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Rising From The Financial Crisis Through Lending

Scott Kavanaugh, CEO, First Foundation

April 20, 2010

Lending activity for First Foundation Bank is healthy and thriving. Despite widespread public sentiment that banks have been lagging in this category, we're proud to have stepped up here to demonstrate our strength as a fast growing business bank. As of the end of March, we have more than $226 million in loans, up from zero in October of 2007 when we opened. For a young bank our size this is almost unheard of in a weak economy.

The fortunate part of being a young bank that opened just before the financial crisis of 2008 is that we have virtually no troubled loans. Where others have been held back, we were able to focus on making deals happen rather than cleaning up old loans and taking massive write downs. This ability to grow has put us on track to gain market share, making us a rare success story to come out of the crisis.

One of the keys to our success throughout the First Foundation organization has been to focus only on quality clients. Even in the darker days of the financial crisis we managed to expand with financially strong and healthy business owners and high-net-worth individuals. Last year the bank grew its total assets more than 80% to nearly $240 million, making it one of the fastest growing in the country.

To stay free of bad loans, we maintain stringent underwriting standards. We only lend when our high underwriting standards are met. At the end of the 1st quarter 2010, our combined weighted average loan to value ratio on the portfolio was 52.67%. The combined weighted average debt service coverage on income producing real estate was 1.49. These rigorous marks allow us greater cushions to manage troubled situations, should they occur.

Looking out this year, we expect our growth to continue as we make loans to qualified borrowers throughout the market areas where we currently lend. As several indications suggest a stronger economy going forward, we anticipate our clients to be well positioned to take advantage of it. We continue to look forward to being your banking partner.

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