10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2019

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 001-36461

FIRST FOUNDATION INC.

(Exact name of Registrant as specified in its charter)

Delaware	20-8639702
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)
18101 Von Karman Avenue, Suite 700 Irvine, CA 92612	92612
(Address of principal executive offices)	(Zip Code)

(949) 202-4160

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No   ☒

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	FFWM	NASDAQ Global Market

As of May 6, 2019, there were 44,620,831 shares of registrant’s common stock outstanding

FIRST FOUNDATION INC.

QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED March 31, 2019

TABLE OF CONTENTS

		Page No.
Part I. Financial Information
Item 1.	Financial Statements	1
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	38
Item 4.	Controls and Procedures	38
Part II. Other Information
Item 1A	Risk Factors	38
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	38
Item 6	Exhibits	39
SIGNATURES		S-1

(i)

PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

FIRST FOUNDATION INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share amounts)

	March 31, 2019			December 31, 2018
		(unaudited)
ASSETS
Cash and cash equivalents	$	80,693		$	67,312
Securities available-for-sale (“AFS”)		788,160			809,569
Loans held for sale		613,528			507,643
Loans, net of deferred fees		4,336,065			4,293,669
Allowance for loan and lease losses (“ALLL”)		(19,200	)		(19,000	)
Net loans		4,316,865			4,274,669
Investment in FHLB stock		22,734			20,307
Deferred taxes		12,832			13,251
Premises and equipment, net		9,259			9,145
Real estate owned (“REO”)		465			815
Goodwill and intangibles		98,852			99,482
Other assets		57,816			38,219
Total Assets	$	6,001,204		$	5,840,412
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities:
Deposits	$	4,568,702		$	4,532,968
Borrowings		800,000			708,000
Accounts payable and other liabilities		64,259			40,260
Total Liabilities		5,432,961			5,281,228
Commitments and contingencies		—			—
Shareholders’ Equity
Common Stock, par value $0.001: 70,000,000 shares authorized;  44,620,831 and 44,496,007 shares issued and outstanding at March 31, 2019 and December 31, 2018, respectively		44			44
Additional paid-in-capital		432,621			431,832
Retained earnings		137,490			128,461
Accumulated other comprehensive loss, net of tax		(1,912	)		(1,153	)
Total Shareholders’ Equity		568,243			559,184
Total Liabilities and Shareholders’ Equity	$	6,001,204		$	5,840,412

(See accompanying notes to the consolidated financial statements)

1

FIRST FOUNDATION INC.

CONSOLIDATED INCOME STATEMENTS - UNAUDITED

(In thousands, except share and per share amounts)

	For the Quarter Ended March 31,
	2019		2018
Interest income:
Loans	$	53,835	$	38,971
Securities		6,165		3,422
FHLB stock, fed funds sold and interest-bearing deposits		544		926
Total interest income		60,544		43,319
Interest expense:
Deposits		15,448		5,872
Borrowings		4,049		3,179
Total interest expense		19,497		9,051
Net interest income		41,047		34,268
Provision for loan losses		540		1,688
Net interest income after provision for loan losses		40,507		32,580
Noninterest income:
Asset management, consulting and other fees		6,794		7,181
Gain on sale of loans		—		545
Other income		1,671		1,256
Total noninterest income		8,465		8,982
Noninterest expense:
Compensation and benefits		18,902		17,169
Occupancy and depreciation		4,868		4,171
Professional services and marketing costs		2,004		2,489
Customer service costs		3,389		2,771
Other expenses		3,782		2,388
Total noninterest expense		32,945		28,988
Income before taxes on income		16,027		12,574
Taxes on income		4,768		3,598
Net income	$	11,259	$	8,976
Net income per share:
Basic	$	0.25	$	0.23
Diluted	$	0.25	$	0.23
Shares used in computation:
Basic		44,540,865		38,577,271
Diluted		44,798,306		39,124,732

(See accompanying notes to the consolidated financial statements)

2

FIRST FOUNDATION INC.

CONSOLIDATED STATEMENT OF CHANGES

IN SHAREHOLDERS’ EQUITY - UNAUDITED

(In thousands, except share amounts)

	Common Stock								Accumulated Other
	Number of Shares	Amount		Additional Paid-in Capital		Retained Earnings			Comprehensive Income (Loss)			Total
Balance: December 31, 2018	44,496,007	$	44	$	431,832	$	128,461		$	(1,153	)	$	559,184
Net income	—		—		—		11,259			—			11,259
Other comprehensive income	—		—		—		—			(759	)		(759	)
Stock based compensation	—		—		692		—			—			692
Cash dividend	—		—		—		(2,230	)		—			(2,230	)
Issuance of common stock:
Exercise of options	13,000		—		97		—			—			97
Stock grants – vesting of Restricted Stock Units	111,824		—		—		—			—			—
Balance: March 31, 2019	44,620,831	$	44	$	432,621	$	137,490		$	(1,912	)	$	568,243

Balance: December 31, 2017	38,207,766	$	38	$	314,501	$	85,503	$	(5,091	)	$	394,951
Net income	—		—		—		8,976		—			8,976
Other comprehensive income	—		—		—		—		(5,264	)		(5,264	)
Stock based compensation	—		—		1,165		—		—			1,165
Issuance of common stock:			—
Exercise of options	123,000				944		—		—			944
Stock grants – vesting of Restricted Stock Units	99,940		—
Capital Raise	625,730		—		11,341		—		—			11,342
Balance: March 31, 2018	39,056,436	$	38	$	327,951	$	94,479	$	(10,355	)	$	412,114

(See accompanying notes to the consolidated financial statements)

3

FIRST FOUNDATION INC.

CONSOLIDATED STATEMENTS OF

COMPREHENSIVE INCOME - UNAUDITED

(In thousands)

	For the Quarter Ended March 31,
	2019			2018
Net income	$	11,259		$	8,976
Other comprehensive income:
Unrealized holding gains (losses) on securities arising during the period		(1,074	)		(7,440	)
Other comprehensive income (loss) before tax		(1,074	)		(7,440	)
Income tax expense (benefit) related to items of other comprehensive income		(315	)		(2,176	)
Other comprehensive income (loss)		(759	)		(5,264	)
Total comprehensive income	$	10,500		$	3,712

(See accompanying notes to the consolidated financial statements)

4

FIRST FOUNDATION INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED

(In thousands)

	For the Three Months Ended March 31,
	2019			2018
Cash Flows from Operating Activities:
Net income	$	11,259		$	8,976
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses		540			1,688
Stock–based compensation expense		692			1,165
Depreciation and amortization		738			664
Deferred tax expense		734			390
Amortization of core deposit intangible		630			325
Amortization of mortgage servicing rights – net		320			234
Amortization of discounts (premiums) on purchased loans – net		(2,171	)		(654	)
Gain on sale of loans		—			(545	)
Gain on sale of REO		(118	)		—
Loss (gain) from hedging activities		(291	)		—
(Increase) decrease in other assets		887			(2,336	)
Increase (decrease) in accounts payable and other liabilities		(2,028	)		169
Net cash provided by operating activities		11,192			10,076
Cash Flows from Investing Activities:
Net increase in loans		(141,346	)		(296,711	)
Proceeds from sale of loans		—			52,376
Proceeds from sale of REO		468			755
Purchase of premises and equipment		(852	)		(799	)
Recovery of allowance for loan losses		208			—
Purchases of AFS securities		—			(20,000	)
Maturities of AFS securities		20,537			18,880
Sale (purchases) of FHLB stock, net		(2,427	)		(3,566	)
Net cash used in investing activities		(123,412	)		(249,065	)
Cash Flows from Financing Activities:
Increase in deposits		35,734			192,665
FHLB Advances – net increase (decrease)		92,000			111,000
Line of credit net change – borrowings (paydowns), net		—			(20,000	)
Dividends paid		(2,230	)		—
Proceeds from sale of stock, net		97			12,286
Net cash provided by financing activities		125,601			295,951
Increase in cash and cash equivalents		13,381			56,962
Cash and cash equivalents at beginning of year		67,312			120,394
Cash and cash equivalents at end of period	$	80,693		$	177,356
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Income taxes	$	149		$	18
Interest		17,447			8,534
Noncash transactions:
Transfer of loans to (from) loans held for sale	$	101,397		$	46,338
Mortgage servicing rights created from loan sales		—			317
Chargeoffs (recoveries) against allowance for loans losses		548			88
Acquisition reconciliation – goodwill/deferred taxes		—			300

(See accompanying notes to the consolidated financial statements)

5

FIRST FOUNDATION INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the Quarter Ended March 31, 2019 - UNAUDITED

NOTE 1: BASIS OF PRESENTATION

The consolidated financial statements include First Foundation Inc. (“FFI”) and its wholly owned subsidiaries: First Foundation Advisors (“FFA”) and First Foundation Bank (“FFB” or the “Bank”) and the wholly owned subsidiaries of FFB, First Foundation Insurance Services (“FFIS”) and Blue Moon Management, LLC (collectively referred to as the “Company”). All intercompany balances and transactions have been eliminated in consolidation. The results of operations reflect any interim adjustments, all of which are of a normal recurring nature and which, in the opinion of management, are necessary for a fair presentation of the results for the interim period presented. The results for the 2019 interim periods are not necessarily indicative of the results expected for the full year.

The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America and prevailing practices within the banking industry. In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet and revenues and expenses for the period. Actual results could differ significantly from those estimates.

The accompanying unaudited consolidated financial statements include all information and footnotes required for interim financial statement presentation. These financial statements assume that readers have read the most recent Annual Report on Form 10-K which contains the latest available audited consolidated financial statements and notes thereto as of and for the year ended December 31, 2018.

Certain reclassifications have been made to the prior year consolidated financial statements to conform to the 2019 presentation.

In March 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2019-01, Codification Improvements to Topic 842, Leases. ASU 2019-01 provides improvements to clarify ASU 2016-02, Leases (Topic 842), or to correct unintended application of guidance. The amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted. The adoption of ASU 2019-01 is not expected to have a significant impact on the Company's consolidated financial statements.

In November 2018, the FASB issued ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments – Credit Losses. ASU 2018-19 provides improvements to clarify the guidance in the amendments in ASU 2016-13, Financial Instruments – Credit Losses (Topic 326), or to correct unintended application of guidance.  We expect the adoption of ASU 2018-19 will impact the Company’s accounting for credit losses in the same manner as the guidance in ASU 2016-13 described below.

In August 2018, the FASB issued guidance within ASU 2018-13, Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement. The amendments within ASU 2018-13 remove, modify, and supplement the disclosure requirements for fair value measurements. Disclosure requirements that were removed include: the amount and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, the policy for timing of transfers between levels, and the valuation processes for Level 3 fair value measurements. The amendments clarify that the measurement uncertainty disclosure is to communicate information about the uncertainty in measurement as of the reporting date. Additional disclosure requirements include: the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period, and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. With the exception of the above additional disclosure requirements, which will be applied prospectively, all other amendments should be applied retrospectively to all periods presented upon their effective date. The amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted. The adoption of ASU 2018-13 is not expected to have a significant impact on the Company's consolidated financial statements.

In January 2017, the FASB issued ASU 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment which provides updated guidance on how an entity is required to test goodwill for impairment. This update is effective for the Company for annual periods beginning after December 15, 2019, and interim periods within those annual periods. The adoption of ASU 2017-04 is not expected to have a material effect on the Company’s consolidated financial statements.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments which introduces new guidance for the accounting for credit losses on certain types of financial instruments. It also modifies the impairment model for available-for-sale debt securities and provides for a simplified accounting model for purchased financial assets with credit deterioration since their origination. The new model, referred to as the current expected credit losses (CECL) model, will apply to financial assets subject to credit losses and measured at amortized cost, and certain

6

FIRST FOUNDATION INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the Quarter Ended March 31, 2019 – UNAUDITED

off-balance sheet credit exposures. Upon initial recognition of the exposure, the CECL model requires an entity to estimate the credit losses expected over the life of an exposure. This update is effective for the Company for annual periods beginning after December 15, 2019, and interim periods within those annual periods. The Company has begun analyzing the data requirements needed to implement the adoption of ASU 2016-13 and we expect that the adoption of ASU 2016-13 may have a significant impact on the Company’s recording of its allowance for loan losses. The financial statement impact of the implementation of ASU 2016-13 is undeterminable at this time.

NOTE 2: ACQUISITIONS

On June 1, 2018, the Company completed the acquisition of PBB Bancorp and its wholly owned subsidiary Premier Business Bank (collectively “PBB”), through a merger of PBB with and into the Bank, in exchange for 5,234,593 shares of its common stock with a fair value of $19.39 per share. The primary reason for acquiring PBB was to expand our operations in Southern California.

The acquisition is accounted for under the purchase method of accounting. The acquired assets, assumed liabilities and identifiable intangible assets are recorded at their respective acquisition date fair values. Goodwill of $61 million, which is not tax deductible, is included in intangible assets in the table below.  

The following table represents the assets acquired and liabilities assumed of PBB as of June 1, 2018 and the fair value adjustments and amounts recorded by the Bank in 2018 under the acquisition method of accounting:

(dollars in thousands)		PBB Book Value		Fair Value Adjustments			Fair Value
Assets Acquired:
Cash and cash equivalents	$	47,582		$	—		$	47,582
Securities AFS		10,072			(90	)		9,982
Loans, net of deferred fees		537,885			(14,986	)		522,899
Allowance for loan losses		(3,011	)		3,011			—
Premises and equipment, net		3,811			(1,536	)		2,275
Investment in FHLB stock		3,229			—			3,229
Deferred taxes		1,451			2,398			3,849
REO		934			(109	)		825
Goodwill and Core deposit intangible		634			66,615			67,249
Other assets		6,634			(566	)		6,068
Total assets acquired	$	609,221		$	54,737		$	663,958
Liabilities Assumed:
Deposits	$	477,366		$	219		$	477,585
Borrowings		79,911			(341	)		79,570
Accounts payable and other liabilities		5,204			100			5,304
Total liabilities assumed		562,481			(22	)		562,459
Excess of assets acquired over liabilities assumed		46,740			54,759			101,499
Total	$	609,221		$	54,737		$	663,958
Consideration:
Stock issued							$	101,499

In many cases, the fair values of assets acquired and liabilities assumed were determined by estimating the cash flows expected to result from those assets and liabilities and discounting them at appropriate market rates. The most significant category of assets for which this procedure was used was that of acquired loans. The excess of expected cash flows above the fair value of the majority of loans will be accreted to interest income over the remaining lives of the loans in accordance with FASB Accounting Standards Codification (“ASC”) 310-20.

Certain loans, for which specific credit-related deterioration since origination was identified, are recorded at fair value reflecting the present value of the amounts expected to be collected. Income recognition on these “purchased credit impaired” loans is based on a reasonable expectation about the timing and amount of cash flows to be collected. Acquired loans deemed impaired and considered

7

FIRST FOUNDATION INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the Quarter Ended March 31, 2019 – UNAUDITED

collateral dependent, with the timing of the sale of loan collateral indeterminate, remain on nonaccrual status and have no accretable yield. All purchased credit impaired loans were classified as accruing loans as of and subsequent to the acquisition date.

In accordance with generally accepted accounting principles there was no carryover of the allowance for loan losses that had been previously recorded by PBB.

The Company recorded a deferred income tax asset of $3.8 million related to PBB’s operating loss carry-forward and other tax attributes of PBB, along with the effects of fair value adjustments resulting from applying the purchase method of accounting.

The fair value of savings and transaction deposit accounts acquired from PBB were assumed to approximate their carrying value as these accounts have no stated maturity and are payable on demand. Certificates of deposit accounts were valued by comparing the contractual cost of the portfolio to an identical portfolio bearing current market rates. The portfolio was segregated into pools based on remaining maturity. For each pool, the projected cash flows from maturing certificates were then calculated based on contractual rates and prevailing market rates. The valuation adjustment for each pool is equal to the present value of the difference of these two cash flows, discounted at the assumed market rate for a certificate with a corresponding maturity. This valuation adjustment will be accreted to reduce interest expense over the remaining maturities of the respective pools. The Company also recorded a core deposit intangible, which represents the value of the deposit relationships acquired from PBB, of $6.7 million. The core deposit intangible will be amortized over a period of 10 years.

Pro Forma Information (unaudited)

The following table presents unaudited pro forma information for the three months periods ending March 31, 2018 as if the acquisition of PBB had occurred on January 1, 2018, after giving effect to certain adjustments. The unaudited pro forma information for this period includes adjustments for interest income on loans acquired, amortization of intangibles arising from the transaction, adjustments for interest expense on deposits acquired, acquisition costs, and the related income tax effects of all these items. The net effect of these pro forma adjustments was an increase of $0.4 million in net income for the three months ended March 31, 2018. The unaudited pro forma financial information is not necessarily indicative of the results of operations that would have occurred had the transaction been effected on the assumed date.

(dollars in thousands)	Three Months Ended March 31, 2018
Net interest income	$	41,063
Provision for loan losses		1,688
Noninterest income		9,524
Noninterest expenses		32,868
Income before taxes		16,031
Taxes on income		4,624
Net income	$	11,407
Net income per share:
Basic	$	0.26
Diluted	$	0.26

NOTE 3:FAIRVALUEMEASUREMENTS

Assets Measured at Fair Value on a Recurring Basis

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.  Current accounting guidance establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.  There are three levels of inputs that may be used to measure fair values:

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FIRST FOUNDATION INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the Quarter Ended March 31, 2019 – UNAUDITED

Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3: Significant unobservable inputs that reflect the Company's own assumptions about the assumptions that market participants would use in pricing an asset or liability.

Securities available for sale and effective with the adoption of ASU 2016-01 on January 1, 2018, investments in equity securities, are measured at fair value on a recurring basis depending upon whether the inputs are Level 1, 2 or 3 as described above.

Thefollowingtablesshowtherecordedamountsofassetsandliabilitiesmeasuredatfairvalueona recurringbasisas of:

			Fair Value Measurement Level
(dollars in thousands)	Total		Level 1		Level 2		Level 3
March 31, 2019:
Investment securities available for sale:
Agency mortgage-backed securities	$	701,612	$	—	$	701,612	$	—
Beneficial interest – FHLMC securitizations		30,616		—		—		30,616
Corporate bonds		54,427		—		54,427		—
Other		1,505		499		1,006		—
Investment in equity securities		399		399		—		—
Total assets at fair value on a recurring basis	$	788,559	$	898	$	757,045	$	30,616
Derivatives:
Interest rate swaps		10,196		—		10,196		—
December 31, 2018:
Investment securities available for sale:
Agency mortgage-backed securities	$	721,669		—		388,527		333,142
Beneficial interest – FHLMC securitizations		32,086		—		—		32,086
Corporate bonds		54,344		—		54,344		—
Other		1,470		497		973		—
Investment in equity securities		352		352		—		—
Total assets at fair value on a recurring basis	$	809,921	$	849	$	443,844	$	365,228
Derivatives:
Interest rate swaps		5,175		—		5,175		—

The decrease in Level 3 assets from December 31, 2018 was due to a change in pricing methodology of agency mortgage-backed securities. The December 31, 2018 agency mortgage-backed securities Level 2 and Level 3 values have been adjusted to reflect a correction to the amounts previously reported. The total amount of agency mortgage-backed securities at December 31, 2018 did not change.

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FIRST FOUNDATION INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the Quarter Ended March 31, 2019 – UNAUDITED

Assets Measured at Fair Value on a Nonrecurring Basis

From time to time, we may be required to measure other assets at fair value on a nonrecurring basis. These nonrecurring fair value adjustments typically involve application of lower of cost or market accounting or write-downs of individual assets.  

Impaired Loans. ASC 820-10 applies to loans measured for impairment in accordance with ASC 310-10, Accounting by Creditors for Impairment of a Loan, at the fair value of the loan’s collateral (if the loan is collateral dependent) less estimated selling costs. When the fair value of the collateral is based on an observable market price or a current appraised value, we measure the impaired loan at nonrecurring Level 2. When an appraised value is not available, or management determines the fair value of the collateral is further impaired below the appraised value and there is no observable market price or a discounted cash flow has been used to determine the fair value, we measure the impaired loan at nonrecurring Level 3. The total collateral dependent impaired Level 3 loans were $21.9 million and $12.8 million at March 31, 2019 and December 31, 2018, respectively.  There were no specific reserves related to these loans at March 31, 2019 and December 31, 2018.

Real Estate Owned.  The fair value of real estate owned is based on external appraised values that include adjustments for estimated selling costs and assumptions of market conditions that are not directly observable, resulting in a Level 3 classification.  As of March 31, 2019 and December 31, 2018, the fair value of real estate owned was $0.5 million and $0.8 million, respectively.

Mortgage Servicing Rights. When mortgage loans are sold with servicing retained, servicing rights are initially recorded at fair value with the income statement effect recorded in gains on sales of loans.  Fair value is based on a valuation model that calculates the present value of estimated future net servicing income, resulting in a Level 3 classification.  All classes of servicing assets are subsequently measured using the amortization method which requires servicing rights to be amortized into noninterest income in proportion to, and over the period of, the estimated future net servicing income of the underlying loans.

Fair Value of Financial Instruments

FASB ASC 825, “Disclosures about Fair Value of Financial Instruments” requires disclosure of the fair value information about financial instruments, whether or not recognized in the balance sheet, for which it is practicable to estimate such value. The methodologies for estimating the fair value of financial assets and financial liabilities measured at fair value on a recurring and non-recurring basis are discussed above. The estimated fair value amounts have been determined by management using available market information and appropriate valuation methodologies and are based on the exit price notion set forth by ASU 2016-1. In cases where quoted market prices are not available, fair values are based on estimates using present value or other market value techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. In that regard, the derived fair value estimates cannot be substantiated by comparison to independent markets and, in many cases, could not be realized in immediate settlement of the instrument. The aggregate fair value amounts presented below do not represent the underlying value of the Company.

Fair value estimates are made at a discrete point in time based on relevant market information and other information about the financial instruments. Because no active market exists for a significant portion of our financial instruments, fair value estimates are based in large part on judgments we make primarily regarding current economic conditions, risk characteristics of various financial instruments, prepayment rates, and future expected loss experience. These estimates are subjective in nature and invariably involve some inherent uncertainties. Additionally, unexpected changes in events or circumstances can occur that could require us to make changes to our assumptions and which, in turn, could significantly affect and require us to make changes to our previous estimates of fair value.

