First Foundation drops after surprise capital raise prompts Raymond James downgrade

First Foundation

03/07/2024 11:18

** Shares of First Foundation Inc  FFWM.N  down ~28% at
$4.74 premarket
    ** Raymond James cuts rating on Texas-based regional bank to
"market perform" from "strong buy" citing "unexpected" capital
raise
    ** FFWM on Tuesday said it has reached agreement with a
group of investors to raise over $225 mln in equity investment
    ** Brokerage doesn't believe FFWM needed to raise additional
capital and co's turnaround remains underway
    ** Suspects heavy commercial real estate exposure and
low-relative loan loss reserve (LLR) 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
    ** As per LSEG data, only two analysts rate stock "strong
buy" and three "hold"; their median PT is $8
    ** Stock has fallen ~32% YTD as of last close

 (Reporting by Roshan Abraham)
 ((Roshan.Abraham@thomsonreuters.com))