Calls on Stockholders to Vote on
your BLUE Proxy Card
First Foundation Inc. (NASDAQ: FFWM) (“First Foundation” or the
“Company”), a financial services company with two wholly-owned
operating subsidiaries, First Foundation Advisors and First
Foundation Bank, today filed definitive proxy materials with the
U.S. Securities and Exchange Commission in connection with its 2023
Annual Meeting of Stockholders, which is scheduled to be held on
June 27, 2023.
This press release features multimedia. View
the full release here:
https://www.businesswire.com/news/home/20230515005773/en/
(Graphic: Business Wire)
In conjunction with the definitive proxy filing, First
Foundation is mailing the following letter from the First
Foundation Board of Directors to First Foundation’s
Stockholders.
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Dear Fellow Stockholders,
Thank you for your investment in First Foundation Inc. (“First
Foundation,” “we,” “our,” or “us”). Over the past year, First
Foundation has navigated a volatile regional banking environment by
taking decisive actions to protect the bank’s strengths and
preserve the ability to continue to create long term stockholder
value. As a publicly traded financial services company, First
Foundation has maintained a resilient core business, remains
well-capitalized and continues to generate solid, sustainable
results with a strong liquidity position. We are committed to the
hard work required to navigate the challenging interest rate
environment and continue to evaluate ways we can increase deposits,
improve our loan-to-deposit ratio, reduce expenses, and enhance
operational efficiency.
At First Foundation’s Annual Meeting of Stockholders on June 27,
2023, there is an important decision to be made. Abbott Cooper’s
Driver Management (“Driver” or “Mr. Cooper”), an activist hedge
fund who has claimed to own approximately 0.6% of First Foundation
stock1, has launched a proxy contest in an effort to add a member
to the First Foundation Board of Directors (the “Board”). Similar
to prior campaigns launched by Mr. Cooper against other small and
mid-size banks, his engagement to date has been plagued by
short-sighted initiatives that exhibit both a blatant disregard for
stockholders’ time and resources and a total lack of understanding
of our business. Further, he has made no effort to work
constructively with the Board to learn about our strategy, educate
himself on our plans to navigate the volatile market, or propose a
coherent plan that would benefit First Foundation stockholders.
We appreciate engaging with our stockholders, and we attempted
to treat Mr. Cooper as we would any other stockholder despite Mr.
Cooper’s history. First Foundation has made significant efforts to
engage directly with Mr. Cooper to understand his ideas to enhance
long-term value for all stockholders. We were disappointed in our
one and only meeting because we did not meet someone willing to
engage with constructive feedback or ideas. Instead, we met a
showman demanding a settlement.
We write to you today to ask for your support to protect First
Foundation by voting “FOR” Ulrich E. Keller, Jr., Scott F.
Kavanaugh, Max A. Briggs, John A. Hakopian, David G. Lake,
Elizabeth A. Pagliarini, Mitchell M. Rosenberg, Ph.D, Diane M.
Rubin, Jacob P. Sonenshine, and Gabriel V. Vazquez and selecting
“WITHHOLD” for the Driver Nominee on your BLUE Proxy Card. We
need to unite against the disruptive and unqualified nominee Mr.
Cooper has selected.
We want to emphasize the resiliency of First Foundation in the
face of the current economic headwinds. As a carefully diversified
regional bank with scale and a proven business model, our core
strategy and the fundamentals of our business
remain strong.
________________________ 1 This number was calculated by
dividing Driver’s reported holdings of 354,000 shares (as of filing
dated May 12, 2023) by First Foundation’s outstanding shares of
56,424,276 (as of May 1, 2023).
Decisive Actions Taken by First Foundation
The impact of the interest rate increases made by the Federal
Reserve (the “Fed”) came to a dramatic head during the first
quarter. We witnessed a crisis that led to the second largest
failure of a financial institution in U.S. history. Regional banks,
in particular, have had to re-evaluate every aspect of their
business while also attempting to maintain client confidence in
deposits, liquidity, security portfolios, and risk management.
Looking back on the fourth quarter of 2022, when continued signs
of the Fed’s interest rate increases were apparent, we took
proactive steps to mitigate the effects on our business model.
Beginning in October of 2022, we implemented a liquidity funding
strategy where members of management met regularly to discuss ways
the organization could increase deposits, reduce our
loan-to-deposit ratio, and suspend almost all lending activities.