In addition, the fair value estimates are based on existing on and off-balance sheet financial instruments without attempting to estimate the value of existing and anticipated future customer relationships and the value of assets and liabilities that are not considered financial instruments, such as premises and equipment and other real estate owned.

The following methods and assumptions were used to estimate the fair value of financial instruments.

Cash and Cash Equivalents. The fair value of cash and cash equivalents approximates its carrying value.

Interest-Bearing Deposits with Financial Institutions. The fair values of interest-bearing deposits maturing within ninety days approximate their carrying values.

10

FIRST FOUNDATION INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the Quarter Ended March 31, 2019 – UNAUDITED

Investment Securities Available for Sale. Investment securities available-for-sale are measured at fair value on a recurring basis. Fair value measurement is based upon quoted prices, if available. If quoted prices are not available, fair values are measured using independent pricing models or other model-based valuation techniques such as the present value of future cash flows, adjusted for the security’s credit rating, prepayment assumptions and other factors such as credit loss assumptions. When a market is illiquid or there is a lack of transparency around the inputs to valuation, the securities are classified as Level 3 and reliance is placed upon internally developed models, and management judgment and evaluation for valuation. Level 1 securities include those traded on an active exchange, such as the New York Stock Exchange, U.S. Treasury securities that are traded by dealers or brokers in active over-the-counter markets and money market funds. Level 2 securities include mortgage-backed securities issued by government sponsored entities, municipal bonds and corporate debt securities. Securities classified as Level 3 include beneficial interests – FHLMC securitization. Significant assumptions in the valuation of these Level 3 securities as of March 31, 2019 and December 31, 2018 included a prepayment rate of 15% and discount rates ranging from 4.0% to 10%.

Federal Home Loan Bank Stock. The Bank is a member of the Federal Home Loan Bank (the “FHLB”). As a member, we are required to own stock of the FHLB, the amount of which is based primarily on the level of our borrowings from this institution. The fair value of the stock is equal to the carrying amount, is classified as restricted securities and is periodically evaluated for impairment based on our assessment of the ultimate recoverability of our investments in that stock. Any cash or stock dividends paid to us on such stock are reported as income.

Loans Held For Sale. The fair value of loans held for sale is determined using secondary market pricing.

Loans, Other than Impaired Loans. The fair value for loans with variable interest rates is the carrying amount. The fair value of fixed rate loans is derived by calculating the discounted value of future cash flows expected to be received by the various homogeneous categories of loans. All loans have been adjusted to reflect changes in credit risk.

Deposits. The fair value of demand deposits, savings deposits, and money market deposits is defined as the amounts payable on demand. The fair value of fixed maturity certificates of deposit is estimated based on the discounted value of the future cash flows expected to be paid on the deposits.

Borrowings. The fair value of borrowings is the carrying value of overnight FHLB advances that approximate fair value because of the short-term maturity of this instrument, resulting in a Level 2 classification. The fair value of term borrowings is derived by calculating the discounted value of future cash flows expected to be paid out by the Company.

Interest rate swaps. Interest rate swaps are reported at an estimated fair value utilizing Level 2 inputs including LIBOR rates from overnight to one year and U.S. swap rates from one year to thirty years.

11

FIRST FOUNDATION INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the Quarter Ended March 31, 2019 – UNAUDITED

The carrying amounts and estimated fair values of financial instruments are as follows as of:

	Carrying		Fair Value Measurement Level
(dollars in thousands)	Value		1		2		3		Total
March 31, 2019:
Assets:
Cash and cash equivalents	$	80,693	$	80,693	$	—	$	—	$	80,693
Securities AFS		788,160		499		757,045		30,616		788,160
Loans held for sale		613,528		—		607,631		—		607,631
Loans, net		4,316,865		—		—		4,361,565		4,361,565
Investment in FHLB stock		22,734		—		22,734		—		22,734
Investment in equity securities		399		399		—		—		399
Liabilities:
Deposits		4,568,702		2,598,436		1,963,623		—		4,562,059
Borrowings		800,000		—		795,000		5,000		800,000
Interest rate swaps		10,196		—		10,196		—		10,196
December 31, 2018:
Assets:
Cash and cash equivalents	$	67,312	$	67,312	$	—	$	—	$	67,312
Securities AFS		809,569		497		443,844		365,228		809,569
Loans held for sale		507,643		—		517,273		—		517,273
Loans, net		4,274,669		—		—		4,408,788		4,408,788
Investment in FHLB stock		20,307		—		20,307		—		20,307
Investment in equity securities		352		352		—		—		352
Liabilities:
Deposits		4,532,968		2,582,758		1,943,635		—		4,526,393
Borrowings		708,000		—		703,000		5,000		708,000
Interest rate swaps		5,175		—		5,175		—		5,175

NOTE 4: SECURITIES

The following table provides a summary of the Company’s securities AFS portfolio as of:

		Amortized	Gross Unrealized					Estimated
(dollars in thousands)		Cost	Gains		Losses			Fair Value
March 31, 2019:
Agency mortgage-backed securities	$	704,262	$	4,338	$	(6,988	)	$	701,612
Beneficial interests in FHLMC securitization		31,136		1,308		(1,828	)		30,616
Corporate bonds		54,000		497		(70	)		54,427
Other		1,465		41		(1	)		1,505
Total	$	790,863	$	6,184	$	(8,887	)	$	788,160
December 31, 2018:
Agency mortgage-backed securities	$	723,597	$	11,883	$	(13,811	)	$	721,669
Beneficial interests in FHLMC securitization		32,143		1,756		(1,813	)		32,086
Corporate bonds		54,000		638		(294	)		54,344
Other		1,458		15		(3	)		1,470
Total	$	811,198	$	14,292	$	(15,921	)	$	809,569

US Treasury securities of $0.5 million as of March 31, 2019 that are included in the table above as Other are pledged as collateral to the State of California to meet regulatory requirements related to the Bank’s trust operations. As of March 31, 2019, $78 million of agency mortgage-backed securities are pledged as collateral as support for the Banks’s obligations under a loan sales and securitization agreement entered into in 2018.

12

FIRST FOUNDATION INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the Quarter Ended March 31, 2019 – UNAUDITED

Thetablesbelowindicate,asofMarch 31, 2019 and December 31, 2018,thegrossunrealizedlossesandfairvaluesofourinvestments,aggregatedbyinvestmentcategoryand lengthoftimethattheindividualsecuritieshavebeenina continuousunrealizedlossposition.

	Securities with Unrealized Loss at March 31, 2019
	Less than 12 months					12 months or more					Total
(dollars in thousands)	Fair Value			Unrealized Loss		Fair Value			Unrealized Loss		Fair Value		Unrealized Loss
Agency mortgage-backed securities	$	—	$	—		$	356,193	$	(6,988	)	$	356,193	$	(6,988	)
Beneficial interests in FHLMC securitization		—		—			6,605		(1,828	)		6,605		(1,828	)
Corporate bonds		3,930		(70	)		—		—			3,930		(70	)
Other		—		—			299		(1	)		299		(1	)
Total temporarily impaired securities	$	3,930		(70	)	$	363,097	$	(8,817	)	$	367,027	$	(8,887	)

	Securities with Unrealized Loss at December 31, 2018
(dollars in thousands)	Less than 12 months					12 months or more					Total
	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
Agency mortgage-backed securities	$	—	$	—		$	387,151	$	(13,811	)	$	387,151	$	(13,811	)
Beneficial interests in FHLMC securitization		429		(11	)		7,038		(1,802	)		7,467		(1,813	)
Corporate bonds		38,706		(294	)		—		—			38,706		(294	)
Other		—		—			497		(3	)		497		(3	)
Total temporarily impaired securities	$	39,135	$	(305	)	$	394,686	$	(15,616	)	$	433,821	$	(15,921	)

Unrealized losses in agency mortgage-backed securities, beneficial interests in FHLMC securitizations, and other securities have not been recognized into income because the issuer bonds are of high credit quality, management does not intend to sell, it is not more likely than not that management would be required to sell the securities prior to their anticipated recovery, and the decline in fair value is largely due to changes in discount rates and assumptions regarding future interest rates. The fair value is expected to recover as the bonds approach maturity.

The scheduled maturities of securities AFS and the related weighted average yields were as follows for the periods indicated:

(dollars in thousands)	Less than  1 Year			1 Through  5 years			5 Through  10 Years			After 10 Years			Total
March 31, 2019
Amortized Cost:
Corporate bonds	$	—		$	—		$	54,000		$	—		$	54,000
Other		500			—			965			—			1,465
Total		500			—			54,965			—			55,465
Weighted average yield	$	1.03	%		—	%		5.29	%		—	%		5.25	%
Estimated Fair Value:
Corporate bonds	$	—		$	—		$	54,427		$	—		$	54,427
Other		499			—			1,006			—			1,505
Total	$	499		$	—		$	55,433		$	—		$	55,932

13

FIRST FOUNDATION INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the Quarter Ended March 31, 2019 – UNAUDITED

(dollars in thousands)	Less than  1 Year			1 Through  5 years			5 Through  10 Years			After 10 Years			Total
December 31, 2018
Amortized Cost:
Corporate bonds	$	—		$	—		$	54,000		$	—		$	54,000
Other		500			—			958			—			1,458
Total		500			—			54,958			—			55,458
Weighted average yield		1.03	%		—	%		5.29	%		—	%		5.25	%
Estimated Fair Value:
Corporate bonds	$	—		$	—		$	54,344		$	—		$	54,344
Other		497			—			973			—			1,470
Total	$	497		$	—		$	55,317		$	—		$	55,814

Agency mortgage-backed securities and beneficial interests in FHLMC securitizations are excluded from the above table because such securities are not due at a single maturity date. The weighted average yield of the agency mortgage-backed securities and beneficial interests as of March 31, 2019 was 2.92%.

NOTE 5: LOANS

The following is a summary of our loans as of:

(dollars in thousands)	March 31, 2019		December 31, 2018
Outstanding principal balance:
Loans secured by real estate:
Residential properties:
Multifamily	$	1,987,690	$	1,956,935
Single family		903,992		904,828
Total real estate loans secured by residential properties		2,891,682		2,861,763
Commercial properties		902,060		869,169
Land		59,917		80,187
Total real estate loans		3,853,659		3,811,119
Commercial and industrial loans		454,849		449,805
Consumer loans		17,693		22,699
Total loans		4,326,201		4,283,623
Premiums, discounts and deferred fees and expenses		9,864		10,046
Total	$	4,336,065	$	4,293,669

As of March 31, 2019 and December 31, 2018, the principal balances shown above are net of unaccreted discount related to loans acquired in an acquisition of $11.1 million and $13.3 million, respectively.

14

FIRST FOUNDATION INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the Quarter Ended March 31, 2019 – UNAUDITED

In 2017and 2018 the Company purchased loans, for which there was, at acquisition, evidence of deterioration of credit quality since origination and it was probable, at acquisition, that all contractually required payments would not be collected. The carrying amount of these purchased credit impaired loans is as follows as of:

(dollars in thousands)	March 31, 2019			December 31, 2018
Outstanding principal balance:
Loans secured by real estate:
Residential properties	$	371		$	451
Commercial properties		7,477			10,871
Land		1,081			1,089
Total real estate loans		8,929			12,411
Commercial and industrial loans		1,434			1,150
Consumer loans		9			10
Total loans		10,372			13,571
Unaccreted discount on purchased credit impaired loans		(4,861	)		(6,490	)
Total	$	5,511		$	7,081

Accretable yield, or income expected to be collected on purchased credit impaired loans, and the related changes, is as follows for the periods indicated:

(dollars in thousands)	Three Months Ended March 31, 2019			Year Ended December 31, 2018
Beginning balance	$	767		$	850
Accretion of income		(80	)		(1,509	)
Acquisition		—			1,887
Disposals		(51	)		(461	)
Ending balance	$	636		$	767

The following table summarizes our delinquent and nonaccrual loans as of:

	Past Due and Still Accruing												Total Past
(dollars in thousands)	30–59 Days			60-89 Days			90 Days  or More			Nonaccrual			Due and Nonaccrual			Current		Total
March 31, 2019:
Real estate loans:
Residential properties	$	—		$	664		$	—		$	1,811		$	2,475		$	2,889,207	$	2,891,682
Commercial properties		—			—			—			2,533			2,533			899,527		902,060
Land		—			—			—			697			697			59,220		59,917
Commercial and industrial loans		4,521			610			—			10,496			15,627			439,222		454,849
Consumer loans		5			4			—			—			9			17,684		17,693
Total	$	4,526		$	1,278		$	—		$	15,537		$	21,341		$	4,304,860	$	4,326,201
Percentage of total loans		0.10	%		0.03	%		—	%		0.36	%		0.49	%
December 31, 2018:
Real estate loans:
Residential properties	$	74		$	—		$	499		$	651		$	1,224		$	2,860,539	$	2,861,763
Commercial properties		440			117			—			1,607			2,164			867,005		869,169
Land		2,000			—			—			697			2,697			77,490		80,187
Commercial and industrial loans		12,541			300			536			8,559			21,936			427,869		449,805
Consumer loans		—			7			—			2			9			22,690		22,699
Total	$	15,055		$	424		$	1,035		$	11,516		$	28,030		$	4,255,593	$	4,283,623
Percentage of total loans		0.35	%		0.01	%		0.02	%		0.27	%		0.65	%

15

FIRST FOUNDATION INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the Quarter Ended March 31, 2019 – UNAUDITED

The following table presents the loans classified as troubled debt restructurings (“TDR”)by accrual and nonaccrual status as of:

	March 31, 2019							December 31, 2018
(dollars in thousands)	Accrual			Nonaccrual	Total			Accrual	Nonaccrual		Total
Commercial real estate loans	$	1,245	$	1,464	$	2,709	$	1,264	$	1,491	$	2,755
Commercial and industrial loans		—		2,018		2,018		—		2,096		2,096
Total		1,245		3,482		4,727		1,264		3,587		4,851

The following table provides information on loans that were modified as TDRs for the following periods:

		Outstanding Recorded Investment
(dollars in thousands)	Number of loans	Pre-Modification		Post-Modification		Financial Impact
Three Months Ended March 31, 2019:
Commercial real estate loans	—	$	—	$	—	$	—
Commercial loans	1		49		49		—
Total	1	$	49	$	49	$	—

		Outstanding Recorded Investment
(dollars in thousands)	Number of loans	Pre-Modification		Post-Modification		Financial Impact
Year Ended December 31, 2018:
Commercial real estate loans	1	$	1,264	$	1,264	$	—
Commercial loans	3		2,096		2,096		—
Total	4	$	3,360	$	3,360	$	—

All of these loans were classified as a TDR as a result of a reduction in required principal payments and an extension of the maturity date of the loans. These loans have been paying in accordance with the terms of their restructure.

NOTE 6: ALLOWANCE FOR LOAN LOSSES

The following is a roll forward of the Bank’s allowance for loan losses for the quarters ended March 31:

(dollars in thousands)	Beginning Balance		Provision for Loan Losses			Charge-offs			Recoveries		Ending Balance
2019:
Real estate loans:
Residential properties	$	9,216	$	422		$	—		$	—	$	9,638
Commercial properties		4,547		(232	)		—			—		4,315
Land		391		(149	)		—			—		242
Commercial and industrial loans		4,628		503			(543	)		207		4,795
Consumer loans		218		(4	)		(5	)		1		210
Total	$	19,000	$	540		$	(548	)	$	208	$	19,200
2018
Real estate loans:
Residential properties	$	9,715	$	193		$	—		$	—	$	9,908
Commercial properties		4,399		(9	)		—			—		4,390
Land		395		(60	)		—			—		335
Commercial and industrial loans		3,624		1,557			(88	)		—		5,093
Consumer loans		267		7			—			—		274
Total	$	18,400	$	1,688		$	(88	)	$	—	$	20,000

16

FIRST FOUNDATION INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the Quarter Ended March 31, 2019 – UNAUDITED

The following table presents the balance in the allowance for loan losses and the recorded investment in loans by impairment method as of:

	Allowance for Loan Losses								Unaccreted Credit
	Evaluated for Impairment				Purchased				Component
(dollars in thousands)	Individually		Collectively		Impaired		Total		Other Loans
March 31, 2019:
Allowance for loan losses:
Real estate loans:
Residential properties	$	—	$	9,638	$	—	$	9,638	$	1,524
Commercial properties		117		4,198		—		4,315		1,589
Land		—		242		—		242		47
Commercial and industrial loans		507		4,288		—		4,795		509
Consumer loans		—		210		—		210		2
Total	$	624	$	18,576	$	—	$	19,200	$	3,671
Loans:
Real estate loans:
Residential properties	$	1,811	$	2,889,871	$	—	$	2,891,682	$	234,595
Commercial properties		8,944		889,412		3,704		902,060		280,393
Land		697		58,418		802		59,917		37,624
Commercial and industrial loans		10,496		443,348		1,005		454,849		55,921
Consumer loans		—		17,693		—		17,693		314
Total	$	21,948	$	4,298,742	$	5,511	$	4,326,201	$	608,847
December 31, 2018:
Allowance for loan losses:
Real estate loans:
Residential properties	$	—	$	9,216	$	—	$	9,216	$	1,724
Commercial properties		126		4,421		—		4,547		1,779
Land		—		391		—		391		84
Commercial and industrial loans		290		4,338		—		4,628		633
Consumer loans		—		218		—		218		3
Total	$	416	$	18,584	$	—	$	19,000	$	4,223
Loans:
Real estate loans:
Residential properties	$	651	$	2,861,112	$	—	$	2,861,763	$	241,698
Commercial properties		2,871		860,835		5,463		869,169		275,516
Land		697		78,681		809		80,187		41,132
Commercial and industrial loans		8,559		440,437		809		449,805		61,183
Consumer loans		—		22,699		—		22,699		366
Total	$	12,778	$	4,263,764	$	7,081	$	4,283,623	$	619,895

The column labeled “Unaccreted Credit Component Other Loans” represents the amount of unaccreted credit component discount for the other loans acquired in a business combination, and the stated principal balance of the related loans. The discount is equal to 0.60% and 0.68% of the stated principal balance of these loans as of March 31, 2019 and December 31, 2018, respectively. In addition to this unaccreted credit component discount, an additional $0.3 million and $0.4 million of ALLL has been provided for these loans as of March 31, 2019 and December 31, 2018, respectively.

17

FIRST FOUNDATION INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the Quarter Ended March 31, 2019 – UNAUDITED

The Bank categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as current financial information, historical payment experience, collateral adequacy, credit documentation, and current economic trends, among other factors. The Bank analyzes loans individually by classifying the loans as to credit risk. This analysis typically includes larger, non-homogeneous loans such as loans secured by multifamily or commercial real estate and commercial and industrial loans. This analysis is performed on an ongoing basis as new information is obtained. The Bank uses the following definitions for risk ratings:

Pass: Loans classified as pass are strong credits with no existing or known potential weaknesses deserving of management’s close attention.

Special Mention: Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date.

Substandard: Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

Impaired: A loan is considered impaired, when, based on current information and events, it is probable that the Bank will be unable to collect all amounts due according to the contractual terms of the loan agreement.

Additionally, all loans classified as TDRs are considered impaired at the time they are restructured. Purchased credit impaired loans are not considered impaired loans for these purposes.

Loans listed as pass include larger non-homogeneous loans not meeting the risk rating definitions above and smaller, homogeneous loans not assessed on an individual basis.

Based on the most recent analysis performed, the risk category of loans by class of loans is as follows as of:

(dollars in thousands)	Pass		Special Mention		Substandard		Impaired		Total
March 31, 2019:
Real estate loans:
Residential properties	$	2,886,943	$	2,928	$	—	$	1,811	$	2,891,682
Commercial properties		880,599		6,696		5,821		8,944		902,060
Land		58,418		—		802		697		59,917
Commercial and industrial loans		440,126		918		3,309		10,496		454,849
Consumer loans		17,693		—		—		—		17,693
Total	$	4,283,779	$	10,542	$	9,932	$	21,948	$	4,326,201
December 31, 2018:
Real estate loans:
Residential properties	$	2,857,666	$	3,446	$	—	$	651	$	2,861,763
Commercial properties		845,672		13,024		7,602		2,871		869,169
Land		78,681		—		809		697		80,187
Commercial and industrial loans		431,751		7,723		1,772		8,559		449,805
Consumer loans		22,699		—		—		—		22,699
Total	$	4,236,469	$	24,193	$	10,183	$	12,778	$	4,283,623

18

FIRST FOUNDATION INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the Quarter Ended March 31, 2019 – UNAUDITED

Impaired loans evaluated individually and any related allowance are as follows as of:

	With No Allowance Recorded				With an Allowance Recorded
(dollars in thousands)	Unpaid Principal Balance		Recorded Investment		Unpaid Principal Balance		Recorded Investment		Related Allowance
March 31, 2019:
Real estate loans:
Residential properties	$	1,835	$	1,811	$	—	$	—	$	—
Commercial properties		7,816		7,699		1,245		1,245		117
Land		697		697		—		—		—
Commercial and industrial loans		6,974		6,766		3,750		3,730		507
Total	$	17,322	$	16,973	$	4,995	$	4,975	$	624
December 31, 2018:
Real estate loans:
Residential properties	$	651	$	651	$	—	$	—	$	—
Commercial properties		1,607		1,607		1,264		1,264		126
Land		697		697		—		—		—
Commercial and industrial loans		6,543		6,543		2,016		2,016		290
Total	$	9,498	$	9,498	$	3,280	$	3,280	$	416

The weighted average annualized average balance of the recorded investment for impaired loans, beginning from when the loan became impaired, and any interest income recorded on impaired loans after they became impaired is as follows for the:

	Three months Ended March 31, 2019				Year Ended December 31, 2018
(dollars in thousands)	Average Recorded Investment		Interest Income after Impairment		Average Recorded Investment		Interest Income after Impairment
Real estate loans:
Residential properties	$	1,151	$	—	$	276	$	—
Commercial properties		6,927		74		3,459		90
Land		697		—		—		—
Commercial and industrial loans		9,499		—		9,117		—
Total	$	18,274	$	74	$	12,852	$	90

There was no interest income recognized on a cash basis in either 2019 or 2018 on impaired loans.

