FFWM - Earnings call transcript Q1 2022

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Operator

Greetings and welcome to the First Foundation's First Quarter 2022 Earnings Conference Call. Today's call is being recorded. At this time, all participants have been placed in a listen-only mode and the floor will be open for questions following the presentation. [Operator Instructions].

Speaking today will be Scott Kavanaugh, First Foundation's Chief Executive Officer; Kevin Thompson, Chief Financial Officer, and David DePillo, President.

expectations call certain Scott, call predictive their views the management note that hand performance current make company's will statements and I over results. please to that reflect and Before financial the about during today's made These Safe Harbor release. to statement, forward-looking subject the today's including statements earnings are

may In discussion financial include addition, some of measures. non-GAAP the

financial from now a Scott measures, Exchange reconciliations actual results cause more that uncertainties could the filings company's complete For the like over Commission. and differ see discussion turn any materially with and of and to statements of call the non-GAAP I the risks Securities to forward-looking to Kavanaugh. the would And

Scott Kavanaugh

us. Hello. Conference XXXX to would Earnings like of First And for welcome Quarter thank Call. joining We you you all to our

activities, providing prepared we will then regarding questions. our respond We comments will and to some be

fantastic few Let everyone we The about words how posed me proud today strong, some Foundation. generate the and to reported we First work saying everyone are to by yet interesting quarter This and for year. am First another challenges The results past to for Foundation a has everyone after our testament organization. hard the great results start continue was at quarter sustainable years a of quarter. start few I in a from

for XX% cash $X.XX share, Tangible million for last earnings declared paid the higher $XX.X increased the We quarter quarter of over quarter. increase first represents and of ended quarter, per XXXX. $X.XX quarter first at the the value book revenues quarter from This we share per first which were our Our first XXXX. $XX.XX. dividend share. quarter or were XX% million per of Total increase $XX.X the

institution dynamic loans markets stock. record from very Directors and favorable continue the basis our authorization received diverse new be of the Board at the Loan our our with company's that low MPAs the our C&I. is we $XX originations to also XX those working continued came for well at to We model million market XX% strength we outlook results across in reported quarter. of of our and serve. reflect points positive to for purchase levels today quarter. billion The remain near of up $X.X from origination's

As job a lending our team fantastic our maintaining credit does high standards.

well. a established touch have more portfolio We the loan this continues Dave later on very that perform to well-balanced call. in will

to quarter, XX% increased deposit ability Our million part at attract in clients. of attractive at a ratio end to of the deposit the Deposits loan high-quality commercial XX% by core profile remains deposits. continue the by $XXX with deposit was our to our And total in quarter. driven

to All of of strength this the our speaks team. deposit

Trust and success continue businesses to Management Wealth the to meaningful Our contributions the firm. of provide

including less many and in effort our of continues our a billion, proud -- our clients decrease all-time the as top fund conditions changing I with to And acquisition a referenced Last in coming demand S&P high. at an for amidst Even important rebounded start the share First in An and been last projects be five-star management the has total Bank, new This everyone in happen, has Nasdaq. for total the will to is for team assets the of our to I the core ended XXX star X% management manage all-weather our a when the to the make quarter, part earning that Management to the our capabilities. our the step systems tremendous we converting second rating prior at fund percentile as we strong the worked quarter. in take the the our hard return in our X% we're few weeks the was strong is all of services volatile in Florida $X.X and conditions, performance this market than working management been the including for investment on, in so offering the all very decrease morning quarter of The has of in-house wealth decrease mutual fund XX and portfolios market and the colleagues Florida. and May. wealth fared Under Assets first due year. who pipeline grateful be largely X% year, Integrity by well which yet days complete performing final volatility and am

from de Texas. novo away really But just new It's turned we're an to presence Texas. an weeks is easy never our branch of also a did retail again, in pleased are team Plano, We and our it branch out. how in opening the at amazing doors exciting have a very now job Starting feat.

