First Foundation (FFWM) Q4 2025 earnings summary

Executive summary

• Reported a net loss of $8.0 million for Q4 2025, or $0.10 per share, primarily due to $8.5 million in hedging costs and $6.1 million in merger-related expenses associated with the pending FirstSun merger.

• Total revenue for the quarter was $48.4 million, down from $63.6 million in Q3 and $64.7 million in Q4 2024.

• Completed a $204.8 million multifamily loan securitization, nearly finalizing a $1.9 billion reduction in the multifamily loan portfolio.

• Planning and integration for the FirstSun merger are underway, with anticipated closing in early Q2 2026.

Financial highlights

• Net interest income was $39.4 million, down from $46.1 million in Q3 and $51.3 million in Q4 2024, mainly due to lower asset yields and hedging costs.

• Net interest margin declined to 1.36% from 1.60% in Q3 and 1.58% in Q4 2024.

• Noninterest income was $8.9 million, down from $17.5 million in Q3, reflecting a $1.1 million loss on capital market activities.

• Noninterest expense increased to $62.9 million, up from $57.5 million in Q3, driven by merger-related costs.

• Efficiency ratio rose to 116.9% from 90.0% in Q3, due to lower revenue and higher expenses.

• Allowance for credit losses on loans held for investment was $93.9 million (1.39% of loans), with net charge-offs of $0.2 million.

Outlook and guidance

• Management expects the merger with FirstSun to drive EPS accretion and improved return metrics, with a focus on balance sheet repositioning and higher profitability.

• Confident in achieving first-quartile performance post-merger, with continued focus on reducing high-cost funding and improving the loan-to-deposit ratio.