Executive Summary

Q4 2021 delivered solid results: EPS $0.51 and total revenue $75.8M; ROA 1.15%, ROATCE 13.4%, efficiency ratio 51% .
Management indicated EPS and net income exceeded Wall Street consensus; revenue declined QoQ but rose QoQ excluding gain-on-sale of loans; NIM increased QoQ to 3.17% .
Record quarterly loan originations of $1.2B with diversified mix (43% commercial business), deposits increased $2B post TGR acquisition; dividend raised 22% to $0.11 for 1Q22, AUM reached $5.7B .
8-K preview flagged a beat on EPS vs consensus and improving NIM as potential catalysts; integration of TGR and continued expansion in TX/FL position FFWM for mid-teens loan growth, while deposit costs remain low at 15 bps .

What Went Well and What Went Wrong

What Went Well
- “Another strong quarter” with EPS $0.51, revenue $75.8M, ROA 1.15%, ROATCE 13.4%; dividend increased to $0.11 per share .
- Net interest margin improved to 3.17% as loan yields and funding costs improved; core deposits 99% with deposit costs at 15 bps .
- Record $1.2B originations; high-quality C&I originations $518M; AUM increased to a record $5.7B; advisory/trust combined pre-tax margin 25% .
What Went Wrong
- Revenue down QoQ due to lower gain-on-sale; net income lower than Q3 ($37.2M in Q3 vs $23.9M in Q4) despite beating EPS consensus per management .
- Integration-related items: $1.1M merger expenses; Day-1 CECL “double count” provision of $5.6M for non-PCD loans tied to TGR acquisition; allowance increased $12.8M .
- Short-term NIM drag expected from excess liquidity inherited from TGR; slight seasonal outflows in legacy deposits .

Financial Results

Metric	Q2 2021	Q3 2021	Q4 2021
Revenue ($USD Millions)	$71.9	$89.9	$75.8
Diluted EPS ($USD)	$0.58	$0.83	$0.51
ROA (%)	1.40%	1.88%	1.15%
ROATCE (%)	16.7%	22.9%	13.4%
Efficiency Ratio (%)	47.3%	41.9%	51.0%
Net Interest Margin (%)	3.20%	3.07%	3.17%

Segment Origination Mix (% of quarterly originations)

Segment	Q2 2021	Q3 2021	Q4 2021
Commercial Business (incl. owner-occupied CRE)	30%	43%	43%
Multifamily	64%	44%	48%
Single Family	5%	10%	6%
Other	1%	3%	3%

Key KPIs

KPI	Q2 2021	Q3 2021	Q4 2021
Quarterly Originations ($USD Billions)	$1.1	$0.802	$1.2
Deposit Cost (bps)	18	15	15
Loan-to-Deposit Ratio (%)	85%	85%	84%
Core Deposits (% of total)	98%	98%	99%
Non-interest Bearing Deposits (% of total)	46%	44%	37%
NPAs / Assets (bps)	20	24	14
Weighted Avg Rate on Originations (%)	3.35%	3.46%	3.38%
Portfolio Yield on Loans (%)	—	3.74%	3.80%

Notes: Management disclosed Q4 net income of $23.9M; allowance for credit losses increased to $33.8M (+$12.8M) tied to TGR acquisition; PPP fees recognized $0.561M, $0.618M remaining; PPP loans remaining $50.8M including acquired loans .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Non-interest expense run-rate	FY 2022	—	$46–$47M “for the year” per remarks (context suggests per-quarter run-rate)	New (clarify in follow-ups)
Efficiency ratio	FY 2022	~50% target	~50% even above $10B assets	Maintained
Deposit beta assumption	Rate cycle	—	~10% beta; 15–20% decay modeled	New detail
NIM outlook	2022	3.10–3.20% after TGR dilution (Q3 view)	Q4: stabilize near current; short-term drag from TGR excess liquidity	Maintained
Tax rate	FY 2022	—	~28%; trending down over time as CA concentration falls	New
TGR integration cost saves	FY 2022+	Modeled 30% expense reductions	On track; improved possible	Maintained
Originations	FY 2022	~$4.0–$4.4B baseline; $5B aspirational	Pipelines at record; expect similar mix	Maintained
Dividend	1Q22	$0.09 (4Q21 paid)	$0.11 declared	Raised