provide of and to these many continue benefit need the ensure technology they efforts, ever exceed solutions employees projects and systems near changing expectations client to client also our investing of we clients to people to service. regulators demand in of exceptional as compliance and to our environment. Even adding enable continue our invest We're the for our meet including completion, with and we in

turned primary of have with technology revamped we In our a bank variety Financial viewed our choice, of when This efforts offering. clients. of adding building High-quality expanded robust NYDIG and their as comes offering, our bring to financial X. with their our teams, we're our investment additional. These recently offering, midpoint course to already our it clients banking. and product Fiserv addition when the our offering, we stack, their needs, to and as especially life. for our into lending expanding and are also enhancements us important X. existing are to relationships to and footprint, of financial expanded Solutions, X. our management SBA includes Many deepen to out

for sheet that our Foundation First quarter, a well-positioned our off is are a and business balance all economy, ahead lines we to transitioning to with that demand start. environment Is accomplished rate very a I'm perhaps remains pipelines look strong great and grateful XXXX As services. credit levels excellent a rising even all across for and very robust. in we have peak the and

will to over the call Kevin, I CFO. our turn Now,

Kevin Thompson

you, quarter. Scott. common assets XX.X%. of diluted The return per Thank $X.XX X.XX% the equity tangible was in strong on a Earnings on first at was share with return

and second acquisition first-quarter As These and value the a higher to through loans the duplicate considering result book systems during in expenses assets contracted points of momentum, loans the has decrease bonuses. total We good available expenses margin $XX.XX carrying related to the basis increasing time, was prior generally The metrics the our net remains interest of to conversion of were payroll XX four our credit same merger-related XXX to some to tangible until all share we quarter basis in this good with the have to taxes intent loans. per our X.XX%. we're a assets. of quarter. for held-to-maturity compensation low And increased at total we quarter. TGR points especially in into result to because metrics the for allowance million balances basis loan sale growth current quarter. high This portfolios Financial. had at the quarter. quarter loans in already purchase points the that begun specific deposits points in XX much loan acquisitions. We in of maintained reserves maintain slightly from average of have transferred our loan primarily success discipline basis deploy XX able losses strong we X% credit from of production from securities on Non-performing and core Credit our cash At of from maturity. average the to We've securities for cost were payoff that to XX continues hold the liquidity deposits the these yield strong the increasing with to decreased for since points basis deteriorated of remain

fees with were Trust of in quarter. revenues margin $XX.X of strong million Advisory divisions management XX% combined -tax the and and a our profit pre achieved Asset

billion, to Other from $X.X income a related management advisement $X.X transaction. at quarter gain included ended of FFA efficiency million were billion. sale under trust excluded is assets item Assets the ratio. FFP under This $X.X our leaseback while to

mostly increased our Also of average contributing acquisition at FTE compensation the were of a expenses quarter. fourth were due increases merit beginning XX.X% the the non-interest result to in increase to as higher in Our of effective benefits expense year. related that

I generally taxes mentioned our payroll has related As first-quarter earlier, seasonally compensation to higher and expenses bonuses.

extra recent associated costs turn was Finally, call in I at the systems still until and over carrying Efficiency ratio systems David with conversions DePillo. quarter, we we for of the duplicate will now to some finish are second headcount. the XX%. quarter our strong acquisition

David DePillo

year very successful Kevin. you, Foundation. indeed Thank a start for the First It of was

loans a in most first billion in incredible us the of ever we've production loan mentioned, As another year. originated $X.X Scott we for first the the quarter, funded of quarter in and quarter

solid lending compared business increase months the to accounted year. first of a first three C&I in in commercial which XX% of loans year. the of in C&I million funded We Our loans, $XXX the quarter a last for originations represents XX%

continue $XX rate estate our be quarter of credit, portfolio originations neutral. $XXX of and without million shifting in over the C&I to testament diversify credit to ability to term commercial years, ours loans, C&I compromising focus to to million Our our occupied loans finance equipment owner of few XX% million comprised quality $XX million of past loans, of and loans. loan which were team. lines commercial public sheet the revolving more finance of adjustable entire commercial of the $XX loans, of our balance The a is a were continued remaining real

