UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 30, 2018
FIRST FOUNDATION INC.
(Exact name of registrant as specified in its charter)
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Delaware |
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001-36461 |
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20-8639702 |
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(State or other jurisdiction of incorporation) |
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(Commission
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(IRS Employer Identification Number) |
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18101 Von Karman Avenue, Suite 700 Irvine, California |
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(Address of Principal Executive Offices) |
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(Zip Code) |
(949) 202-4160
(Registrant’s Telephone Number, Including Area Code)
N/A
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
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Item 1.01 |
Entry into a Material Definitive Agreement |
On October 30, 2018, First Foundation Inc. (the “ Company ” ) entered into the Third Amendment to Loan Agreement (the “ Third Amendment ” ) with NexBank SSB, a Texas savings bank, which amends the Loan Agreement, dated as of February 8, 2017, as amended by the First Amendment to Loan Agreement, dated as of May 18, 2017, and the Second Amendment to Loan Agreement, dated as of April 6, 2018 (collectively the “ Loan Agreement ” ), to revise the restricted payments provision to allow for distributions by the Company in an aggregate amount not to exceed in any trailing twelve month period fifty percent (50%) of the Company’s net income for such trailing twelve month period. Except as modified and amended by the Third Amendment, all of the terms and provisions of the Loan Agreement remain in full force and effect.
A copy of the Third Amendment is attached hereto as Exhibit 10.1 and is incorporated herein by reference. The foregoing description of the Third Amendment does not purport to be complete and is qualified in its entirety by reference to Exhibit 10.1.
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Item 7.01 |
Regulation FD Disclosure |
On October 30, 2018, the Company issued a press release announcing the authorization of a stock repurchase program, as described in greater detail in Item 8.01 of this Current Report on Form 8-K. A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K.
The information contained in Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.1 attached hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended. The information contained in this Item 7.01 and in the press release attached as Exhibit 99.1 shall not be incorporated by reference into any filing with the SEC made by the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.
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Item 8.01 |
Other Events |
On October 30, 2018, the Board of Directors of the Company authorized a stock repurchase program, pursuant to which the Company may repurchase up to 2,200,000 shares, or approximately 5% of the outstanding shares of the Company’s common stock. Under the stock repurchase program, shares of common stock may be repurchased by the Company from time to time in open market transactions or in privately negotiated transactions as permitted under applicable rules and regulations. The extent to which the Company repurchases its shares and the timing of such repurchases will depend on market conditions and other considerations as may be considered in the Company’s sole discretion. The stock repurchase program does not obligate the Company to repurchase any specific number of shares and may be modified, suspended or discontinued at any time without notice.
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Item 9.01 |
Financial Statements and Exhibits
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Exhibit
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Description |
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10.1 |
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99.1 |
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Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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FIRST FOUNDATION INC. |
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Date: October 30, 2018 |
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By: |
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/s/ JOHN M. MICHEL |
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John M. Michel Executive Vice President & Chief Financial Officer |
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Exhibit 10.1
THIRD AMENDMENT TO LOAN AGREEMENT
THIS THIRD AMENDMENT TO LOAN AGREEMENT (this “ Amendment ”) is entered into as of October 30, 2018, between FIRST FOUNDATION INC. , a Delaware corporation (“ Borrower ”), and NEXBANK SSB (with its participants, successors and assigns, “ Lender ”).
R E C I T A L S
A. Borrower and Lender are parties to that certain Loan Agreement dated as of February 8, 2017 (as heretofore amended and as it may be further amended, modified, supplemented, restated or amended and restated from time to time, the “ Loan Agreement ”). Unless otherwise indicated herein, all terms used with their initial letter capitalized are used herein with their meaning as defined in the Loan Agreement and all Section references are to Sections in the Loan Agreement.
B. Borrower has requested that Lender amend the Loan Agreement as provided below.
C. Borrower and Lender desire to amend the Loan Documents, subject to the terms, conditions, and representations set forth herein, as requested by Borrower.
D. Borrower and Lender agree to the other terms and provisions provided below, subject to the terms, conditions, and representations set forth herein.
NOW, THEREFORE, in consideration of these premises and other valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree, as follows:
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1. |
Amendments to Loan Agreement . Subject to the satisfaction of the conditions set forth herein, the Loan Agreement is amended as follows: |
(a) Section 11.6 of the Loan Agreement is hereby amended and restated in its entirety to read as follows:
“ 11.6 Restricted Payments.
Without the prior written consent of Lender, the Borrower will not declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment other than, provided that no Default or Event of Default shall exist or arise as a result, Restricted Payments in an aggregate amount not to exceed in any trailing twelve month period fifty percent (50%) of Net Income of the Borrower for such trailing twelve month period.”
