consumers and businesses.
Added
Risks Related to Our Proposed Merger with FirstSun Capital Bancorp ● The value of the merger consideration will fluctuate based on the trading price of FirstSun common stock. ● The pendency of the Merger may adversely affect our business, results of operations and financial condition. ● Failure to consummate the Merger could negatively impact FFI. ● Combining FFI and FirstSun and the balance sheet repositioning may be more difficult, costly or time-consuming than expected; the combined company may fail to realize the anticipated benefits of the Merger; and any actions we take in contemplation of the Merger may be detrimental to FFI as a stand-alone company. ● The combined company may be unable to retain FFI or FirstSun personnel successfully after the Merger is completed. ● Stockholder litigation related to the Merger could prevent or delay the completion of the Merger, result in the payment of damages or otherwise negatively impact the business and operations of FFI. ● The Merger Agreement limits our ability to pursue alternatives to the Merger and may discourage other companies from trying to acquire FFI. ● The Merger Agreement may be terminated in accordance with its terms, and the Merger may not be completed. ● Holders of FFI common stock will have a substantially reduced ownership and voting interest in the combined company after the consummation of the Merger. ● Our ability to use net operating loss carryforwards and other tax attributes may be limited in connection with the Merger or other ownership changes. ​ General Economic Conditions Risks ● Our business and operations may be adversely affected in numerous and complex ways by economic conditions. ● Our business and operations may be adversely affected by the impacts of inflation on us an our customers. ​ Credit Risks ● We could incur losses on the loans we make. 23 Table of Contents ● Our allowance for credit losses may not be adequate to cover actual losses. ● Our banking, investment advisory and wealth management operations are geographically concentrated in California, Florida, Nevada, Texas, and Hawaii, leading to significant exposure to those markets. ● Loans secured by multifamily and commercial real estate represent a high percentage of the loans we make, making our results of operations vulnerable to downturns in the real estate market. ​ Market Risks ● Changes in interest rates could reduce our net interest margin and net interest income. ● Changes in interest rates could increase our operating expenses. ● We may incur significant losses as a result of ineffective hedging of interest rate risk. ● We may incur significant losses from the balance sheet repositioning and future asset sales. ​ Liquidity and Capital Risks ● Liquidity risk may adversely affect our ability to fund operations and hurt our financial condition. ● We may not be able to maintain a strong core deposit base or other low-cost funding sources. ● Our high concentration of large depositors may increase our liquidity risk, and the loss of any large depositor may negatively impact our net interest margin. ● We are subject to capital adequacy standards and liquidity, and a failure to meet these standards may adversely affect our financial condition. ● We may not have the ability to attract capital necessary to maintain regulatory ratios and fund growth. ● The actions and commercial soundness of other financial institutions may affect our ability to engage in routine funding transactions. ​ Strategic, Operational and External Risks ● We have experienced turnover in our Board of Directors and executive management team and are embarking upon a new strategic plan, all of which create uncertainties and could harm our business. ● Completing the diversification of our loan portfolio may be more difficult, costly or time-consuming than expected and the anticipated benefits and cost savings of the plan may not be realized. ● Adverse developments affecting the banking industry may have a material effect on our operations and/or stock price. ● New lines of business or new products and services may subject us to additional risks. ● We face intense competition from other banks and financial institutions and other wealth and investment management firms that could hurt our business. ● We are required to make significant estimates and assumptions in the preparation of our financial statements and our estimates and assumptions may not be accurate. ● The fair value of our investment securities can fluctuate due to factors outside of our control. ● A loss or material reduction of access to securitization markets for multifamily loans may adversely impact our business model, profitability and growth. ● Technology and marketing costs may negatively impact our future operating results. ● Our business, financial condition, results of operations or future prospects may be adversely affected by fraudulent activity, breaches of our information security systems, and cybersecurity attacks. ● We rely on communications, information, operating and financial control systems technology and related services from third-party service providers and there can be no assurance that we will not suffer an interruption in those systems. ● Our ability to attract and retain clients and key employees could be adversely affected if our reputation is harmed. ● We may incur significant losses due to ineffective risk management processes and strategies. 24 Table of Contents ● A natural disaster could harm our business. ● We are exposed to the risk of environmental liabilities with respect to real properties that we may acquire. ● Fraudulent activity, breaches of our information security systems, or cybersecurity incidents could have a material adverse effect on our business, financial condition, results of operations or future prospects. ● The market for investment managers is extremely competitive and the loss of a key investment manager to a competitor could adversely affect our investment advisory and wealth management business. ● We may be adversely affected by the soundness of certain securities brokerage firms. ​ Regulatory and Compliance Risks ● The banking industry is highly regulated, and legislative or regulatory actions taken now or in the future may have a significant adverse effect on our operations. ● Federal and state banking agencies periodically conduct examinations of our business, including those focused on our compliance with laws and regulations.
Removed
To address the persistent levels of inflation, the Federal Reserve’s Federal Open Market Committee (“FOMC”) maintained the target range for the federal funds rate at elevated levels throughout most of 2024, with decisions to cut rates not occurring until late in the third quarter (50 basis point cut) and late in the fourth quarter (two 25 basis point cuts) of 2024.
Added
Such examinations may subject us to supervisory actions and our failure to comply with such actions may adversely affect us. ● We are subject to increased regulation because we have more than $10 billion in total consolidated assets. ● We are subject to numerous laws designed to protect consumers, including the Community Reinvestment Act and fair lending laws, and failure to comply with these laws could lead to a wide variety of sanctions. ● We face the risk of noncompliance and enforcement action with the Bank Secrecy Act and other anti-money laundering statutes and regulations. ● Regulations relating to privacy, information security and data protection could increase our costs, affect or limit how we collect and use personal information and adversely affect our business opportunities. ● FFA’s business is highly regulated, and regulators have the ability to limit or restrict, and impose fines or other sanctions on, FFA’s business. ● Future legislation, regulatory reform or policy changes could have a material effect on our business and results of operations. ​ Risks Related to Ownership of Our Common Stock ● We may not resume the payment of dividends on common stock. ● An investment in our common stock is not an insured deposit and is not guaranteed by the FDIC, so you could lose some or all of your investment. ● If we fail to maintain effective internal control over financial reporting, or if we fail to remediate material weaknesses previously identified, we may not be able to report our financial results accurately and timely. ● The exercise of our outstanding warrants would increase the number of shares of common stock eligible for future resale in the public market and result in dilution to our existing stockholders. ​ Risk Factors Risks Related to Our Proposed Merger with FirstSun Capital Bancorp The value of the merger consideration will fluctuate based on the trading price of FirstSun common stock.
Removed
Heading into 2025, it is expected that additional rate cuts may occur albeit at a much more moderate pace and that interest rates are expected to stay higher for a longer period. The impact of these measures on the Company’s business, including future actions taken by the FOMC, are uncertain.
Added
The exchange ratio determining the number of shares of FirstSun common stock to be issued in the Merger in exchange for each share of FFI common stock will not automatically adjust based on the trading price of FirstSun common stock, and the market value of those shares may vary from the closing price of FirstSun common stock on the date the Merger was announced, on the date of the special meeting of FFI’s shareholders to approve the Merger Agreement, on the date the Merger is consummated and thereafter.
Removed
Market Risks Changes in interest rates could reduce our net interest margin and net interest income.
Added
Any change in the market price of FirstSun common stock prior to consummation of the Merger will affect the amount of and the market value of the merger consideration that FFI’s shareholders will receive upon consummation of the Merger.
Removed
We may not be able to fully utilize our deferred tax asset. We have a deferred tax asset, of $76.7 million but we cannot assure that it will be fully realized.
Added
Stock price changes may result from a variety of factors, including general market and economic conditions, changes in business, operations and prospects, and regulatory 25 Table of Contents considerations. Many of these factors are beyond FirstSun’s or FFI’s control. The pendency of the Merger could adversely affect our business, results of operations and financial condition.
Removed
Our deferred tax asset represents an amount equal to the tax credit and tax loss carryforwards and tax deductions (collectively “tax benefits”) that we believe will be available to us to offset or reduce income taxes in future periods.
Added
The pending Merger may create significant uncertainty and disruption across our business operations, regardless of whether the transaction is ultimately completed. This uncertainty could adversely affect our relationships with existing and prospective customers, suppliers, and employees, and may negatively impact our business, financial condition, and results of operations.
Removed
Under applicable federal and state income tax laws and regulations, most of our net operating losses have an unlimited carryforward period and we anticipate we will utilize all of them.
Added
In particular, the Merger may impair our ability to attract, retain, and motivate key personnel, as some employees may experience uncertainty about their future roles and choose to pursue other opportunities. We could also lose important customers or suppliers, and new business relationships or contracts may be delayed or diminished due to hesitation surrounding the transaction.
Removed
If we determine that we will not achieve sufficient future taxable income to realize our net deferred tax asset, generally accepted accounting principles would require that we establish a full or partial valuation allowance, which would result in a charge to operating income.
Added
Additionally, we have committed substantial management resources to the execution of the Merger, which may divert attention from day-to-day operations and strategic initiatives, potentially impacting performance. We are also subject to operational restrictions under the Merger Agreement prior to closing, including limitations on acquiring other businesses, selling or transferring assets, and amending organizational documents.
Removed
We regularly assess available positive and negative evidence to determine whether it is more likely than not that our deferred tax asset will be realized. For additional 27 Table of Contents information, see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies – Deferred Income Taxes” in this report.
Added
These restrictions may hinder our ability to respond effectively to competitive pressures, industry developments, and emerging opportunities, and may affect our ability to retain key personnel. Given these risks and uncertainties, we cannot assure that the Merger will be completed on the terms and conditions currently anticipated, or at all. Failure to consummate the Merger could negatively impact FFI.
Removed
In addition, an “ownership change,” as defined under Section 382 of the Internal Revenue Code could extend our utilization of net operating loss carryforwards. In general, an ownership change will occur if there is a cumulative increase in our ownership by “5-percent shareholders” (as defined in the Internal Revenue Code) that exceeds 50 percentage points over a rolling three-year period.
Added
If the Merger is not consummated for any reason, FFI could face a range of adverse consequences. These may include negative reactions from financial markets, customers, vendors, and employees. FFI’s business may also be negatively affected by the diversion of management attention and resources from other strategic opportunities, without realizing any of the anticipated benefits of the Merger.
Removed
A corporation that experiences an ownership change will generally be subject to an annual limitation on the use of its pre-ownership change deferred tax assets equal to the equity value of the corporation immediately before the ownership change, multiplied by the long-term exempt rate. New lines of business or new products and services may subject us to additional risks.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeItem 1C. Cybersecurity. ​ Cybersecurity Risk Management ​ We recognize the security of our banking operations is critical to protecting our customers, maintaining our reputation and preserving our enterprise value. We maintain a comprehensive process for identifying, assessing, and managing material risks from cybersecurity threats as part of our broader risk management system and processes.
Biggest changeItem 1C. Cybersecurity. ​ Cybersecurity Risk Management ​ We recognize that cybersecurity risk is an integral component of our overall enterprise risk management framework. We maintain a comprehensive process for identifying, assessing, and managing material risks from cybersecurity threats that are designed to protect the confidentiality, integrity, and availability of our information systems and the data we maintain.
For more information on our cybersecurity related risks, see Item 1A—“Risk Factors” of this Annual Report on Form 10-K. ​ Cybersecurity Governance ​ The Board of Directors, through the Audit Committee and Directors’ Risk Committee, provides direction and oversight of the Company’s risk management system.
However, we may be subject to future cybersecurity threats or incidents that could have a material impact. For more information on our cybersecurity related risks, see Item 1A—“Risk Factors” of this Annual Report on Form 10-K. ​ Cybersecurity Governance ​ Our Board of Directors provides oversight of cybersecurity risk as part of its broader oversight of enterprise risk management.
Removed
The Company’s Information Security Officer is primarily responsible for developing, monitoring, and implementing our cybersecurity program, which establishes policies and procedures for the measurement of the effectiveness and efficiency of information security controls related to both design and operations.
Added
Our cybersecurity risk management processes include, among other things, periodic risk assessments, continuous monitoring of our information technology environment, vulnerability management, and the use of preventative, detective, and corrective controls. These processes are guided by applicable regulatory guidance and industry standards, including the Federal Financial Institutions Examination Council (“FFIEC”) Cybersecurity Assessment Tool.
Removed
The Chief Technology Officer is responsible for implementing the appropriate controls and monitoring them towards adherence with the established standards. ​ As a regulated financial institution, we have designed our cybersecurity program based on the requirements of the Gramm-Leach Bliley Act of 1999 and Federal Financial Institutions Examination Council (“FFIEC”) Cybersecurity Assessment Tool.