in follows: rated is Multifamily that quarter, Family two And the it high quarter. worth As of in loan standards Other. in points. pipeline first remains -- second Construction X% X.XX a is originations on the even high fourth compared XX%, and of X.XX XX%, our quarter, percentage we quarter X% during of level very We changing into a and strong a only Land or heading interest our as in addition, with underwriting originations and the breakdown, of accomplished the rate a X%, basis Single the loan our originations without achieved composition this to average noting drop Commercial

higher to second rate pipeline locked and funds originations going our at on quarter funding loans the start into additional out as start we will We see yield yields. loan

rise. to the end continued has the As of long curve

of conditions. $XX loans of balances consists X% real held our consumer of on for banking originated Both XX% we lending March that continued multifamily balances the held-for-investment of our markets XX% economic robust is total of across single-family, sale. commercial loan potential focus estate, note, and reflects also due commercial million markets commercial are loans The well composition activity coupled gaining noted diverse to as and now occupied non-owner Florida our market XXst, Of increasing and combined loans, loan business new of year-over-year, for business very of forward. which an great Texas X% we construction, our with portfolio a loan multifamily, XX% geographic Atlantic going up X% our and changing and combined. in It's loans increased As our makeup pipeline see positions commercial as these XX% our approximately in XX% traction quarter conditions. make portfolio diverse

focusing For for experiencing right us growth, we incredibly that the Texas. as pivot have for as now such are footprint towards able for benefit potential a greater Florida we our on of and bank are that geographic size, diverse an case to should geographies

evaluating pipeline and while economic third our ahead portfolio, loan As are attractiveness of sale. at systematic quarter continuing we we on our look

of an they we potentially loan model have now balances our business are have allowing important past, for more sale contemplating part of that and and elected a years been to strategy our defer grow. to attractive While

that we economic said, Given sale. be our conditions, loan we agency will for to our greater benefit conducting size by current and market rather a keep in continue increasing portfolio believe options than open the it an would sales. future That

deposits growth and an $X the XX in end during deposits at million, loans. of deposit our a our success first business Our million. deploy started of liquidity also on slight worth $XXX XXXX. the XX% at team basis to billion, great online hand X%, increase banking steady $XXX ticked included a our we quarter experienced increase million reflects quarter It first last achieved quarter ratio deposit a into the noting commercial the this up will the as have Operator. compared in deposits To could quarter service strong branch drop without of deposit XXXX by held of $XX and had in have hard slightly group is growth to which ready in XXXX. over of quarter we retail At $XXX offset place. to $XX the of loan A and with points first have increase million, also quarter the our quarter All deposits to of million their time, the so it work. we're excess take questions. been am back for this not grateful I the to I during dedication

Operator

coming [Operator with Feaster from Instructions] question David Our James. first is Raymond

David Feaster

Good morning, everybody.

David DePillo

David. Hi

David Feaster

$XXX follow-up and then especially balance organic the you the each maintaining to your your continue guys holding the deposit doing how I think done to some commentary you the million to sheet. to to securitization about about hold just your have strategy growth, wanted the another on the through continue Could you strong you And just there? has deposit sheet? do that not to what's on on ability fund, ability maintain talk but side on phenomenal, as growth the year been of balance fund

David DePillo

Sure.

Scott Kavanaugh

to want the loan side? you take David,

David DePillo

we plus sale, holding sense about yes do earned, make plus that better The saying, of three-year portfolios for going points And loan where around And a market? the of off is our the are those interest margin capital the maintain sale, prior in the our started answer do just because average, have selling loans And to it of versus on do on but benefit really last Yes. economics the forward? we have a in average, life but it gain, we on X% risk-based interesting net to those one-time obvious we was analysis to on hold couple sense, call an was you're as average to throughout what record if part into percent them I at sales X.X the aware historically, think our get a we a say, portfolios. level, life. on does us agency a

years. life average been X.X about securitization has Our

than we gain we'll having spread not that gain from bit diminish can income. income. rather spread So will within It a that year have year, little one-time us a gain, next this additional that but

we've some for evaluating quite So this been time.