We are grateful that these strategic moves allowed us to be a step
ahead in actively positioning our bank for long-term stability and
success.
Despite the uncertainty the regional
banking crisis has caused, we are proud to report that our deposits
have stabilized. Following the collapse of Silicon Valley
Bank and others, a significant portion of the deposits that left
First Foundation Bank have returned. Additionally, during this
time, several clients moved money from their First Foundation Bank
accounts to First Foundation Advisors, our wealth advisory arm.
This illustrates the value of our business model and
enterprise-wide offerings that ensure the stickiness of our client
base. Our resilience is also attributable to the exceptional
efforts of our entire organization and the unwavering commitment of
the First Foundation team to deliver incredible client service when
their support was needed most.
We now see net positive days from our
deposit channels, and retail and online banking have
performed particularly well. Since March 21st, our deposit levels
have markedly improved.
Over the past several months, our team has helped clients
navigate uncertainties and restoring confidence in our bank and
banking system. We have worked closely with each deposit
relationship to ensure clients understand the options available to
them, such as pairing their deposit balances, adding beneficiaries,
utilizing products such as insured cash sweeps (“ICS”) accounts and
strategically repositioning accounts to ensure full FDIC insurance
coverage.
We have also taken a number of actions to ensure the strength
and resiliency of our business, including:
- Stabilizing and growing our deposits, including adding $138
million in total deposits as of May 12, 2023;
- Significantly decreasing our uninsured deposits to
approximately 13% of our total deposits as of May 12, 2023, putting
our performance on this metric well above industry standards, and
continuing to make improvements since we reported this number
during our recent earnings call;
- Maintaining a strong liquidity position, with liquidity
remaining at $3.5 billion as of our recent earnings call and
reporting $1.3 billion in cash and securities as of March 31,
2023;
- Ensuring our high underwriting standards, as evidenced by our
Loan-to-Value (“LTV”) ratios of 55.3% for multifamily loans and
54.9% for single-family loans as of May 12, 2023, continuing this
same underwriting discipline that helped propel us during the Great
Recession; and
- Preserving our pristine credit quality and Non-Performing
Assets (“NPA”) ratio of 13 basis points as of March 31, 2023.
We remain committed to prepare for and face the changing
interest rate environment. Our leadership across the organization
is dedicated to ensuring the long-term success of our business, and
we are confident in our ability to continue providing exceptional
financial services to our clients.
Mr. Cooper’s Distraction Campaign
It is important for us to recognize the recent extraordinary
events and how we are positioned amid the current banking
environment. But we believe it is important to look at the whole
picture. It is widely understood that the challenges facing the
entire regional banking sector have caused near-term share price
disruption. Mr. Cooper is self-servingly using this disruption to
criticize First Foundation’s performance in an attempt to justify
nominating a completely unqualified candidate to the Board.
There is a reason why Mr. Cooper only references total return
over the near-term with little to no additional insights or
context. In reality, since our IPO in 2014,
First Foundation was one of the best performing regional bank
stocks. The chart included shows that from our IPO until the
Fed began its tightening cycle in March of 2022, First Foundation’s
total stockholder return was 174% while the KBW Nasdaq Regional
Banking Index rose just 58%. During 2021, FFWM’s net interest
margin was 3.15%, in line with peers, while its efficiency ratio
was below that of peers. Overall, prior to the Fed tightening
cycle, a move that shifted the ground under all regional banks,
First Foundation was outperforming peers.
Since then, and specifically in the first quarter of 2023, we
experienced a volatile banking environment. After the Fed raised
interest rates, First Foundation Bank moved swiftly to raise rates
on its deposits. We intentionally did this in line with the Fed to
keep pace with the rate of increases, while some others in the
industry did not. As a result, we are no longer seeing a rapid
increase in the cost of deposits, as we have already absorbed that
increase.
Why you should continue to have confidence in our Board of
Directors
Your Board has the right experience, skillsets, and deep
knowledge of regional banking and First Foundation to continue
overseeing the successful execution of our strategy and deliver
value to our stockholders. This knowledge and experience have been
invaluable in shaping our long-term strategy and executing it
successfully over the years, as well as ensuring the bank’s
stability during these tumultuous times for the industry.