Added
We maintain a documented incident response plan that is designed to enable timely identification, containment, investigation, remediation, and recovery from cybersecurity incidents. The incident response plan is periodically reviewed and tested through tabletop exercises and simulations and incorporates escalation and notification protocols consistent with applicable regulatory requirements.
Removed
Our processes for identifying, assessing and managing material risks from cybersecurity threats rely on the FFIEC Cybersecurity Assessment Tool as well as recurring audits and assessments of our cybersecurity program and controls. As part of our cybersecurity program, we have developed an incident response plan based on industry-standard cybersecurity frameworks, with procedures for responding to and remediating a cyber-incident.
Added
We also engage third-party service providers to perform independent assessments of our cybersecurity program, including penetration testing and other security evaluations. Cybersecurity risks are evaluated alongside other operational and strategic risks as part of our enterprise risk management processes.
Removed
We also review and test our incident response plan through simulations and assessments. Further, we employ recurring security awareness training for employees and produce recurring security awareness material for our customers. ​ We engage third-party services to conduct penetration testing as well as other regular evaluations of our security protocols and processes.
Added
These risks include, but are not limited to, threats arising from unauthorized access, data breaches, ransomware, social engineering, and reliance on third-party service providers.
Removed
Additionally, we assess and monitor the cybersecurity controls of third-party service providers and partners.
Added
While our cybersecurity program is designed to reduce the likelihood and impact of cybersecurity incidents, no system or control environment can provide absolute assurance. 43 Table of Contents To date, we have not experienced a cybersecurity incident that has materially affected our business, financial condition, or results of operations.
Removed
Ongoing and regular monitoring of our third parties is also managed through our Information Security Program team’s protocols in partnership with the vendor management, enterprise risk management, and internal audit departments. ​ Our business, financial condition and results of operations have not been materially affected by risks from cybersecurity threats, including as a result of previous cybersecurity incidents, but we cannot provide assurance that they will not be materially affected in the future by such risks or any future material incidents.
Added
The Board, either directly or through its committees, receives periodic updates regarding cybersecurity risks, threat trends, control effectiveness, and significant incidents, if any. ​ Management is responsible for the day-to-day operation of our cybersecurity program. Our Information Security Officer is responsible for developing, implementing, and maintaining our information security program, including policies, standards, and procedures designed to manage cybersecurity risk.
Removed
Our Chief Technology Officer is responsible for managing our 36 Table of Contents information security team, while our Information Security Officer is responsible for maintaining and continuing to develop and implement our cybersecurity program enterprise-wide and assessing and managing risks from cybersecurity threats.
Added
The Chief Technology Officer is responsible for implementing and operating the information technology systems and controls that support the information security program. Our cybersecurity governance structure includes defined roles and responsibilities, escalation protocols, and reporting mechanisms designed to ensure that material cybersecurity risks are communicated to appropriate levels of management and the Board in a timely manner.
Removed
Both the Information Security Officer and Chief Technology Officer have extensive experience in the banking industry and in information technology and information security. The Information Security Officer has served in information security roles for twenty-five years and in banking for thirty-five years.
Added
Cybersecurity considerations are incorporated into our broader risk management, vendor management, and business continuity planning processes. ​ ​
Removed
The Chief Technology Officer has been with the Company since 2010 and has over twenty years of experience in information technology and cybersecurity within the banking industry. ​ We have processes to inform the Directors’ Risk Committee, Audit Committee and the Board about risks from cybersecurity threats.
Removed
Our management team reports its findings using the FFIEC Cybersecurity Assessment Tool and our information security team’s determination as to whether our security controls, at a minimum, are in place and effective.
Removed
The Information Security Officer and Chief Technology Officer regularly report to the Director Risk Committee , Audit Committee and the Board regarding cybersecurity and related threats and trends, changes, control effectiveness and residual risk, the areas where our cybersecurity program may be improved and improvements made to address and remediate issues . ​

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties. The Company’s corporate headquarters is located in Dallas, Texas, at 200 Crescent Court, Suite 1400, Dallas, Texas 75201. The Company has 29 banking offices and 1 loan production office in the states of California, Nevada, Florida, Texas, and Hawaii.
Biggest changeItem 2. Properties. The Company’s corporate headquarters is located in Dallas, Texas, at 5221 N. O’Connor Blvd, Suite 1375, Irving, Texas 75039. The Company has 29 banking offices and two loan production offices in the states of California, Nevada, Florida, Texas, and Hawaii.
Six of our office buildings are owned and the remaining are leased pursuant to non-cancelable operating leases that will expire between 2025 and 2035. The building for the office in Auburn, California is owned by us and is on land that is leased under a non-cancellable lease that expires in 2028. ​
Six of our office buildings are owned and the remaining are leased pursuant to non-cancelable operating leases that will expire between 2026 and 2035. The building for the office in Auburn, California is owned by us and is on land that is leased under a non-cancellable lease that expires in 2028. ​

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe following table provides information relating to the Company’s purchases of shares of its common stock during the fourth quarter of 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Number of ​ Approximate Dollar ​ ​ Total Number ​ ​ ​ Shares Purchased ​ Value of Shares That ​ ​ of Shares ​ Price Paid Per ​ as Part of Publicly ​ May Yet Be Purchased Purchase Dates Purchased Share Announced Program Under the Program October 1 to October 31, 2024 ​ ​ - $ - ​ - ​ $ 71,518,400 November 1 to November 30, 2024 ​ ​ - ​ - ​ - ​ ​ 71,518,400 December 1 to December 31, 2024 ​ ​ - ​ - ​ - ​ ​ 71,518,400 Total ​ ​ - ​ ​ ​ ​ ​ - ​ ​ ​ ​ 39 Table of Contents Stock Performance Graph The following graph shows a comparison from December 31, 2020 through December 31, 2024 of the cumulative total return for our common stock, compared against (i) the Russell 2000 Index, which measures the performance of the smallest 2,000 members, by market cap, (ii) the Russell 3000 Index, which measures the performance of the smallest 3,000 members, by market cap, of the Russell Index, and (iii) an index published by SNL Securities L.C.
Biggest changeThe Company did not repurchase any shares of common stock during 2025. 46 Table of Contents Stock Performance Graph The following graph shows a comparison from December 31, 2021 through December 31, 2025 of the cumulative total return for our common stock, compared against (i) the Russell 2000 Index, which measures the performance of the smallest 2,000 members, by market cap, (ii) the Russell 3000 Index, which measures the performance of the smallest 3,000 members, by market cap, of the Russell Index, and (iii) an index published by SNL Securities L.C.
There were no sales of unregistered securities during the fiscal year ended December 31, 2024. Dividend Policy and Restrictions on the Payment of Dividends The timing and amount of cash dividends paid to our common stockholders depends on our earnings, capital requirements, financial condition, regulatory approval, and other relevant factors, as determined by our Board of Directors.
There were no sales of unregistered securities during the fiscal year ended December 31, 2025. Dividend Policy and Restrictions on the Payment of Dividends The timing and amount of cash dividends paid to our common stockholders depends on our earnings, capital requirements, financial condition, regulatory approval, and other relevant factors, as determined by our Board of Directors.
Also, because the payment of cash dividends has the effect of reducing capital, capital requirements imposed on FFB by the DFPI and the FDIC may operate, as a practical matter, to preclude the payment, or limit the amount of, cash dividends that might otherwise be permitted to be made under California law; and the DFPI and the FDIC, as part of their supervisory powers, generally require insured banks to adopt dividend policies which limit the payment of cash dividends much more strictly than do applicable state laws.
Also, because the payment of cash dividends has the effect of reducing capital, capital requirements imposed on FFB by the DFPI and the FDIC may operate, as a practical matter, to preclude the payment, or limit the amount of, cash dividends that might otherwise be permitted to be made under California law; and the DFPI and the FDIC, as part of their supervisory powers, generally require insured banks to adopt dividend policies which limit the payment of cash dividends 45 Table of Contents much more strictly than do applicable state laws.
The stock performance graph assumes that $100 was invested in Company common stock at the close of market on December 31, 2020, and, at that same date, in the Russell 2000 Index, the Russell 3000 Index and the KBW Nasdaq Regional Bank Index and that any dividends paid in the indicated periods were reinvested.
The stock performance graph assumes that $100 was invested in Company common stock at the close of market on December 31, 2021, and, at that same date, in the Russell 2000 Index, the Russell 3000 Index and the KBW Nasdaq Regional Bank Index and that any dividends paid in the indicated periods were reinvested.
Shareholder returns shown in the stock performance graph are not necessarily indicative of future stock price performance. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Period Ending ​ 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/31/2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ First Foundation Inc.
Shareholder returns shown in the stock performance graph are not necessarily indicative of future stock price performance. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Period Ending ​ ​ ​ ​ 12/31/2021 ​ ​ ​ 12/31/2022 ​ ​ ​ 12/31/2023 ​ ​ ​ 12/31/2024 ​ ​ ​ 12/31/2025 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ First Foundation Inc.
This stock repurchase program, which has no stated expiration date, 38 Table of Contents replaced and superseded the stock repurchase program approved by the Board of Directors on October 30, 2018, which had authorized the Company to repurchase up to 2,200,000 shares of its common stock. During 2024, the Company did not repurchase any shares of common stock.
This stock repurchase program, which has no stated expiration date, replaced and superseded the stock repurchase program approved by the Board of Directors on October 30, 2018, which had authorized the Company to repurchase up to 2,200,000 shares of its common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information Our common stock trades on the NYSE under the trading symbol “FFWM”. As of February 21, 2025, a total of 82,365,388 shares of our common stock were issued and outstanding which were held of record by approximately 8,719 shareholders.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information Our common stock trades on the NYSE under the trading symbol “FFWM”. As of March 4, 2026 a total of 82,926,292 shares of our common stock were issued and outstanding which were held of record by approximately 10,552 shareholders.
Our ability to pay dividends to our stockholders is also subject to the restrictions set forth in the Delaware General Corporation Law (the “DGCL”) and the regulatory authority of the Federal Reserve.
Our ability to pay dividends to our stockholders is also subject to the restrictions set forth in the Delaware General Corporation Law (the “DGCL”) and the regulatory authority of the Federal Reserve. We have paid no quarterly dividends since the second quarter of 2024.
(FFWM) 100.00 124.86 71.97 48.62 31.19 Russell 2000 Index 100.00 113.69 89.18 102.64 112.93 Russell 3000 Index 100.00 124.60 99.08 122.81 150.01 KBW Regional Bank Index 100.00 133.20 120.61 115.78 126.88 ​ The above performance graph shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities under that section and shall not be deemed to be incorporated by reference into any of our filings under the Securities Act or the Exchange Act.
(FFWM) ​ ​ ​ 100.00 ​ ​ ​ 57.64 ​ 38.94 ​ 24.98 ​ 24.78 Russell 2000 Index 100.00 78.44 ​ 90.28 ​ 99.33 ​ 110.54 Russell 3000 Index 100.00 79.52 ​ 98.57 ​ 120.40 ​ 139.26 KBW Regional Bank Index 100.00 90.55 ​ 86.92 ​ 95.25 ​ 98.41 ​ The above performance graph shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities under that section and shall not be deemed to be incorporated by reference into any of our filings under the Securities Act or the Exchange Act.