strategically pencils the years. face this which gain the same we on future, risk-based and what contemplating to deposit. down this have we sale out the that have ability than certainly issues into issues like continue do in go less At loans sell of will we've the whether environment been would doing market on securitization. a is we But with But gone doesn't saw in collect and capital prior point, the in cash capital on whole we've on it we agency-level We significantly the for and had that something this overhang depends again, funding. to also be

balance for portfolio, funding we make any near-term on the those Given on the hold will don't CPRs our less constraints it profitable see that sheet. to us

Scott Kavanaugh

to outstrip capital sides ability. we capital ratios were and clients on we that more now I was loans our need part we that to recall, it don't think think -- multi-family concluded really on doing our outstripping or our ability why you the then side, And securitization that's if we David, but of that. were all the to

a them relationships. in we constrain and our tearing some -- XXs we loans-to-deposit the side, we last we overhang been take about you say would deposit deposit clients actually either that the by and the ratio were low had talked were that had can't On we and more we larger was rates I of zero to think was interest then recall, if when that saying I quarter, their hurting had fact or

We us greater I just client have we to to can of believe don't to going some there back that go issues that in any will there. leverage take long-standing as So that pull Dave to is allow relationships. think we're said, even our deposits

So pretty I just we to. demand feel that we good meet the think can Dave referred that

David Feaster

margin. drag the might That's liquidity quarter. great. thinking how And weighed the on just translate that about kind then of the into Obviously,

I have you're past and just, the TGRF? -- see loan the in look the balance trough You to and be think about whether, been then the liquidity should of that some this retain rate forward. growth updated made any seems you guess sensitivity moves you do thoughts And going I obviously, we have that light that we managing balance with you've expansion forward? done guess, given excess what above it's And those. margin guys like sheet the active with how already of to going deploying would as going on that sheet in accelerating guys

Scott Kavanaugh

to the now. a put client you point, on Fed accounts going would and say that such in That's their two up. and All XX that year going to increase or are any one said, we right had increase. That things last be hurt The going constrain point request in or always so. week our or issues got it's going margin. at a been of relationships being rates Yeah, that an are well, basis is start I the some so. bank to going that back here that has our next interest on to be come biggest has taken have liquidity rates to demand excess We've

just putting We're still it work. incredibly demand Dave strong. mentioned, our to As is loan

XX%. Dave, have We're the started We you the But we at the talk -- deposit hope last end to to to to quarter this XX% want loans higher -- think I ended XX% or at a even or quarter. of at ratio.

David DePillo

Sure.

David Feaster

see? the yield's the loan where side and -- to how expect you

Scott Kavanaugh

through this said, at at, cash our a amount quarter, like you this significant now will should and rebound. continue trough the Yeah deployed as we be I think looking of will looking

news have of end the margin going is of forward long yield the us At is quarter. early. And big the relatively good that middle will second nice end yield think in rebound or issue. the to long The maintaining for I adjust the curve. we a

lower start out what several to fund So the last doing effect in as through start we probably at on pipeline our we're basis margin. points going XXX maintaining that higher potentially to on have We're see expanding average rates. than burned higher and since quarters. yielding many cases the on In to

and very So Scott up continuing But we higher be balance the good and as by would hopefully depend of happens robust the if what our to We'll say, middle with pipeline significantly long But offset banks at pressure continues will the on any the portfolio of most rates. I and point than faster rate the yield. the see move of on there side higher all fund at aggressively, is a build will pressure rates having funding assets to says, at the a such remix are able curve. end sheet. to Fed we account. news

David DePillo

I like very that slow a will we've last were in you're as Fed cycle, scenario you'll this Betas and seems spend bank see quicker quickly remember. the add seen. little deposit the in as passive than may you, that rate is Still decrease liquidity well. It quite betas move moving quickly fairly

second we have in trended our then of headwind kind on the then sensitive looks, So these and are, in perform. for the Scott a slightly banks, we year first Scholastic how market asset this as academic year that and how in all sensitive have bond modeling. asset how slightly remain more depends bit and will also curve Competition and the of We're rate I yield increases sensitive. the tight mentioned digest think. could still we liability But

David Feaster

that then starting additional identify out just you of gotten helpful. management, what roll updates just that dig the that's benefits you've I investment, with and relationship? hoping working to new ton remarks on about, really a gone from where you've are are has other where expand as maybe are just you that partnership some obviously prepared we there? curious partnership on and that any well, then investment the exactly of talked the exciting written you SBA any the deeper could on things, offerings you up you was I and that the And on with that seeing in already Okay working opportunities And but guys

Scott Kavanaugh

David, take want to you the SBA?

