First Foundation (FFWM) Strategic Update summary

Strategic Capital Raise and Investment Structure

• Announced $228 million equity investment led by Fortress Investment Group, Canyon Partners, Strategic Value Bank Partners, and North Reef Capital, with Fortress contributing $115 million and other investors making up the remainder; additional commitments total $67 million from other respected investors.

• The deal is priced at $4.10 per common share and includes convertible non-voting preferred stock and seven-year warrants at a 25% strike price premium; full conversion could result in approximately 66.5 million new shares.

• No regulatory approvals required for closing, expected July 8, 2024, but shareholder approval is needed for certain aspects; Jefferies LLC acts as exclusive financial advisor.

• Customary shelf and piggyback registration rights will be provided to investors.

Board and Leadership Changes

• Board will be reduced to nine members, with four new directors joining post-transaction, including Simone Lagomarsino as President, Henchy Enden, Sam Edelson, and Ben Mackovak; Fortress retains the right to add another member.

• Additional board members include representatives from Fortress, Canyon, and Strategic Value Bank Partners, bringing significant financial expertise.

Strategic Plan and Market Focus

• The capital infusion aims to strengthen the balance sheet, reduce multifamily loan concentration, grow the commercial and industrial (C&I) platform, increase allowance for credit losses, and materially improve earnings.

• Five-point plan includes strengthening ACL, reducing multifamily concentration, evaluating lower-yielding multifamily loans for sale, supporting wealth management, and focusing on C&I growth in key states such as California, Texas, and Florida.

• Presence in five states with 31 branches, $13.6 billion in assets, and $5.5 billion in assets under management; focus on affluent and fast-growing markets.