First Foundation Inc. (NYSE:FFWM) Q3 2024 Earnings Conference Call October 29, 2024 11:00 AM ET
Company Participants
Scott Kavanaugh - Chief Executive Officer
Jamie Britton - Executive Vice President and Chief Financial Officer
Chris Naghibi - Executive Vice President, Chief Operating Officer
Conference Call Participants
David Feaster - Raymond James
Gary Tenner - D.A. Davidson
Matthew Clark - Piper Sandler
Operator
Greetings, and welcome to First Foundation's Third Quarter 2024 Earnings Conference Call. Today's call is being recorded.
Speaking today will be Scott Kavanaugh, First Foundation's Chief Executive Officer; James Britton, First Foundation's Chief Financial Officer; and Chris Naghibi, First Foundation's Chief Operating Officer.
Before I hand the call over to Scott, please note that management will make certain predictive statements during today's call that reflect their current views and expectations about the company's performance and financial results. These forward-looking statements are made subject to the safe harbor statement included in today's earnings release.
In addition, some of the discussion may include non-GAAP financial measures. For a more complete discussion of the risks and uncertainties that could cause actual results to differ materially from any forward-looking statements or reconciliations of non-GAAP financial measures, please see the company's filings with the Securities and Exchange Commission.
And with that, I would now like to turn the call over to CEO, Scott Kavanaugh.
Scott Kavanaugh
Good morning, and welcome. Thank you for joining us for today's third quarter 2024 earnings call.
I would qualify this quarter as fairly noisy. As previously discussed early in the third quarter, the company completed the $228 million capital raise. The quarter was capped off with the recently announced balance sheet realignment moving $1.9 billion of multifamily loans from held for investment to available for sale. This move created a paper loss adjustment associated with the fair value adjustment of $117.5 million.
Income for the quarter for continuing operations during the quarter was $2.7 million, which excludes the LOCOM adjustment and other adjustments. As stated in our October 3, 2024, press release, this move allows First Foundation to methodically evaluate reducing our exposure to low coupon fixed rate loans and continue to reduce our exposure in CRE.
By shrinking the balance sheet of these loans, we will auto-look to reduce the liability side of the balance sheet and cut our reliance on some of our high-cost wholesale funding. We have taken the steps to securitize with an agency approximately $0.5 billion of these loans, which should be completed in the fourth quarter. We are also currently continuing to evaluate other loan sales and will evaluate other securitizations in 2025.