First Foundation Inc . (NYSE:FFWM), a financial services company, announced the appointment of C. Allen Parker to its Board of Directors and its subsidiary, First Foundation Bank, effective immediately. This addition, disclosed in a recent SEC filing, occurred on Thursday, November 14, 2024.
Parker, 69, brings a wealth of experience in corporate governance and finance. Since December 2022, he has been on the board of Archer Systems, LLC. His previous roles include serving as an independent director for SVB Financial Group from July 2023 to November 2024, and as a Senior Advisor at McKinsey & Co. from July 2020 to July 2022. Notably, Parker was an executive at Wells Fargo (NYSE:WFC) & Company from March 2017 to March 2020, where he served as General Counsel and Interim CEO, and was a member of their Board of Directors.
Before his tenure at Wells Fargo, Parker spent 27 years at the law firm Cravath, Swaine & Moore LLP, specializing in finance and corporate governance. He held the position of presiding partner from January 2013 to December 2016.
Parker's director compensation aligns with the company's standard practices for non-employee directors, as detailed in the proxy statement filed on April 18, 2024. He will also enter into the company's standard indemnification agreement.
His appointment comes as part of an investment agreement with Fortress Credit Advisors LLC, dated July 2, 2024. There are no reported family relationships between Parker and any current directors or executive officers at First Foundation Inc., nor are there any transactions between Parker and the company that would require disclosure under SEC regulations.
This strategic move aims to strengthen First Foundation's governance and oversight capabilities, leveraging Parker's extensive background in legal and financial institutions to guide the company's future endeavors.
In other recent news, First Foundation Inc. reported mixed Q3 results amid significant strategic shifts. The company underwent a $228 million capital raise and a balance sheet adjustment that moved $1.9 billion in multifamily loans to available for sale, leading to a paper loss of $117.5 million. Despite these developments, First Foundation reported a net income from continuing operations of $2.7 million. However, due to the balance sheet realignment, there was a net loss attributable to common shareholders of $82.2 million or $1.23 per share.
The bank's total deposits decreased to $10.3 billion, and the loan to deposit ratio rose to 95.9%. Interest income improved to $157.2 million, while non-interest expense increased to $60.2 million, resulting in an efficiency ratio of 98.1%. Looking ahead, First Foundation plans to securitize around $0.5 billion of loans in the fourth quarter of 2024 and is considering further loan sales and securitizations in 2025.
InvestingPro Insights
The appointment of C. Allen Parker to First Foundation Inc.'s (NYSE:FFWM) Board of Directors comes at a time when the company is facing financial challenges but showing signs of potential recovery. According to InvestingPro data, FFWM has experienced a significant revenue decline, with a -60.91% growth rate over the last twelve months as of Q3 2024. Despite this, the stock has shown strong performance recently, with a 28.08% price total return over the past three months and a 33.33% return over six months.
InvestingPro Tips suggest that while FFWM was not profitable over the last twelve months, analysts predict the company will be profitable this year. This aligns with the expectation that net income is set to grow, potentially justifying the recent stock price uptick. The addition of Parker to the board could be seen as a strategic move to navigate these financial challenges and capitalize on the projected turnaround.
For investors considering FFWM, it's worth noting that the stock is trading at a Price to Book ratio of 0.67, indicating it may be undervalued relative to its book value. However, the company suffers from weak gross profit margins, which could be an area where Parker's extensive experience in finance and corporate governance might prove valuable.
InvestingPro offers 7 additional tips for FFWM, providing a more comprehensive analysis for those interested in deeper insights into the company's financial health and prospects.
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