NOTE 7: LOAN SALES AND MORTGAGE SERVICING RIGHTS

During the first three months of 2019, FFB did not have any loan sales. In 2018, FFB sold $674 million of multifamily loans to financial institutions and recognized a gain of $0.4 million.

For sales of multifamily loans, FFB retained servicing rights for the majority of these loans and recognized mortgage servicing rights as part of the transactions. As of March 31, 2019 and December 31, 2018, mortgage servicing rights were $6.1 million and $6.4 million, respectively and the amount of loans serviced for others totaled $1.3 billion at March 31, 2019 and December 31, 2018. Servicing fees for the three months ended March 31, 2019, and in 2018 were $0.4 million and $1.1 million, respectively.  

19

FIRST FOUNDATION INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the Quarter Ended March 31, 2019 – UNAUDITED

NOTE 8: DEPOSITS

The following table summarizes the outstanding balance of deposits and average rates paid thereon as of:

	March 31, 2019					December 31, 2018
(dollars in thousands)	Amount		Weighted Average Rate			Amount		Weighted Average Rate
Demand deposits:
Noninterest-bearing	$	1,114,596		—		$	1,074,661		—
Interest-bearing		307,854		0.790	%		317,380		0.798	%
Money market and savings		1,175,986		1.180	%		1,190,717		1.115	%
Certificates of deposits		1,970,266		2.276	%		1,950,210		2.142	%
Total	$	4,568,702		1.338	%	$	4,532,968		1.270	%

At March 31, 2019, of the $398 million of certificates of deposits of $250,000 or more, $376 million mature within one year and $22 million mature after one year. Of the $1.6 billion of certificates of deposit of less than $250,000, $1.5 billion mature within one year and $51 million mature after one year. At December 31, 2018, of the $360 million of certificates of deposits of $250,000 or more, $332 million mature within one year and $28 million mature after one year. Of the $1.6 billion of certificates of deposit of less than $250,000, $1.5 billion mature within one year and $53 million mature after one year.  

NOTE 9: BORROWINGS

At March 31, 2019, our borrowings consisted of $795 million of overnight FHLB advances at the Bank and $5 million of borrowings outstanding on a holding company line of credit. At December 31, 2018, our borrowings consisted of $703 million of overnight FHLB advances at the Bank and $5 million of borrowings outstanding on a holding company line of credit. The overnight FHLB advances were paid in full in the early part of April 2019 and January 2019, respectively, and bore interest rates of 2.58% and 2.56%, respectively. At March 31, 2019, the interest rate on the holding company line of credit was 6.30%. Because the Bank utilizes overnight borrowings, the balance of outstanding borrowings fluctuates on a daily basis.

FHLB advances are collateralized primarily by loans secured by multifamily and commercial real estate properties with a carrying value of $3.1 billion as of March 31, 2019. As a matter of practice, the Bank provides substantially all of its qualifying loans as collateral to the FHLB. The Bank’s total borrowing capacity from the FHLB at March 31, 2019 was $2.3 billion. In addition to the $795 million borrowing at March 31, 2019, the Bank had in place $231 million of letters of credit from the FHLB which are used to meet collateral requirements for borrowings from the State of California and local agencies.

During 2017, FFI entered into a loan agreement with an unaffiliated lender that provides for a revolving line of credit for up to $75 million. The loan agreement matures in five years, with an option to extend the maturity date subject to certain conditions, and bears interest at 90 day LIBOR plus 350 basis points (3.50%). We are required to meet certain financial covenants during the term of the loan, including minimum capital levels and limits on classified assets. FFI’s obligations under the loan agreement are secured by, among other things, a pledge of all of its equity in FFB.

The Bank also has $120 million available borrowing capacity through unsecured fed funds lines, ranging in size from $20 million to $25 million, with five other financial institutions and a $57 million secured line with the Federal Reserve Bank. None of these lines had outstanding borrowings as of March 31, 2019. Combined, the Bank’s unused lines of credit as of March 31, 2019 and December 31, 2018 were $1.5 billion and $1.5 billion, respectively. The average balance of overnight borrowings during the first three months of 2019 was $636 million, as compared to $557 million during all of 2018.

NOTE 10: LEASES

TheCompanyadoptedASU2016-02, Leases(Topic842), onJanuary1,2019,usingthealternativetransitionmethodwherebycomparativeperiodswerenotrestated.Nocumulativeeffectadjustment totheopeningbalanceofretainedearningswasrequired.

TheCompanyleasescertainfacilities for its corporate offices and branch operations under non-cancelable operating leases that expire through 2026.Allleaseswereclassifiedasoperatingleases and therefore, were previously not recognized on the Company’s consolidated balance sheet.With the adoption of Topic 842, operating lease agreements are required to be recognized on the consolidated balance sheet as a right-of-use (“ROU”) asset and a corresponding lease liability.

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FIRST FOUNDATION INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the Quarter Ended March 31, 2019 – UNAUDITED

Certainleasesincludeoptions torenew,withrenewaltermsthatcanextendtheleaseterm.Thedepreciablelifeofleased assetsarelimitedbytheexpectedleaseterm.

AdoptionofthisstandardresultedintheCompanyrecognizinga rightof use assetof$21.1 million, acorrespondingleaseliabilityof$22.7 million onJanuary1,2019 and eliminated a $1.6 million deferred rent liability recognized under previous accounting standards.

Supplemental lease information at or for the three months ended March 31, 2019 is as follows:

(dollars in thousands)
Balance Sheet:
Operating lease asset classified as other assets	$	20,015
Operating lease liability classified as other liabilities		21,644
Income Statement:
Operating lease cost classified as occupancy and equipment expense	$	1,188
Weighted average lease term, in years		3.12
Weighted average discount rate		5.53
Operating cash flows	$	1,497

The calculated amount of the ROU assets and lease liabilities in the table above are impacted by the length of the lease term and the discount rate used to present value the minimum lease payments.  The Company’s lease agreements often include one or more options to renew at the Company’s discretion. Topic 842 requires the use of the rate implicit in the lease whenever this rate is readily determinable.  As this rate is rarely determinable, the Company utilizes its incremental borrowing rate at lease inception, on a collateralized basis, over a similar term. For operating leases existing prior to January 1, 2019, the rate for the remaining lease term as of January 1, 2019 was used.

The table below summarizes the maturity of remaining lease liabilities at March 31, 2019:

(dollars in thousands)
2019	$	4,591
2020		6,052
2021		5,511
2022		4,607
2023 and after		3,893
Total future minimum lease payments	$	24,654
Discount on cash flows		(3,010	)
Total lease liability	$	21,644

21

FIRST FOUNDATION INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the Quarter Ended March 31, 2019 – UNAUDITED

NOTE 11: EARNINGS PER SHARE

Basic earnings per share excludes dilution and is computed by dividing net income or loss available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflects the potential dilution that could occur if contracts to issue common stock were exercised or converted into common stock that would then share in earnings. The following table sets forth the Company’s unaudited earnings per share calculations for the quarters ended March 31:

	2019				2018
(dollars in thousands, except per share amounts)	Basic		Diluted		Basic		Diluted
Net income	$	11,259	$	11,259	$	8,976	$	8,976
Basic common shares outstanding		44,540,865		44,540,865		38,577,271		38,577,271
Effect of contingent shares issuable				1,592				1,592
Effect of options and restricted stock				255,849				545,869
Diluted common shares outstanding				44,798,306				39,124,732
Earnings per share	$	0.25	$	0.25	$	0.23	$	0.23

22

FIRST FOUNDATION INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the Quarter Ended March 31, 2019 – UNAUDITED

NOTE 12: SEGMENT REPORTING

For the quarters ended March 31, 2019 and 2018, the Company had two reportable business segments: Banking (FFB and FFIS) and Wealth Management (FFA). The results of FFI and any elimination entries are included in the column labeled Other. The following tables show key operating results for each of our business segments used to arrive at our consolidated totals for the following periods:

(dollars in thousands)	Banking		Wealth Management		Other			Total
Quarter ended March 31, 2019:
Interest income	$	60,544	$	—	$	—		$	60,544
Interest expense		19,482		—		15			19,497
Net interest income		41,062		—		(15	)		41,047
Provision for loan losses		540		—		—			540
Noninterest income		2,994		5,731		(260	)		8,465
Noninterest expense		26,587		5,518		840			32,945
Income (loss) before taxes on income	$	16,929	$	213	$	(1,115	)	$	16,027

Quarter ended March 31, 2018:
Interest income	$	43,319	$	—	$	—		$	43,319
Interest expense		8,520		—		531			9,051
Net interest income		34,799		—		(531	)		34,268
Provision for loan losses		1,688		—		—			1,688
Noninterest income		2,557		6,414		11			8,982
Noninterest expense		21,811		5,817		1,360			28,988
Income (loss) before taxes on income	$	13,857	$	597	$	(1,880	)	$	12,574

NOTE 13: SUBSEQUENT EVENTS

Cash Dividend

On May 2, 2019, the Board of Directors of the Company declared an initial quarterly cash dividend of $0.05 per common share to be paid on June 17, 2019 to stockholders of record as of the close of business on June 3, 2019.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis is intended to facilitate the understanding and assessment of significant changes and trends in our businesses that accounted for the changes in our results of operations in the quarter ended March 31, 2019 as compared to our results of operations in the quarter ended March 31, 2018; and our financial condition at March 31, 2019 as compared to our financial condition at December 31, 2018. This discussion and analysis is based on and should be read in conjunction with our consolidated financial statements and the accompanying notes thereto contained elsewhere in this report and our audited consolidated financial statements for the year ended December 31, 2018, and the notes thereto, which are set forth in Item 8 of our Annual Report on Form 10-K (our “2018 10-K”) which we filed with the Securities and Exchange Commission (“SEC”) on March 1, 2019.

Forward-Looking Statements

Statements contained in this report that are not historical facts or that discuss our expectations, beliefs or views regarding our future financial performance or future financial condition, or financial or other trends in our business or in the markets in which we operate, constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. Often, they include words such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” “project,” “forecast” or words of similar meaning, or future or conditional verbs such as “will,” “would,” “should,” “could,” or “may.” Such forward-looking statements are based on current information that is available to us, and on assumptions that we make, about future events or economic or financial conditions or trends over which we do not have control. In addition, our businesses and the markets in which we operate are subject to a number of risks and uncertainties. Those risks and uncertainties, and unexpected future events, could cause our financial condition or actual operating results in the future to differ, possibly significantly, from our expected financial condition and operating results that are set forth in the forward-looking statements contained in this report.

The principal risks and uncertainties to which our businesses are subject are discussed in Item 1A in our 2018 10-K and in this Item 2 below. Therefore, you are urged to read not only the information contained in this Item 2, but also the risk factors and other cautionary information contained in Item 1A of our 2018 10-K, which qualify the forward-looking statements contained in this report.

Due to these risks and uncertainties, you are cautioned not to place undue reliance on the forward-looking statements contained in this report and not to make predictions about our future financial performance based solely on our historical financial performance. We also disclaim any obligation to update forward-looking statements contained in this report or in our 2018 10-K, except as may otherwise be required by applicable law or government regulations.

Critical Accounting Policies

Our consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and accounting practices in the banking industry. Certain of those accounting policies are considered critical accounting policies, because they require us to make estimates and assumptions regarding circumstances or trends that could materially affect the value of those assets, such as economic conditions or trends that could impact our ability to fully collect our loans or ultimately realize the carrying value of certain of our other assets. Those estimates and assumptions are made based on current information available to us regarding those economic conditions or trends or other circumstances. If changes were to occur in the events, trends or other circumstances on which our estimates or assumptions were based, or other unanticipated events were to occur that might affect our operations, we may be required under GAAP to adjust our earlier estimates and to reduce the carrying values of the affected assets on our balance sheet, generally by means of charges against income, which could also affect our results of operations in the fiscal periods when those charges are recognized.

Utilization and Valuation of Deferred Income Tax Benefits. We record as a “deferred tax asset” on our balance sheet an amount equal to the tax credit and tax loss carryforwards and tax deductions (collectively “tax benefits”) that we believe will be available to us to offset or reduce income taxes in future periods. Under applicable federal and state income tax laws and regulations, tax benefits related to tax loss carryforwards will expire if they cannot be used within specified periods of time. Accordingly, the ability to fully use our deferred tax asset related to tax loss carryforwards to reduce income taxes in the future depends on the amount of taxable income that we generate during those time periods. At least once each year, or more frequently, if warranted, we make estimates of future taxable income that we believe we are likely to generate during those future periods. If we conclude, on the basis of those estimates and the amount of the tax benefits available to us, that it is more likely than not that we will be able to fully utilize those tax benefits prior to their expiration, we recognize the deferred tax asset in full on our balance sheet. On the other hand, if we conclude on the basis of those estimates and the amount of the tax benefits available to us that it has become more likely, than not, that we will be unable to utilize those tax benefits in full prior to their expiration, then, we would establish a valuation allowance to reduce the deferred tax asset on our balance sheet to the amount with respect to which we believe it is still more likely, than not, that we will

24

be able to use to offset or reduce taxes in the future. The establishment of such a valuation allowance, or any increase in an existing valuation allowance, would be effectuated through a charge to the provision for income taxes or a reduction in any income tax credit for the period in which such valuation allowance is established or increased.

Allowance for Loan and Lease Losses. Our ALLL is established through a provision for loan losses charged to expense and may be reduced by a recapture of previously established loss reserves, which are also reflected in the income statement. Loans are charged against the ALLL when management believes that collectability of the principal is unlikely. The ALLL is an amount that management believes will be adequate to absorb estimated losses on existing loans that may become uncollectible based on an evaluation of the collectability of loans and prior loan loss experience. This evaluation also takes into consideration such factors as changes in the nature and volume of the loan portfolio, overall portfolio quality, review of specific problem loans, current economic conditions and certain other subjective factors that may affect the borrower’s ability to pay. While we use the best information available to make this evaluation, future adjustments to our ALLL may be necessary if there are significant changes in economic or other conditions that can affect the collectability in full of loans in our loan portfolio.

We have two business segments, “Banking” and “Wealth Management”. Banking includes the operations of FFB and FFIS and Wealth Management includes the operations of FFA. The financial position and operating results of the stand-alone holding company, FFI, are included under the caption “Other” in certain of the tables that follow, along with any consolidation elimination entries.

Overview and Recent Developments  

The Company declared and paid its first quarterly cash dividend of $0.05 per common share in the first quarter of 2019.

Total loans, including loans held for sale, increased $148 million in the first quarter of 2019 as a result of $400 million of originations and a $5 million increase in the mark to market for loans held for sale which were partially offset by payoffs or scheduled payments of $256 million. Total revenues (net interest income and noninterest income) increased by 14% in the first three months of 2019 when compared to the first three months of 2018.

Results of Operations

Consolidated net income and income before taxes in the first quarter of 2019 were $11.3 million and $16.0 million, respectively, as compared to $9.0 million and $12.6 million, respectively, in the first quarter of 2018.

The effective tax rate for the first quarter of 2019 was 29.7% as compared to 28.6% for the first quarter of 2018 and as compared to our statutory tax rate of 29.0%.

The primary sources of revenue for Banking are net interest income, fees from its deposits, trust, consulting and insurance services and loan fees. The primary source of revenue for Wealth Management is asset management fees assessed on the balance of assets under management (“AUM”). Compensation and benefit costs, which represent the largest component of noninterest expense, accounted for 54% and 77%, respectively, of the total noninterest expense for Banking and Wealth Management in the first quarter of 2019.

25

The following table shows key operating results for each of our business segments for the quarter ended March 31:

(dollars in thousands)	Banking		Wealth Management		Other			Total
2019:
Interest income	$	60,544	$	—	$	—		$	60,544
Interest expense		19,482		—		15			19,497
Net interest income		41,062		—		(15	)		41,047
Provision for loan losses		540		—		—			540
Noninterest income		2,994		5,731		(260	)		8,465
Noninterest expense		26,587		5,518		840			32,945
Income (loss) before taxes on income	$	16,929	$	213	$	(1,115	)	$	16,027
2018:
Interest income	$	43,319	$	—	$	—		$	43,319
Interest expense		8,520		—		531			9,051
Net interest income		34,799		—		(531	)		34,268
Provision for loan losses		1,688		—		—			1,688
Noninterest income		2,557		6,414		11			8,982
Noninterest expense		21,811		5,817		1,360			28,988
Income (loss) before taxes on income	$	13,857	$	597	$	(1,880	)	$	12,574

General. Consolidated income before taxes in the first quarter of 2019 was $16.0 million, as compared to $12.6 million in the first quarter of 2018. The $3.5 million increase in income before taxes was the result of a $3.1 million increase in income before taxes for Banking, a $0.4 million decrease for Wealth Management, a $0.5 million decrease in corporate interest expenses and a $0.3 million net decrease in other corporate income and expenses. The increase in Banking was due to higher net interest income and a lower provision for loan losses which was partially offset by higher noninterest expenses. The decrease in Wealth Management was due to lower noninterest income which was partially offset by lower noninterest expenses.

Net Interest Income. The following tables set forth, for the periods indicated, information regarding (i) the total dollar amount of interest income from interest-earning assets and the resultant average yields on those assets; (ii) the total dollar amount of interest expense and the average rate of interest on our interest-bearing liabilities; (iii) net interest income; (iv) net interest rate spread; and (v) net yield on interest-earning assets for the quarters ended March 31:

26

	2019							2018
(dollars in thousands)	Average Balances		Interest		Average Yield / Rate			Average Balances		Interest		Average Yield / Rate
Interest-earning assets:
Loans	$	4,835,920	$	53,835		4.46	%	$	3,942,402	$	38,971		3.96	%
Securities		802,503		6,165		3.07	%		519,259		3,422		2,64	%
FHLB stock, fed funds, and deposits		48,801		544		4.52	%		158,425		926		2.37	%
Total interest-earning assets		5,687,224		60,544		4.27	%		4,620,086		43,319		3.76	%
Noninterest-earning assets:
Nonperforming assets		12,226							11,579
Other		184,081							66,751
Total assets	$	5,883,531						$	4,698,416
Interest-bearing liabilities:
Demand deposits	$	313,084	$	732		0.95	%	$	226,618		305		0.55	%
Money market and savings		1,173,837		3,350		1,16	%		1,110,910		2,254		0.82	%
Certificates of deposit		2,018,270		11,366		2.28	%		984,523		3,313		1.36	%
Total interest-bearing deposits		3,505,191		15,448		1.79	%		2,322,051		5,872		1.03	%
Borrowings		637,036		4,049		2.58	%		735,024		3,179		1.75	%
Total interest-bearing liabilities		4,142,227		19,497		1.91	%		3,057,075		9,051		1.20	%
Noninterest-bearing liabilities:
Demand deposits	$	1,124,318						$	1,220,435
Other liabilities		58,077							21,650
Total liabilities		5,324,622							4,299,160
Shareholders’ equity		558,909							399,256
Total liabilities and equity	$	5,883,531						$	4,698,416
Net Interest Income			$	41,047						$	34,268
Net Interest Rate Spread						2.36	%						2.56	%
Net Yield on Interest-earning Assets						2.88	%						2.96	%

Net interest income is impacted by the volume (changes in volume multiplied by prior rate), interest rate (changes in rate multiplied by prior volume) and mix of interest-earning assets and interest-bearing liabilities. The following table provides a breakdown of the changes in net interest income due to volume and rate changes for the first quarter ended March 31, 2019, as compared to the first quarter in 2018:

	Increase (Decrease) due to					Net Increase (Decrease)
(dollars in thousands)	Volume			Rate
Interest earned on:
Loans	$	9,613		$	5,251	$	14,864
Securities		2,113			630		2,743
FHLB stock, fed funds and deposits		(892	)		510		(382	)
Total interest-earning assets		10,834			6,391		17,225
Interest paid on:
Demand deposits		146			281		427
Money market and savings		133			963		1,096
Certificates of deposit		4,905			3,148		8,053
Borrowings		(468	)		1,338		870
Total interest-bearing liabilities		4,716			5,730		10,446
Net interest income	$	6,118		$	661	$	6,779

Net interest income for Banking increased 18% from $34.8 million in the first quarter of 2018, to $41.1 million in the first quarter of 2019 due to a 23% increase in interest-earning assets which was partially offset by a decrease in our net interest rate spread. The decrease in the net interest rate spread from 2.56% in the first quarter of 2018 to 2.36% in the first quarter of 2019 was due to an increase in the cost of interest-bearing liabilities from 1.20% in the first quarter of 2018 to 1.91% in the first quarter of 2019 which was partially offset by an increase in yield on total interest-earning assets from 3.76% in the first quarter of 2018 to 4.27% in the first quarter of 2019. The decrease in our net interest rate spread was offset by a larger benefit derived from noninterest-bearing funding

27

sources, including noninterest-bearing deposits and equity, as interest rates rise. As a result, our net yield on interest-earning assets only decreased eight basis points from 2.96% in the first quarter of 2018 to 2.88% in the first quarter of 2019. The yield on interest-earning assets increased as new loans and securities added to the portfolio bear interest rates higher than the current portfolio rates as a result of increases in market rates. In addition, the realization of credit and yield discounts on the payoff of acquired loans was $1.7 million in the first quarter of 2019 as compared to $0.1 million in the first quarter of 2018. The increase in the cost of interest-bearing liabilities was due to increased costs of interest-bearing deposits, resulting from increases in deposit market rates, and increased costs of borrowings as the average rate on FHLB advances increased from 1.55% in the first quarter of 2018 to 2.57% in the first quarter of 2019. The average balance outstanding under the holding company line of credit decreased from $41.7 million in the first quarter of 2018 to $1.1 million in the first quarter of 2019, resulting in a $0.5 million decrease in corporate interest expense.

Provision for loan losses. The provision for loan losses represents our estimate of the amount necessary to be charged against the current period’s earnings to maintain the ALLL at a level that we consider adequate in relation to the estimated losses inherent in the loan portfolio. The provision for loan losses is impacted by changes in loan balances as well as changes in estimated loss assumptions and charge-offs and recoveries. The amount of the provision also takes into consideration such factors as changes in the nature and volume of the loan portfolio, overall portfolio quality, review of specific problem loans, current economic conditions and certain other subjective factors that may affect the ability of borrowers to meet their repayment obligations to us. The provision for loan losses in the first quarter of 2019 and 2018 was $0.5 million and $1.7 million, respectively. The growth in loans subject to ALLL in the first quarter of 2018 was 65% higher than the growth in such loans the first quarter of 2019.