Removed
During the year ended December 31, 37 Table of Contents 2024, the Company paid a quarterly dividend totaling $0.01 per common share for the first quarter, but elected to suspend its dividends thereafter.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe following table provides a summary of past due and nonaccrual loans in our loans held for investment portfolio as of December 31: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Past Due and Still Accruing ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 90 Days ​ ​ ​ ​ Total Past Due ​ ​ ​ ​ ​ ​ (dollars in thousands) 30–59 Days 60-89 Days or More Nonaccrual and Nonaccrual Current Total 2024: ​ ​ ​ ​ ​ ​ ​ Real estate loans: ​ ​ ​ ​ ​ ​ ​ Residential properties ​ $ 7,083 ​ $ — ​ $ — ​ $ 23,324 ​ $ 30,407 ​ $ 4,193,994 ​ $ 4,224,401 Commercial properties ​ 7,944 ​ 428 ​ 12,900 ​ 7,946 ​ 29,218 ​ 874,463 ​ 903,681 Land and construction ​ — ​ — ​ — ​ — ​ — ​ 69,134 ​ 69,134 Commercial and industrial loans ​ 997 ​ 617 ​ — ​ 9,174 ​ 10,788 ​ 2,732,226 ​ 2,743,014 Consumer loans ​ — ​ — ​ — ​ — ​ — ​ 1,163 ​ 1,163 Total ​ $ 16,024 ​ $ 1,045 ​ $ 12,900 ​ $ 40,444 ​ $ 70,413 ​ $ 7,870,980 ​ $ 7,941,393 Percentage of total loans ​ 0.20 % 0.01 % 0.16 % 0.51 % 0.89 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023: ​ ​ ​ ​ ​ ​ ​ Real estate loans: ​ ​ ​ ​ ​ ​ ​ Residential properties ​ $ 93 ​ $ 416 ​ $ — ​ $ 112 ​ $ 621 ​ $ 6,196,923 ​ $ 6,197,544 Commercial properties ​ 27,403 ​ 403 ​ 1,730 ​ 2,915 ​ 32,451 ​ 954,321 ​ 986,772 Land and construction ​ — ​ — ​ — ​ — ​ — ​ 136,827 ​ 136,827 Commercial and industrial loans ​ 525 ​ 88 ​ — ​ 8,804 ​ 9,417 ​ 2,845,845 ​ 2,855,262 Consumer loans ​ — ​ — ​ — ​ — ​ — ​ 1,397 ​ 1,397 Total ​ $ 28,021 ​ $ 907 ​ $ 1,730 ​ $ 11,831 ​ $ 42,489 ​ $ 10,135,313 ​ $ 10,177,802 Percentage of total loans ​ 0.28 % 0.01 % 0.02 % 0.12 % 0.42 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022: ​ ​ ​ ​ ​ ​ ​ Real estate loans: ​ ​ ​ ​ ​ ​ ​ Residential properties ​ $ 511 ​ $ 57 ​ $ — ​ $ 2,556 ​ $ 3,124 ​ $ 6,374,100 ​ $ 6,377,224 Commercial properties ​ 15,000 ​ 946 ​ 1,213 ​ 4,547 ​ 21,706 ​ 1,180,357 ​ 1,202,063 Land and construction ​ — ​ — ​ — ​ — ​ — ​ 157,630 ​ 157,630 Commercial and industrial loans ​ 385 ​ 1,495 ​ 982 ​ 3,228 ​ 6,090 ​ 2,978,668 ​ 2,984,758 Consumer loans ​ — ​ 167 ​ — ​ — ​ 167 ​ 4,351 ​ 4,518 Total ​ $ 15,896 ​ $ 2,665 ​ $ 2,195 ​ $ 10,331 ​ $ 31,087 ​ $ 10,695,106 ​ $ 10,726,193 Percentage of total loans ​ 0.15 % 0.02 % 0.02 % 0.10 % 0.29 % ​ ​ 61 Table of Contents The following table summarizes our nonaccrual loans as of: ​ ​ ​ ​ ​ ​ ​ ​ ​ Nonaccrual ​ Nonaccrual ​ ​ with Allowance ​ with no Allowance (dollars in thousands) for Credit Losses for Credit Losses December 31, 2024 ​ ​ ​ Real estate loans: ​ ​ ​ ​ ​ ​ Residential properties ​ $ 1,420 ​ $ 21,904 Commercial properties ​ ​ 3,449 ​ ​ 4,497 Commercial and industrial loans ​ 9,174 ​ — Total ​ $ 14,043 ​ $ 26,401 ​ ​ ​ ​ ​ ​ ​ December 31, 2023 ​ ​ ​ Real estate loans: ​ ​ ​ ​ ​ ​ Residential properties ​ $ — ​ $ 112 Commercial properties ​ ​ — ​ ​ 2,915 Commercial and industrial loans ​ 7,406 ​ 1,398 Total ​ $ 7,406 ​ $ 4,425 ​ The $27.9 million increase in total past due and nonaccrual loans from $42.5 million at December 31, 2023 to $70.4 million at December 31, 2024 was largely due to two residential property loans totaling $19.1 million to the same high net worth individual, both of which are well secured by the borrower’s net worth and value of the collateral. ​ 62 Table of Contents Allowance for Credit Losses.
Biggest changeThe following table provides a summary of past due and nonaccrual loans in our loans held for investment portfolio as of December 31: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Past Due and Still Accruing ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 90 Days ​ ​ ​ ​ Total Past Due ​ ​ ​ ​ ​ ​ (dollars in thousands) ​ ​ ​ 30–59 Days ​ ​ ​ 60-89 Days ​ ​ ​ or More ​ ​ ​ Nonaccrual ​ ​ ​ and Nonaccrual ​ ​ ​ Current ​ ​ ​ Total 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Real estate loans: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Residential properties ​ $ 9,518 ​ $ — ​ $ — ​ $ 4,212 ​ $ 13,730 ​ $ 4,019,663 ​ $ 4,033,393 Commercial properties ​ 1,263 ​ — ​ — ​ 2,563 ​ 3,826 ​ 675,001 ​ 678,827 Land and construction ​ — ​ — ​ — ​ — ​ — ​ 9,368 ​ 9,368 Commercial and industrial loans ​ 2,022 ​ 294 ​ — ​ 30,900 ​ 33,216 ​ 1,973,025 ​ 2,006,241 Consumer loans ​ — ​ — ​ — ​ — ​ — ​ 1,349 ​ 1,349 Total ​ $ 12,803 ​ $ 294 ​ $ — ​ $ 37,675 ​ $ 50,772 ​ $ 6,678,406 ​ $ 6,729,178 Percentage of total loans ​ 0.19 % 0.00 % — % 0.56 % 0.75 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Real estate loans: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Residential properties ​ $ 7,083 ​ $ — ​ $ — ​ $ 23,324 ​ $ 30,407 ​ $ 4,193,994 ​ $ 4,224,401 Commercial properties ​ 7,944 ​ 428 ​ 12,900 ​ 7,946 ​ 29,218 ​ 874,463 ​ 903,681 Land and construction ​ — ​ — ​ — ​ — ​ — ​ 69,134 ​ 69,134 Commercial and industrial loans ​ 997 ​ 617 ​ — ​ 9,174 ​ 10,788 ​ 2,732,226 ​ 2,743,014 Consumer loans ​ — ​ — ​ — ​ — ​ — ​ 1,163 ​ 1,163 Total ​ $ 16,024 ​ $ 1,045 ​ $ 12,900 ​ $ 40,444 ​ $ 70,413 ​ $ 7,870,980 ​ $ 7,941,393 Percentage of total loans ​ 0.20 % 0.01 % 0.16 % 0.51 % 0.89 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Real estate loans: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Residential properties ​ $ 93 ​ $ 416 ​ $ — ​ $ 112 ​ $ 621 ​ $ 6,196,923 ​ $ 6,197,544 Commercial properties ​ 27,403 ​ 403 ​ 1,730 ​ 2,915 ​ 32,451 ​ 954,321 ​ 986,772 Land and construction ​ — ​ — ​ — ​ — ​ — ​ 136,827 ​ 136,827 Commercial and industrial loans ​ 525 ​ 88 ​ — ​ 8,804 ​ 9,417 ​ 2,845,845 ​ 2,855,262 Consumer loans ​ — ​ — ​ — ​ — ​ — ​ 1,397 ​ 1,397 Total ​ $ 28,021 ​ $ 907 ​ $ 1,730 ​ $ 11,831 ​ $ 42,489 ​ $ 10,135,313 ​ $ 10,177,802 Percentage of total loans ​ 0.28 % 0.01 % 0.02 % 0.12 % 0.42 % ​ ​ ​ ​ 68 Table of Contents The following table summarizes our nonaccrual loans as of: ​ ​ ​ ​ ​ ​ ​ ​ ​ Nonaccrual ​ Nonaccrual ​ ​ with Allowance ​ with no Allowance (dollars in thousands) ​ ​ ​ for Credit Losses ​ ​ for Credit Losses December 31, 2025 ​ ​ ​ ​ Real estate loans: ​ ​ ​ ​ ​ ​ Residential properties ​ $ 654 ​ $ 3,558 Commercial properties ​ ​ 157 ​ ​ 2,406 Commercial and industrial loans ​ 30,793 ​ 107 Total ​ $ 31,604 ​ $ 6,071 ​ ​ ​ ​ ​ ​ ​ December 31, 2024 ​ ​ ​ ​ Real estate loans: ​ ​ ​ ​ ​ ​ Residential properties ​ $ 1,420 ​ $ 21,904 Commercial properties ​ ​ 3,449 ​ ​ 4,497 Commercial and industrial loans ​ 9,174 ​ — Total ​ $ 14,043 ​ $ 26,401 ​ Nonaccrual loans totaled $37.7 million as of December 31, 2025, compared to $40.4 million as of December 31, 2024.
Noninterest income. Noninterest income for Banking includes fees charged to clients for trust services and deposit services, consulting fees, prepayment and late fees charged on loans, gain on sale of loans, securities, and REO, gains from capital market activities, and changes in the valuation of the loans held for sale portfolio.
Noninterest income for Banking includes fees charged to clients for trust services and deposit services, consulting fees, prepayment and late fees charged on loans, gain on sale of loans, securities, and REO, gains from capital market activities, and changes in the valuation of the loans held for sale portfolio.
The following table provides a breakdown of noninterest income for Banking for the years ended December 31: ​ ​ ​ ​ ​ ​ ​ ​ (dollars in thousands) 2024 2023 Year Ended December 31: ​ ​ ​ ​ ​ ​ Trust and consulting fees ​ $ 6,767 ​ $ 7,107 Loan related fees ​ 5,608 ​ 7,213 Deposit charges ​ 1,843 ​ 2,020 Gain on sale of loans ​ 5,068 ​ — Gain on sale of securities available-for-sale ​ ​ 1,204 ​ ​ 2,304 Capital market activities ​ ​ 1,673 ​ ​ — Loss on sale of assets ​ ​ (382) ​ ​ — Gain on sale of REO ​ ​ 679 ​ ​ — LHFS LOCOM adjustment ​ ​ (120,810) ​ ​ — Other ​ 3,351 ​ 2,896 Total noninterest income ​ $ (94,999) ​ $ 21,540 ​ Noninterest income in Banking was ($95.0) million for the year ended December 31 2024, compared to $21.5 million for 2023.
The following table provides a breakdown of noninterest income for Banking for the years ended December 31: ​ ​ ​ ​ ​ ​ ​ ​ (dollars in thousands) ​ ​ ​ 2024 ​ ​ ​ 2023 Trust and consulting fees ​ $ 6,767 ​ $ 7,107 Loan related fees ​ 5,608 ​ 7,213 Deposit charges ​ 1,843 ​ 2,020 Gain on sale of loans ​ 5,068 ​ — Gain on sale of securities available-for-sale ​ ​ 1,204 ​ ​ 2,304 Capital market activities ​ ​ 1,673 ​ ​ — Loss on sale of assets ​ ​ (382) ​ ​ — Gain on sale of REO ​ ​ 679 ​ ​ — LHFS LOCOM adjustment ​ ​ (120,810) ​ ​ — Other ​ 3,351 ​ 2,896 Total noninterest income ​ $ (94,999) ​ $ 21,540 ​ Noninterest income in Banking was ($95.0) million for the year ended December 31 2024, compared to $21.5 million for 2023.
The following table provides a breakdown of noninterest expense for Banking and Wealth Management for the years ended December 31: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Banking ​ Wealth Management (dollars in thousands) ​ 2024 ​ 2023 ​ 2024 ​ 2023 Year Ended December 31: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Compensation and benefits $ 64,954 $ 67,114 $ 16,602 $ 16,049 Occupancy and depreciation ​ 35,609 ​ 34,886 ​ 1,868 ​ 1,913 Professional services and marketing ​ 12,574 ​ 9,626 ​ 3,825 ​ 3,487 Customer service costs ​ 63,586 ​ 76,806 ​ — ​ — Other ​ 28,294 ​ 22,082 ​ 738 ​ 651 Total operating expense ​ ​ 205,017 ​ ​ 210,514 ​ ​ 23,033 ​ ​ 22,100 Goodwill impairment ​ ​ — ​ ​ 215,252 ​ ​ — ​ ​ — Total noninterest expense ​ $ 205,017 ​ $ 425,766 ​ $ 23,033 ​ $ 22,100 ​ Noninterest expense in Banking was $205.0 million for the year ended December 31, 2024, compared to $210.5 million for 2023, excluding the $215.3 million goodwill impairment charge.
