First Foundation drops after 'unexpected' fundraise

First Foundation

03/07/2024 15:20

(Updates)
    ** Texas-based lender First Foundation's  FFWM.N  shares
down 18.4% at $5.36
    ** Brokerage Raymond James cuts rating on bank's shares to
"market perform" from "strong buy", citing "unexpected" capital
raise
    ** FFWM said on Tuesday it has reached agreement with group
of investors to raise over $225 mln in equity investment
    ** Brokerage doesn't believe FFWM needed to raise additional
capital
    ** Brokerage suspects heavy commercial real estate exposure
and low-relative loan loss reserve ratio drove increased
regulatory scrutiny of bank despite pristine credit quality,
ultimately leading to the capital raise
    ** "We believe the worst-case scenario has now been taken
off the table, which should ease investor concerns looking
forward" - Raymond James
    ** 2 analysts rate stock "strong buy" and 3 "hold"; median
PT $8 - LSEG
    ** Including session's move, stock down 49.3% YTD

 (Reporting by Roshan Abraham and Jaiveer Shekhawat in
Bengaluru)
 ((Roshan.Abraham@thomsonreuters.com))