Noninterest income. The following table provides a breakdown of noninterest income for Banking for the quarters ended March 31:

(dollars in thousands)	2019		2018
Trust fees	$	1,185	$	822
Loan related fees		1,145		564
Deposit charges		202		120
Gain on sale of loans		—		545
Consulting fees		106		118
Other		356		388
Total noninterest income	$	2,994	$	2,557

Noninterest income in Banking in the first quarter of 2019 was $0.4 million higher than the first quarter of 2018 as higher trust fees and loan fees, including prepayment and servicing fees, more than offset the decrease in gain on loans held for sale. During the first quarter of 2018 we realized $0.5 million in gains on the sale of $52 million of multifamily loans with no sales of loans in the first quarter of 2019.

Noninterest income for Wealth Management includes fees charged to high net-worth clients for managing their assets and for providing financial planning consulting services. The following table provides a breakdown of noninterest income for Wealth Management for the quarters ended March 31:

(dollars in thousands)	2019		2018
Asset management fees	$	5,731	$	6,414

Noninterest income for Wealth Management decreased by $0.7 million in the first quarter of 2019 when compared to the corresponding period in 2018 due primarily to lower levels of billable AUM.

Noninterest Expense. The following table provides a breakdown of noninterest expense for Banking and Wealth Management for the periods indicated:

	Banking				Wealth Management
(dollars in thousands)	2019		2018		2019		2018
Quarter Ended March 31:
Compensation and benefits	$	14,309	$	12,539	$	4,234	$	4,267
Occupancy and depreciation		4,241		3,577		587		548
Professional services and marketing		1,240		1,226		528		815
Customer service costs		3,389		2,771		—		—
Other expenses		3,408		1,698		169		187
Total noninterest expense	$	26,587	$	21,811	$	5,518	$	5,817

28

Noninterest expense in Banking increased from $21.8 million in the first quarter of 2018 to $26.6 million in the first quarter of 2019, due to increases in staffing and other costs associated with the Bank’s expansion, including the acquisition of Premier Business Bank (“PBB”) in June 2018, the growth of its balances of loans and deposits and general increases in costs. Compensation and benefits for Banking increased $1.8 million or 14% during the first quarter of 2019 as compared to the first quarter of 2018 due to salary increases and an increase in the number of full time equivalent employees (“FTE”) in Banking, which increased to 425.0 in the first quarter of 2019 from 338.4 in the first quarter of 2018 as a result of the increased staffing related to the PBB acquisition and additional personnel added to support the growth in loans and deposits. A $0.7 million increase in occupancy and depreciation for Banking in the first quarter of 2019 as compared to the first quarter of 2018 was due to costs related to the PBB acquisition and increases in our data processing costs due to increased volumes of loan and deposit activities. Customer service costs for Banking increased from $2.8 million in the first quarter of 2018 to $3.4 million in the first quarter of 2019 due to increases in the earnings credit rates paid on the balances which was partially offset by a decrease in balances. Other expenses increased by $1.7 million in the first quarter of 2019 when compared to the corresponding period in 2018 due to higher costs related to the acquisition of PBB, including the amortization of core deposit intangibles, and higher FDIC insurance costs related the higher deposit balances.The $0.3 million decrease in noninterest expense for Wealth Management was due to decreases in legal related costs related to 2018 litigation matters.

Financial Condition

The following table shows the financial position for each of our business segments, and of FFI and elimination entries used to arrive at our consolidated totals which are included in the column labeled Other and Eliminations, as of:

(dollars in thousands)	Banking		Wealth Management		Other and Eliminations			Total
March 31, 2019:
Cash and cash equivalents	$	80,443	$	1,666	$	(1,416	)	$	80,693
Securities AFS		788,160		—		—			788,160
Loans held for sale		613,528		—		—			613,528
Loans, net		4,316,865		—		—			4,316,865
Premises and equipment		8,322		801		136			9,259
FHLB Stock		22,734		—		—			22,734
Deferred taxes		12,366		105		361			12,832
REO		465		—		—			465
Goodwill and intangibles		98,852		—		—			98,852
Other assets		40,680		475		16,661			57,816
Total assets	$	5,982,415	$	3,047	$	15,742		$	6,001,204
Deposits	$	4,576,893	$	—	$	(8,191	)	$	4,568,702
Borrowings		795,000		—		5,000			800,000
Intercompany balances		3,139		495		(3,634	)		—
Other liabilities		39,709		1,553		22,997			64,259
Shareholders’ equity		567,674		999		(430	)		568,243
Total liabilities and equity	$	5,982,415	$	3,047	$	15,742		$	6,001,204
December 31, 2018:
Cash and cash equivalents	$	67,148	$	4,636	$	(4,472	)	$	67,312
Securities AFS		809,569		—		—			809,569
Loans held for sale		507,643		—		—			507,643
Loans, net		4,274,669		—		—			4,274,669
Premises and equipment		8,221		788		136			9,145
FHLB Stock		20,307		—		—			20,307
Deferred taxes		12,905		103		243			13,251
REO		815		—		—			815
Goodwill and Intangibles		99,482		—		—			99,482
Other assets		35,906		605		1,708			38,219
Total assets	$	5,836,665	$	6,132	$	(2,385	)	$	5,840,412
Deposits	$	4,544,168	$	—	$	(11,200	)	$	4,532,968
Borrowings		703,000		—		5,000			708,000
Intercompany balances		3,689		467		(4,156	)		—
Other liabilities		34,886		2,830		2,544			40,260
Shareholders’ equity		550,922		2,835		5,427			559,184
Total liabilities and equity	$	5,836,665	$	6,132	$	(2,385	)	$	5,840,412

29

Our consolidated balance sheet is primarily affected by changes occurring in Banking, as Wealth Management does not maintain significant levels of assets. Banking has experienced and is expected to continue to experience increases in its total assets as a result of our growth strategy.

During the first quarter of 2019, total assets increased by $161 million primarily due to increases in loans, including loans held for sale. Loans and loans held for sale increased $148 million in the first quarter of 2019 as a result of $400 million of originations and a $5 million increase in the mark to market for loans held for sale which were partially offset by payoffs or scheduled payments of $256 million. The $36 million growth in deposits during the first quarter of 2019 included increases in specialty deposits of $46 million and wholesale deposits of $58 million which were partially offset by a $68 million decrease in branch deposits. Borrowings increased by $92 million due primarily to the additional borrowings utilized to support our loan growth.

Cash and cash equivalents, certificates of deposit and securities. Cash and cash equivalents, which primarily consist of funds held at the Federal Reserve Bank or at correspondent banks, including fed funds, increased $13 million during the first three months of 2019. Changes in cash equivalents are primarily affected by the funding of loans, investments in securities, and changes in our sources of funding: deposits, FHLB advances and FFI borrowings.  

Securities available for sale. The following table provides a summary of the Company’s AFS securities portfolio as of:

	Amortized		Gross Unrealized					Estimated
(dollars in thousands)	Cost		Gains		Losses			Fair Value
March 31, 2019:
Agency mortgage-backed securities	$	704,262	$	4,338	$	(6,988	)	$	701,612
Beneficial interest – FHLMC securitization		31,136		1,308		(1,828	)		30,616
Corporate bonds		54,000		497		(70	)		54,427
Other		1,465		41		(1	)		1,505
Total	$	790,863	$	6,184	$	(8,887	)	$	788,160
December 31, 2018:
Agency mortgage-backed securities	$	723,597	$	11,883	$	(13,811	)	$	721,669
Beneficial interest – FHLMC securitization		32,143		1,736		(1,813	)		32,086
Corporate bonds		54,000		638		(294	)		54,344
Other		1,458		15		(3	)		1,470
Total	$	811,198	$	14,292	$	(15,921	)	$	809,569

US Treasury securities of $0.5 million as of March 31, 2019 that are included in the table above as Other are pledged as collateral to the State of California to meet regulatory requirements related to the Bank’s trust operations. As of March 31, 2019, $78 million of agency mortgage-backed securities are pledged as collateral as support for the Banks’s obligations under a loan sales and securitization agreement entered into in 2018.

The scheduled maturities of securities AFS, other than agency mortgage-backed securities, and the related weighted average yield is as follows as of March 31, 2019:

(dollars in thousands)	Less than 1 Year			1 Through 5 years			5 Through 10 Years			After 10 Years			Total
Amortized Cost:
Corporate bonds	$	—		$	—		$	54,000		$	—		$	54,000
Other		500			—			965			—			1,465
Total	$	500			—			54,965			—			55,465
Weighted average yield		1.03	%		—	%		5.29	%		—	%		5.25	%
Estimated Fair Value:
Corporate bonds	$	—		$	—		$	54,427		$	—		$	54,427
Other		499			—			1,006			—			1,505
Total	$	499		$	—		$	55,433		$	—		$	55,932

Agency mortgage-backed securities and beneficial interest – FHLMC securitizations are excluded from the above table because such securities are not due at a single maturity date. The weighted average yield of the agency mortgage-backed securities and beneficial interests in FHLMC securitizations as of March 31, 2019 was 2.92%.

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Loans. The following table sets forth our loans, by loan category, as of:

(dollars in thousands)	March 31, 2019		December 31, 2018
Outstanding principal balance:
Loans secured by real estate:
Residential properties:
Multifamily	$	1,987,690	$	1,956,935
Single family		903,992		904,828
Total real estate loans secured by residential properties		2,891,682		2,861,763
Commercial properties		902,060		869,169
Land		59,917		80,187
Total real estate loans		3,853,659		3,811,119
Commercial and industrial loans		454,849		449,805
Consumer loans		17,693		22,699
Total loans		4,326,201		4,283,623
Premiums, discounts and deferred fees and expenses		9,864		10,046
Total	$	4,336,065	$	4,293,669

Total loans, including loans held for sale, increased $148 million during the first three months of 2019 as a result of $400 million of originations and a $5 million increase in the mark to market for loans held for sale which were partially offset by payoffs or scheduled payments of $256 million.

Deposits. The following table sets forth information with respect to our deposits and the average rates paid on deposits, as of:

	March 31, 2019					December 31, 2018
(dollars in thousands)	Amount		Weighted Average Rate			Amount		Weighted Average Rate
Demand deposits:
Noninterest-bearing	$	1,114,596		—		$	1,074,661		—
Interest-bearing		307,854		0.790	%		317,380		0.798	%
Money market and savings		1,175,986		1.180	%		1,190,717		1.115	%
Certificates of deposits		1,970,266		2.276	%		1,950,210		2.142	%
Total	$	4,568,702		1.338	%	$	4,532,968		1.270	%

During the first quarter of 2019, our deposit rates increased slightly as we have raised rates to attract deposits. The weighted average rate of our interest bearing deposits increased from 1.67% at December 31, 2018 to 1.77% at March 31, 2019, while the weighted average interest rates of both interest-bearing and noninterest-bearing deposits have increased from 1.27% at December 31, 2018 to 1.34% at March 31, 2019.

The maturities of our certificates of deposit of $100,000 or more were as follows as of March 31, 2019:

(dollars in thousands)
3 months or less	$	284,087
Over 3 months through 6 months		115,409
Over 6 months through 12 months		162,714
Over 12 months		59,274
Total	$	621,484

From time to time, the Bank will utilize brokered deposits as a source of funding. As of March 31, 2019 the Bank held $1.3 billion of deposits which are classified as brokered deposits.

Borrowings. At March 31, 2019 our borrowings consisted of $795 million in overnight FHLB advances and $5 million of borrowings on our holding company line of credit. At December 31, 2018, our borrowings consisted of $703 million of overnight FHLB advances at FFB and $5 million of borrowings on our holding company line of credit. The FHLB overnight advances were paid in full in the early parts of April 2019 and January 2019, respectively. Because FFB primarily utilizes overnight borrowings, the balance of outstanding borrowings fluctuates on a daily basis. The average balance of FHLB advances outstanding during the first quarter of 2019 was $636 million, as compared to $693 million for the first quarter of 2018. The weighted average interest rate on these borrowings was 2.57% for the first quarter of 2019, as compared to 1.55% for the first quarter of 2018. The maximum amount of borrowings at the Bank outstanding at any month-end during the first quarter of 2019 and during all of 2018 was $795 million and $773 million, respectively.  

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Delinquent Loans, Nonperforming Assets and Provision for Credit Losses

Loans are considered past due following the date when either interest or principal is contractually due and unpaid. Loans on which the accrual of interest has been discontinued are designated as nonaccrual loans. Accrual of interest on loans is discontinued when reasonable doubt exists as to the full, timely collection of interest or principal and, generally, when a loan becomes contractually past due for 90 days or more with respect to principal or interest. However, the accrual of interest may be continued on a well-secured loan contractually past due 90 days or more with respect to principal or interest if the loan is in the process of collection or collection of the principal and interest is deemed probable. The following tables provide a summary of past due and nonaccrual loans as of:

(dollars in thousands)	30–59 Days			60-89 Days			90 Days or More			Nonaccrual			Total Past Due and Nonaccrual			Current		Total
March 31, 2019:
Real estate loans:
Residential properties	$	—		$	664		$	—		$	1,811		$	2,475		$	2,889,207	$	2,891,682
Commercial properties		—			—			—			2,533			2,533			899,527		902,060
Land		—			—			—			697			697			59,220		59,917
Commercial and industrial loans		4,521			610			—			10,496			15,627			439,222		454,849
Consumer loans		5			4			—			—			9			17,684		17,693
Total	$	4,526		$	1,278		$	—		$	15,537		$	21,341		$	4,304,860	$	4,326,201
Percentage of total loans		0.10	%		0.03	%		—	%		0.36	%		0.49	%
December 31, 2018:
Real estate loans:
Residential properties	$	74		$	—		$	499		$	651		$	1,224		$	2,860,539	$	2,861,763
Commercial properties		440			117			—			1,607			2,164			867,005		869,169
Land		2,000			—			—			697			2,697			77,490		80,187
Commercial and industrial loans		12,541			300			536			8,559			21,936			427,869		449,805
Consumer loans		—			7			—			2			9			22,690		22,699
Total	$	15,055		$	424		$	1,035		$	11,516		$	28,030		$	4,255,593	$	4,283,623
Percentage of total loans		0.35	%		0.01	%		0.02	%		0.27	%		0.65	%

The following table presents the composition of TDRs by accrual and nonaccrual status as of:

	March 31, 2019							December 31, 2018
(dollars in thousands)	Accrual			Nonaccrual	Total			Accrual	Nonaccrual		Total
Commercial real estate loans	$	1,245	$	1,464	$	2,709	$	1,264	$	1,491	$	2,755
Commercial and industrial loans		—		2,018		2,018		—		2,096		2,096
Total		1,245		3,482		4,727		1,264		3,587		4,851

These loans were classified as a TDR as a result of a reduction in required principal payments, reductions in rates and/or an extension of the maturity date of the loans.

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The following is a breakdown of our loan portfolio by the risk category of loans as of:

(dollars in thousands)	Pass		Special  Mention		Substandard		Impaired		Total
March 31, 2019:
Real estate loans:
Residential properties	$	2,886,943	$	2,928	$	—	$	1,811	$	2,891,682
Commercial properties		880,599		6,696		5,821		8,944		902,060
Land		58,418		—		802		697		59,917
Commercial and industrial loans		440,126		918		3,309		10,496		454,849
Consumer loans		17,693		—		—		—		17,693
Total	$	4,283,779	$	10,542	$	9,932	$	21,948	$	4,326,201
December 31, 2018:
Real estate loans:
Residential properties	$	2,857,666	$	3,446	$	—	$	651	$	2,861,763
Commercial properties		845,672		13,024		7,602		2,871		869,169
Land		78,681		—		809		697		80,187
Commercial and industrial loans		431,751		7,723		1,772		8,559		449,805
Consumer loans		22,699		—		—		—		22,699
Total	$	4,236,469	$	24,193	$	10,183	$	12,778	$	4,283,623

We consider a loan to be impaired when, based upon current information and events, we believe that it is probable that we will be unable to collect all amounts due according to the contractual terms of the loan. We measure impairment using either the present value of the expected future cash flows discounted at the loan’s effective interest rate, or the fair value of the properties collateralizing the loan, for collateral dependent loans. Impairment losses are included in the ALLL through a charge to provision for loan losses. Adjustments to impairment losses due to changes in the fair value of the property collateralizing an impaired loan are considered in computing the provision for loan losses. Loans collectively reviewed for impairment include all loans except for loans which are individually reviewed based on specific criteria, such as delinquency, debt coverage, adequacy of collateral and condition of property collateralizing the loans. Impaired loans include nonaccrual loans (excluding those collectively reviewed for impairment), certain restructured loans and certain performing loans less than 90 days delinquent (“other impaired loans”) which we believe are not likely to be collected in accordance with the contractual terms of the loans.

In 2017 and 2018, we purchased loans, for which there was, at acquisition, evidence of deterioration of credit quality since origination and it was probable, at acquisition, that all contractually required payments would not be collected. The carrying amount of these purchased credit impaired loans is as follows as of:

(dollars in thousands)	March 31, 2019			December 31, 2018
Outstanding principal balance:
Loans secured by real estate:
Residential properties	$	371		$	451
Commercial properties		7,477			10,871
Land		1,081			1,089
Total real estate loans		8,929			12,411
Commercial and industrial loans		1,434			1,150
Consumer loans		9			10
Total loans		10,372			13,571
Unaccreted discount on purchased credit impaired loans		(4,861	)		(6,490	)
Total	$	5,511		$	7,081

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 Allowance for Loan Losses. The following table summarizes the activity in our ALLL for the periods indicated:

(dollars in thousands)	Beginning Balance		Provision for Loan Losses			Charge-offs			Recoveries		Ending Balance
Quarter ended March 31, 2019:
Real estate loans:
Residential properties	$	9,216	$	422		$	—		$	—	$	9,638
Commercial properties		4,547		(232	)		—			—		4,315
Land		391		(149	)		—			—		242
Commercial and industrial loans		4,628		503			(543	)		207		4,795
Consumer loans		218		(4	)		(5	)		1		210
Total	$	19,000	$	540		$	(548	)	$	208	$	19,200
Year ended December 31, 2018:
Real estate loans:
Residential properties	$	9,715	$	(499	)	$	—		$	—	$	9,216
Commercial properties		4,399		359			(211	)		—		4,547
Land		395		(4	)		—			—		391
Commercial and industrial loans		3,624		4,413			(3,978	)		569		4,628
Consumer loans		267		(49	)		—			—		218
Total	$	18,400	$	4,220		$	(4,189	)	$	569	$	19,000

Excluding the loans acquired in acquisitions, our ALLL represented 0.51% of total loans outstanding as of both March 31, 2019 and December 31, 2018.

The amount of the ALLL is adjusted periodically by charges to operations (referred to in our income statement as the “provision for loan losses”) (i) to replenish the ALLL after it has been reduced due to loan write-downs or charge-offs, (ii) to reflect increases in the volume of outstanding loans, and (iii) to take account of changes in the risk of potential loan losses due to a deterioration in the condition of borrowers, or in the value of property securing non–performing loans, or adverse changes in economic conditions. The amounts of the provisions we make for loan losses are based on our estimate of losses in our loan portfolio. In estimating such losses, we use economic and loss migration models that are based on bank regulatory guidelines and industry standards, and our historical charge-off experience and loan delinquency rates, local and national economic conditions, a borrower’s ability to repay its borrowings, and the value of any property collateralizing the loan, as well as a number of subjective factors. However, these determinations involve judgments about changes and trends in current economic conditions and other events that can affect the ability of borrowers to meet their loan obligations to us and a weighting among the quantitative and qualitative factors we consider in determining the sufficiency of the ALLL. Moreover, the duration and anticipated effects of prevailing economic conditions or trends can be uncertain and can be affected by a number of risks and circumstances that are outside of our control. If changes in economic or market conditions or unexpected subsequent events were to occur, or if changes were made to bank regulatory guidelines or industry standards that are used to assess the sufficiency of the ALLL, it could become necessary for us to incur additional, and possibly significant, charges to increase the ALLL, which would have the effect of reducing our income.

In addition, the FDIC and the DBO, as an integral part of their examination processes, periodically review the adequacy of our ALLL. These agencies may require us to make additional provisions for loan losses, over and above the provisions that we have already made, the effect of which would be to reduce our income.

34

The following table presents the balance in the ALLL and the recorded investment in loans by impairment method as of:

	Allowance for Loan Losses								Unaccreted Credit
	Evaluated for Impairment				Purchased				Component
(dollars in thousands)	Individually		Collectively		Impaired		Total		Other Loans
March 31, 2019:
Allowance for loan losses:
Real estate loans:
Residential properties	$	—	$	9,638	$	—	$	9,638	$	1,524
Commercial properties		117		4,198		—		4,315		1,589
Land		—		242		—		242		47
Commercial and industrial loans		507		4,288		—		4,795		509
Consumer loans		—		210		—		210		2
Total	$	624	$	18,576	$	—	$	19,200	$	3,671
Loans:
Real estate loans:
Residential properties	$	1,811	$	2,889,871	$	—	$	2,891,682	$	234,595
Commercial properties		8,944		889,412		3,704		902,060		280,393
Land		697		58,418		802		59,917		37,624
Commercial and industrial loans		10,496		443,348		1,005		454,849		55,921
Consumer loans		—		17,693		—		17,693		314
Total	$	21,948	$	4,298,742	$	5,511	$	4,326,201	$	608,847

	Allowance for Loan Losses								Unaccreted Credit
	Evaluated for Impairment				Purchased				Component
(dollars in thousands)	Individually		Collectively		Impaired		Total		Other Loans
December 31, 2018:
Allowance for loan losses:
Real estate loans:
Residential properties	$	—	$	9,216	$	—	$	9,216	$	1,724
Commercial properties		126		4,421		—		4,547		1,779
Land		—		391		—		391		84
Commercial and industrial loans		290		4,338		—		4,628		633
Consumer loans		—		218		—		218		3
Total	$	416	$	18,584	$	—	$	19,000	$	4,223
Loans:
Real estate loans:
Residential properties	$	651	$	2,861,112	$	—	$	2,861,763	$	241,698
Commercial properties		2,871		860,835		5,463		869,169		275,516
Land		697		78,681		809		80,187		41,132
Commercial and industrial loans		8,559		440,437		809		449,805		61,183
Consumer loans		—		22,699		—		22,699		366
Total	$	12,778	$	4,263,764	$	7,081	$	4,283,623	$	619,895

The column labeled “Unaccreted Credit Component Other Loans” represents the amount of unaccreted credit component discount for the other loans acquired in prior acquisitions, and the stated principal balance of the related loans. The unaccreted credit component discount is equal to 0.60% and 0.68% of the stated principal balances of these loans as of March 31, 2019 and December 31, 2018, respectively. In addition to this unaccreted credit component discount, an additional $0.3 million and $0.4 million of the ALLL were provided for these loans as of March 31, 2019 and December 31, 2018, respectively.

