First Foundation (FFWM) Stock Forecast & Price Target

First Foundation Inc. has demonstrated solid loan and deposit trends, highlighted by an increase in held-for-investment loans of $1.2 million and a notable rise in end-of-period deposits of $117.4 million, which underscores strong inflows, particularly in money market accounts and savings. The company's net interest margin (NIM) expanded by 19 basis points to 1.36%, surpassing industry expectations and indicating a positive trend in profitability, with an anticipated improvement as the deposit balance builds. Additionally, First Foundation is strategically focused on accelerating growth in its fee income business and diversifying its loan portfolio geographically, positioning the company for sustained growth and improved returns in the future.

First Foundation Inc. is facing challenges with weak profitability compared to its peers, which is expected to persist longer than initially anticipated. Additionally, a decrease in securities yields and a miss in net interest income have raised concerns about the company's revenue generation ability, suggesting potential downward pressure on earnings forecasts. The rising funding costs, net interest margin (NIM) pressures, and concerns about credit quality as multifamily loan maturities approach further contribute to the negative outlook.