David DePillo

Sure.

us. growing involved bank always been in related on, a more market last footprint some were the to six XA available strategically, been a that has is [Indiscernible] As were we've five resources larger, there lending aspirational years. or in merger able would for of. advantage Because the going of that for I But issues some say take to that we significant

are offerings have So we in really option. never those a operation viable force hired footprint. XA sales opportunistically we're certainly expanding Florida that and to now And really Texas a adding We our had production in California. really new best now across exploited our expand entire haven't additional and

growth within commercial we suite area that a suite products. significant as see our So for us of --

And with with significant finish to looking we but market and services opportunities and income partnerships. secure that our we not expansion of to our initiatives, obviously side, would out can relationship that on But necessarily only to achieving that fintechs where the they're today. continue important working that. majority traditional core regulators and very On consider strategic that the out through explore be make relationship in -- the deep, our side is is focused given roll more point and very less sure what transactions bank for is with our those significant not of of out are rails We're on there's the that environment fintech our close are deposit coming We're platform NYDIG for providing there's product. pick very really strategic and bank on additional prove that front our the is are provider, concept a fee to robust, to heavily comfortable them exciting. that us given line that happening it's facilitated on there to

area going that's exploring advantage banks forward. lot the going and world a a are there's very to great for of we're that be So few taking really looking opportunities crypto beyond us are we it and feel growth that of just today

Scott Kavanaugh

relationship first Florida. front, David, our in we as a have management investment added employee manager the On

our here this also have think weeks trust Florida. point. our branch two in opens I less received powers And at Texas successfully in than in We

final now are employees Our and powers of going which seeking be will them at the through launched getting we're taxes. and time on we training right trust

our investment every about relationship So on and of we're for leads And proposal or onboard to come integrity requests Florida, management. trust out I TGR. first of Florida one received a believe we've those quite has in few First

So we're highly relationship got we've working encouraged that the Florida. that folks by already in with

off being in And a our able do to those of ancillary relationships we side. so we're trust together, great and place, both never business an did it all start, coming to any nor contemplate And the impact monetarily. on would way, we two the management did when investment the by of having have companies modeling

it further done to adds the that transaction. So of benefits only having

David Feaster

you. call, That's Thank everybody. great, great

Kevin Thompson

Thank you, Dave.

Scott Kavanaugh

you. Thank

Operator

Instructor] come [Operator Piper will next Matthew with question Our Clark Sandler. from

Matthew Clark

pretty through the for of year? as you've like of terms you're up morning, deposit budgeting strong sense loan might and Good the further, strong ratio close to how trying the what for year, in year, to you're the but on growth loop come get the the growth just Maybe deposit got flexibility obviously growth gentlemen. a to for take sense to growth. balance well thinking lot this deposit the of get deposit a for some pipeline's sounds a loan trailed trying and I'm it

Scott Kavanaugh

deposits. work of increasing of where but billion that to the all last ratio things was margins. needed reality loans spicket has those I a turning one Right close it on putting Matthew, to on same two at don't and we're got had curtailing of we our we time you've been dramatic also XX% frankly about going the put and average, believe [Indiscernible], the is, it overhang we've I because quarter, we're Fed effect deposit But at those lot an mean, such excess to because to the to it a things they that because net added up going wind to want we've very which deposit on. interest deposits, the be growth on. now, had it's work, rates back

David DePillo

faced One a is our quarter the large in our seasonal typically, relationships. issues we first of other the of in lot runoff that

commercial time in the is rich and how to So positive are. even negative of this relationships a growth had fact services those depository year. Usually, our that's that a during we testament