Liquidity

Liquidity management focuses on our ability to generate, on a timely and cost-effective basis, cash sufficient to meet the funding needs of current loan demand, deposit withdrawals, principal and interest payments with respect to outstanding borrowings and to pay operating expenses. Our liquidity management is both a daily and long-term function of funds management. Liquid assets are generally invested in marketable securities or held as cash at the Federal Reserve Bank, or other financial institutions.

35

We monitor our liquidity in accordance with guidelines established by our Board of Directors and applicable regulatory requirements. Our need for liquidity is affected by our loan activity, net changes in deposit levels and the maturities of our borrowings. The principal sources of our liquidity consist of deposits, loan interest and principal payments and prepayments, investment management and consulting fees, FHLB advances and proceeds from borrowings and sales of shares by FFI. The remaining balances of the Bank’s lines of credit available to draw down totaled $1.5billion at March 31, 2019.  

Cash Flows Provided by Operating Activities. During the quarter ended March 31, 2019, operating activities provided net cash of $11 million, comprised primarily of our net income of $11 million. During the quarter ended March 31, 2018, operating activities provided net cash of $10 million, comprised primarily of our net income of $9 million.

Cash Flows Used in Investing Activities. During the quarter ended March 31, 2019, investing activities used net cash of $123 million, primarily to fund a $141 million net increase in loans and $2 million in FHLB stock purchases, offset partially by $21 million in cash received in proceeds from the sale, principal collection, and maturities of securities. During the quarter ended March 31, 2018, investing activities used net cash of $250 million, primarily to fund a $298 million net increase in loans and $20 million in purchases of securities, offset partially by $19 million in cash received from the sale, principal collection, and maturities of securities, and $52 million in loan sales.

Cash Flow Provided by Financing Activities. During the quarter ended March 31, 2019, financing activities provided net cash of $126 million, consisting primarily of net increases of $36 million in deposits and $92 million in FHLB advances, offset partially by $2 million in dividends paid. During the quarter ended March 31, 2018, financing activities provided net cash of $296 million, consisting primarily of net increases of $193 million in deposits and $111 million in FHLB advances, and $12 million in proceeds from the sale of stock, offset by a net decrease of $20 million in our line of credit.

Ratio of Loans to Deposits. The relationship between gross loans and total deposits can provide a useful measure of a bank’s liquidity. Since repayment of loans tends to be less predictable than the maturity of investments and other liquid resources, the higher the loan-to-deposit ratio, the less liquid are our assets. On the other hand, since we realize greater yields on loans than we do on other interest-earning assets, a lower loan-to-deposit ratio can adversely affect interest income and earnings. As a result, our goal is to achieve a loan-to-deposit ratio that appropriately balances the requirements of liquidity and the need to generate a fair return on our assets. At March 31, 2019 and December 31, 2018, the loan-to-deposit ratios at the Bank were 108% and 106%, respectively.

Off-Balance Sheet Arrangements

The following table provides the off-balance sheet arrangements of the Company as of March 31, 2019:

(dollars in thousands)
Commitments to fund new loans	$	45,950
Commitments to fund under existing loans, lines of credit		380,230
Commitments under standby letters of credit		11,695

Some of the commitments to fund existing loans, lines of credit and letters of credit are expected to expire without being drawn upon. Therefore, the total commitments do not necessarily represent future cash requirements. As of March 31, 2019, the Bank was obligated on $231 million of letters of credit to the FHLB which were being used as collateral for public fund deposits, including $213million of deposits from the State of California.

Capital Resources and Dividend Policy

The capital rules applicable to United States based bank holding companies and federally insured depository institutions require the Company (on a consolidated basis) and FFB (on a stand-alone basis) to meet specific capital adequacy requirements that, for the most part, involve quantitative measures, primarily in terms of the ratios of their capital to their assets, liabilities, and certain off-balance sheet items, calculated under regulatory accounting practices. In addition, prompt correct action regulations place a federally insured depository institution, such as FFB, into one of five capital categories on the basis of its capital ratios: (i) well capitalized; (ii) adequately capitalized; (iii) undercapitalized; (iv) significantly undercapitalized; or (v) critically undercapitalized. A depository institution’s primary federal regulatory agency may determine that, based on certain qualitative assessments, the depository institution should be assigned to a lower capital category than the one indicated by its capital ratios. At each successive lower capital category, a depository institution is subject to greater operating restrictions and increased regulatory supervision by its federal bank regulatory agency.

36

The following table sets forth the capital and capital ratios of FFI (on a consolidated basis) and FFB as of the respective dates indicated below, as compared to the respective regulatory requirements applicable to them:

	Actual					For Capital Adequacy Purposes					To Be Well Capitalized Under Prompt Corrective Action Provisions
(dollars in thousands)	Amount		Ratio			Amount		Ratio			Amount		Ratio
FFI
March 31, 2019:
CET1 capital ratio	$	471,912		10.92	%	$	194,456		4.50	%
Tier 1 leverage ratio		471,912		8.15	%		231,658		4.00	%
Tier 1 risk-based capital ratio		471,912		10.92	%		259,275		6.00	%
Total risk-based capital ratio		493,038		11.41	%		345,699		8.00	%
December 31, 2018:
CET1 capital ratio	$	460,600		10.67	%	$	194,179		4.50	%
Tier 1 leverage ratio		460,600		8.39	%		219,694		4.00	%
Tier 1 risk-based capital ratio		460,600		10.67	%		258,906		6.00	%
Total risk-based capital ratio		481,476		11.16	%		345,207		8.00	%
FFB
March 31, 2019:
CET1 capital ratio	$	471,304		10.95	%	$	193,619		4.50	%	$	279,672		6.50	%
Tier 1 leverage ratio		471,304		8.17	%		230,846		4.00	%		288,558		5.00	%
Tier 1 risk-based capital ratio		471,304		10.95	%		258,159		6.00	%		344,212		8.00	%
Total risk-based capital ratio		492,430		11.44	%		344,212		8.00	%		430,264		10.00	%
December 31, 2018:
CET1 capital ratio	$	453,248		10.51	%	$	194,058		4.50	%	$	280,306		6.50	%
Tier 1 leverage ratio		453,248		8.26	%		219,568		4.00	%		274,461		5.00	%
Tier 1 risk-based capital ratio		453,248		10.51	%		258,744		6.00	%		344,992		8.00	%
Total risk-based capital ratio		474,124		10.99	%		344,992		8.00	%		431,240		10.00	%

As of each of the dates set forth in the above table, the Company exceeded the minimum required capital ratios applicable to it and FFB’s capital ratios exceeded the minimums necessary to qualify as a well-capitalized depository institution under the prompt corrective action regulations. The required ratios for capital adequacy set forth in the above table do not include the additional capital conservation buffer, though each of the Company and FFB maintained capital ratios necessary to satisfy the capital conservation buffer requirements as of the dates indicated.  

During the first quarter of 2019, FFI made capital contributions to FFB of $5 million. As of March 31, 2019, FFI had $11.6 million of available capital and, therefore, has the ability and financial resources to contribute additional capital to FFB, if needed.

As of March 31, 2019, the amount of capital at FFB in excess of amounts required to be Well Capitalized was $192 million for the CET-1 capital ratio, $183 million for the Tier 1 leverage ratio, $127 million for the Tier 1 risk-based capital ratio and $62 million for the Total risk-based capital ratio.

The Company paid its first quarterly cash dividend of $0.05 per common share in the first quarter of 2019. It is our current intention to continue to pay quarterly dividends. The amount and declaration of future cash dividends are subject to approval by our Board of Directors and certain regulatory restrictions which are discussed in Item 1 “Business—Supervision and Regulation—Dividends and Stock Repurchases” inPart I of our Annual Report on Form 10-K for the year ended December 31, 2018. Additionally, under the terms of the holding company line of credit agreement, FFI may only declare and pay a dividend if the total amount of dividends and stock repurchases during the current twelve months does not exceed 50% of FFI’s net income for the same twelve month period. We did not pay dividends in 2018.

We had no material commitments for capital expenditures as of March 31, 2019. However, we intend to take advantage of opportunities that may arise in the future to grow our businesses, including by opening additional offices or acquiring complementary businesses that we believe will provide us with attractive risk-adjusted returns, although we do not have any immediate plans, arrangements or understandings relating to any material acquisition. As a result, we may seek to obtain additional borrowings and to sell additional shares of our common stock to raise funds which we might need for these purposes. There is no assurance, however, that, if required, we will succeed in obtaining additional borrowings or selling additional shares of our common stock on terms that are acceptable to us, if at all, as this will depend on market conditions and other factors outside of our control, as well as our future results of operations.

37

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to certain financial risks, which are discussed in detail in Management's Discussion and Analysis of Financial Condition and Results of Operations in the section titled Asset and Liability Management: Interest Rate Risk in our Annual Report on Form 10-K which we filed with the Securities and Exchange Commission on March 1, 2019.  There have been no material changes to our quantitative and qualitative disclosures about market risk since December 31, 2018.

ITEM 4. CONTROLS AND PROCEDURES

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer to allow timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, our management recognized that any system of controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, as ours are designed to do, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.  

In accordance with SEC rules, an evaluation was performed under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer of the effectiveness, as of March 31, 2019, of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act). Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of March 31, 2019, the Company’s disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed in our reports that we file under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

There was no change in our internal control over financial reporting that occurred during the quarter ended March 31, 2019 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II—OTHER INFORMATION

ITEM 1A. RISK FACTORS

There have been no material changes in the risk factors that were disclosed in Item 1A, under the caption “Risk Factors” in Part I of our Annual Report on Form 10-K for the year ended December 31, 2018, which we filed with the SEC on March 1, 2019.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The Company adopted a stock repurchase plan on October 30, 2018 for the repurchase of up to 2,200,000 shares of its common stock from time to time as market conditions allow. This plan has no stated expiration date for the repurchases. The Company did not repurchase any shares during the first quarter of 2019. As of March 31, 2019, the maximum number of shares that may be purchased under the program were 2,164,700.

38

ITEM 6. EXHIBITS

Exhibit No.	Description of Exhibit
3.1	Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed on October 29, 2015).
3.2	Bylaws of the Company (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K, filed on October 29, 2015).
31.1	Certification of Chief Executive Officer under Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer under Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of Chief Executive Officer under Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification of Chief Financial Officer under Section 906 of the Sarbanes-Oxley Act of 2002
101	XBRL (eXtensive Business Reporting Language). The following financial materials from the Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2019, formatted in XBRL: (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Operations, (iii) Consolidated Statements of Comprehensive Loss, (iv) Condensed Consolidated Statements of Cash Flows, and (v) Notes to Condensed Consolidated Financial Statements.

39

SIGNATURES

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 thereunto duly authorized.

	FIRST FOUNDATION INC.
Dated: May 8, 2019	By:	/s/    JOHN M. MICHEL
		John M. Michel
		Executive Vice President and Chief Financial Officer

S-1

EX-31.1

Exhibit 31.1

CERTIFICATIONS OF CHIEF EXECUTIVE OFFICER

UNDER

SECTION 302 OF THE SARBANES-OXLEY ACT

I, Scott Kavanaugh, certify that:

1. I have reviewed this quarterly report on Form 10-Q of First Foundation Inc. for the quarter ended March 31, 2019;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 8, 2019

/s/ SCOTT KAVANAUGH

Scott Kavanaugh

Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATIONS OF CHIEF FINANCIAL OFFICER

UNDER

SECTION 302 OF THE SARBANES-OXLEY ACT

I, John M. Michel, certify that:

1. I have reviewed this quarterly report on Form 10-Q of First Foundation Inc. for the quarter ended March 31, 2019;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 8, 2019

/s/ JOHN M. MICHEL

John M. Michel

Executive Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATIONS OF CHIEF EXECUTIVE OFFICER

UNDER

SECTION 906 OF THE SARBANES-OXLEY ACT

FIRST FOUNDATION INC.

Quarterly Report on Form 10-Q

for the Quarter ended March 31, 2019

The undersigned, who is the Chief Executive Officer of First Foundation Inc (the “Company”), hereby certifies that (i) the Quarterly Report on Form 10-Q for the quarter ended March 31, 2019, as filed by the Company with the Securities and Exchange Commission (the “Quarterly Report”), to which this Certification is an Exhibit, fully complies with the applicable requirements of Section 13(a) and 15(d) of the Exchange Act; and (ii) the information contained in this Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: May 8, 2019

/s/  SCOTT KAVANAUGH

Scott Kavanaugh

Chief Executive Officer

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

CERTIFICATIONS OF CHIEF FINANCIAL OFFICER

UNDER

SECTION 906 OF THE SARBANES-OXLEY ACT

FIRST FOUNDATION INC.

Quarterly Report on Form 10-Q

for the Quarter ended March 31, 2019

The undersigned, who is the Chief Financial Officer of First Foundation Inc. (the “Company”), hereby certifies that (i) the Quarterly Report on Form 10-Q for the quarter ended March 31, 2019, as filed by the Company with the Securities and Exchange Commission (the “Quarterly Report”), to which this Certification is an Exhibit, fully complies with the applicable requirements of Section 13(a) and 15(d) of the Exchange Act; and (ii) the information contained in this Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: May 8, 2019

/s/ JOHN M. MICHEL

John M. Michel

Executive Vice President and Chief Financial Officer

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2019	May 06, 2019
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q1
Trading Symbol	FFWM
Entity Registrant Name	First Foundation Inc.
Entity Central Index Key	0001413837
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Common Stock, Shares Outstanding		44,620,831

XML

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
ASSETS
Cash and cash equivalents	$ 80,693	$ 67,312
Securities available-for-sale (“AFS”)	788,160	809,569
Loans held for sale	613,528	507,643
Loans, net of deferred fees	4,336,065	4,293,669
Allowance for loan and lease losses (“ALLL”)	(19,200)	(19,000)
Net loans	4,316,865	4,274,669
Investment in FHLB stock	22,734	20,307
Deferred taxes	12,832	13,251
Premises and equipment, net	9,259	9,145
Real estate owned (“REO”)	465	815
Goodwill and intangibles	98,852	99,482
Other assets	57,816	38,219
Total Assets	6,001,204	5,840,412
Liabilities:
Deposits	4,568,702	4,532,968
Borrowings	800,000	708,000
Accounts payable and other liabilities	64,259	40,260
Total Liabilities	5,432,961	5,281,228
Commitments and contingencies
Shareholders’ Equity
Common Stock, par value $0.001: 70,000,000 shares authorized; 44,620,831 and 44,496,007 shares issued and outstanding at March 31, 2019 and December 31, 2018, respectively	44	44
Additional paid-in-capital	432,621	431,832
Retained earnings	137,490	128,461
Accumulated other comprehensive loss, net of tax	(1,912)	(1,153)
Total Shareholders’ Equity	568,243	559,184
Total Liabilities and Shareholders’ Equity	$ 6,001,204	$ 5,840,412

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Mar. 31, 2019	Dec. 31, 2018
Statement Of Financial Position [Abstract]
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	70,000,000	70,000,000
Common stock, shares issued	44,620,831	44,496,007
Common stock, shares outstanding	44,620,831	44,496,007

XML

CONSOLIDATED INCOME STATEMENTS - UNAUDITED - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Interest income:
Loans	$ 53,835	$ 38,971
Securities	6,165	3,422
FHLB stock, fed funds sold and interest-bearing deposits	544	926
Total interest income	60,544	43,319
Interest expense:
Deposits	15,448	5,872
Borrowings	4,049	3,179
Total interest expense	19,497	9,051
Net interest income	41,047	34,268
Provision for loan losses	540	1,688
Net interest income after provision for loan losses	40,507	32,580
Noninterest income:
Revenue from contract with customers	$ 6,794	$ 7,181
Type of Revenue [Extensible List]	us-gaap:InvestmentAdvisoryManagementAndAdministrativeServiceMember	us-gaap:InvestmentAdvisoryManagementAndAdministrativeServiceMember
Gain on sale of loans		$ 545
Other income	$ 1,671	1,256
Total noninterest income	8,465	8,982
Noninterest expense:
Compensation and benefits	18,902	17,169
Occupancy and depreciation	4,868	4,171
Professional services and marketing costs	2,004	2,489
Customer service costs	3,389	2,771
Other expenses	3,782	2,388
Total noninterest expense	32,945	28,988
Income before taxes on income	16,027	12,574
Taxes on income	4,768	3,598
Net income	$ 11,259	$ 8,976
Net income per share:
Basic	$ 0.25	$ 0.23
Diluted	$ 0.25	$ 0.23
Shares used in computation:
Basic	44,540,865	38,577,271
Diluted	44,798,306	39,124,732

XML

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - UNAUDITED - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-in-Capital	Retained Earnings	Accumulated Other Comprehensive Income (Loss)
Beginning balance at Dec. 31, 2017	$ 394,951	$ 38	$ 314,501	$ 85,503	$ (5,091)
Beginning balance (in shares) at Dec. 31, 2017		38,207,766
Net income	8,976			8,976
Other comprehensive income	(5,264)				(5,264)
Stock based compensation	1,165		1,165
Exercise of options	944		944
Exercise of options (in shares)		123,000
Stock grants - vesting of Restricted Stock Units (in shares)		99,940
Capital Raise	11,342		11,341
Capital Raise (in shares)		625,730
Ending balance at Mar. 31, 2018	412,114	$ 38	327,951	94,479	(10,355)
Ending balance (in shares) at Mar. 31, 2018		39,056,436
Beginning balance at Dec. 31, 2018	559,184	$ 44	431,832	128,461	(1,153)
Beginning balance (in shares) at Dec. 31, 2018		44,496,007
Net income	11,259			11,259
Other comprehensive income	(759)				(759)
Stock based compensation	692		692
Cash dividend	(2,230)			(2,230)
Exercise of options	97		97
Exercise of options (in shares)		13,000
Stock grants - vesting of Restricted Stock Units (in shares)		111,824
Ending balance at Mar. 31, 2019	$ 568,243	$ 44	$ 432,621	$ 137,490	$ (1,912)
Ending balance (in shares) at Mar. 31, 2019		44,620,831

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - UNAUDITED - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Statement Of Income And Comprehensive Income [Abstract]
Net income	$ 11,259	$ 8,976
Other comprehensive income:
Unrealized holding gains (losses) on securities arising during the period	(1,074)	(7,440)
Other comprehensive income (loss) before tax	(1,074)	(7,440)
Income tax expense (benefit) related to items of other comprehensive income	(315)	(2,176)
Other comprehensive income (loss)	(759)	(5,264)
Total comprehensive income	$ 10,500	$ 3,712

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Cash Flows from Operating Activities:
Net income	$ 11,259	$ 8,976
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses	540	1,688
Stock–based compensation expense	692	1,165
Depreciation and amortization	738	664
Deferred tax expense	734	390
Amortization of core deposit intangible	630	325
Amortization of mortgage servicing rights – net	320	234
Amortization of discounts (premiums) on purchased loans – net	(2,171)	(654)
Gain on sale of loans		(545)
Gain on sale of REO	(118)
Loss (gain) from hedging activities	(291)
(Increase) decrease in other assets	887	(2,336)
Increase (decrease) in accounts payable and other liabilities	(2,028)	169
Net cash provided by operating activities	11,192	10,076
Cash Flows from Investing Activities:
Net increase in loans	(141,346)	(296,711)
Proceeds from sale of loans		52,376
Proceeds from sale of REO	468	755
Purchase of premises and equipment	(852)	(799)
Recovery of allowance for loan losses	208
Purchases of AFS securities		(20,000)
Maturities of AFS securities	20,537	18,880
Sale (purchases) of FHLB stock, net	(2,427)	(3,566)
Net cash used in investing activities	(123,412)	(249,065)
Cash Flows from Financing Activities:
Increase in deposits	35,734	192,665
FHLB Advances – net increase (decrease)	92,000	111,000
Line of credit net change – borrowings (paydowns), net		(20,000)
Dividends paid	(2,230)
Proceeds from sale of stock, net	97	12,286
Net cash provided by financing activities	125,601	295,951
Increase in cash and cash equivalents	13,381	56,962
Cash and cash equivalents at beginning of year	67,312	120,394
Cash and cash equivalents at end of period	80,693	177,356
Supplemental disclosures of cash flow information:
Income taxes	149	18
Interest	17,447	8,534
Noncash transactions:
Transfer of loans to (from) loans held for sale	101,397	46,338
Mortgage servicing rights created from loan sales		317
Chargeoffs (recoveries) against allowance for loans losses	$ 548	88
Acquisition reconciliation – goodwill/deferred taxes		$ 300

XML

Basis of Presentation

3 Months Ended

Mar. 31, 2019

Accounting Policies [Abstract]

Basis of Presentation

NOTE 1: BASIS OF PRESENTATION

The consolidated financial statements include First Foundation Inc. (“FFI”) and its wholly owned subsidiaries: First Foundation Advisors (“FFA”) and First Foundation Bank (“FFB” or the “Bank”) and the wholly owned subsidiaries of FFB, First Foundation Insurance Services (“FFIS”) and Blue Moon Management, LLC (collectively referred to as the “Company”). All intercompany balances and transactions have been eliminated in consolidation. The results of operations reflect any interim adjustments, all of which are of a normal recurring nature and which, in the opinion of management, are necessary for a fair presentation of the results for the interim period presented. The results for the 2019 interim periods are not necessarily indicative of the results expected for the full year.

The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America and prevailing practices within the banking industry. In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet and revenues and expenses for the period. Actual results could differ significantly from those estimates.

The accompanying unaudited consolidated financial statements include all information and footnotes required for interim financial statement presentation. These financial statements assume that readers have read the most recent Annual Report on Form 10-K which contains the latest available audited consolidated financial statements and notes thereto as of and for the year ended December 31, 2018.