The following table provides a breakdown of noninterest expense for Banking and Wealth Management for the years ended December 31: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Banking ​ Wealth Management (dollars in thousands) ​ 2024 ​ 2023 ​ 2024 ​ 2023 Compensation and benefits ​ ​ ​ $ 64,954 ​ ​ ​ $ 67,114 ​ ​ ​ $ 16,602 ​ ​ ​ $ 16,049 Occupancy and depreciation ​ 35,609 ​ 34,886 ​ 1,868 ​ 1,913 Professional services and marketing ​ 12,574 ​ 9,626 ​ 3,825 ​ 3,487 Customer service costs ​ 63,586 ​ 76,806 ​ — ​ — Other ​ 28,294 ​ 22,082 ​ 738 ​ 651 Total operating expense ​ ​ 205,017 ​ ​ 210,514 ​ ​ 23,033 ​ ​ 22,100 Goodwill impairment ​ ​ — ​ ​ 215,252 ​ ​ — ​ ​ ​ Total noninterest expense ​ $ 205,017 ​ $ 425,766 ​ $ 23,033 ​ $ 22,100 ​ Noninterest expense in Banking was $205.0 million for the year ended December 31, 2024, compared to $210.5 million for 2023, excluding the $215.3 million goodwill impairment charge.
Our net interest income, net interest rate spread, and net interest margin are sensitive to general business and economic conditions.
Our net interest income, net interest rate spread, and net interest margin are sensitive to general business and economic conditions.
The provision for credit losses for loans is impacted by changes in loan balances as well as changes in estimated loss assumptions and charge-offs and recoveries.
The provision for credit losses for loans is impacted by changes in loan balances as well as changes in estimated loss assumptions and charge-offs and recoveries.
The amount of the provision for loans also takes into consideration such factors as changes in the nature and volume of the loan portfolio, overall portfolio quality, review of specific problem loans, current economic conditions and certain other subjective factors that may affect the ability of borrowers to meet their repayment obligations to us.
The amount of the provision for loans also takes into consideration such factors as changes in the nature and volume of the loan portfolio, overall portfolio quality, review of specific problem loans, current economic conditions and certain other subjective factors that may affect the ability of borrowers to meet their repayment obligations to us.
Ratio of Loans to Deposits. The relationship between gross loans and total deposits can provide a useful measure of a bank’s liquidity. Since repayment of loans tends to be less predictable than the maturity of investments and other liquid resources, the higher the loan-to-deposit ratio the less liquid are our assets.
The relationship between gross loans and total deposits can provide a useful measure of a bank’s liquidity. Since repayment of loans tends to be less predictable than the maturity of investments and other liquid resources, the higher the loan-to-deposit ratio the less liquid are our assets.
For complete discussion and disclosure of other accounting policies, see Note 1: Summary of Significant Accounting Policies of the Company’s consolidated financial statements. We have two business segments, “Banking” and “Investment Management and Wealth Planning” (“Wealth Management”). Banking includes the operations of FFB, FFIS, FFPF, and Blue Moon Management LLC and Wealth Management includes the operations of FFA.
For complete discussion and disclosure of other accounting policies, see Note 1: Summary of Significant Accounting Policies of the Company’s consolidated financial statements. We have two business segments, “Banking” and “Investment Management and Wealth Planning” (“Wealth Management”). Banking includes the operations of FFB, FFPF, and Blue Moon Management LLC and Wealth Management includes the operations of FFA.
The following table provides a breakdown of the changes in net interest income due to volume and rate changes between 2024 as compared to 2023. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Increase (Decrease) due to Net Increase (dollars in thousands) ​ Volume Rate (Decrease) Interest earned on: ​ ​ ​ ​ Loans, including LHFS ​ $ (22,290) ​ $ 7,894 ​ $ (14,396) Securities AFS ​ 39,799 ​ 2,771 ​ 42,570 Securities HTM ​ ​ (1,536) ​ ​ 1,003 ​ ​ (533) Cash, FHLB stock, and fed funds ​ 3,507 ​ 6,157 ​ 9,664 Total interest-earning assets ​ 19,480 ​ 17,825 ​ 37,305 Interest paid on: ​ ​ ​ Demand deposits ​ (261) ​ 8,093 ​ 7,832 Money market and savings ​ 9,182 ​ 19,118 ​ 28,300 Certificates of deposit ​ 1,818 ​ 9,803 ​ 11,621 Borrowings ​ 16,537 ​ (7,339) ​ 9,198 Subordinated debt ​ ​ 3 ​ ​ 12 ​ ​ 15 Total interest-bearing liabilities ​ 27,279 ​ 29,687 ​ 56,966 Net interest (expense) income ​ $ (7,799) ​ $ (11,862) ​ $ (19,661) ​ Net interest income was $182.6 million for the year ended December 31, 2024, compared to $202.3 million for 2023.
The following table provides a breakdown of the changes in net interest income due to volume and rate changes between 2024 as compared to 2023. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Increase (Decrease) due to ​ ​ ​ Net Increase (dollars in thousands) ​ ​ ​ Volume ​ ​ ​ Rate ​ ​ ​ (Decrease) Interest earned on: ​ ​ ​ ​ ​ ​ Loans ​ $ (22,290) ​ $ 7,894 ​ $ (14,396) Securities AFS ​ 39,799 ​ 2,771 ​ 42,570 Securities HTM ​ ​ (1,536) ​ ​ 1,003 ​ ​ (533) Cash, FHLB stock, and fed funds ​ 3,507 ​ 6,157 ​ 9,664 Total interest-earning assets ​ 19,480 ​ 17,825 ​ 37,305 Interest paid on: ​ ​ ​ ​ ​ ​ Demand deposits ​ (261) ​ 8,093 ​ 7,832 Money market and savings ​ 9,182 ​ 19,118 ​ 28,300 Certificates of deposit ​ 1,818 ​ 9,803 ​ 11,621 Borrowings ​ 16,537 ​ (7,339) ​ 9,198 Subordinated debt ​ ​ 3 ​ ​ 12 ​ ​ 15 Total interest-bearing liabilities ​ 27,279 ​ 29,687 ​ 56,966 Net interest income ​ $ (7,799) ​ $ (11,862) ​ $ (19,661) ​ Net interest income was $182.6 million for the year ended December 31, 2024, compared to $202.3 million for 2023.
For further discussion on our interest rate risk management practices, see “Interest Rate Risk Management” within Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations . ​ The following tables set forth information regarding (i) the total dollar amount of interest income from interest-earning assets and the resultant average yields on those assets; (ii) the total dollar amount of interest expense and the average rate of interest on our interest-bearing liabilities; (iii) net interest income; (iv) net interest rate spread; and (v) net interest margin for the years ended December 31: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31: ​ ​ 2024 2023 ​ ​ Average ​ ​ ​ ​ Average ​ Average ​ ​ ​ ​ Average ​ (dollars in thousands) ​ Balances Interest Yield /Rate Balances Interest Yield /Rate Interest-earning assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loans, including LHFS ​ $ 10,005,219 ​ $ 474,322 4.74 % $ 10,477,485 ​ $ 488,718 4.66 % Securities AFS ​ 1,207,223 ​ 64,593 5.35 % 459,279 ​ 22,023 4.80 % Securities HTM ​ ​ 751,926 ​ ​ 17,356 ​ 2.31 % ​ 819,945 ​ ​ 17,889 ​ 2.18 % Cash, FHLB stock, and fed funds ​ 1,054,515 ​ 54,725 5.19 % 981,593 ​ 45,061 4.59 % Total interest-earning assets ​ 13,018,883 ​ 610,996 4.69 % 12,738,302 ​ 573,691 4.50 % Noninterest-earning assets: ​ ​ ​ ​ ​ Nonperforming assets ​ 23,729 ​ ​ ​ ​ 12,659 ​ ​ ​ ​ Other ​ 255,070 ​ ​ ​ ​ 367,036 ​ ​ ​ ​ Total assets ​ $ 13,297,682 ​ ​ ​ ​ $ 13,117,997 ​ ​ ​ ​ Interest-bearing liabilities: ​ ​ ​ ​ ​ Demand deposits ​ $ 2,373,085 ​ 92,572 3.90 % $ 2,380,373 ​ 84,740 3.56 % Money market and savings ​ 3,406,861 ​ 133,822 3.93 % 3,147,427 ​ 105,522 3.35 % Certificates of deposit ​ 2,700,995 ​ 132,120 4.89 % 2,661,375 ​ 120,499 4.53 % Total interest-bearing deposits ​ 8,480,941 ​ 358,514 4.23 % 8,189,175 ​ 310,761 3.79 % Borrowings ​ 1,539,413 ​ 62,989 4.09 % 1,153,068 ​ 53,791 4.67 % Subordinated debt ​ ​ 173,426 ​ ​ 6,849 ​ 3.95 % ​ 173,364 ​ ​ 6,834 ​ 3.94 % Total interest-bearing liabilities ​ 10,193,780 ​ 428,352 4.20 % 9,515,607 ​ 371,386 3.90 % Noninterest-bearing liabilities: ​ ​ ​ ​ ​ Demand deposits ​ 1,973,605 ​ ​ ​ ​ 2,440,561 ​ ​ ​ ​ Other liabilities ​ 129,394 ​ ​ ​ ​ 138,161 ​ ​ ​ ​ Total liabilities ​ 12,296,779 ​ ​ ​ ​ 12,094,329 ​ ​ ​ ​ Shareholders’ equity ​ 1,000,903 ​ ​ ​ ​ 1,023,668 ​ ​ ​ ​ Total liabilities and equity ​ $ 13,297,682 ​ ​ ​ ​ $ 13,117,997 ​ ​ ​ ​ Net Interest Income ​ ​ ​ ​ $ 182,644 ​ ​ ​ ​ $ 202,305 ​ ​ Net Interest Rate Spread ​ ​ ​ ​ ​ 0.49 % ​ ​ ​ ​ 0.60 % Net Interest Margin ​ ​ ​ ​ ​ 1.40 % ​ ​ ​ ​ 1.59 % ​ 45 Table of Contents Net interest income is impacted by the volume (changes in volume multiplied by prior rate), interest rate (changes in rate multiplied by prior volume) and mix of interest-earning assets and interest-bearing liabilities.
For further discussion on our interest rate risk management practices, see “Interest Rate Risk Management” within Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations . 57 Table of Contents The following tables set forth information regarding (i) the total dollar amount of interest income from interest-earning assets and the resultant average yields on those assets; (ii) the total dollar amount of interest expense and the average rate of interest on our interest-bearing liabilities; (iii) net interest income; (iv) net interest rate spread; and (v) net interest margin for the years ended December 31: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 ​ ​ ​ 2023 ​ ​ Average ​ ​ ​ ​ Average ​ Average ​ ​ ​ ​ Average ​ (dollars in thousands) ​ ​ ​ Balances ​ ​ ​ Interest ​ ​ ​ Yield /Rate ​ ​ ​ Balances ​ ​ ​ Interest ​ ​ ​ Yield /Rate ​ ​ ​ Interest-earning assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loans ​ $ 10,005,219 ​ $ 474,322 4.74 % $ 10,477,485 ​ $ 488,718 4.66 % Securities AFS ​ 1,207,223 ​ 64,593 5.35 % 459,279 ​ 22,023 4.80 % Securities HTM ​ ​ 751,926 ​ ​ 17,356 ​ 2.31 ​ ​ 819,945 ​ ​ 17,889 ​ 2.18 % Cash, FHLB stock, and fed funds ​ 1,054,515 ​ 54,725 5.19 % 981,593 ​ 45,061 4.59 % Total interest-earning assets ​ 13,018,883 ​ 610,996 4.69 % 12,738,302 ​ 573,691 4.50 % Noninterest-earning assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nonperforming assets ​ 23,729 ​ ​ ​ ​ ​ 12,659 ​ ​ ​ ​ ​ Other ​ 255,070 ​ ​ ​ ​ ​ 367,036 ​ ​ ​ ​ ​ Total assets ​ $ 13,297,682 ​ ​ ​ ​ ​ ​ $ 13,117,997 ​ ​ ​ ​ ​ ​ Interest-bearing liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Demand deposits ​ $ 2,373,085 ​ 92,572 3.90 % $ 2,380,373 ​ 84,740 3.56 % Money market and savings ​ 3,406,861 ​ 133,822 3.93 % 3,147,427 ​ 105,522 3.35 % Certificates of deposit ​ 2,700,995 ​ 132,120 4.89 % 2,661,375 ​ 120,499 4.53 % Total interest-bearing deposits ​ 8,480,941 ​ 358,514 4.23 % 8,189,175 ​ 310,761 3.79 % Borrowings ​ 1,539,413 ​ 62,989 4.09 % 1,153,068 ​ 53,791 4.67 % Subordinated debt ​ ​ 173,426 ​ ​ 6,849 ​ 3.95 % ​ 173,364 ​ ​ 6,834 ​ 3.94 % Total interest-bearing liabilities ​ 10,193,780 ​ 428,352 4.20 % 9,515,607 ​ 371,386 3.90 % Noninterest-bearing liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Demand deposits ​ 1,973,605 ​ ​ ​ ​ 2,440,561 ​ ​ ​ ​ Other liabilities ​ 129,394 ​ ​ ​ ​ 138,161 ​ ​ ​ ​ Total liabilities ​ 12,296,779 ​ ​ ​ ​ 12,094,329 ​ ​ ​ ​ Stockholders’ equity ​ 1,000,903 ​ ​ ​ ​ 1,023,668 ​ ​ ​ ​ Total liabilities and equity ​ $ 13,297,682 ​ ​ ​ ​ ​ $ 13,117,997 ​ ​ ​ ​ ​ Net Interest Income ​ ​ ​ ​ $ 182,644 ​ ​ ​ ​ $ 202,305 ​ ​ Net Interest Rate Spread ​ ​ ​ ​ ​ 0.49 % ​ ​ ​ ​ 0.60 % Net Interest Margin ​ ​ ​ ​ ​ 1.40 % ​ ​ ​ ​ 1.59 % ​ 58 Table of Contents Net interest income is impacted by the volume (changes in volume multiplied by prior rate), interest rate (changes in rate multiplied by prior volume) and mix of interest-earning assets and interest-bearing liabilities.