So going start the be always to into to excess generate that assets as never rising we'll you quarter. the ability offset into have going and But noted, available second funding we those been of issue. our balances, has some contemplate an

maintain our ability into has cycle. it rate to been biggest always be going Our to our and this continue challenge issue deposit increasing biggest growth will

needed. our we moderate years However, position the real and deposit temper as and unlike presence years -- exposure has the last mentioned, passed having in deposit the wholesale in can really over no growth the for in having side had solidified several that commercial of side business us large-scale put a can we Scott as

we commensurate. -- our loan much higher with and But of even have lack good we somewhat sales, to feel fundings growth expectations even deposit ability are keep our about -- feel about So a -- good

Scott Kavanaugh

In -- rates, point the on funded core were interest I last the high mean, funded to we of and now. Dave, point, core million can XX% we're right margin. -- XX% to having cycle we borrow were your your

I think a time. So last a your position in luxury we the that around. much to have we have point, we're last didn't time just we different than different And were

Matthew Clark

Yes.

upcoming Great. on then that the in come Kevin. like seasonality expenses, there's And should there for seem just does Okay. out in some in excess quarter. It maybe

in the $XX $XX from kind cost the But got million deal, saves I'm rate sure, ballpark. too the going like seems You right forward? I run million, want of make to

Kevin Thompson

Yes.

in so seasonal there a are million excess about expenses app, or expenses probably and are Some quarter. the the this from from merger

anticipate our this support in both as growth However, well to our we will as going engine. growth have that support quickly. you as areas we're to expanding growth We'll do need have areas production in forward

So we the increasing XX% year, expenses low our do efficiency through the area. our in anticipate but ratio remaining

Matthew Clark

in the any have that a margin. on Okay. recoveries you quarter deal, Kevin, hone And happen know contribution from while enhance might reported Do you, anything just unusual if then that trying in kind of any? the to or core like other accretion And margins? to I the

Kevin Thompson

the of the about an course, Yeah, all of was We in the talked unique bet. the release of -- accretion The you about in MSR we $XXX,XXX. down are $XXX,XXX. $X.X had adjustment income quarter And million. leaseback Those sale benefit

David DePillo

Our [Indiscernible] margin.

Kevin Thompson

Oh, to you're talking I'm margin. not sorry. --

Matthew Clark

the I'll the helpful for. take those. mean, XX, okay. I we got is It's XXX but

David DePillo

Really.

margin, just If talking I income. I It really your accretion the you're question. just apologize. misunderstood be

Kevin Thompson

recovery is The through Yeah. ACL.

David DePillo

right. That's

Matthew Clark

on just Okay. And Scott, M&A. then

Your of discussions in you infrastructure kind of might provide to that late maybe getting done and the you prospect Texas something that need. for

Scott Kavanaugh

were continue While California, since all were a a ever out would focus up much quieter. taxes. There to a the country, quite when banks would seems of But that we that have off. little on. of activity I But to like bank in additive beat Right tailed gotten anywhere trading say stocks think gotten bit that we hearing look a of continue it across Florida, bit still stocks I'm to has areas little look it's I across think continue we lot higher. now Texas, not be we

book value value. So little relative we're looking for tangible is a opportunities, to but our depreciated stock bit

scenario a So of think that bit muted I be may a for creating M&A.

Matthew Clark

you. Understood. Thank

Operator

Thank you.

from Moss Steve comes question Securities. B. with Riley next Our

Steve Moss

Good guys. morning,

Scott Kavanaugh

Steve. Morning,

Steve Moss

kind about Maybe about loan of commercial up more to just that specific points, your across Just there. the estate? are -- board XXX or and There comments to curious was back Dave real year. to multi-family circling yields basis XXX a

David DePillo

I of on is across a think XXX product points all really average, lines. basis it's kind

fairly libor lower and get in. the within have pipeline expect on higher are the low of to our say, of And of the board. a yielding three's at second about new points increases part news our kind points seen the segment we of been now of some I of day-out. yield that's with quarter multifamily, pipelines. in a mid that's basis of the average that's and on new will And on kind start four's, on XXX CNI is the the So depending benefit rate. kind the worked curve day-in to through kind low funding rate that where that But latter of coming new, in. of in, low as it rest portfolio that's coming been is, pretty on coming would based But across rise of the gradually we The XXX sitting much good basis going we that's in