Certain reclassifications have been made to the prior year consolidated financial statements to conform to the 2019 presentation.

In March 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2019-01, Codification Improvements to Topic 842, Leases. ASU 2019-01 provides improvements to clarify ASU 2016-02, Leases (Topic 842), or to correct unintended application of guidance. The amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted. The adoption of ASU 2019-01 is not expected to have a significant impact on the Company's consolidated financial statements.

In November 2018, the FASB issued ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments – Credit Losses. ASU 2018-19 provides improvements to clarify the guidance in the amendments in ASU 2016-13, Financial Instruments – Credit Losses (Topic 326), or to correct unintended application of guidance.  We expect the adoption of ASU 2018-19 will impact the Company’s accounting for credit losses in the same manner as the guidance in ASU 2016-13 described below.

In August 2018, the FASB issued guidance within ASU 2018-13, Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement. The amendments within ASU 2018-13 remove, modify, and supplement the disclosure requirements for fair value measurements. Disclosure requirements that were removed include: the amount and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, the policy for timing of transfers between levels, and the valuation processes for Level 3 fair value measurements. The amendments clarify that the measurement uncertainty disclosure is to communicate information about the uncertainty in measurement as of the reporting date. Additional disclosure requirements include: the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period, and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. With the exception of the above additional disclosure requirements, which will be applied prospectively, all other amendments should be applied retrospectively to all periods presented upon their effective date. The amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted. The adoption of ASU 2018-13 is not expected to have a significant impact on the Company's consolidated financial statements.

In January 2017, the FASB issued ASU 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment which provides updated guidance on how an entity is required to test goodwill for impairment. This update is effective for the Company for annual periods beginning after December 15, 2019, and interim periods within those annual periods. The adoption of ASU 2017-04 is not expected to have a material effect on the Company’s consolidated financial statements.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments which introduces new guidance for the accounting for credit losses on certain types of financial instruments. It also modifies the impairment model for available-for-sale debt securities and provides for a simplified accounting model for purchased financial assets with credit deterioration since their origination. The new model, referred to as the current expected credit losses (CECL) model, will apply to financial assets subject to credit losses and measured at amortized cost, and certain off-balance sheet credit exposures. Upon initial recognition of the exposure, the CECL model requires an entity to estimate the credit losses expected over the life of an exposure. This update is effective for the Company for annual periods beginning after December 15, 2019, and interim periods within those annual periods. The Company has begun analyzing the data requirements needed to implement the adoption of ASU 2016-13 and we expect that the adoption of ASU 2016-13 may have a significant impact on the Company’s recording of its allowance for loan losses. The financial statement impact of the implementation of ASU 2016-13 is undeterminable at this time.

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Acquisitions

3 Months Ended

Mar. 31, 2019

Business Combinations [Abstract]

Acquisitions

NOTE 2: ACQUISITIONS

On June 1, 2018, the Company completed the acquisition of PBB Bancorp and its wholly owned subsidiary Premier Business Bank (collectively “PBB”), through a merger of PBB with and into the Bank, in exchange for 5,234,593 shares of its common stock with a fair value of $19.39 per share. The primary reason for acquiring PBB was to expand our operations in Southern California.

The acquisition is accounted for under the purchase method of accounting. The acquired assets, assumed liabilities and identifiable intangible assets are recorded at their respective acquisition date fair values. Goodwill of $61 million, which is not tax deductible, is included in intangible assets in the table below.  

The following table represents the assets acquired and liabilities assumed of PBB as of June 1, 2018 and the fair value adjustments and amounts recorded by the Bank in 2018 under the acquisition method of accounting:

(dollars in thousands)		PBB Book Value		Fair Value Adjustments			Fair Value
Assets Acquired:
Cash and cash equivalents	$	47,582		$	—		$	47,582
Securities AFS		10,072			(90	)		9,982
Loans, net of deferred fees		537,885			(14,986	)		522,899
Allowance for loan losses		(3,011	)		3,011			—
Premises and equipment, net		3,811			(1,536	)		2,275
Investment in FHLB stock		3,229			—			3,229
Deferred taxes		1,451			2,398			3,849
REO		934			(109	)		825
Goodwill and Core deposit intangible		634			66,615			67,249
Other assets		6,634			(566	)		6,068
Total assets acquired	$	609,221		$	54,737		$	663,958
Liabilities Assumed:
Deposits	$	477,366		$	219		$	477,585
Borrowings		79,911			(341	)		79,570
Accounts payable and other liabilities		5,204			100			5,304
Total liabilities assumed		562,481			(22	)		562,459
Excess of assets acquired over liabilities assumed		46,740			54,759			101,499
Total	$	609,221		$	54,737		$	663,958
Consideration:
Stock issued							$	101,499

In many cases, the fair values of assets acquired and liabilities assumed were determined by estimating the cash flows expected to result from those assets and liabilities and discounting them at appropriate market rates. The most significant category of assets for which this procedure was used was that of acquired loans. The excess of expected cash flows above the fair value of the majority of loans will be accreted to interest income over the remaining lives of the loans in accordance with FASB Accounting Standards Codification (“ASC”) 310-20.

Certain loans, for which specific credit-related deterioration since origination was identified, are recorded at fair value reflecting the present value of the amounts expected to be collected. Income recognition on these “purchased credit impaired” loans is based on a reasonable expectation about the timing and amount of cash flows to be collected. Acquired loans deemed impaired and considered collateral dependent, with the timing of the sale of loan collateral indeterminate, remain on nonaccrual status and have no accretable yield. All purchased credit impaired loans were classified as accruing loans as of and subsequent to the acquisition date.

In accordance with generally accepted accounting principles there was no carryover of the allowance for loan losses that had been previously recorded by PBB.

The Company recorded a deferred income tax asset of $3.8 million related to PBB’s operating loss carry-forward and other tax attributes of PBB, along with the effects of fair value adjustments resulting from applying the purchase method of accounting.

The fair value of savings and transaction deposit accounts acquired from PBB were assumed to approximate their carrying value as these accounts have no stated maturity and are payable on demand. Certificates of deposit accounts were valued by comparing the contractual cost of the portfolio to an identical portfolio bearing current market rates. The portfolio was segregated into pools based on remaining maturity. For each pool, the projected cash flows from maturing certificates were then calculated based on contractual rates and prevailing market rates. The valuation adjustment for each pool is equal to the present value of the difference of these two cash flows, discounted at the assumed market rate for a certificate with a corresponding maturity. This valuation adjustment will be accreted to reduce interest expense over the remaining maturities of the respective pools. The Company also recorded a core deposit intangible, which represents the value of the deposit relationships acquired from PBB, of $6.7 million. The core deposit intangible will be amortized over a period of 10 years.

Pro Forma Information (unaudited)

The following table presents unaudited pro forma information for the three months periods ending March 31, 2018 as if the acquisition of PBB had occurred on January 1, 2018, after giving effect to certain adjustments. The unaudited pro forma information for this period includes adjustments for interest income on loans acquired, amortization of intangibles arising from the transaction, adjustments for interest expense on deposits acquired, acquisition costs, and the related income tax effects of all these items. The net effect of these pro forma adjustments was an increase of $0.4 million in net income for the three months ended March 31, 2018. The unaudited pro forma financial information is not necessarily indicative of the results of operations that would have occurred had the transaction been effected on the assumed date.

(dollars in thousands)	Three Months Ended March 31, 2018
Net interest income	$	41,063
Provision for loan losses		1,688
Noninterest income		9,524
Noninterest expenses		32,868
Income before taxes		16,031
Taxes on income		4,624
Net income	$	11,407
Net income per share:
Basic	$	0.26
Diluted	$	0.26

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Fair Value Measurements

3 Months Ended

Mar. 31, 2019

Fair Value Disclosures [Abstract]

Fair Value Measurements

NOTE 3:FAIRVALUEMEASUREMENTS

Assets Measured at Fair Value on a Recurring Basis

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.  Current accounting guidance establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.  There are three levels of inputs that may be used to measure fair values:

Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3: Significant unobservable inputs that reflect the Company's own assumptions about the assumptions that market participants would use in pricing an asset or liability.

Securities available for sale and effective with the adoption of ASU 2016-01 on January 1, 2018, investments in equity securities, are measured at fair value on a recurring basis depending upon whether the inputs are Level 1, 2 or 3 as described above.

Thefollowingtablesshowtherecordedamountsofassetsandliabilitiesmeasuredatfairvalueona recurringbasisas of:

			Fair Value Measurement Level
(dollars in thousands)	Total		Level 1		Level 2		Level 3
March 31, 2019:
Investment securities available for sale:
Agency mortgage-backed securities	$	701,612	$	—	$	701,612	$	—
Beneficial interest – FHLMC securitizations		30,616		—		—		30,616
Corporate bonds		54,427		—		54,427		—
Other		1,505		499		1,006		—
Investment in equity securities		399		399		—		—
Total assets at fair value on a recurring basis	$	788,559	$	898	$	757,045	$	30,616
Derivatives:
Interest rate swaps		10,196		—		10,196		—
December 31, 2018:
Investment securities available for sale:
Agency mortgage-backed securities	$	721,669		—		388,527		333,142
Beneficial interest – FHLMC securitizations		32,086		—		—		32,086
Corporate bonds		54,344		—		54,344		—
Other		1,470		497		973		—
Investment in equity securities		352		352		—		—
Total assets at fair value on a recurring basis	$	809,921	$	849	$	443,844	$	365,228
Derivatives:
Interest rate swaps		5,175		—		5,175		—

The decrease in Level 3 assets from December 31, 2018 was due to a change in pricing methodology of agency mortgage-backed securities. The December 31, 2018 agency mortgage-backed securities Level 2 and Level 3 values have been adjusted to reflect a correction to the amounts previously reported. The total amount of agency mortgage-backed securities at December 31, 2018 did not change.

Assets Measured at Fair Value on a Nonrecurring Basis

From time to time, we may be required to measure other assets at fair value on a nonrecurring basis. These nonrecurring fair value adjustments typically involve application of lower of cost or market accounting or write-downs of individual assets.  

Impaired Loans. ASC 820-10 applies to loans measured for impairment in accordance with ASC 310-10, Accounting by Creditors for Impairment of a Loan, at the fair value of the loan’s collateral (if the loan is collateral dependent) less estimated selling costs. When the fair value of the collateral is based on an observable market price or a current appraised value, we measure the impaired loan at nonrecurring Level 2. When an appraised value is not available, or management determines the fair value of the collateral is further impaired below the appraised value and there is no observable market price or a discounted cash flow has been used to determine the fair value, we measure the impaired loan at nonrecurring Level 3. The total collateral dependent impaired Level 3 loans were $21.9 million and $12.8 million at March 31, 2019 and December 31, 2018, respectively.  There were no specific reserves related to these loans at March 31, 2019 and December 31, 2018.

Real Estate Owned.  The fair value of real estate owned is based on external appraised values that include adjustments for estimated selling costs and assumptions of market conditions that are not directly observable, resulting in a Level 3 classification.  As of March 31, 2019 and December 31, 2018, the fair value of real estate owned was $0.5 million and $0.8 million, respectively.

Mortgage Servicing Rights. When mortgage loans are sold with servicing retained, servicing rights are initially recorded at fair value with the income statement effect recorded in gains on sales of loans.  Fair value is based on a valuation model that calculates the present value of estimated future net servicing income, resulting in a Level 3 classification.  All classes of servicing assets are subsequently measured using the amortization method which requires servicing rights to be amortized into noninterest income in proportion to, and over the period of, the estimated future net servicing income of the underlying loans.

Fair Value of Financial Instruments

FASB ASC 825, “Disclosures about Fair Value of Financial Instruments” requires disclosure of the fair value information about financial instruments, whether or not recognized in the balance sheet, for which it is practicable to estimate such value. The methodologies for estimating the fair value of financial assets and financial liabilities measured at fair value on a recurring and non-recurring basis are discussed above. The estimated fair value amounts have been determined by management using available market information and appropriate valuation methodologies and are based on the exit price notion set forth by ASU 2016-1. In cases where quoted market prices are not available, fair values are based on estimates using present value or other market value techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. In that regard, the derived fair value estimates cannot be substantiated by comparison to independent markets and, in many cases, could not be realized in immediate settlement of the instrument. The aggregate fair value amounts presented below do not represent the underlying value of the Company.

Fair value estimates are made at a discrete point in time based on relevant market information and other information about the financial instruments. Because no active market exists for a significant portion of our financial instruments, fair value estimates are based in large part on judgments we make primarily regarding current economic conditions, risk characteristics of various financial instruments, prepayment rates, and future expected loss experience. These estimates are subjective in nature and invariably involve some inherent uncertainties. Additionally, unexpected changes in events or circumstances can occur that could require us to make changes to our assumptions and which, in turn, could significantly affect and require us to make changes to our previous estimates of fair value.

In addition, the fair value estimates are based on existing on and off-balance sheet financial instruments without attempting to estimate the value of existing and anticipated future customer relationships and the value of assets and liabilities that are not considered financial instruments, such as premises and equipment and other real estate owned.

The following methods and assumptions were used to estimate the fair value of financial instruments.

Cash and Cash Equivalents. The fair value of cash and cash equivalents approximates its carrying value.

Interest-Bearing Deposits with Financial Institutions. The fair values of interest-bearing deposits maturing within ninety days approximate their carrying values.

Investment Securities Available for Sale. Investment securities available-for-sale are measured at fair value on a recurring basis. Fair value measurement is based upon quoted prices, if available. If quoted prices are not available, fair values are measured using independent pricing models or other model-based valuation techniques such as the present value of future cash flows, adjusted for the security’s credit rating, prepayment assumptions and other factors such as credit loss assumptions. When a market is illiquid or there is a lack of transparency around the inputs to valuation, the securities are classified as Level 3 and reliance is placed upon internally developed models, and management judgment and evaluation for valuation. Level 1 securities include those traded on an active exchange, such as the New York Stock Exchange, U.S. Treasury securities that are traded by dealers or brokers in active over-the-counter markets and money market funds. Level 2 securities include mortgage-backed securities issued by government sponsored entities, municipal bonds and corporate debt securities. Securities classified as Level 3 include beneficial interests – FHLMC securitization. Significant assumptions in the valuation of these Level 3 securities as of March 31, 2019 and December 31, 2018 included a prepayment rate of 15% and discount rates ranging from 4.0% to 10%.

Federal Home Loan Bank Stock. The Bank is a member of the Federal Home Loan Bank (the “FHLB”). As a member, we are required to own stock of the FHLB, the amount of which is based primarily on the level of our borrowings from this institution. The fair value of the stock is equal to the carrying amount, is classified as restricted securities and is periodically evaluated for impairment based on our assessment of the ultimate recoverability of our investments in that stock. Any cash or stock dividends paid to us on such stock are reported as income.

Loans Held For Sale. The fair value of loans held for sale is determined using secondary market pricing.

Loans, Other than Impaired Loans. The fair value for loans with variable interest rates is the carrying amount. The fair value of fixed rate loans is derived by calculating the discounted value of future cash flows expected to be received by the various homogeneous categories of loans. All loans have been adjusted to reflect changes in credit risk.

Deposits. The fair value of demand deposits, savings deposits, and money market deposits is defined as the amounts payable on demand. The fair value of fixed maturity certificates of deposit is estimated based on the discounted value of the future cash flows expected to be paid on the deposits.

Borrowings. The fair value of borrowings is the carrying value of overnight FHLB advances that approximate fair value because of the short-term maturity of this instrument, resulting in a Level 2 classification. The fair value of term borrowings is derived by calculating the discounted value of future cash flows expected to be paid out by the Company.

Interest rate swaps. Interest rate swaps are reported at an estimated fair value utilizing Level 2 inputs including LIBOR rates from overnight to one year and U.S. swap rates from one year to thirty years.

The carrying amounts and estimated fair values of financial instruments are as follows as of:

	Carrying		Fair Value Measurement Level
(dollars in thousands)	Value		1		2		3		Total
March 31, 2019:
Assets:
Cash and cash equivalents	$	80,693	$	80,693	$	—	$	—	$	80,693
Securities AFS		788,160		499		757,045		30,616		788,160
Loans held for sale		613,528		—		607,631		—		607,631
Loans, net		4,316,865		—		—		4,361,565		4,361,565
Investment in FHLB stock		22,734		—		22,734		—		22,734
Investment in equity securities		399		399		—		—		399
Liabilities:
Deposits		4,568,702		2,598,436		1,963,623		—		4,562,059
Borrowings		800,000		—		795,000		5,000		800,000
Interest rate swaps		10,196		—		10,196		—		10,196
December 31, 2018:
Assets:
Cash and cash equivalents	$	67,312	$	67,312	$	—	$	—	$	67,312
Securities AFS		809,569		497		443,844		365,228		809,569
Loans held for sale		507,643		—		517,273		—		517,273
Loans, net		4,274,669		—		—		4,408,788		4,408,788
Investment in FHLB stock		20,307		—		20,307		—		20,307
Investment in equity securities		352		352		—		—		352
Liabilities:
Deposits		4,532,968		2,582,758		1,943,635		—		4,526,393
Borrowings		708,000		—		703,000		5,000		708,000
Interest rate swaps		5,175		—		5,175		—		5,175

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Securities

3 Months Ended

Mar. 31, 2019

Investments Debt And Equity Securities [Abstract]

Securities

NOTE 4: SECURITIES

The following table provides a summary of the Company’s securities AFS portfolio as of:

		Amortized	Gross Unrealized					Estimated
(dollars in thousands)		Cost	Gains		Losses			Fair Value
March 31, 2019:
Agency mortgage-backed securities	$	704,262	$	4,338	$	(6,988	)	$	701,612
Beneficial interests in FHLMC securitization		31,136		1,308		(1,828	)		30,616
Corporate bonds		54,000		497		(70	)		54,427
Other		1,465		41		(1	)		1,505
Total	$	790,863	$	6,184	$	(8,887	)	$	788,160
December 31, 2018:
Agency mortgage-backed securities	$	723,597	$	11,883	$	(13,811	)	$	721,669
Beneficial interests in FHLMC securitization		32,143		1,756		(1,813	)		32,086
Corporate bonds		54,000		638		(294	)		54,344
Other		1,458		15		(3	)		1,470
Total	$	811,198	$	14,292	$	(15,921	)	$	809,569

US Treasury securities of $0.5 million as of March 31, 2019 that are included in the table above as Other are pledged as collateral to the State of California to meet regulatory requirements related to the Bank’s trust operations. As of March 31, 2019, $78 million of agency mortgage-backed securities are pledged as collateral as support for the Banks’s obligations under a loan sales and securitization agreement entered into in 2018.

Thetables belowindicate,asofMarch 31, 2019 and December 31, 2018,thegrossunrealizedlossesandfairvaluesofourinvestments,aggregatedbyinvestmentcategoryand lengthoftimethattheindividualsecuritieshavebeenina continuousunrealizedlossposition.

	Securities with Unrealized Loss at March 31, 2019
	Less than 12 months					12 months or more					Total
(dollars in thousands)	Fair Value			Unrealized Loss		Fair Value			Unrealized Loss		Fair Value		Unrealized Loss
Agency mortgage-backed securities	$	—	$	—		$	356,193	$	(6,988	)	$	356,193	$	(6,988	)
Beneficial interests in FHLMC securitization		—		—			6,605		(1,828	)		6,605		(1,828	)
Corporate bonds		3,930		(70	)		—		—			3,930		(70	)
Other		—		—			299		(1	)		299		(1	)
Total temporarily impaired securities	$	3,930		(70	)	$	363,097	$	(8,817	)	$	367,027	$	(8,887	)

	Securities with Unrealized Loss at December 31, 2018
(dollars in thousands)	Less than 12 months					12 months or more					Total
	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
Agency mortgage-backed securities	$	—	$	—		$	387,151	$	(13,811	)	$	387,151	$	(13,811	)
Beneficial interests in FHLMC securitization		429		(11	)		7,038		(1,802	)		7,467		(1,813	)
Corporate bonds		38,706		(294	)		—		—			38,706		(294	)
Other		—		—			497		(3	)		497		(3	)
Total temporarily impaired securities	$	39,135	$	(305	)	$	394,686	$	(15,616	)	$	433,821	$	(15,921	)

Unrealized losses in agency mortgage-backed securities, beneficial interests in FHLMC securitizations, and other securities have not been recognized into income because the issuer bonds are of high credit quality, management does not intend to sell, it is not more likely than not that management would be required to sell the securities prior to their anticipated recovery, and the decline in fair value is largely due to changes in discount rates and assumptions regarding future interest rates. The fair value is expected to recover as the bonds approach maturity.

The scheduled maturities of securities AFS and the related weighted average yields were as follows for the periods indicated:

(dollars in thousands)	Less than  1 Year			1 Through  5 years			5 Through  10 Years			After 10 Years			Total
March 31, 2019
Amortized Cost:
Corporate bonds	$	—		$	—		$	54,000		$	—		$	54,000
Other		500			—			965			—			1,465
Total		500			—			54,965			—			55,465
Weighted average yield	$	1.03	%		—	%		5.29	%		—	%		5.25	%
Estimated Fair Value:
Corporate bonds	$	—		$	—		$	54,427		$	—		$	54,427
Other		499			—			1,006			—			1,505
Total	$	499		$	—		$	55,433		$	—		$	55,932
(dollars in thousands)	Less than  1 Year			1 Through  5 years			5 Through  10 Years			After 10 Years			Total
December 31, 2018
Amortized Cost:
Corporate bonds	$	—		$	—		$	54,000		$	—		$	54,000
Other		500			—			958			—			1,458
Total		500			—			54,958			—			55,458
Weighted average yield		1.03	%		—	%		5.29	%		—	%		5.25	%
Estimated Fair Value:
Corporate bonds	$	—		$	—		$	54,344		$	—		$	54,344
Other		497			—			973			—			1,470
Total	$	497		$	—		$	55,317		$	—		$	55,814

Agency mortgage-backed securities and beneficial interests in FHLMC securitizations are excluded from the above table because such securities are not due at a single maturity date. The weighted average yield of the agency mortgage-backed securities and beneficial interests as of March 31, 2019 was 2.92%.