The increase was due primarily to the aforementioned increase in net charge-offs, as well as an increase in the qualitative reserve portion of the overall ACL, reflecting updated adjustment for the repricing and interest rate risks in the multifamily portfolio, the potential risk associated with substandard loans not impaired, increased reserves for the equipment finance loans and potential impact of the continued high rates on the C&I loan portfolio.
The increase was due primarily to the aforementioned increase in net charge-offs, as well as an increase in the qualitative reserve portion of the overall ACL, reflecting updated adjustment for the repricing and interest rate risks in the multifamily portfolio, the potential risk associated with substandard loans not impaired, increased reserves for the equipment finance loans and potential impact of the continued high rates on the C&I loan portfolio. ​ Noninterest income.
The following tables show key operating results for each of our business segments for the years ended December 31: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Wealth ​ ​ ​ ​ (dollars in thousands) Banking Management Other Total 2024: ​ ​ ​ ​ Interest income ​ $ 610,996 ​ $ — ​ $ — ​ $ 610,996 Interest expense ​ 421,503 ​ — ​ 6,849 ​ 428,352 Net interest income ​ 189,493 ​ — ​ (6,849) ​ 182,644 Provision for credit losses ​ 20,700 ​ — ​ — ​ 20,700 Noninterest income ​ 22,518 ​ 30,583 ​ (1,456) ​ 51,645 LHFS LOCOM adjustment ​ ​ (117,517) ​ ​ — ​ ​ — ​ ​ (117,517) Noninterest expense ​ 205,017 ​ 23,033 ​ 5,402 ​ 233,452 (Loss) income before income taxes ​ ​ (131,223) ​ ​ 7,550 ​ ​ (13,707) ​ ​ (137,380) Income tax (benefit) expense ​ ​ (43,790) ​ ​ 2,129 ​ ​ (3,312) ​ ​ (44,973) Net (loss) income ​ $ (87,433) ​ $ 5,421 ​ $ (10,395) ​ $ (92,407) 2023: ​ ​ ​ ​ Interest income ​ $ 573,691 ​ $ — ​ $ — ​ $ 573,691 Interest expense ​ 364,310 ​ — ​ 7,076 ​ 371,386 Net interest income ​ 209,381 ​ — ​ (7,076) ​ 202,305 Provision (reversal) for credit losses ​ (482) ​ — ​ — ​ (482) Noninterest income ​ 21,540 ​ 29,358 ​ (1,547) ​ 49,351 Noninterest expense ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Goodwill impairment ​ ​ 215,252 ​ ​ — ​ ​ — ​ ​ 215,252 Operating ​ ​ 210,514 ​ ​ 22,100 ​ ​ 4,336 ​ ​ 236,950 (Loss) income before income taxes ​ ​ (194,363) ​ ​ 7,258 ​ ​ (12,959) ​ ​ (200,064) Income tax expense (benefit) ​ ​ 560 ​ ​ 2,072 ​ ​ (3,632) ​ ​ (1,000) Net (loss) income ​ $ (194,923) ​ $ 5,186 ​ $ (9,327) ​ $ (199,064) ​ Years Ended December 31, 2024 and 2023.
The following tables show key operating results for each of our business segments for the years ended December 31: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Wealth ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (dollars in thousands) ​ ​ ​ Banking ​ ​ ​ Management ​ ​ ​ Other ​ ​ ​ Total 2024: ​ ​ ​ ​ ​ ​ ​ ​ Interest income ​ $ 610,996 ​ $ — ​ $ — ​ $ 610,996 Interest expense ​ 421,503 ​ — ​ 6,849 ​ 428,352 Net interest income ​ 189,493 ​ — ​ (6,849) ​ 182,644 Provision (reversal) for credit losses ​ 20,700 ​ — ​ — ​ 20,700 Noninterest income ​ 22,518 ​ 30,583 ​ (1,456) ​ 51,645 LHFS LOCOM adjustment ​ ​ (117,517) ​ — ​ — ​ (117,517) Noninterest expense ​ ​ 205,017 ​ 23,033 ​ 5,402 ​ 233,452 (Loss) income before income taxes ​ ​ (131,223) ​ ​ 7,550 ​ ​ (13,707) ​ ​ (137,380) Income tax expense (benefit) ​ ​ (43,790) ​ ​ 2,129 ​ ​ (3,312) ​ ​ (44,973) Net (loss) income ​ $ (87,433) ​ $ 5,421 ​ $ (10,395) ​ $ (92,407) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023: ​ ​ ​ ​ ​ ​ ​ ​ Interest income ​ $ 573,691 ​ $ — ​ $ — ​ $ 573,691 Interest expense ​ 364,310 ​ — ​ 7,076 ​ 371,386 Net interest income ​ 209,381 ​ — ​ (7,076) ​ 202,305 Provision for credit losses ​ (482) ​ — ​ — ​ (482) Noninterest income ​ 21,540 ​ 29,358 ​ (1,547) ​ 49,351 Noninterest expense: ​ ​ ​ ​ ​ ​ ​ — Goodwill impairment ​ ​ 215,252 ​ ​ — ​ ​ — ​ ​ 215,252 Operating ​ ​ 210,514 ​ ​ 22,100 ​ ​ 4,336 ​ ​ 236,950 Income (loss) before income taxes ​ ​ (194,363) ​ ​ 7,258 ​ ​ (12,959) ​ ​ (200,064) Income tax expense (benefit) ​ ​ 560 ​ ​ 2,072 ​ ​ (3,632) ​ ​ (1,000) Net income (loss) ​ $ (194,923) ​ $ 5,186 ​ $ (9,327) ​ $ (199,064) ​ Combined net loss for 2024 was $92.4 million, compared to net loss of $199.1 million for 2023.
We manage net interest income through affecting changes in the mix of interest-earning assets as well as the mix of interest-bearing liabilities, changes in the level of interest-bearing liabilities in proportion to interest-earning assets, and the growth and maturity of earning assets.
We manage net interest income through affecting changes in the mix of interest-earning assets as well as the mix of interest-bearing liabilities, changes in the level of interest-bearing liabilities in proportion to that of interest-earning assets, and the growth and maturity of earning assets.
Yields on interest-earning assets averaged 4.69% for the year ended December 31, 2024, compared to 4.50% for 2023, an increase of 19 basis points. Yields on interest-earning assets increased due to increases in yields on loans (including LHFS), securities, and cash balances compared to the prior year.
Yields on interest-earning assets averaged 4.69% for the year ended December 31, 2024, compared to 4.50% for 2023, an increase of 19 basis points. Yields on interest-earning assets increased due to increases in yields on loans (including LHFS), securities, and cash balances compared to the prior year. Yields on loans increased to 4.74% in 2024 compared to 4.66% in 2023.
The Bank had a total of $240 million in unused borrowing capacity available through its correspondent bank lines of credit as of December 31, 2024. We monitor our liquidity in accordance with guidelines established by our Board of Directors and applicable regulatory requirements.
The Bank had a total of $240 million in unused borrowing capacity available through its correspondent bank lines of credit as of December 31, 2025. We monitor our liquidity in accordance with guidelines established by our Board of Directors and applicable regulatory requirements.
Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis is intended to facilitate the understanding and assessment of significant changes and trends in our businesses that accounted for the changes in our results of operations in the year ended December 31, 2024, as compared to our results of operations in the year ended December 31, 2023; in our results of operations in the year ended December 31, 2023, as compared to our results of operations in the year ended December 31, 2022; and our financial condition at December 31, 2024 as compared to our financial condition at December 31, 2023.
Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis is intended to facilitate the understanding and assessment of significant changes and trends in our businesses that accounted for the changes in our results of operations in the year ended December 31, 2025, as compared to our results of operations in the year ended December 31, 2024; in our results of operations in the year ended December 31, 2024, as compared to our results of operations in the year ended December 31, 2023; and our financial condition at December 31, 2025 as compared to our financial condition at December 31, 2024.
The NII simulation is used to measure and evaluate potential changes in our net interest income resulting from changes in interest rates. The model measures the impact over a range of instantaneous shocks in 100 basis points increments to our net interest income over a 12-months forecast period.
The NII simulation is used to measure and evaluate potential changes in our net interest income resulting from changes in interest rates. The model measures the impact over a range of instantaneous shocks in 100 basis points increments to our net interest income over a 12-month forecast period.
Actual results may vary significantly from the results suggested by the table above. Loan prepayments and deposit attrition, changes in our mix of earning assets or funding sources, and future asset/liability management decisions, among others, may vary significantly from our assumptions.
Actual results may vary significantly from the results suggested by the tables above. Loan prepayments and deposit attrition, changes in our mix of earning assets or funding sources, and future asset/liability management decisions, among others, may vary significantly from our assumptions.
During the year ended December 31, 2024, investing activities provided net cash of $287 million, primarily due to a combined $816 million net decrease in loans (including $472 million in proceeds from loan sales), $749 million in proceeds from the sale of securities AFS, $608 million cash received in principal collection and maturities of securities AFS and HTM, offset by $1.9 billion (net of discount) in purchases of securities 64 Table of Contents AFS.
During the year ended December 31, 2024, investing activities provided net cash of $287 million, primarily due to a combined $816 million net decrease in loans (including $472 million in proceeds from loan sales), $749 million in proceeds from the sale of AFS securities, $608 million cash received in principal collection and maturities of AFS and HTM securities, offset by $1.9 billion (net of discount) in purchases of AFS securities.
The $1.2 million increase was due to an increase in fees earned on AUM balance as average AUM balances increased to $5.5 billion for the year ended December 31, 2024, compared to $5.2 billion for 2023.
The $1.2 million increase was due to an increase in fees earned on AUM balance as average AUM balances increased to $5.5 billion for the year ended December 31, 2024, compared to $5.2 billion for 2023. Noninterest Expense.
The $116.5 million decrease in noninterest income in Banking was due primarily to a $120.8 million LHFS LOCOM adjustment. In August 2024, the Company transferred $1.9 billion principal balance of multifamily loans from loans held for investment to loans held for sale and recorded a $117.5 million LOCOM adjustment at the time of 47 Table of Contents transfer.
The $116.5 million decrease in noninterest income in Banking was due primarily to a $120.8 million LHFS LOCOM adjustment. In August 2024, the Company transferred $1.9 billion principal balance of multifamily loans from loans held for investment to loans held for sale and recorded a $117.5 million LOCOM adjustment at the time of transfer.
The primary sources of revenue for Banking are net interest income, fees from its deposits and trust services, certain loan fees, and consulting fees. The primary sources of revenue for Wealth Management are asset management fees assessed on the balance of AUM.
Results of Operations The primary sources of revenue for Banking are net interest income, fees from its deposits and trust services, certain loan fees, and consulting fees. The primary sources of revenue for Wealth Management are asset management fees assessed on the balance of AUM.
On the other hand, if we conclude on the basis of those estimates and the amount of the tax benefits available to us that it has become more likely than not that we will be unable to utilize those tax benefits in full prior to their expiration, then we would establish a valuation allowance to reduce the deferred tax asset on our balance sheet to the amount with respect to which we believe it is still more likely than not that we will be able to use to offset or reduce taxes in the future.