Our directors bring expertise in areas such as finance, banking,
real estate, human resources, and risk management. Among their
ranks are the Founder and President of a successful restaurant
franchise, the President and CEO of an international consulting
firm, the Co-Founder and current President and CEO of a wealth
management company, and the COO and CFO for a publicly registered,
non-traded REIT. This diversity allows the Board to approach
challenges and opportunities from multiple angles, leading to more
robust decision-making and better outcomes for our
stockholders.
More importantly, the Board proactively looks to add new,
independent directors who can add fresh perspectives that will
ultimately bring value to our stockholders. This was demonstrated
with our most recent director appointment, Gabriel Vazquez. Mr.
Vazquez is the Vice President and Associate General Counsel for
Operations of Vistra Corp., a Fortune 500 integrated power company
based in Irving, Texas. Mr. Vazquez’s extensive experience as a
leader in the legal group of a large, highly regulated entity is an
important and timely addition to the Board, as risks and
regulations in the regional banking space continue to evolve. His
experience will provide immediate value for stockholders as the
bank seeks to anticipate and navigate potential regulatory
developments.
Our experienced leadership is especially necessary during
today’s banking sector challenges. As has been true since our
founding, your Board remains committed to stockholder value
creation. We ask for your support to protect First Foundation by
voting “FOR” Ulrich E. Keller, Jr., Scott F. Kavanaugh, Max A.
Briggs, John A. Hakopian, David G. Lake, Elizabeth A. Pagliarini,
Mitchell M. Rosenberg, Ph.D, Diane M. Rubin, Jacob P. Sonenshine,
and Gabriel V. Vazquez and selecting “WITHHOLD” for the Driver
Nominee on your BLUE Proxy Card. We need to unite against the
disruptive and unqualified nominee Mr. Cooper has selected.
Mr. Cooper’s unqualified nominee, Allison Ball
Mr. Cooper’s proposed change will be detrimental to creating
value for you, our stockholders.
First Foundation believes that Mr. Cooper’s candidate, Allison
Ball, does not possess the necessary experience, qualifications,
and decorum required of a director of a publicly traded financial
services institution. Specifically, the Company is concerned about
Ms. Ball’s lack of experience in a highly regulated business and
executive experience in any relevant industry. Additionally, Ms.
Ball has exhibited a penchant for making inflammatory, insulting,
and degrading comments that would reflect negatively on First
Foundation, its clients and its stockholders. We believe that Ms.
Ball's election to the Board could pose significant risks to First
Foundation’s reputation and performance, as well as client
retention and recruitment.
Ms. Ball failed to be fully transparent regarding her employment
history and her ownership of a business through which she operated
a podcast. During our due diligence, we discovered that Mr.
Cooper’s nomination materials omitted key facts even though our
questionnaire required the missing information. These critical
omissions included Ms. Ball’s service as the Chief Product Officer
of Grata, an online recognition platform, and her ownership of Hell
or High Ranch Water LLC (the “LLC”), through which she co-hosted a
podcast series titled, “Hell or High Ranch Water.” During some
episodes of this podcast, Ms. Ball and her business partner made
numerous inappropriate, ill-considered comments that reflect a
level of judgment and professionalism far below the standard
expected of a First Foundation Board member. Further, by not
revealing the existence of the LLC, Ms. Ball concealed significant
issues related to her independence as a Board member.2
In short, Mr. Cooper has mischaracterized First Foundation in a
deliberate attempt to divert attention away from what is important:
selecting the most qualified director nominees to oversee the
execution of First Foundation’s strategy to enhance stockholder
value. Your Board and management team are committed to delivering
substantial and enduring value for our stockholders.
We urge you to support us in this by voting “FOR” Ulrich E.
Keller, Jr., Scott F. Kavanaugh, Max A. Briggs, John A. Hakopian,
David G. Lake, Elizabeth A. Pagliarini, Mitchell M. Rosenberg,
Ph.D, Diane M. Rubin, Jacob P. Sonenshine, and Gabriel V. Vazquez
and selecting “WITHHOLD” for the Driver Nominee on your BLUE Proxy
Card.
For more information about Mr. Cooper’s reckless campaign
against First Foundation, please visit
www.truthfirstfoundationinc.com.
Sincerely,
The First Foundation Board of Directors
___________________________ 2 Mr. Cooper originally submitted a
second purported nominee in this proxy contest: the co-owner of the
LLC with Ms. Ball, who also did not disclose the LLC’s existence.