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Loans

3 Months Ended

Mar. 31, 2019

Receivables [Abstract]

Loans

NOTE 5: LOANS

The following is a summary of our loans as of:

(dollars in thousands)	March 31, 2019		December 31, 2018
Outstanding principal balance:
Loans secured by real estate:
Residential properties:
Multifamily	$	1,987,690	$	1,956,935
Single family		903,992		904,828
Total real estate loans secured by residential properties		2,891,682		2,861,763
Commercial properties		902,060		869,169
Land		59,917		80,187
Total real estate loans		3,853,659		3,811,119
Commercial and industrial loans		454,849		449,805
Consumer loans		17,693		22,699
Total loans		4,326,201		4,283,623
Premiums, discounts and deferred fees and expenses		9,864		10,046
Total	$	4,336,065	$	4,293,669

As of March 31, 2019 and December 31, 2018, the principal balances shown above are net of unaccreted discount related to loans acquired in an acquisition of $11.1 million and $13.3 million, respectively.

In 2017 and 2018 the Company purchased loans, for which there was, at acquisition, evidence of deterioration of credit quality since origination and it was probable, at acquisition, that all contractually required payments would not be collected. The carrying amount of these purchased credit impaired loans is as follows as of:

(dollars in thousands)	March 31, 2019			December 31, 2018
Outstanding principal balance:
Loans secured by real estate:
Residential properties	$	371		$	451
Commercial properties		7,477			10,871
Land		1,081			1,089
Total real estate loans		8,929			12,411
Commercial and industrial loans		1,434			1,150
Consumer loans		9			10
Total loans		10,372			13,571
Unaccreted discount on purchased credit impaired loans		(4,861	)		(6,490	)
Total	$	5,511		$	7,081

Accretable yield, or income expected to be collected on purchased credit impaired loans, and the related changes, is as follows for the periods indicated:

(dollars in thousands)	Three Months Ended March 31, 2019			Year Ended December 31, 2018
Beginning balance	$	767		$	850
Accretion of income		(80	)		(1,509	)
Acquisition		—			1,887
Disposals		(51	)		(461	)
Ending balance	$	636		$	767

The following table summarizes our delinquent and nonaccrual loans as of:

	Past Due and Still Accruing												Total Past
(dollars in thousands)	30–59 Days			60-89 Days			90 Days  or More			Nonaccrual			Due and Nonaccrual			Current		Total
March 31, 2019:
Real estate loans:
Residential properties	$	—		$	664		$	—		$	1,811		$	2,475		$	2,889,207	$	2,891,682
Commercial properties		—			—			—			2,533			2,533			899,527		902,060
Land		—			—			—			697			697			59,220		59,917
Commercial and industrial loans		4,521			610			—			10,496			15,627			439,222		454,849
Consumer loans		5			4			—			—			9			17,684		17,693
Total	$	4,526		$	1,278		$	—		$	15,537		$	21,341		$	4,304,860	$	4,326,201
Percentage of total loans		0.10	%		0.03	%		—	%		0.36	%		0.49	%
December 31, 2018:
Real estate loans:
Residential properties	$	74		$	—		$	499		$	651		$	1,224		$	2,860,539	$	2,861,763
Commercial properties		440			117			—			1,607			2,164			867,005		869,169
Land		2,000			—			—			697			2,697			77,490		80,187
Commercial and industrial loans		12,541			300			536			8,559			21,936			427,869		449,805
Consumer loans		—			7			—			2			9			22,690		22,699
Total	$	15,055		$	424		$	1,035		$	11,516		$	28,030		$	4,255,593	$	4,283,623
Percentage of total loans		0.35	%		0.01	%		0.02	%		0.27	%		0.65	%

The following table presents the loans classified as troubled debt restructurings (“TDR”) by accrual and nonaccrual status as of:

	March 31, 2019							December 31, 2018
(dollars in thousands)	Accrual			Nonaccrual	Total			Accrual	Nonaccrual		Total
Commercial real estate loans	$	1,245	$	1,464	$	2,709	$	1,264	$	1,491	$	2,755
Commercial and industrial loans		—		2,018		2,018		—		2,096		2,096
Total		1,245		3,482		4,727		1,264		3,587		4,851

The following table provides information on loans that were modified as TDRs for the following periods:

		Outstanding Recorded Investment
(dollars in thousands)	Number of loans	Pre-Modification		Post-Modification		Financial Impact
Three Months Ended March 31, 2019:
Commercial real estate loans	—	$	—	$	—	$	—
Commercial loans	1		49		49		—
Total	1	$	49	$	49	$	—

		Outstanding Recorded Investment
(dollars in thousands)	Number of loans	Pre-Modification		Post-Modification		Financial Impact
Year Ended December 31, 2018:
Commercial real estate loans	1	$	1,264	$	1,264	$	—
Commercial loans	3		2,096		2,096		—
Total	4	$	3,360	$	3,360	$	—

All of these loans were classified as a TDR as a result of a reduction in required principal payments and an extension of the maturity date of the loans. These loans have been paying in accordance with the terms of their restructure.

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Allowance for Loan Losses

3 Months Ended

Mar. 31, 2019

Receivables [Abstract]

Allowance for Loan Losses

NOTE 6: ALLOWANCE FOR LOAN LOSSES

The following is a roll forward of the Bank’s allowance for loan losses for the quarters ended March 31:

(dollars in thousands)	Beginning Balance		Provision for Loan Losses			Charge-offs			Recoveries		Ending Balance
2019:
Real estate loans:
Residential properties	$	9,216	$	422		$	—		$	—	$	9,638
Commercial properties		4,547		(232	)		—			—		4,315
Land		391		(149	)		—			—		242
Commercial and industrial loans		4,628		503			(543	)		207		4,795
Consumer loans		218		(4	)		(5	)		1		210
Total	$	19,000	$	540		$	(548	)	$	208	$	19,200
2018
Real estate loans:
Residential properties	$	9,715	$	193		$	—		$	—	$	9,908
Commercial properties		4,399		(9	)		—			—		4,390
Land		395		(60	)		—			—		335
Commercial and industrial loans		3,624		1,557			(88	)		—		5,093
Consumer loans		267		7			—			—		274
Total	$	18,400	$	1,688		$	(88	)	$	—	$	20,000

The following table presents the balance in the allowance for loan losses and the recorded investment in loans by impairment method as of:

	Allowance for Loan Losses								Unaccreted Credit
	Evaluated for Impairment				Purchased				Component
(dollars in thousands)	Individually		Collectively		Impaired		Total		Other Loans
March 31, 2019:
Allowance for loan losses:
Real estate loans:
Residential properties	$	—	$	9,638	$	—	$	9,638	$	1,524
Commercial properties		117		4,198		—		4,315		1,589
Land		—		242		—		242		47
Commercial and industrial loans		507		4,288		—		4,795		509
Consumer loans		—		210		—		210		2
Total	$	624	$	18,576	$	—	$	19,200	$	3,671
Loans:
Real estate loans:
Residential properties	$	1,811	$	2,889,871	$	—	$	2,891,682	$	234,595
Commercial properties		8,944		889,412		3,704		902,060		280,393
Land		697		58,418		802		59,917		37,624
Commercial and industrial loans		10,496		443,348		1,005		454,849		55,921
Consumer loans		—		17,693		—		17,693		314
Total	$	21,948	$	4,298,742	$	5,511	$	4,326,201	$	608,847
December 31, 2018:
Allowance for loan losses:
Real estate loans:
Residential properties	$	—	$	9,216	$	—	$	9,216	$	1,724
Commercial properties		126		4,421		—		4,547		1,779
Land		—		391		—		391		84
Commercial and industrial loans		290		4,338		—		4,628		633
Consumer loans		—		218		—		218		3
Total	$	416	$	18,584	$	—	$	19,000	$	4,223
Loans:
Real estate loans:
Residential properties	$	651	$	2,861,112	$	—	$	2,861,763	$	241,698
Commercial properties		2,871		860,835		5,463		869,169		275,516
Land		697		78,681		809		80,187		41,132
Commercial and industrial loans		8,559		440,437		809		449,805		61,183
Consumer loans		—		22,699		—		22,699		366
Total	$	12,778	$	4,263,764	$	7,081	$	4,283,623	$	619,895

The column labeled “Unaccreted Credit Component Other Loans” represents the amount of unaccreted credit component discount for the other loans acquired in a business combination, and the stated principal balance of the related loans. The discount is equal to 0.60% and 0.68% of the stated principal balance of these loans as of March 31, 2019 and December 31, 2018, respectively. In addition to this unaccreted credit component discount, an additional $0.3 million and $0.4 million of ALLL has been provided for these loans as of March 31, 2019 and December 31, 2018, respectively.

The Bank categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as current financial information, historical payment experience, collateral adequacy, credit documentation, and current economic trends, among other factors. The Bank analyzes loans individually by classifying the loans as to credit risk. This analysis typically includes larger, non-homogeneous loans such as loans secured by multifamily or commercial real estate and commercial and industrial loans. This analysis is performed on an ongoing basis as new information is obtained. The Bank uses the following definitions for risk ratings:

Pass: Loans classified as pass are strong credits with no existing or known potential weaknesses deserving of management’s close attention.

Special Mention: Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date.

Substandard: Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

Impaired: A loan is considered impaired, when, based on current information and events, it is probable that the Bank will be unable to collect all amounts due according to the contractual terms of the loan agreement.

Additionally, all loans classified as TDRs are considered impaired at the time they are restructured. Purchased credit impaired loans are not considered impaired loans for these purposes.

Loans listed as pass include larger non-homogeneous loans not meeting the risk rating definitions above and smaller, homogeneous loans not assessed on an individual basis.

Based on the most recent analysis performed, the risk category of loans by class of loans is as follows as of:

(dollars in thousands)	Pass		Special Mention		Substandard		Impaired		Total
March 31, 2019:
Real estate loans:
Residential properties	$	2,886,943	$	2,928	$	—	$	1,811	$	2,891,682
Commercial properties		880,599		6,696		5,821		8,944		902,060
Land		58,418		—		802		697		59,917
Commercial and industrial loans		440,126		918		3,309		10,496		454,849
Consumer loans		17,693		—		—		—		17,693
Total	$	4,283,779	$	10,542	$	9,932	$	21,948	$	4,326,201
December 31, 2018:
Real estate loans:
Residential properties	$	2,857,666	$	3,446	$	—	$	651	$	2,861,763
Commercial properties		845,672		13,024		7,602		2,871		869,169
Land		78,681		—		809		697		80,187
Commercial and industrial loans		431,751		7,723		1,772		8,559		449,805
Consumer loans		22,699		—		—		—		22,699
Total	$	4,236,469	$	24,193	$	10,183	$	12,778	$	4,283,623

Impaired loans evaluated individually and any related allowance are as follows as of:

	With No Allowance Recorded				With an Allowance Recorded
(dollars in thousands)	Unpaid Principal Balance		Recorded Investment		Unpaid Principal Balance		Recorded Investment		Related Allowance
March 31, 2019:
Real estate loans:
Residential properties	$	1,835	$	1,811	$	—	$	—	$	—
Commercial properties		7,816		7,699		1,245		1,245		117
Land		697		697		—		—		—
Commercial and industrial loans		6,974		6,766		3,750		3,730		507
Total	$	17,322	$	16,973	$	4,995	$	4,975	$	624
December 31, 2018:
Real estate loans:
Residential properties	$	651	$	651	$	—	$	—	$	—
Commercial properties		1,607		1,607		1,264		1,264		126
Land		697		697		—		—		—
Commercial and industrial loans		6,543		6,543		2,016		2,016		290
Total	$	9,498	$	9,498	$	3,280	$	3,280	$	416

The weighted average annualized average balance of the recorded investment for impaired loans, beginning from when the loan became impaired, and any interest income recorded on impaired loans after they became impaired is as follows for the:

	Three months Ended March 31, 2019				Year Ended December 31, 2018
(dollars in thousands)	Average Recorded Investment		Interest Income after Impairment		Average Recorded Investment		Interest Income after Impairment
Real estate loans:
Residential properties	$	1,151	$	—	$	276	$	—
Commercial properties		6,927		74		3,459		90
Land		697		—		—		—
Commercial and industrial loans		9,499		—		9,117		—
Total	$	18,274	$	74	$	12,852	$	90

There was no interest income recognized on a cash basis in either 2019 or 2018 on impaired loans.

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Loan Sales and Mortgage Servicing Rights

3 Months Ended

Mar. 31, 2019

Loan Sales And Mortgage Servicing Rights Disclosure [Abstract]

Loan Sales and Mortgage Servicing Rights

NOTE 7: LOAN SALES AND MORTGAGE SERVICING RIGHTS

During the first three months of 2019, FFB did not have any loan sales. In 2018, FFB sold $674 million of multifamily loans to financial institutions and recognized a gain of $0.4 million.

For sales of multifamily loans, FFB retained servicing rights for the majority of these loans and recognized mortgage servicing rights as part of the transactions. As of March 31, 2019 and December 31, 2018, mortgage servicing rights were $6.1 million and $6.4 million, respectively and the amount of loans serviced for others totaled $1.3 billion at March 31, 2019 and December 31, 2018. Servicing fees for the three months ended March 31, 2019, and in 2018 were $0.4 million and $1.1 million, respectively.  

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Deposits

3 Months Ended

Mar. 31, 2019

Deposits [Abstract]

Deposits

NOTE 8: DEPOSITS

The following table summarizes the outstanding balance of deposits and average rates paid thereon as of:

	March 31, 2019					December 31, 2018
(dollars in thousands)	Amount		Weighted Average Rate			Amount		Weighted Average Rate
Demand deposits:
Noninterest-bearing	$	1,114,596		—		$	1,074,661		—
Interest-bearing		307,854		0.790	%		317,380		0.798	%
Money market and savings		1,175,986		1.180	%		1,190,717		1.115	%
Certificates of deposits		1,970,266		2.276	%		1,950,210		2.142	%
Total	$	4,568,702		1.338	%	$	4,532,968		1.270	%

At March 31, 2019, of the $398 million of certificates of deposits of $250,000 or more, $376 million mature within one year and $22 million mature after one year. Of the $1.6 billion of certificates of deposit of less than $250,000, $1.5 billion mature within one year and $51 million mature after one year. At December 31, 2018, of the $360 million of certificates of deposits of $250,000 or more, $332 million mature within one year and $28 million mature after one year. Of the $1.6 billion of certificates of deposit of less than $250,000, $1.5 billion mature within one year and $53 million mature after one year.  

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Borrowings

3 Months Ended

Mar. 31, 2019

Debt Disclosure [Abstract]

Borrowings

NOTE 9: BORROWINGS

At March 31, 2019, our borrowings consisted of $795 million of overnight FHLB advances at the Bank and $5 million of borrowings outstanding on a holding company line of credit. At December 31, 2018, our borrowings consisted of $703 million of overnight FHLB advances at the Bank and $5 million of borrowings outstanding on a holding company line of credit. The overnight FHLB advances were paid in full in the early part of April 2019 and January 2019, respectively, and bore interest rates of 2.58% and 2.56%, respectively. At March 31, 2019, the interest rate on the holding company line of credit was 6.30%. Because the Bank utilizes overnight borrowings, the balance of outstanding borrowings fluctuates on a daily basis.

FHLB advances are collateralized primarily by loans secured by multifamily and commercial real estate properties with a carrying value of $3.1 billion as of March 31, 2019. As a matter of practice, the Bank provides substantially all of its qualifying loans as collateral to the FHLB. The Bank’s total borrowing capacity from the FHLB at March 31, 2019 was $2.3 billion. In addition to the $795 million borrowing at March 31, 2019, the Bank had in place $231 million of letters of credit from the FHLB which are used to meet collateral requirements for borrowings from the State of California and local agencies.

During 2017, FFI entered into a loan agreement with an unaffiliated lender that provides for a revolving line of credit for up to $75 million. The loan agreement matures in five years, with an option to extend the maturity date subject to certain conditions, and bears interest at 90 day LIBOR plus 350 basis points (3.50%). We are required to meet certain financial covenants during the term of the loan, including minimum capital levels and limits on classified assets. FFI’s obligations under the loan agreement are secured by, among other things, a pledge of all of its equity in FFB.

The Bank also has $120 million available borrowing capacity through unsecured fed funds lines, ranging in size from $20 million to $25 million, with five other financial institutions and a $57 million secured line with the Federal Reserve Bank. None of these lines had outstanding borrowings as of March 31, 2019. Combined, the Bank’s unused lines of credit as of March 31, 2019 and December 31, 2018 were $1.5 billion and $1.5 billion, respectively. The average balance of overnight borrowings during the first three months of 2019 was $636 million, as compared to $557 million during all of 2018.

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Leases

3 Months Ended

Mar. 31, 2019

Leases [Abstract]

Leases

NOTE 10: LEASES

TheCompanyadoptedASU2016-02, Leases(Topic842), onJanuary1,2019,usingthealternativetransitionmethodwherebycomparativeperiodswerenotrestated.Nocumulativeeffectadjustment totheopeningbalanceofretainedearningswasrequired.

TheCompanyleasescertainfacilities for its corporate offices and branch operations under non-cancelable operating leases that expire through 2026.Allleaseswereclassifiedasoperatingleases and therefore, were previously not recognized on the Company’s consolidated balance sheet.With the adoption of Topic 842, operating lease agreements are required to be recognized on the consolidated balance sheet as a right-of-use (“ROU”) asset and a corresponding lease liability.

Certainleasesincludeoptions torenew,withrenewaltermsthatcanextendtheleaseterm.Thedepreciablelifeof leased assetsarelimitedbytheexpectedleaseterm.

AdoptionofthisstandardresultedintheCompanyrecognizinga rightof use assetof$21.1 million, acorrespondingleaseliabilityof$22.7 million onJanuary1,2019 and eliminated a $1.6 million deferred rent liability recognized under previous accounting standards.

Supplemental lease information at or for the three months ended March 31, 2019 is as follows:

(dollars in thousands)
Balance Sheet:
Operating lease asset classified as other assets	$	20,015
Operating lease liability classified as other liabilities		21,644
Income Statement:
Operating lease cost classified as occupancy and equipment expense	$	1,188
Weighted average lease term, in years		3.12
Weighted average discount rate		5.53
Operating cash flows	$	1,497

The calculated amount of the ROU assets and lease liabilities in the table above are impacted by the length of the lease term and the discount rate used to present value the minimum lease payments.  The Company’s lease agreements often include one or more options to renew at the Company’s discretion. Topic 842 requires the use of the rate implicit in the lease whenever this rate is readily determinable.  As this rate is rarely determinable, the Company utilizes its incremental borrowing rate at lease inception, on a collateralized basis, over a similar term. For operating leases existing prior to January 1, 2019, the rate for the remaining lease term as of January 1, 2019 was used.

The table below summarizes the maturity of remaining lease liabilities at March 31, 2019:

(dollars in thousands)
2019	$	4,591
2020		6,052
2021		5,511
2022		4,607
2023 and after		3,893
Total future minimum lease payments	$	24,654
Discount on cash flows		(3,010	)
Total lease liability	$	21,644

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Earnings Per Share

3 Months Ended

Mar. 31, 2019

Earnings Per Share [Abstract]

Earnings Per Share

NOTE 11: EARNINGS PER SHARE

Basic earnings per share excludes dilution and is computed by dividing net income or loss available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflects the potential dilution that could occur if contracts to issue common stock were exercised or converted into common stock that would then share in earnings. The following table sets forth the Company’s unaudited earnings per share calculations for the quarters ended March 31:

	2019				2018
(dollars in thousands, except per share amounts)	Basic		Diluted		Basic		Diluted
Net income	$	11,259	$	11,259	$	8,976	$	8,976
Basic common shares outstanding		44,540,865		44,540,865		38,577,271		38,577,271
Effect of contingent shares issuable				1,592				1,592
Effect of options and restricted stock				255,849				545,869
Diluted common shares outstanding				44,798,306				39,124,732
Earnings per share	$	0.25	$	0.25	$	0.23	$	0.23

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Segment Reporting

3 Months Ended

Mar. 31, 2019

Segment Reporting [Abstract]

Segment Reporting

NOTE 12: SEGMENT REPORTING

For the quarters ended March 31, 2019 and 2018, the Company had two reportable business segments: Banking (FFB and FFIS) and Wealth Management (FFA). The results of FFI and any elimination entries are included in the column labeled Other. The following tables show key operating results for each of our business segments used to arrive at our consolidated totals for the following periods:

(dollars in thousands)	Banking		Wealth Management		Other			Total
Quarter ended March 31, 2019:
Interest income	$	60,544	$	—	$	—		$	60,544
Interest expense		19,482		—		15			19,497
Net interest income		41,062		—		(15	)		41,047
Provision for loan losses		540		—		—			540
Noninterest income		2,994		5,731		(260	)		8,465
Noninterest expense		26,587		5,518		840			32,945
Income (loss) before taxes on income	$	16,929	$	213	$	(1,115	)	$	16,027

Quarter ended March 31, 2018:
Interest income	$	43,319	$	—	$	—		$	43,319
Interest expense		8,520		—		531			9,051
Net interest income		34,799		—		(531	)		34,268
Provision for loan losses		1,688		—		—			1,688
Noninterest income		2,557		6,414		11			8,982
Noninterest expense		21,811		5,817		1,360			28,988
Income (loss) before taxes on income	$	13,857	$	597	$	(1,880	)	$	12,574

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Subsequent Events

3 Months Ended

Mar. 31, 2019

Subsequent Events [Abstract]

Subsequent Events

NOTE 13: SUBSEQUENT EVENTS

Cash Dividend

On May 2, 2019, the Board of Directors of the Company declared an initial quarterly cash dividend of $0.05 per common share to be paid on June 17, 2019 to stockholders of record as of the close of business on June 3, 2019.