On the other hand, if we conclude on the basis of those estimates and the amount of the tax benefits available to us that it has become more likely than not that we will be unable to utilize those tax benefits, then we would establish a valuation allowance to reduce the deferred tax asset on our balance sheet to the amount with respect to which we believe it is still more likely than not that we will be able to use to offset or reduce taxes in the future.
Our statutory tax rates were 27.8% and 28.2% for 2024 and 2023, respectively. 44 Table of Contents Net Interest Income. The principal component of the Company’s earnings is net interest income, which is the difference between the interest and fees earned on loans and investments (interest-earning assets) and the interest paid on deposits and borrowed funds (interest-bearing liabilities).
Our statutory tax rates were 27.8% and 28.2% for 2024 and 2023, respectively. Net Interest Income. The principal component of the Company’s earnings is net interest income, which is the difference between the interest and fees earned on loans and investments (interest-earning assets) and the interest paid on deposits and borrowed funds (interest-bearing liabilities).
See Note 3: Securities in the consolidated financial statements for additional information related to our allowance for credit losses on securities AFS. 41 Table of Contents Allowance for Credit Losses – Loans Held for Investment .
See Note 3: Securities in the consolidated financial statements for additional information related to our allowance for credit losses on securities AFS. 48 Table of Contents Allowance for Credit Losses – Loans Held for Investment .
If we conclude, on the basis of those estimates and the amount of the tax benefits available to us, that it is more likely than not that we will be able to fully utilize those tax benefits prior to their expiration, we recognize the deferred tax asset in full on our balance sheet.
If we conclude, on the basis of those estimates and the amount of the tax benefits available to us, that it is more likely than not that we will be able to fully utilize those tax benefits, we recognize the deferred tax asset in full on our balance sheet.
In December 2024, $489 million principal balance of the transferred loans were sold. The remaining $1.4 billion in transferred loans were evaluated for impairment and written down to fair value as of December 31, 2024, resulting in an additional $3.3 million LOCOM adjustment being recorded.
In December 2024, $489 million principal balance of the transferred loans were sold. The remaining $1.4 billion in transferred loans were evaluated for impairment and written down to fair value as of December 31, 2024, resulting in 60 Table of Contents an additional $3.3 million LOCOM adjustment being recorded.
The change in net income for the Banking segment was largely due to an increase in the provision for credit losses of $21.2 million and a decrease in net interest income of $19.9 million; offset by an increase in noninterest income of $0.1 million and a decrease in noninterest operating expense of $5.5 million.
The change in net income for the Banking segment was largely due to an increase in the provision for credit losses of $21.2 million and a decrease in net interest income of $19.9 million; offset by an increase in noninterest income of $0.1 56 Table of Contents million and a decrease in noninterest operating expense of $5.5 million.
The remaining balances of the Bank’s lines of credit available to draw down totaled $3.0 billion at December 31, 2024. We believe our liquid assets and available liquidity sources are sufficient to meet current funding needs and that we have the ability to manage unplanned decreases or changes in funding sources, as well as abnormal and unexpected needs.
The remaining balances of the Bank’s lines of credit available to draw down totaled $3.5 billion at December 31, 2025. We believe our liquid assets and available liquidity sources are sufficient to meet current funding needs and that we have the ability to manage unplanned decreases or changes in funding sources, as well as abnormal and unexpected needs.
We employ various strategies to mitigate IRR by managing 65 Table of Contents our asset and liability mix, including adjusting the duration of our assets to align with our liabilities. Our IRR management process is dynamic and includes regular monitoring and review.
We employ various strategies to mitigate IRR by managing our asset and liability mix, including adjusting the duration of our assets to align with our liabilities. Our IRR management process is dynamic and includes regular monitoring and review.
The increase in investment securities included $1.1 billion in net purchases of securities available-for-sale, offset by $608 million in maturities of securities available-for-sale and securities held-for-investment during the year. The net purchases of securities available-for-sale largely consisted of agency mortgage-backed securities.
The increase in investment securities included $1.4 billion in net purchases of securities available-for-sale, offset by $351 million in maturities of securities available-for-sale and securities held-for-investment during the year. The net purchases of securities available-for-sale largely consisted of agency mortgage-backed securities.
The provision for credit losses represents our estimate of the amount necessary to be charged against the current period’s earnings to maintain the ACL for loans and investments at a level that we consider adequate in relation to the estimated losses inherent in the loan and investment portfolios.
Provision for credit losses. The provision for credit losses represents our estimate of the amount necessary to be charged against the current period’s earnings to maintain the ACL for loans and investments at a level that we consider adequate in relation to the expected lifetime credit losses in the loan and investment portfolios.
The Dodd-Frank Act permanently increased the maximum deposit insurance amount for banks, savings institutions and credit unions to $250,000 per depositor. Insured and collateralized deposits comprised approximately 84% of total deposits at December 31, 2024.
The Dodd-Frank Act permanently increased the maximum deposit insurance amount for banks, savings institutions and credit unions to $250,000 per depositor. Insured and collateralized deposits comprised approximately 86% of total deposits at December 31, 2025.
Our need for liquidity is affected by our loan activity, net changes in deposit levels and the maturities of our borrowings. The principal sources of our liquidity consist of deposits, loan interest and principal payments and prepayments, investment management and consulting fees, proceeds from borrowings, and sales of FFI common stock.
Our need for liquidity is affected by our loan activity, net changes in deposit levels and the maturities of our borrowings. The principal sources of our liquidity consist of deposits, loan interest and principal payments and prepayments, investment management and consulting fees, and proceeds from borrowings.
Large depositor relationships, consisting of deposit relationships which exceed 2% of total deposits, accounted for, in the aggregate, 19.7% and 12.5% of our total deposits as of December 31, 2024, and 2023, respectively. The composition of our large depositor relationships includes mortgage servicing clients who have maintained long-term depository relationships with us.
Large depositor relationships, consisting of deposit relationships which exceed 2% of total deposits, accounted for, in the aggregate, 9.7% and 19.7% of our total deposits as of December 31, 2025, and 2024, respectively. The composition of our large depositor relationships includes mortgage servicing clients who have maintained long-term depository relationships with us.
The $0.9 million increase in noninterest expense in Wealth Management was largely due to a $0.6 million increase in compensation and benefits and $0.3 million increase in professional services and marketing expense, offset by a small decrease in occupancy and depreciation expense.
The $0.9 million increase in noninterest expense in Wealth Management was largely due to a 61 Table of Contents $0.6 million increase in compensation and benefits and $0.3 million increase in professional services and marketing expense, offset by a small decrease in occupancy and depreciation expense.
Additionally, prepayments of loans and early withdrawals of certificates of deposit could cause interest sensitivities to vary. The EVE modeled results above are in compliance with the EVE limits. The EVE is an interest rate risk management tool and the results are not necessarily an indication of our actual future results.
Additionally, prepayments of loans and early withdrawals of certificates of deposit could cause interest sensitivities to vary. The EVE modeled results above are in compliance with the EVE Board limits. The NII and EVE sensitivity analysis are an interest rate risk management tool and the results are not necessarily an indication of our actual future results.
The Bank’s Federal Reserve Bank credit line is secured by pledged collateral in the form of qualifying loans and investment securities. As of December 31, 2024, the Bank had secured unused borrowing capacity of $1.1 billion under this agreement. The Bank’s unused borrowing capacity with the FHLB as of December 31, 2024 was $1.7 billion.
The Bank’s Federal Reserve Bank credit line is secured by pledged collateral in the form of qualifying loans and investment securities. As of December 31, 2025, the Bank had secured unused borrowing capacity of $1.8 billion under this agreement. The Bank’s unused borrowing capacity with the FHLB as of December 31, 2025 was $1.4 billion.
Subordinated debt. At December 31, 2024 and December 31, 2023, FFI had two issuances of subordinated notes with an aggregate carrying value of $173 million. For additional information about subordinated debt, see Note 13: Subordinated Debt to the consolidated financial statements.
For additional information about borrowings, see Note 12: Borrowings to the consolidated financial statements. Subordinated debt. At December 31, 2025 and December 31, 2024, FFI had two issuances of subordinated notes with an aggregate carrying value of $174 million and $173 million, respectively. For additional information about subordinated debt, see Note 13: Subordinated Debt to the consolidated financial statements.
We regularly monitor liquidity to ensure levels are in compliance with minimum requirements established by our Board of Directors. As of December 31, 2024, our available liquidity ratio was 51.0%, which is above our minimum policy requirement of 25%.
We regularly monitor liquidity to ensure levels are in compliance with minimum requirements established by our Board of Directors. As of December 31, 2025, our available liquidity ratio was 67.7%, which is above our minimum policy requirement of 25%.
Cash Flows from Financing Activities. During the year ended December 31, 2024, financing activities used net cash of $589 million, comprised primarily of a net decrease in deposits of $818 million, offset by net proceeds received from the July 2024 capital raise of $214.5 million and a net decrease in repurchase agreements of $39 million.
During the year ended December 31, 2024, financing activities used net cash of $589 million, comprised primarily of a net decrease in deposits of $818 million, offset by net proceeds received from the July 2024 capital raise of $214.5 million and a net decrease in repurchase agreements of $39 million. 72 Table of Contents Ratio of Loans to Deposits.
The level of interest rates and the volume and mix of interest-earning assets and interest-bearing liabilities impact net interest income and net interest margin. The net interest rate spread is the yield on average interest-earning assets minus the cost of average interest-earning liabilities.
Net interest margin is net interest income as a percentage of average interest-earning assets for the period. The level of interest rates and the volume and mix of interest-earning assets and interest-bearing liabilities impact net interest income and net interest margin. The net interest rate spread is the yield on average interest-earning assets minus the cost of average interest-earning liabilities.
The average balance of borrowings and the weighted average interest rate on such borrowings were $1.5 billion and 4.09%, respectively for the year ended December 31, 2024. The average balance of borrowings and the weighted average interest rate on such borrowings were $1.2 billion and 4.67%, respectively for the year ended December 31, 2023.
The average balance of borrowings and the weighted average interest rate on such borrowings were $1.5 billion and 4.10%, respectively, for the year ended December 31, 2025. The average balance of borrowings and the weighted average interest rate on such borrowings were $1.5 billion and 4.09%, respectively for the year ended December 31, 2024.
The weighted average rates paid on non-ICS and ICS brokered deposit balances were 4.15% and 3.10%, respectively for accounts held at December 31, 2024. The weighted average rates paid on non-ICS and ICS brokered deposit balances were 4.35% and 3.53%, respectively for accounts held at December 31, 2023.
The weighted average rates paid on non-ICS brokered deposit balances was 4.20% for accounts held at December 31, 2025. The weighted average rates paid on non-ICS and ICS brokered deposit balances were 4.15% and 3.10%, respectively for accounts held at December 31, 2024.
Cash and cash equivalents, certificates of deposit and securities: Cash and cash equivalents, which primarily consist of funds held at the Federal Reserve Bank or at correspondent banks, including fed funds, decreased by $310 million at December 31, 2024, compared to December 31, 2023.
Cash and cash equivalents, certificates of deposit and securities: Cash and cash equivalents, which primarily consist of funds held at the Federal Reserve Bank or at correspondent banks, including fed funds, increased by $608.7 million at December 31, 2025, compared to December 31, 2024.
Yields on securities AFS increased to 5.35% for the year ended December 31, 2024, compared to 4.80% for 2023, largely due to the current year acquisition of higher-yielding and highly liquid AFS securities, primarily agency mortgage-backed securities.
Yields on new loan fundings averaged 8.08% for the year ended December 31, 2024, compared to 7.94% for 2023. Yields on securities AFS increased to 5.35% for the year ended December 31, 2024, compared to 4.80% for 2023, largely due to the current year acquisition of higher-yielding and highly liquid AFS securities, primarily agency mortgage-backed securities.
During 2024, the Board of Directors declared a quarterly cash dividend of $0.01 per share for the quarter ended March 31, 2024, with no subsequent declarations made. During 2023, the Board of Directors declared quarterly cash dividends totaling $0.06 per share. 69 Table of Contents We had no material commitments for capital expenditures as of December 31, 2024.
During 2024, the Board of Directors declared a quarterly cash dividend of $0.01 per share for the quarter ended March 31, 2024, with no subsequent declarations made. We had no material commitments for capital expenditures as of December 31, 2025. ​ ​
The Bank held brokered deposits totaling $3.2 billion and $4.2 59 Table of Contents billion at December 31, 2024 and December 31, 2023, respectively including insured cash sweep (“ICS”) accounts totaling $1.0 billion and $1.4 billion at December 31, 2024 and December 31, 2023, respectively which are classified as brokered deposit accounts for regulatory reporting purposes.