First Foundation was unaware that the nominees/co-owners had any
relationship with each other, whether personally or professionally,
until it learned of the LLC. Ms. Ball’s partner withdrew herself
from consideration after First Foundation, in a letter to Mr.
Cooper, raised its concerns regarding his purported nominees’
independence.
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About First Foundation
First Foundation Inc. (NASDAQ: FFWM) and its subsidiaries offer
personal banking, business banking, and private wealth management
services, including investment, trust, insurance, and philanthropy
services. This comprehensive platform of financial services is
designed to help clients at any stage in their financial journey.
The broad range of financial products and services offered by First
Foundation are more consistent with those offered by larger
financial institutions, while its high level of personalized
service, accessibility, and responsiveness to clients is more
aligned with community banks and boutique wealth management firms.
This combination of an integrated platform of comprehensive
financial products and personalized service differentiates First
Foundation from many of its competitors and has contributed to the
growth of its client base and business. Learn more at
firstfoundationinc.com or connect with us on LinkedIn and
Twitter.
Forward-Looking Statements
This press release includes forward-looking statements within
the meaning of the “Safe-Harbor” provisions of the Private
Securities Litigation Reform Act of 1995, including forward-looking
statements regarding our expectations and beliefs about our future
financial performance and financial condition, as well as trends in
our business and markets. Forward-looking statements often include
words such as "believe," "expect," "anticipate," "intend," "plan,"
"estimate," "project," "outlook," or words of similar meaning, or
future or conditional verbs such as "will," "would," "should,"
"could," or "may." The forward-looking statements in this press
release are based on current information and on assumptions that we
make about future events and circumstances that are subject to a
number of risks and uncertainties that are often difficult to
predict and beyond our control. As a result of those risks and
uncertainties, our actual financial results in the future could
differ, possibly materially, from those expressed in or implied by
the forward-looking statements contained in this press release and
could cause us to make changes to our future plans.
Additional information regarding these and other risks and
uncertainties to which our business and future financial
performance are subject is contained in our Annual Report on Form
10-K for the fiscal year ended December 31, 2022, as amended, our
Quarterly Report on Form 10-Q for the fiscal quarter ended March
31, 2023, and other documents we file with the SEC from time to
time. We urge readers of this press release to review those reports
and other documents we file with the SEC from time to time. Also,
our actual financial results in the future may differ from those
currently expected due to additional risks and uncertainties of
which we are not currently aware or which we do not currently view
as, but in the future may become, material to our business or
operating results. Due to these and other possible uncertainties
and risks, readers are cautioned not to place undue reliance on the
forward-looking statements contained in this press release, which
speak only as of today's date, or to make predictions based solely
on historical financial performance. We also disclaim any
obligation to update forward-looking statements contained in this
press release or in the above-referenced reports, whether as a
result of new information, future events or otherwise, except as
may be required by law or NASDAQ rules.
Important Additional Information
The Company, its directors and certain of its executive officers
are participants in the solicitation of proxies from the Company’s
stockholders in connection with its upcoming 2023 Annual Meeting of
Stockholders (the “2023 Annual Meeting”). The Company has filed a
definitive proxy statement and a BLUE universal proxy card with the
Securities and Exchange Commission (the “SEC”) in connection with
its solicitation of proxies from the Company’s stockholders.
STOCKHOLDERS OF THE COMPANY ARE STRONGLY ENCOURAGED TO READ SUCH
PROXY STATEMENT, ACCOMPANYING BLUE UNIVERSAL PROXY CARD AND ALL
OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY
AS THEY CONTAIN IMPORTANT INFORMATION. Information regarding the
identity of the participants and their direct and indirect
interests, by security holdings or otherwise is set forth in the
definitive proxy statement and other materials filed with the SEC
in connection with the 2023 Annual Meeting. Stockholders can obtain
the definitive proxy statement, any amendments or supplements to
the proxy statement and other documents filed by the Company with
the SEC at no charge at the SEC’s website at www.sec.gov. Copies
are also available at no charge on the Company’s website at
www.ff-inc.com.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230515005773/en/
Investor and Media Contact: Shannon Wherry Director of
Corporate Communications swherry@ff-inc.com (469) 638-9642
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