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Conditions Precedent . Notwithstanding any contrary provision, this Amendment shall be effective on the first Business Day upon which all of the following conditions precedent have been satisfied (the “ Effective Date ”): |
(a) Lender shall have received counterparts of this Amendment executed by Borrower, Lender, and each other party set forth on the signature pages hereto;
(b) Lender shall have received satisfactory evidence that Borrower has paid the fees and expenses of counsel described in Section 5 ;
(c) No Default or Event of Default shall have occurred and be continuing or shall result after giving effect to this Amendment; and
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(d) Lender shall have received such other instruments and documents incidental and appropriate to the transactions provided for herein as Lender or its counsel may reasonably request, and all such documents shall be in form and substance satisfactory to Lender (it being agreed that execution of this Amendment by Lender shall evidence that the foregoing conditions have been fulfilled).
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Reaffirmation of Loan Documents and Liens . Except as amended and modified hereby, any and all of the terms and provisions of the Loan Agreement and the other Loan Documents shall remain in full force and effect and are hereby in all respects ratified and confirmed by Borrower. Borrower hereby agrees that, except as expressly provided in this Amendment, the amendments and modifications herein contained shall in no manner affect or impair the liabilities, duties and obligations of Borrower under the Loan Agreement and the other Loan Documents or the Liens securing the payment and performance thereof. Borrower further confirms that the liens and security interests in the Collateral created under the Loan Documents secure, among other indebtedness, Borrower’s obligations under the Loan Documents, and all modifications, amendments, renewals, extensions, and restatements thereof. |
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Representations and Warranties . As a material inducement for Lender to enter into this Amendment, Borrower hereby represents and warrants to Lender (with the knowledge and intent that Lender is relying upon the same in consenting to this Amendment) that as of the Effective Date, and after giving effect to the transactions contemplated by this Amendment: (a) all representations and warranties in the Loan Agreement and in all other Loan Documents are true and correct in all material respects, as though made on the date hereof, except to the extent that (i) any of them speak to a different specific date; or (ii) the facts or circumstances on which any of them were based have been changed by transactions or events not prohibited by the Loan Documents; (b) no Default or Event of Default exists under the Loan Documents or will exist after giving effect to this Amendment; (c) this Amendment has been duly authorized and approved by all necessary organizational action and requires the consent of no other Person, and is binding and enforceable against Borrower in accordance with its terms; and (d) the execution, delivery and performance of this Amendment in accordance with its terms, does not and will not, by the passage of time, the giving of notice, or otherwise: (i) require any governmental approval, other than such as have been obtained and are in full force and effect, or violate any applicable law relating to Borrower; (ii) conflict with, result in a breach of, or constitute a default under the Constituent Documents of Borrower thereof, or any indenture, agreement, or other instrument to which Borrower is a party or by which it or any of its properties may be bound; or (iii) result in or require the creation or imposition of any Lien upon or with respect to any property now owned or hereafter acquired by Borrower. |
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Fees, Costs and Expenses . Borrower agrees to pay promptly the reasonable fees and expenses of counsel to Lender for services rendered in connection with the preparation, negotiation, reproduction, execution, and delivery of this Amendment and all related documents; and |
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Miscellaneous . |
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(a) |
This Amendment shall be deemed to constitute a Loan Document for all purposes and in all respects. Each reference in the Loan Agreement to “this Agreement,” “hereunder,” “hereof,” “herein” or words of like import, and each reference in the Loan Agreement or in any other Loan Document, or other agreements, documents or other instruments executed and delivered pursuant to the Loan Agreement to the “Loan Agreement”, shall mean and be a reference to the Loan Agreement as amended by this Amendment. |
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(b) |
The Loan Documents shall remain unchanged and in full force and effect, except as provided in this Amendment, and are hereby ratified and confirmed. The execution, delivery, and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any rights of Lender under any Loan Document, nor constitute a waiver under any of the Loan Documents. |
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(c) |
All of the terms and provisions of this Amendment shall bind and inure to the benefit of the parties hereto and their respective successors and assigns. |
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(d) |
This Amendment may be executed in one or more counterparts and by different parties hereto in separate counterparts each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument; signature pages may be detached from multiple separate counterparts and attached to a single counterpart so that all signature pages are physically attached to the same document. Delivery of photocopies of the signature pages to this Amendment by facsimile or electronic mail shall be effective as delivery of manually executed counterparts of this Amendment. |
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(e) |
THIS AMENDMENT, THE LOAN AGREEMENT, AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. |
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(f) |
The headings, captions and arrangements used in this Amendment are, unless specified otherwise, for convenience only and shall not be deemed to limit, amplify or modify the terms of this Amendment, nor affect the meaning thereof. |
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(g) |
Any provision of this Amendment held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction. |
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(h) |
This Amendment shall be construed in accordance with and governed by the laws of the State of Texas without regard to its principles of conflicts of laws. |
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(i) |
The execution, delivery and effectiveness of this Amendment shall not operate as a waiver of any right, power or remedy of Lender under any of the Loan Documents, nor constitute a waiver of any provision of any of the Loan Documents |
[ Remainder of Page Intentionally Left Blank; Signature Page Follows ]
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment in multiple counterparts on the date stated on the signature pages hereto, but effective as of Effective Date.