Earnings Call Themes & Trends

Topic	Q2 2021 (Prior-2)	Q3 2021 (Prior-1)	Q4 2021 (Current)	Trend
Technology & Digital (mobile, data, NYDIG/Bitcoin)	Rolling out crypto with NYDIG/Fiserv by Q4; new mobile app planned	Q1’22 rollout; scope conservative; bank-centric delivery	New mobile app launched; strategic NYDIG investment gain $1.1M recognized	Execution progressing; monetization emerging
NIM & Rate Sensitivity	NIM 3.20%; deposit costs down to 18 bps	NIM 3.07%; short-term drag from liquidity; outlook 3.10–3.20% post TGR	NIM 3.17%; short-term drag from TGR liquidity; stabilization expected	Improving; manageable rate beta
Loan Growth & Mix	$1.1B originations; 30% C&I	$0.802B; 43% C&I	$1.2B; 43% C&I, strong TX/FL momentum	Sustained; diversified
Deposits & Funding	Core 98%; non-int bearing 46%; L/D 85%	Core 98%; non-int bearing 44%; seasonal/managed outflows	Core 99%; non-int bearing 37%; +$2B deposits via TGR	Very strong core; franchise broadened
TGR Acquisition & Integration	Announced; talent retention to prep for >$10B	Closed late Q4; cost saves modeled 30%; integration through May	Benefits: geography, deposits, loans; Day-1 CECL; liquidity drag near-term	On track; near-term noise, long-term leverage
Asset Quality & Reserves	NPAs 20 bps; allowance 40 bps of loans	NPAs 24 bps; CECL MSR impacts	NPAs 14 bps; allowance up $12.8M (TGR) to $33.8M	Strong; prudent build from acquisition
Regional Expansion	TX LPO launched; Florida acquisition planned	TX pipeline building; FL synergies anticipated	TX branch opening; FL market leadership retained	Scaling footprint

Management Commentary

CEO: “Another strong quarter… loan originations hit $1.2 billion… deposits grew… AUM ended the year at a record $5.7 billion… dividend payment increased 22% from $0.09 to $0.11 per share” .
CFO: “NIM increased to 3.17%… $561,000 net PPP fee income… allowance for credit losses for loans increased $12.8 million to $33.8 million… efficiency ratio was very strong 51% for the quarter” .
President: “Record $1.2 billion in loans… C&I loans were 43%… weighted average rate on originations at 3.3%… deposit costs stabilized at 15 bps… pipeline remains strong into Q1” .

Q&A Highlights

Growth outlook: Pipeline at record levels; expect ~$4.0–$4.4B originations in 2022; $5B aspirational depending on rate environment and competition .
Integration & expenses: TGR integration progressing; modeled 30% expense reductions; management retained talent to prepare for >$10B regulatory regime; non-interest expense run-rate guided to $46–$47M (context suggests per quarter) .
Margin & rate sensitivity: Loan yields stabilizing; deposit beta ~10%; margin expected to stabilize near current with short-term drag from TGR liquidity; pro forma sensitivity relatively neutral due to core deposit mix .
Funding & borrowings: Inherited TGR borrowings; holdco line repaid with subordinated debt proceeds; repurchase agreements reflect customer structure .
Profitability goals: Normalized ROA ~1.25% midpoint; potential up to ~1.55% with securities gains; ROE mid-teens .

Estimates Context

S&P Global consensus estimates (EPS and revenue) for Q4 2021, Q3 2021, and Q2 2021 were unavailable at the time of this report due to data access limits. Values retrieved from S&P Global.
Management disclosed EPS and net income exceeded consensus for Q4 2021; revenue declined QoQ but excluding gain-on-sale increased QoQ, implying potential estimate revisions toward stronger core NII/NIM and lower reliance on gain-on-sale .
Implication: Expect upward revisions to forward EPS/NII as NIM trends improve and deposit costs remain favorable; near-term integration expenses and CECL effects may temper GAAP optics.

Key Takeaways for Investors

Core beat: EPS and net income exceeded consensus; NIM expanded; core deposit franchise strengthened to 99% with deposit costs at 15 bps—supportive for forward NII and EPS .
Growth engine: Sustained high-quality originations ($1.2B; 43% C&I) and expanding TX/FL platforms support mid-teens loan growth with diversification benefits .
Near-term noise, long-term leverage: TGR integration introduces CECL and liquidity-related margin drag near-term; modeled 30% cost saves and broader footprint should enhance operating leverage and efficiency over 2022–2023 .
Asset quality intact: NPAs to assets at 14 bps; reserve build tied to acquisition rather than deterioration; credit metrics remain strong across multifamily and C&I .
Capital and dividend: $150M sub debt enhances growth capacity; dividend raised to $0.11—signals confidence in earnings durability and capital flexibility .
Trading setup: Positive narrative shifts—EPS beat, NIM expansion, dividend increase—could catalyze near-term stock appreciation; monitor integration milestones and NIM stabilization vs TGR liquidity drag .
Medium-term thesis: Efficiency ~50%, stable NIM with low deposit beta, diversified loan mix, and fee income from advisory/trust (25% margin) underpin ROA ~1.25% and mid-teens ROE targets as integration benefits accrue .

Source Index

Q4 2021 8-K Item 2.02 (Results preview)
Q4 2021 earnings call transcript
Q4 2021 investor presentation (slides)
Q3 2021 earnings call transcript
Q2 2021 earnings call transcript

First Foundation Inc. (FFWM)·Q4 2021 Earnings Summary