Steve Moss

curious the just of assuming these rate rates, And large X% of just portfolio variable on rate, loans total portfolio helpful. days? chunk the what variable perhaps is That's a C&I percentage maybe is variable of

David DePillo

time was I Last at, looked XX%? that

Scott Kavanaugh

XX% XX%. Yeah. to

David DePillo

these trends hope right. but into To -- over time. And have we'll that's XX% in the excludes probably loans see period That's time. variable it's environment, that period add that if those on rate this to increasing translate been variable of currently. fixed over a those And that that, the about graduate more

Steve Moss

strong originations strong, terms indicated updated any just in total then to And very thinking of curious obviously just pipeline here, thoughts helpful. XXXX? as That's quarter you're guys about you here, originations how for

David DePillo

than Well, was expected. stronger first quarter

Second be expected. than will much stronger quarter

to you new period. client Third know quarter the will skit an is, we used through probably go be summer little of normal and time. rates a bit as One adjustment

we'll our historical So And probably strongest expect dip levels. that quarter typically -- see is probably will then to quarter. fourth we

on we're this demand, But for looking the point, the for at current based $X.X low-end billion at be we rate. current just higher. could is So a probably run year given us

Steve Moss

you good nature? a rate management there's asset business, this good side in fees Alright, here, is anything on for run the generation and of there trust if the terms wealth the hear or onetime guys in of

Scott Kavanaugh

basis always side, trust That's our measure, much have And the the has markets at in still on look side. near reasonable FFA think melted as points affected necessary Not balances. is absolute the I Obviously average terms on XX points. down. fees how the between XX that a on of you basis are and things.

on still I new pipeline always also being calling robust, we but remain that. if I on to markets -- pretty had and we're are go have past to downdrafts, clients from at bring a fact business think XX%. the the is where were to Our down look trying big real emphasis back that the trying markets there do But in times

time. start a had extraordinary to out and put you they've And and All what's you're But able to an an decline They've going talk see clients. on the look I'm X.X. time like job through markets a -- you been why spend in spend an fair the to adding normal equal just lot commentary new that to I marketplace of years, then a is recently again, done that we're generation amount probably walking from conversing time said, on in a we but lot the that's focusing wanting of say for times, quarter, of make spending with So this of but X.X of guess sure to are clients what incredible more at downdraft going time amount either. you've doing. out we're back still the there trying of has through being when assets. you're And not new door trying business, also with this, them amount the stuff's a FFA

Steve Moss

taking Okay. very my questions. you Great. for Thank much

David DePillo

Thanks, Steve

Scott Kavanaugh

Steve. Thanks,

Operator

Thank you.

comes question with D.A. Davidson. from next Gary Tenner Our

Gary Tenner

Guys, good morning.

Scott Kavanaugh

Gary. Hey,

Gary Tenner

Hey.

SBA So thinking going sale that or I for gain as portfolio that? of wanted is grow a to to be the you flow initiative. ask Are on a you business that more as on of

David DePillo

modeled we've what it. a which kind build more you would So traditionally of as it we is little sales see,

down So majority or retained. the it three so of curtail to we XX% then, it in be year years, think a I after about maybe the But market. going and will back to XX% after market

earnings some And we So down makes us more offset build a That of operational the having drag portfolio on quick it. way as net to profitability to and we'll sale a traditional as costs, which start product. we bit it be it and look not that sense? use the get of gain we curtailing that want at of will then little it an as sales kind fairly

Gary Tenner

annual And it allocate realize have hear does. the actually just -- I Thank Did that the even it. excuse not right -- for asset, that do me, securitize after you it the Yeah, to capital securitization I it securitize if and you to this the you even to it you. annuals didn't on then that going to you're year. life of the

upfront an not getting impact other So there's than not the gain? really

Kevin Thompson

That's correct.