The Bank held brokered deposits totaling $2.8 billion and $3.2 billion at December 31, 2025 and December 31, 2024, respectively, including insured cash sweep (“ICS”) accounts totaling $1.0 billion at December 31, 2024, which are classified as brokered deposit accounts for regulatory reporting purposes.
As of December 31, 2024, FFB was obligated on $69 million of letters of credit, consisting of a $59 million letter of credit to Freddie Mac as collateral for the 2024 multifamily loan sale/securitization, and a $10 million letter of credit to the FHLB used as collateral for public fund deposits.
As of December 31, 2025, FFB was obligated on $151.0 million of letters of credit, consisting of a $141 million letter of credit to Freddie Mac as collateral for the 2024 and 2025 multifamily loan sale/securitizations, and a $10 million letter of credit to the FHLB used as collateral for public fund deposits.
As of December 31, 2024, the amount of capital at FFB in excess of amounts required to be well-capitalized for purposes of the prompt corrective action regulations was $580 million for the common equity tier 1 ratio, $480 million for the leverage ratio, $451 million for the tier 1 risk-based capital ratio and $314 million for the total risk-based capital ratio.
As of December 31, 2025, the amount of capital at FFB in excess of amounts required to be well-capitalized for purposes of the prompt corrective action regulations was $571 million for the common equity tier 1 ratio, $470 million for the leverage ratio, $456 million for the tier 1 risk-based capital ratio and $399 million for the total risk-based capital ratio.
The 0.19% increase in average yield earned on interest-earning assets was offset by a 0.30% increase in average rate paid on interest-bearing liability balances, resulting in a contraction of NIM for the year ended December 31, 2024. NIM was 1.40% for the year ended December 31, 2024, compared to 1.59% for 2023. Provision for credit losses.
Borrowings outstanding totaled $1.4 billion at December 31, 2024, compared to $1.4 billion at December 31, 2023. The 0.19% increase in average yield earned on interest-earning assets was offset by a 0.30% increase in average rate paid on interest-bearing liability balances, resulting in a contraction of NIM for the year ended December 31, 2024.
The Board-approved limits on NII sensitivity and 66 Table of Contents the actual computed changes to our NII based on the +/- 100 and +/- 200 basis points hypothetical interest rate scenarios as of December 31, 2024 are shown below: ​ ​ ​ ​ ​ ​ ​ ​ Estimated Increase ​ ​ ​ (Decrease) in Net ​ ​ ​ ​ Assumed Instantaneous Change in Interest Rates Interest Income ​ ​ Board Limits ​ + 100 basis points (15.43) % ​ (20.00) % + 200 basis points (30.10) % ​ (25.00) % - 100 basis points 6.60 % ​ (10.00) % - 200 basis points 12.02 % ​ (20.00) % ​ The modeled one year NII results indicate that the Bank is more earnings sensitive in the rising rate shock scenarios of 100 through 200 basis points.
The Board-approved limits on NII sensitivity and the actual computed changes to our NII based on the +/- 100 and +/- 200 basis points hypothetical interest rate scenarios as of December 31, 2025 are shown below: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Estimated Increase ​ ​ ​ (Decrease) in Net ​ ​ ​ ​ Assumed Instantaneous Change in Interest Rates Interest Income ​ ​ Board Limits ​ + 100 basis points (2.19) % ​ (6.00) % + 200 basis points (1.51) % ​ (12.00) % - 100 basis points 1.44 % ​ (6.00) % - 200 basis points (0.19) % ​ (12.00) % ​ 74 Table of Contents The modeled one-year NII results indicate that the Bank is more earnings sensitive in the rising rate shock scenarios of 100 through 200 basis points.
NIM was 1.59% for the year ended December 31, 2023 compared to 2.91% for 2022. ​ Provision for credit losses.
NIM was 1.40% for the year ended December 31, 2024, compared to 1.59% for 2023. ​ Provision for credit losses.
Our ACL for loans held for investment represented 0.41% of total loans held for investment outstanding as of December 31, 2024, compared to 0.29% of total loans held for investment outstanding as of December 31, 2023. The ACL for loans increased $3.1 million as of December 31, 2024, compared to December 31, 2023.
Our ACL for loans held for investment represented 1.39% of total loans held for investment outstanding as of December 31, 2025, compared to 0.41% of total loans held for investment outstanding as of December 31, 2024. The ACL for loans increased $61.5 million as of December 31, 2025, compared to December 31, 2024.
The following table summarizes the activity in our ACL related to loans held for investment for the year ended December 31: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Provision ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Beginning ​ (Reversal) for ​ ​ ​ ​ ​ ​ ​ Ending (dollars in thousands) Balance Credit Losses ​ Charge-offs Recoveries Balance 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Real estate loans: ​ ​ ​ ​ ​ ​ Residential properties ​ $ 9,921 ​ $ (2,048) ​ $ (657) ​ $ — ​ $ 7,216 Commercial properties ​ 4,148 ​ 3,499 ​ (964) ​ — ​ 6,683 Land and construction ​ 332 ​ (271) ​ — ​ — ​ 61 Commercial and industrial loans ​ 14,796 ​ 19,815 ​ (16,770) ​ 492 ​ 18,333 Consumer loans ​ 8 ​ 23 ​ (23) ​ 1 ​ 9 Total ​ $ 29,205 ​ $ 21,018 ​ $ (18,414) ​ $ 493 ​ $ 32,302 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net (charge-offs) recoveries ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ (17,921) Net (charge-offs) recoveries to average loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 0.18% ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023: ​ ​ ​ ​ ​ Real estate loans: ​ ​ ​ ​ ​ Residential properties ​ $ 8,306 ​ $ 1,615 ​ $ — ​ $ — ​ $ 9,921 Commercial properties ​ 8,714 ​ (4,317) ​ (249) ​ — ​ 4,148 Land and construction ​ 164 ​ 168 ​ — ​ — ​ 332 Commercial and industrial loans ​ 16,521 ​ 1,171 ​ (4,998) ​ 2,102 ​ 14,796 Consumer loans ​ 26 ​ (18) ​ (2) ​ 2 ​ 8 Total ​ $ 33,731 ​ $ (1,381) ​ $ (5,249) ​ $ 2,104 ​ $ 29,205 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net (charge-offs) recoveries ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ (3,145) Net (charge-offs) recoveries to average loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 0.03% ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022: ​ ​ ​ ​ ​ Real estate loans: ​ ​ ​ ​ ​ Residential properties ​ $ 2,637 ​ $ 5,674 ​ $ (5) ​ $ — ​ $ 8,306 Commercial properties ​ 17,049 ​ (8,335) ​ — ​ — ​ 8,714 Land and construction ​ 1,995 ​ (1,831) ​ — ​ — ​ 164 Commercial and industrial loans ​ 11,992 ​ 4,804 ​ (711) ​ 436 ​ 16,521 Consumer loans ​ 103 ​ (73) ​ (4) ​ — ​ 26 Total ​ $ 33,776 ​ $ 239 ​ $ (720) ​ $ 436 ​ $ 33,731 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net (charge-offs) recoveries ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ (284) Net (charge-offs) recoveries to average loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 0.00% ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The allowance for credit losses for loans held for investment totaled $32.3 million as of December 31, 2024, compared to $29.2 million as of December 31, 2023.
The following table summarizes the activity in our ACL related to loans held for investment for the year ended December 31: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Provision ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Beginning ​ (Reversal) for ​ ​ ​ ​ ​ ​ ​ Ending (dollars in thousands) ​ ​ ​ Balance ​ ​ ​ Credit Losses ​ Charge-offs ​ ​ ​ Recoveries ​ ​ ​ Balance 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Real estate loans: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Residential properties ​ $ 7,216 ​ $ 35,815 ​ $ — ​ $ 6 ​ $ 43,037 Commercial properties ​ 6,683 ​ 702 ​ — ​ — ​ 7,385 Land and construction ​ 61 ​ (2) ​ — ​ — ​ 59 Commercial and industrial loans ​ 18,333 ​ 26,086 ​ (2,071) ​ 1,010 ​ 43,358 Consumer loans ​ 9 ​ 2 ​ — ​ — ​ 11 Total ​ $ 32,302 ​ $ 62,603 ​ $ (2,071) ​ $ 1,016 ​ $ 93,850 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net (charge-offs) recoveries ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ (1,055) Net charge-offs (recoveries) to average loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 0.01% ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Real estate loans: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Residential properties ​ $ 9,921 ​ $ (2,048) ​ $ (657) ​ $ — ​ $ 7,216 Commercial properties ​ 4,148 ​ 3,499 ​ (964) ​ — ​ 6,683 Land and construction ​ 332 ​ (271) ​ — ​ — ​ 61 Commercial and industrial loans ​ 14,796 ​ 19,815 ​ (16,770) ​ 492 ​ 18,333 Consumer loans ​ 8 ​ 23 ​ (23) ​ 1 ​ 9 Total ​ $ 29,205 ​ $ 21,018 ​ $ (18,414) ​ $ 493 ​ $ 32,302 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net (charge-offs) recoveries ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ (17,921) Net charge-offs (recoveries) to average loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 0.18% ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Real estate loans: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Residential properties ​ $ 8,306 ​ $ 1,615 ​ $ — ​ $ — ​ $ 9,921 Commercial properties ​ 8,714 ​ (4,317) ​ (249) ​ — ​ 4,148 Land and construction ​ 164 ​ 168 ​ — ​ — ​ 332 Commercial and industrial loans ​ 16,521 ​ 1,171 ​ (4,998) ​ 2,102 ​ 14,796 Consumer loans ​ 26 ​ (18) ​ (2) ​ 2 ​ 8 Total ​ $ 33,731 ​ $ (1,381) ​ $ (5,249) ​ $ 2,104 ​ $ 29,205 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net (charge-offs) recoveries ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ (3,145) Net charge-offs (recoveries) to average loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 0.03% ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The allowance for credit losses for loans held for investment totaled $93.9 million as of December 31, 2025, compared to $32.3 million as of December 31, 2024.
The Board-approved limits on EVE sensitivity and the actual computed changes to our EVE based on the +/- 100 and +/- 200 basis points hypothetical interest rate scenarios as of December 31, 2024 are shown below: ​ ​ ​ ​ ​ ​ ​ ​ Estimated Increase ​ ​ ​ (Decrease) ​ ​ ​ ​ ​ ​ in Economic ​ ​ ​ ​ Assumed Instantaneous Change in Interest Rates ​ Value of Equity ​ ​ Board Limits ​ + 100 basis points (3.82) % ​ (15.00) % + 200 basis points (13.88) % ​ (25.00) % - 100 basis points (4.52) % ​ (15.00) % - 200 basis points (11.83) % ​ (20.00) % ​ The results of the EVE are hypothetical, and a variety of factors might cause actual results to differ substantially from what is depicted.
The Board-approved limits on EVE sensitivity and the actual computed changes to our EVE based on the +/- 100 and +/- 200 basis points hypothetical interest rate scenarios as of December 31, 2025 are shown below: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Estimated Increase ​ ​ ​ (Decrease) ​ ​ ​ ​ ​ ​ in Economic ​ ​ ​ ​ Assumed Instantaneous Change in Interest Rates ​ Value of Equity ​ ​ Board Limits ​ + 100 basis points 0.09 % ​ (10.00) % + 200 basis points (1.50) % ​ (20.00) % - 100 basis points 0.55 % ​ (10.00) % - 200 basis points (3.02) % ​ (20.00) % ​ The results of the EVE are hypothetical, and a variety of factors might cause actual results to differ substantially from what is depicted.
Off-Balance Sheet Arrangements The following table provides the off-balance sheet arrangements of the Company as of December 31, 2024: ​ ​ ​ ​ ​ (dollars in thousands) ​ ​ Commitments to fund under existing loans, lines of credit ​ $ 1,032,887 Commitments under standby letters of credit ​ 34,901 ​ Some of the commitments to fund existing loans, lines of credit and letters of credit are expected to expire without being drawn upon.
Off-Balance Sheet Arrangements The following table provides the off-balance sheet arrangements of the Company as of December 31, 2025: ​ ​ ​ ​ ​ (dollars in thousands) ​ ​ ​ ​ ​ Commitments to fund new loans ​ $ 778 Commitments to fund under existing loans, lines of credit ​ ​ 1,124,434 Commitments under standby letters of credit ​ 22,820 ​ Some of the commitments to fund existing loans, lines of credit and letters of credit are expected to expire without being drawn upon.