BORROWER:
FIRST FOUNDATION INC.
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a Delaware corporation
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By: |
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/s/ JOHN M. MICHEL |
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Name: John M. Michel Title: Chief Financial Officer |
Signature Page to
First Amendment to Loan Agreement
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By: |
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/s/ RHETT MILLER |
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Name: Rhett Miller Title: SVP & Chief Credit Officer |
Signature Page to
Third Amendment to Loan Agreement
Exhibit 99.1
First Foundation Inc. Announces Commencement of Stock Repurchase Program
IRVINE, CA — October 30, 2018 – First Foundation Inc. (NASDAQ: FFWM), a financial services company with two wholly-owned operating subsidiaries, First Foundation Advisors and First Foundation Bank, announced today that its Board of Directors has initiated a stock repurchase program.
Under the stock repurchase program, First Foundation may repurchase up to 2,200,000 shares of its common stock, or approximately 5% of the outstanding shares.
"We recently delivered strong results in both banking and investment management services and we believe the current market price of our stock understates the value of our comprehensive wealth management platform,” said Scott F. Kavanaugh, CEO of First Foundation. “This stock repurchase program is reflective of our strong belief in the company’s long-term growth prospects and reinforces our ongoing commitment to building stockholder value.”
Under the stock repurchase program, First Foundation may acquire shares from time to time in the open market or through privately negotiated transactions, at the discretion of management, and on terms (including quantity, timing and price) that management determines to be necessary, appropriate or advisable. The repurchase program does not obligate First Foundation to repurchase any specific number of shares and may be modified, suspended or discontinued at any time at the discretion of the its Board of Directors without notice.
First Foundation previously announced that it suspended its “at-the-market” equity offering program effective as of March 16, 2018. As required by SEC rules, First Foundation will not resume sales under the “at-the-market” equity offering while it is purchasing shares of its common stock under the stock repurchase program.
About First Foundation
First Foundation, a financial institution founded in 1990, provides private wealth management, personal banking, and business banking. The Company has offices in California, Nevada, and Hawaii with headquarters in Irvine, California. For more information, please visit www.firstfoundationinc.com.
Forward Looking Statements
Statements in this news release regarding our expectations and beliefs about our future financial performance and financial condition, as well as trends in our business and markets are "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. 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 news 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 results in the future could differ, possibly materially, from those expressed in or implied by the forward looking statements contained in this news release and could cause us to make changes to our future plans. Those risks and uncertainties include, but are not limited to the risk that the share repurchase program may not be completed as planned on a timely basis or at all; the risk that the expenses and diversion of management’s attention associated with the share repurchase plan may be higher than we currently expect; the risks of
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incurring loan or securities losses, which are inherent risks of the banking business; the risk that the economy in the United States will stall or will be adversely affected by domestic or international economic conditions and risks associated with the Federal Reserve Board taking actions with respect to interest rates, any of which could adversely affect our interest income and interest rate margins and, therefore, our future operating results; the risk that the performance of our investment management business or of the equity and bond markets could lead clients to move their funds from or close their investment accounts with us, which would reduce our assets under management and adversely affect our operating results; risks associated with changes in income tax laws and regulations; and risks associated with seeking new client relationships and maintaining existing client relationships. Additional information regarding these and other risks and uncertainties to which our business and future financial performance are subject is contained in Item 1A, entitled “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2017 that we filed with the SEC on March 16, 2018, and other documents we file with the SEC from time to time. We urge readers of this news release to review the Risk Factors section of that Annual Report and the Risk Factors section of other documents we file with the SEC from time to time. Also, our actual 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 news 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 news release or in the above-referenced 2017 Annual Report on Form 10-K, whether as a result of new information, future events or otherwise, except as may be required by law or NASDAQ rules.
Contact:
John Michel
Chief Financial Officer
First Foundation Inc.
949-202-4160
jmichel@ff-inc.com
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