David DePillo

correct. That's

the and sales hold do we don't requisite -- loan do to have capital. So we market, we all if until

impact we have capital some won't it going any timely on if risk-based needed, forward. more sales, do So if

Gary Tenner

little then Can a pretty Okay, we're on as little about my that's talk think bit go on as and customer costs obviously And quicker that there line we you you item ICS. rates a kind is front-loaded Is getting helpful. question service what of a steeper about last up? Thank rate obviously expenses. you. inflection end, talked you're --

David DePillo

as larger of a Fed of expect relationships. our clients experienced we What Yes. some more tied funds

but lag the going a commensurate move as So moves, the to down. well, average realized model Fed Steeple have somewhat some larger we're we then of the ones fairly that some of

modeled in on on line bigger grow you some guidance don't higher expectations of betas the we our year. of we item are have some Do So that clients will give over really model that? the the

Kevin Thompson

funding, We news it's much higher wholesale that more sophisticated a good tours beta clients beta be won't there, with higher than beta. good don't, compared have will money. definitely a is a but others cheaper even we is relationships but to be higher We expect these The are have XXX% and that beta. if still

Gary Tenner

don't of that of deposit onto line item give provide that can detail, that are we that amount you of kind whatever Even you the assumptions? us or specific to kind want betas pass-through we deposits in could reflected model if

David DePillo

prior around Typically there. funding kind up of of drive Yeah, dollars that of to. typically, we've what we sensitivity had These kind -- it's it a billion been

Gary Tenner

you. Thank

Operator

Instructions]. [Operator

Our Stephens. next with Taro comes question from Andrew

Andrew Taro

good Hey, morning.

David DePillo

Andrew. Morning,

Andrew Taro

on last service Back to one costs. the customer

think so deposits. I or a about heard you of billion I

kind proxy? can of the in to, that back expense item. relatively Is pay outline as balance You'd XXXX/XXXX, we use a maybe that similar

David DePillo

core a those those was this higher as at little as point relationships bit It in far back days, collectively.

Kevin Thompson

even. And I think it was about

David DePillo

Yeah.

Andrew Taro

Scott, more just maybe have of getting then saw right. authorization. the really It at in levels? on that I buyback volatility million $XX I out sounds we is the speak just like nice buyback advantage view in to active All the of buyback just it. -- guess there with -- of as maybe, more that ask any to outlook wanted Got kind And to these appetite you to should the mind, Okay. for or growth take I robust. the could

Scott Kavanaugh

was looked that Well, on which than Yeah. accretive we our earnings. done based that -- were felt modeling, very was where last it time higher we to I trading, the

it we our very have and And you felt becomes the offering, We've we we're debt at did multiples that think peers As defend additive. to some trade excess sub less all know, prepared along capital. we to it. compared I

it or to as say, active price we're the going what lower. to to on it'll as prepared -- be this be tends want look, and I So we're long think level We're just do. that's at act I to stock

Andrew Taro

for updated rate appreciate on expectations maybe Kevin, tax this one I it. helpful. year? Very for Last any just

Kevin Thompson

Yes.

time. we've had rate really You've in some good seen tax benefits our over

have we California, see we'll rate of our As outside growth tax decrease.

going strategies on, We loan, tax some credits. housing in have other increase our

seeing We our is inherited on. outside biggest And our and we that have that we are working loan But have are new our the California. from strategies And Foley other we of portfolio there driver in acquisition. growth pipeline. our

be it we over we'll several So years won't but huge the it tick next gradually see move a It move, will down. down. see

Andrew Taro

for Thank my me. you taking for questions. it That's

David DePillo

Thank you.

Scott Kavanaugh

Thank you.

Operator

concludes Scott This will Mr. I you. remarks. our turn back Kavanaugh the over call allotted for session. question-and-answer closing today's to Thank time for

Scott Kavanaugh

well for stakeholders. participating about started year. our again we for call. proud very at ability you pleased to I'm I'm Thank and how lines in All our our strong very business generate results are and exceptionally stable today's this doing

report be day. the As a reminder, section our website. of Relations earnings investor have your found remainder our Investor presentation you can great a and and on Thank of

Operator

and concludes event. today's ladies you, gentlemen. Thank This

You now disconnect. may

First Foundation (FFWM) 26 Apr 222022 Q1 Earnings call transcript