Activity in total loans, which includes loans held for investment and loans held for sale consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (dollars in thousands) 2024 2023 Loans - beginning balance January 1, ​ $ 10,177,802 $ 10,726,193 Originations and advances ​ 1,548,263 1,538,237 Payoffs, paydowns and other ​ (1,918,798) (2,086,628) Sales ​ (489,383) — LHFS mark-to-market change ​ ​ (90,672) ​ ​ — ​ Loans - ending balance December 31, ​ $ 9,227,212 $ 10,177,802 ​ Cash and cash equivalents as a percentage of total assets totaled 8% at December 31, 2024, compared to 10% at December 31, 2023.
Activity in total loans, which includes loans held for investment and loans held for sale consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (dollars in thousands) ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ Loans - beginning balance January 1, ​ $ 9,227,212 $ 10,177,802 Originations and advances ​ 883,625 1,548,263 Payoffs, paydowns and other ​ (2,135,821) (1,918,798) Sales ​ (1,061,761) (489,383) LHFS mark-to-market change ​ ​ 77,371 ​ ​ (90,672) ​ Loans - ending balance December 31, ​ $ 6,990,626 $ 9,227,212 ​ Cash and cash equivalents as a percentage of total assets totaled 13.6% at December 31, 2025, compared to 8.0% at December 31, 2024.
Combined net loss for 2024 was $92.4 million, compared to net loss of $199.1 million for 2023. Combined net loss before taxes for 2024 was $137.4 million, compared to net loss before taxes of $200.1 million for 2023. Excluding the LHFS LOCOM adjustment, combined net loss before taxes was $19.9 million in the current year.
Combined net loss for 2025 was $155.1 million, compared to net loss of $92.4 million for 2024. Combined net loss before taxes for 2025 was $71.5 million, compared to net loss before taxes of $137.4 million for 2024. Excluding the LHFS LOCOM adjustment, combined net loss before taxes was $19.9 million in 2024.
Net interest income, noninterest income, and noninterest expense are discussed in more detail in the tables that follow. The increase in Wealth Management net income before taxes of $1.6 million was due to a $2.3 million decrease in operating noninterest expense, offset by a $0.7 million decrease in asset management fee income, classified as part of noninterest income.
Net interest income, noninterest income, and noninterest expense are discussed in more detail in the tables that follow. The decrease in Wealth Management net income before taxes of $6.6 million was due to a $2.1 million decrease in noninterest income and a $4.4 million increase in noninterest expense.
At December 31, 2024 and 2023, the loan-to-deposit ratios at FFB were 93.5%, and 95.2%, respectively.
At December 31, 2025 and 2024, the loan-to-deposit ratios at FFB were 75.3%, and 93.5%, respectively.
A depository institution’s primary federal regulatory agency may determine that, based on certain qualitative assessments, the depository institution should be assigned to a lower capital category than the one indicated by its capital ratios.
A depository institution’s primary federal regulatory agency may determine that, based on certain qualitative assessments, the depository institution should be assigned to a lower capital category than the one indicated by its capital ratios. At each successive lower capital category, a depository institution is subject to greater operating restrictions and increased regulatory supervision by its federal bank regulatory agency.
As of December 31, 2023, approximately 86.3% of the loans in our portfolio were made to borrowers who live and/or conduct business in California (72%), Florida (8%), Texas (5.1%), and Nevada (1.2%).
As of December 31, 2025, approximately 87.5% of the loans in our loan portfolio were made to borrowers who live and/or conduct business in California (73%), Florida (8%), Texas (5%), Nevada (1%), and Hawaii (0.5%).
During 2024, total assets decreased by $682 million primarily due to decreases in total loans and cash and cash equivalents, offset by increases in investment securities and deferred taxes. During 2024, total liabilities decreased $810 million primarily due to decreases in deposits, and accounts payable and other liabilities, offset by an increase in borrowings.
During 2025, total assets decreased by $741.2 million primarily due to decreases in total loans and deferred taxes offset by increases in cash and cash equivalents and investment securities. During 2025, total liabilities decreased $600.4 million primarily due to decreases in deposits, and accounts payable and other liabilities.
Our IRR position is regularly measured using two methods: (i) Net Interest Income (“NII”) and (ii) Economic Value of Equity (“EVE”). Consistent with regulatory requirements, the Bank has established Board of Directors-approved IRR limits for NII simulations and EVE calculations. These analyses are reviewed quarterly by the Asset/Liability Committee and the Board of Directors.
Our IRR position and our sensitivity to changes in interest rates are regularly measured using two metrics: (i) Net Interest Income (“NII”) and (ii) Economic Value of Equity (“EVE”). Consistent with regulatory requirements, the Bank has established Board of Directors-approved IRR sensitivity limits for NII simulations and EVE calculations.
As of December 31, 2024, our unused borrowing capacity was $3.0 billion, which consisted of $1.7 billion in available lines of credit with the FHLB, $1.1 billion in available borrowing capacity with the Federal Reserve Bank, $240 million in borrowing capacity through unsecured federal funds lines with six correspondent financial institutions, and $20 million in available borrowing capacity through line of credit arrangement that our holding company maintains with an unaffiliated lender. 60 Table of Contents For additional information about borrowings, see Note 12: Borrowings to the consolidated financial statements.
As of December 31, 2025, our unused borrowing capacity was $3.5 billion, which consisted of $1.4 billion in available lines of credit with the FHLB, $1.8 billion in available borrowing capacity with the Federal Reserve Bank, $240 million in borrowing capacity through unsecured federal funds lines with six correspondent financial institutions, and $7.5 67 Table of Contents million in available borrowing capacity through line of credit arrangement that our holding company maintains with an unaffiliated lender.
At December 31, 2024, $2.7 billion of the loan portfolio consisted of C&I loans consisting of commercial business lines of credit ($1.2 billion), municipal financing loans ($997 million), commercial business term loans ($440 million) and equipment finance loans ($146 million). 58 Table of Contents The loan portfolio is largely concentrated in the geographic markets in which we operate.
At December 31, 2025, $2.0 billion of the loan portfolio consisted of C&I loans consisting of commercial business lines of credit ($758 million), municipal financing loans ($950 million), commercial business term loans ($224 million) and equipment finance loans ($78 million). The loan portfolio is largely concentrated in the geographic markets in which we operate.
Liquidity Liquidity management focuses on our ability to generate, on a timely and cost-effective basis, cash sufficient to meet the funding needs of current loan demand, deposit withdrawals, principal and interest payments with respect to outstanding borrowings and to pay operating expenses.
For additional information about allowance for credit losses, see Note 5: Allowance for Credit Losses to the consolidated financial statements. 71 Table of Contents Liquidity Liquidity management focuses on our ability to generate, on a timely and cost-effective basis, cash sufficient to meet the funding needs of current loan demand, deposit withdrawals, principal and interest payments with respect to outstanding borrowings and to pay operating expenses.
At December 31, 2024, total borrowings represented 11.3% of total assets, compared to 10.6% at December 31, 2023.
At December 31, 2025, total borrowings represented 12.0% of total assets, compared to 11.3% at December 31, 2024.
Management’s estimate of fair value of the collateral considers current and anticipated future real estate market conditions, thereby causing these estimates to be particularly susceptible to changes that could 63 Table of Contents result in a material adjustment to results of operations in the future.
Management’s estimate of fair value of the collateral considers current and anticipated future real estate market conditions, thereby causing these estimates to be particularly susceptible to changes that could result in a material adjustment to results of operations in the future. Provisions for credit losses are charged to operations based on management’s evaluation of estimated losses in its loan portfolio.
Excluding the $215.3 million goodwill impairment charge, combined net income before taxes was $15.2 million in 2023. The $35.1 million decrease in combined net income before taxes was primarily due to a decrease in net income before taxes for the Banking segment.
The $35.1 million decrease in combined net income before taxes was primarily due to a decrease in net income before taxes for the Banking segment.
The increase in professional services and marketing expense were largely due to increases in advisor network and referral fees as well as legal and accounting fees. 49 Table of Contents Years Ended December 31, 2023 and 2022.
The increase in professional services and marketing expense were largely due to increases in advisor network and referral fees as well as legal and accounting fees.
During the year ended December 31, 2023, investing activities provided net cash of $133 million, primarily due to a $541 million net decrease in loans, $176 million in proceeds from the sale of securities AFS, $90 million cash received in principal collection and maturities of securities AFS and HTM, offset by $667 million (net of discount) in purchases of securities AFS.
During the year ended December 31, 2025, investing activities provided net cash of $1.2 billion, primarily due to a combined $2.2 billion net decrease in loans (including $1.0 billion in proceeds from loan sales), $669 million in proceeds from the sale of AFS securities, and $351 million cash received in principal collection and maturities of AFS and HTM securities, offset by $2.0 billion (net of discount) in purchases of AFS securities.
During the fourth quarter of 2024, $266.6 million in Bank Term Funding Program (“BTFP”) borrowings at a rate of 4.76% from the Federal Reserve Bank were repaid in full. Borrowings outstanding totaled $1.4 billion at December 31, 2024, compared to $1.4 billion at December 31, 2023.
The average rate paid on borrowings decreased to 4.09% for the year ended December 31, 2024, compared to 4.67% for 2023. 59 Table of Contents During the fourth quarter of 2024, $266.6 million in Bank Term Funding Program (“BTFP”) borrowings at a rate of 4.76% from the Federal Reserve Bank were repaid in full.
Yields on loans increased to 4.74% in the current year compared to 4.66% in the prior year. Yields on new loan fundings averaged 8.08% for the year ended December 31, 2024, compared to 7.94% for 2023.
Yields on loans decreased to 4.69% in the current year compared to 4.74% in the prior year. Yields on new loan fundings averaged 7.00% for the year ended December 31, 2025, compared to 8.08% for 2024. Yields on securities AFS decreased to 5.18% for the year ended December 31, 2025, compared to 5.35% for 2024.
The following table provides the amounts of noninterest income for Wealth Management for the years ended December 31: ​ ​ ​ ​ ​ ​ ​ ​ (dollars in thousands) 2023 2022 Noninterest income ​ $ 29,358 ​ $ 30,027 ​ 53 Table of Contents Noninterest income for Wealth Management was $29.4 million for the year ended December 31, 2023, compared to $30.0 million for 2022.
The following table provides the amounts of noninterest income for Wealth Management for the years ended December 31: ​ ​ ​ ​ ​ ​ ​ ​ (dollars in thousands) ​ ​ ​ 2025 ​ ​ ​ 2024 Noninterest income ​ $ 28,435 ​ $ 30,583 ​ Noninterest income for Wealth Management was $28.4 million for the year ended December 31, 2025, compared to $30.6 million for 2024.
The increase in interest expense was due to increases in both average interest-bearing liability balances as well as average rates paid on such balances. Average interest-bearing liability balances, consisting of interest-bearing deposits, borrowings, and subordinated debt, increased 41.5% to $9.5 billion for the year ended December 31, 2023, compared to $6.7 billion for 2022.
The decrease in interest expense was due to decreases in both average interest-bearing liability balances as well as average rates paid on such balances. Average interest-bearing liability balances, consisting of interest-bearing deposits, borrowings, and subordinated debt, decreased 8.0% to $9.4 billion for the year ended December 31, 2025, compared to $10.2 billion for 2024.
At December 31, 2024, total assets of $12.6 billion decreased $682 million or 5.1%, from total assets of $13.3 billion at December 31, 2023.
At December 31, 2025, total assets of $11.9 billion decreased $742 million or 5.9%, from total assets of $12.6 billion at December 31, 2024.
The decrease in total assets consisted primarily of decreases in total loans of $951 million, and cash and cash equivalents of $310 million offset by increases in investment securities of $533 million and deferred taxes of $48 million.
The decrease in total assets consisted primarily of decreases in total loans of $2.2 billion, and deferred tax assets of $77 million, offset by increases in investment securities of $1.0 billion and cash and cash equivalents of $609 million.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeItem 7A. Quantitative and Qualitative Disclosures About Market Risk For quantitative and qualitative disclosures regarding market risk in the Company’s portfolio, please see Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations - Interest Rate Risk Management in Part II above. ​ 70 Table of Contents
Biggest changeItem 7A. Quantitative and Qualitative Disclosures About Market Risk For quantitative and qualitative disclosures regarding market risk in the Company’s portfolio, please see Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations - Interest Rate Risk Management in Part II above. ​ 77 Table of Contents

Other FFWM 10-K year-over-year comparisons