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Acquisitions (Tables)

3 Months Ended

Mar. 31, 2019

Business Combinations [Abstract]

Schedule of Assets Acquired and Liabilities Assumed

The following table represents the assets acquired and liabilities assumed of PBB as of June 1, 2018 and the fair value adjustments and amounts recorded by the Bank in 2018 under the acquisition method of accounting

(dollars in thousands)		PBB Book Value		Fair Value Adjustments			Fair Value
Assets Acquired:
Cash and cash equivalents	$	47,582		$	—		$	47,582
Securities AFS		10,072			(90	)		9,982
Loans, net of deferred fees		537,885			(14,986	)		522,899
Allowance for loan losses		(3,011	)		3,011			—
Premises and equipment, net		3,811			(1,536	)		2,275
Investment in FHLB stock		3,229			—			3,229
Deferred taxes		1,451			2,398			3,849
REO		934			(109	)		825
Goodwill and Core deposit intangible		634			66,615			67,249
Other assets		6,634			(566	)		6,068
Total assets acquired	$	609,221		$	54,737		$	663,958
Liabilities Assumed:
Deposits	$	477,366		$	219		$	477,585
Borrowings		79,911			(341	)		79,570
Accounts payable and other liabilities		5,204			100			5,304
Total liabilities assumed		562,481			(22	)		562,459
Excess of assets acquired over liabilities assumed		46,740			54,759			101,499
Total	$	609,221		$	54,737		$	663,958
Consideration:
Stock issued							$	101,499

Pro Forma Summarized Income Statement Data

The following table presents unaudited pro forma information for the three months periods ending March 31, 2018 as if the acquisition of PBB had occurred on January 1, 2018, after giving effect to certain adjustments. The unaudited pro forma information for this period includes adjustments for interest income on loans acquired, amortization of intangibles arising from the transaction, adjustments for interest expense on deposits acquired, acquisition costs, and the related income tax effects of all these items. The net effect of these pro forma adjustments was an increase of $0.4 million in net income for the three months ended March 31, 2018. The unaudited pro forma financial information is not necessarily indicative of the results of operations that would have occurred had the transaction been effected on the assumed date.

(dollars in thousands)	Three Months Ended March 31, 2018
Net interest income	$	41,063
Provision for loan losses		1,688
Noninterest income		9,524
Noninterest expenses		32,868
Income before taxes		16,031
Taxes on income		4,624
Net income	$	11,407
Net income per share:
Basic	$	0.26
Diluted	$	0.26

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Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2019

Fair Value Disclosures [Abstract]

Recorded Amounts of Assets and Liabilities Measured at Fair Value on Recurring Basis

Thefollowingtablesshowtherecordedamountsofassetsandliabilitiesmeasuredatfairvalueona recurringbasisas of:

			Fair Value Measurement Level
(dollars in thousands)	Total		Level 1		Level 2		Level 3
March 31, 2019:
Investment securities available for sale:
Agency mortgage-backed securities	$	701,612	$	—	$	701,612	$	—
Beneficial interest – FHLMC securitizations		30,616		—		—		30,616
Corporate bonds		54,427		—		54,427		—
Other		1,505		499		1,006		—
Investment in equity securities		399		399		—		—
Total assets at fair value on a recurring basis	$	788,559	$	898	$	757,045	$	30,616
Derivatives:
Interest rate swaps		10,196		—		10,196		—
December 31, 2018:
Investment securities available for sale:
Agency mortgage-backed securities	$	721,669		—		388,527		333,142
Beneficial interest – FHLMC securitizations		32,086		—		—		32,086
Corporate bonds		54,344		—		54,344		—
Other		1,470		497		973		—
Investment in equity securities		352		352		—		—
Total assets at fair value on a recurring basis	$	809,921	$	849	$	443,844	$	365,228
Derivatives:
Interest rate swaps		5,175		—		5,175		—

Carrying Amounts and Estimated Fair Value of Financial Instruments

The carrying amounts and estimated fair values of financial instruments are as follows as of:

	Carrying		Fair Value Measurement Level
(dollars in thousands)	Value		1		2		3		Total
March 31, 2019:
Assets:
Cash and cash equivalents	$	80,693	$	80,693	$	—	$	—	$	80,693
Securities AFS		788,160		499		757,045		30,616		788,160
Loans held for sale		613,528		—		607,631		—		607,631
Loans, net		4,316,865		—		—		4,361,565		4,361,565
Investment in FHLB stock		22,734		—		22,734		—		22,734
Investment in equity securities		399		399		—		—		399
Liabilities:
Deposits		4,568,702		2,598,436		1,963,623		—		4,562,059
Borrowings		800,000		—		795,000		5,000		800,000
Interest rate swaps		10,196		—		10,196		—		10,196
December 31, 2018:
Assets:
Cash and cash equivalents	$	67,312	$	67,312	$	—	$	—	$	67,312
Securities AFS		809,569		497		443,844		365,228		809,569
Loans held for sale		507,643		—		517,273		—		517,273
Loans, net		4,274,669		—		—		4,408,788		4,408,788
Investment in FHLB stock		20,307		—		20,307		—		20,307
Investment in equity securities		352		352		—		—		352
Liabilities:
Deposits		4,532,968		2,582,758		1,943,635		—		4,526,393
Borrowings		708,000		—		703,000		5,000		708,000
Interest rate swaps		5,175		—		5,175		—		5,175

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Securities (Tables)

3 Months Ended

Mar. 31, 2019

Investments Debt And Equity Securities [Abstract]

Summary of AFS Securities Portfolio

The following table provides a summary of the Company’s securities AFS portfolio as of:

		Amortized	Gross Unrealized					Estimated
(dollars in thousands)		Cost	Gains		Losses			Fair Value
March 31, 2019:
Agency mortgage-backed securities	$	704,262	$	4,338	$	(6,988	)	$	701,612
Beneficial interests in FHLMC securitization		31,136		1,308		(1,828	)		30,616
Corporate bonds		54,000		497		(70	)		54,427
Other		1,465		41		(1	)		1,505
Total	$	790,863	$	6,184	$	(8,887	)	$	788,160
December 31, 2018:
Agency mortgage-backed securities	$	723,597	$	11,883	$	(13,811	)	$	721,669
Beneficial interests in FHLMC securitization		32,143		1,756		(1,813	)		32,086
Corporate bonds		54,000		638		(294	)		54,344
Other		1,458		15		(3	)		1,470
Total	$	811,198	$	14,292	$	(15,921	)	$	809,569

Schedule of Securities in a Continuous Unrealized Loss Position Aggregated by Investment Category and Length of Time

Thetables belowindicate,asofMarch 31, 2019 and December 31, 2018,thegrossunrealizedlossesandfairvaluesofourinvestments,aggregatedbyinvestmentcategoryand lengthoftimethattheindividualsecuritieshavebeenina continuousunrealizedlossposition.

	Securities with Unrealized Loss at March 31, 2019
	Less than 12 months					12 months or more					Total
(dollars in thousands)	Fair Value			Unrealized Loss		Fair Value			Unrealized Loss		Fair Value		Unrealized Loss
Agency mortgage-backed securities	$	—	$	—		$	356,193	$	(6,988	)	$	356,193	$	(6,988	)
Beneficial interests in FHLMC securitization		—		—			6,605		(1,828	)		6,605		(1,828	)
Corporate bonds		3,930		(70	)		—		—			3,930		(70	)
Other		—		—			299		(1	)		299		(1	)
Total temporarily impaired securities	$	3,930		(70	)	$	363,097	$	(8,817	)	$	367,027	$	(8,887	)

	Securities with Unrealized Loss at December 31, 2018
(dollars in thousands)	Less than 12 months					12 months or more					Total
	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
Agency mortgage-backed securities	$	—	$	—		$	387,151	$	(13,811	)	$	387,151	$	(13,811	)
Beneficial interests in FHLMC securitization		429		(11	)		7,038		(1,802	)		7,467		(1,813	)
Corporate bonds		38,706		(294	)		—		—			38,706		(294	)
Other		—		—			497		(3	)		497		(3	)
Total temporarily impaired securities	$	39,135	$	(305	)	$	394,686	$	(15,616	)	$	433,821	$	(15,921	)

Scheduled Maturities of Securities AFS Other than Mortgage Backed Securities and the Related Weighted Average Yield

The scheduled maturities of securities AFS and the related weighted average yields were as follows for the periods indicated:

(dollars in thousands)	Less than  1 Year			1 Through  5 years			5 Through  10 Years			After 10 Years			Total
March 31, 2019
Amortized Cost:
Corporate bonds	$	—		$	—		$	54,000		$	—		$	54,000
Other		500			—			965			—			1,465
Total		500			—			54,965			—			55,465
Weighted average yield	$	1.03	%		—	%		5.29	%		—	%		5.25	%
Estimated Fair Value:
Corporate bonds	$	—		$	—		$	54,427		$	—		$	54,427
Other		499			—			1,006			—			1,505
Total	$	499		$	—		$	55,433		$	—		$	55,932
(dollars in thousands)	Less than  1 Year			1 Through  5 years			5 Through  10 Years			After 10 Years			Total
December 31, 2018
Amortized Cost:
Corporate bonds	$	—		$	—		$	54,000		$	—		$	54,000
Other		500			—			958			—			1,458
Total		500			—			54,958			—			55,458
Weighted average yield		1.03	%		—	%		5.29	%		—	%		5.25	%
Estimated Fair Value:
Corporate bonds	$	—		$	—		$	54,344		$	—		$	54,344
Other		497			—			973			—			1,470
Total	$	497		$	—		$	55,317		$	—		$	55,814

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Loans (Tables)

3 Months Ended

Mar. 31, 2019

Receivables [Abstract]

Summary of Loans

The following is a summary of our loans as of:

(dollars in thousands)	March 31, 2019		December 31, 2018
Outstanding principal balance:
Loans secured by real estate:
Residential properties:
Multifamily	$	1,987,690	$	1,956,935
Single family		903,992		904,828
Total real estate loans secured by residential properties		2,891,682		2,861,763
Commercial properties		902,060		869,169
Land		59,917		80,187
Total real estate loans		3,853,659		3,811,119
Commercial and industrial loans		454,849		449,805
Consumer loans		17,693		22,699
Total loans		4,326,201		4,283,623
Premiums, discounts and deferred fees and expenses		9,864		10,046
Total	$	4,336,065	$	4,293,669

Carrying Amount of Purchased Credit Impaired Loans

In 2017 and 2018 the Company purchased loans, for which there was, at acquisition, evidence of deterioration of credit quality since origination and it was probable, at acquisition, that all contractually required payments would not be collected. The carrying amount of these purchased credit impaired loans is as follows as of:

(dollars in thousands)	March 31, 2019			December 31, 2018
Outstanding principal balance:
Loans secured by real estate:
Residential properties	$	371		$	451
Commercial properties		7,477			10,871
Land		1,081			1,089
Total real estate loans		8,929			12,411
Commercial and industrial loans		1,434			1,150
Consumer loans		9			10
Total loans		10,372			13,571
Unaccreted discount on purchased credit impaired loans		(4,861	)		(6,490	)
Total	$	5,511		$	7,081

Accretable Yield or Income Expected to be Collected on Purchased Credit Impaired Loans and Related Changes

Accretable yield, or income expected to be collected on purchased credit impaired loans, and the related changes, is as follows for the periods indicated:

(dollars in thousands)	Three Months Ended March 31, 2019			Year Ended December 31, 2018
Beginning balance	$	767		$	850
Accretion of income		(80	)		(1,509	)
Acquisition		—			1,887
Disposals		(51	)		(461	)
Ending balance	$	636		$	767

Summary of Delinquent and Nonaccrual Loans

The following table summarizes our delinquent and nonaccrual loans as of:

	Past Due and Still Accruing												Total Past
(dollars in thousands)	30–59 Days			60-89 Days			90 Days  or More			Nonaccrual			Due and Nonaccrual			Current		Total
March 31, 2019:
Real estate loans:
Residential properties	$	—		$	664		$	—		$	1,811		$	2,475		$	2,889,207	$	2,891,682
Commercial properties		—			—			—			2,533			2,533			899,527		902,060
Land		—			—			—			697			697			59,220		59,917
Commercial and industrial loans		4,521			610			—			10,496			15,627			439,222		454,849
Consumer loans		5			4			—			—			9			17,684		17,693
Total	$	4,526		$	1,278		$	—		$	15,537		$	21,341		$	4,304,860	$	4,326,201
Percentage of total loans		0.10	%		0.03	%		—	%		0.36	%		0.49	%
December 31, 2018:
Real estate loans:
Residential properties	$	74		$	—		$	499		$	651		$	1,224		$	2,860,539	$	2,861,763
Commercial properties		440			117			—			1,607			2,164			867,005		869,169
Land		2,000			—			—			697			2,697			77,490		80,187
Commercial and industrial loans		12,541			300			536			8,559			21,936			427,869		449,805
Consumer loans		—			7			—			2			9			22,690		22,699
Total	$	15,055		$	424		$	1,035		$	11,516		$	28,030		$	4,255,593	$	4,283,623
Percentage of total loans		0.35	%		0.01	%		0.02	%		0.27	%		0.65	%

Loans Classified as Troubled Debt Sestructurings (TDR) by Accrual and Nonaccrual Status

The following table presents the loans classified as troubled debt restructurings (“TDR”) by accrual and nonaccrual status as of:

	March 31, 2019							December 31, 2018
(dollars in thousands)	Accrual			Nonaccrual	Total			Accrual	Nonaccrual		Total
Commercial real estate loans	$	1,245	$	1,464	$	2,709	$	1,264	$	1,491	$	2,755
Commercial and industrial loans		—		2,018		2,018		—		2,096		2,096
Total		1,245		3,482		4,727		1,264		3,587		4,851

The following table provides information on loans that were modified as TDRs for the following periods:

		Outstanding Recorded Investment
(dollars in thousands)	Number of loans	Pre-Modification		Post-Modification		Financial Impact
Three Months Ended March 31, 2019:
Commercial real estate loans	—	$	—	$	—	$	—
Commercial loans	1		49		49		—
Total	1	$	49	$	49	$	—

		Outstanding Recorded Investment
(dollars in thousands)	Number of loans	Pre-Modification		Post-Modification		Financial Impact
Year Ended December 31, 2018:
Commercial real estate loans	1	$	1,264	$	1,264	$	—
Commercial loans	3		2,096		2,096		—
Total	4	$	3,360	$	3,360	$	—

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Allowance for Loan Losses (Tables)

3 Months Ended

Mar. 31, 2019

Receivables [Abstract]

Bank's Allowance for Loan Losses

The following is a roll forward of the Bank’s allowance for loan losses for the quarters ended March 31:

(dollars in thousands)	Beginning Balance		Provision for Loan Losses			Charge-offs			Recoveries		Ending Balance
2019:
Real estate loans:
Residential properties	$	9,216	$	422		$	—		$	—	$	9,638
Commercial properties		4,547		(232	)		—			—		4,315
Land		391		(149	)		—			—		242
Commercial and industrial loans		4,628		503			(543	)		207		4,795
Consumer loans		218		(4	)		(5	)		1		210
Total	$	19,000	$	540		$	(548	)	$	208	$	19,200
2018
Real estate loans:
Residential properties	$	9,715	$	193		$	—		$	—	$	9,908
Commercial properties		4,399		(9	)		—			—		4,390
Land		395		(60	)		—			—		335
Commercial and industrial loans		3,624		1,557			(88	)		—		5,093
Consumer loans		267		7			—			—		274
Total	$	18,400	$	1,688		$	(88	)	$	—	$	20,000

Balance in Allowance for Loan Losses and Recorded Investment in Loans by Impairment

The following table presents the balance in the allowance for loan losses and the recorded investment in loans by impairment method as of:

	Allowance for Loan Losses								Unaccreted Credit
	Evaluated for Impairment				Purchased				Component
(dollars in thousands)	Individually		Collectively		Impaired		Total		Other Loans
March 31, 2019:
Allowance for loan losses:
Real estate loans:
Residential properties	$	—	$	9,638	$	—	$	9,638	$	1,524
Commercial properties		117		4,198		—		4,315		1,589
Land		—		242		—		242		47
Commercial and industrial loans		507		4,288		—		4,795		509
Consumer loans		—		210		—		210		2
Total	$	624	$	18,576	$	—	$	19,200	$	3,671
Loans:
Real estate loans:
Residential properties	$	1,811	$	2,889,871	$	—	$	2,891,682	$	234,595
Commercial properties		8,944		889,412		3,704		902,060		280,393
Land		697		58,418		802		59,917		37,624
Commercial and industrial loans		10,496		443,348		1,005		454,849		55,921
Consumer loans		—		17,693		—		17,693		314
Total	$	21,948	$	4,298,742	$	5,511	$	4,326,201	$	608,847
December 31, 2018:
Allowance for loan losses:
Real estate loans:
Residential properties	$	—	$	9,216	$	—	$	9,216	$	1,724
Commercial properties		126		4,421		—		4,547		1,779
Land		—		391		—		391		84
Commercial and industrial loans		290		4,338		—		4,628		633
Consumer loans		—		218		—		218		3
Total	$	416	$	18,584	$	—	$	19,000	$	4,223
Loans:
Real estate loans:
Residential properties	$	651	$	2,861,112	$	—	$	2,861,763	$	241,698
Commercial properties		2,871		860,835		5,463		869,169		275,516
Land		697		78,681		809		80,187		41,132
Commercial and industrial loans		8,559		440,437		809		449,805		61,183
Consumer loans		—		22,699		—		22,699		366
Total	$	12,778	$	4,263,764	$	7,081	$	4,283,623	$	619,895

Risk Category of Loans by Class of Loans

Based on the most recent analysis performed, the risk category of loans by class of loans is as follows as of:

(dollars in thousands)	Pass		Special Mention		Substandard		Impaired		Total
March 31, 2019:
Real estate loans:
Residential properties	$	2,886,943	$	2,928	$	—	$	1,811	$	2,891,682
Commercial properties		880,599		6,696		5,821		8,944		902,060
Land		58,418		—		802		697		59,917
Commercial and industrial loans		440,126		918		3,309		10,496		454,849
Consumer loans		17,693		—		—		—		17,693
Total	$	4,283,779	$	10,542	$	9,932	$	21,948	$	4,326,201
December 31, 2018:
Real estate loans:
Residential properties	$	2,857,666	$	3,446	$	—	$	651	$	2,861,763
Commercial properties		845,672		13,024		7,602		2,871		869,169
Land		78,681		—		809		697		80,187
Commercial and industrial loans		431,751		7,723		1,772		8,559		449,805
Consumer loans		22,699		—		—		—		22,699
Total	$	4,236,469	$	24,193	$	10,183	$	12,778	$	4,283,623

Individual Evaluation of Impaired Loans and Related Allowance

Impaired loans evaluated individually and any related allowance are as follows as of:

	With No Allowance Recorded				With an Allowance Recorded
(dollars in thousands)	Unpaid Principal Balance		Recorded Investment		Unpaid Principal Balance		Recorded Investment		Related Allowance
March 31, 2019:
Real estate loans:
Residential properties	$	1,835	$	1,811	$	—	$	—	$	—
Commercial properties		7,816		7,699		1,245		1,245		117
Land		697		697		—		—		—
Commercial and industrial loans		6,974		6,766		3,750		3,730		507
Total	$	17,322	$	16,973	$	4,995	$	4,975	$	624
December 31, 2018:
Real estate loans:
Residential properties	$	651	$	651	$	—	$	—	$	—
Commercial properties		1,607		1,607		1,264		1,264		126
Land		697		697		—		—		—
Commercial and industrial loans		6,543		6,543		2,016		2,016		290
Total	$	9,498	$	9,498	$	3,280	$	3,280	$	416

Weighted Average Annualized Balance of Recorded Investment and Interest Income on Impaired Loans

The weighted average annualized average balance of the recorded investment for impaired loans, beginning from when the loan became impaired, and any interest income recorded on impaired loans after they became impaired is as follows for the:

	Three months Ended March 31, 2019				Year Ended December 31, 2018
(dollars in thousands)	Average Recorded Investment		Interest Income after Impairment		Average Recorded Investment		Interest Income after Impairment
Real estate loans:
Residential properties	$	1,151	$	—	$	276	$	—
Commercial properties		6,927		74		3,459		90
Land		697		—		—		—
Commercial and industrial loans		9,499		—		9,117		—
Total	$	18,274	$	74	$	12,852	$	90

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Deposits (Tables)

3 Months Ended

Mar. 31, 2019

Deposits [Abstract]

Summary of Outstanding Balance of Deposits and Average Rates

The following table summarizes the outstanding balance of deposits and average rates paid thereon as of:

	March 31, 2019					December 31, 2018
(dollars in thousands)	Amount		Weighted Average Rate			Amount		Weighted Average Rate
Demand deposits:
Noninterest-bearing	$	1,114,596		—		$	1,074,661		—
Interest-bearing		307,854		0.790	%		317,380		0.798	%
Money market and savings		1,175,986		1.180	%		1,190,717		1.115	%
Certificates of deposits		1,970,266		2.276	%		1,950,210		2.142	%
Total	$	4,568,702		1.338	%	$	4,532,968		1.270	%

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Leases (Tables)

3 Months Ended

Mar. 31, 2019

Leases [Abstract]

Schedule of Supplemental Lease Information

Supplemental lease information at or for the three months ended March 31, 2019 is as follows:

(dollars in thousands)
Balance Sheet:
Operating lease asset classified as other assets	$	20,015
Operating lease liability classified as other liabilities		21,644
Income Statement:
Operating lease cost classified as occupancy and equipment expense	$	1,188
Weighted average lease term, in years		3.12
Weighted average discount rate		5.53
Operating cash flows	$	1,497

Summary of Maturity of Remaining Lease Liabilities

The table below summarizes the maturity of remaining lease liabilities at March 31, 2019:

(dollars in thousands)
2019	$	4,591
2020		6,052
2021		5,511
2022		4,607
2023 and after		3,893
Total future minimum lease payments	$	24,654
Discount on cash flows		(3,010	)
Total lease liability	$	21,644

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Earnings Per Share (Tables)

3 Months Ended

Mar. 31, 2019

Earnings Per Share [Abstract]

Computation of Basic and Diluted Earnings Per Share

The following table sets forth the Company’s unaudited earnings per share calculations for the quarters ended March 31:

	2019				2018
(dollars in thousands, except per share amounts)	Basic		Diluted		Basic		Diluted
Net income	$	11,259	$	11,259	$	8,976	$	8,976
Basic common shares outstanding		44,540,865		44,540,865		38,577,271		38,577,271
Effect of contingent shares issuable				1,592				1,592
Effect of options and restricted stock				255,849				545,869
Diluted common shares outstanding				44,798,306				39,124,732
Earnings per share	$	0.25	$	0.25	$	0.23	$	0.23

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Segment Reporting (Tables)

3 Months Ended

Mar. 31, 2019

Segment Reporting [Abstract]

Key Operating Results of Business Segments

The following tables show key operating results for each of our business segments used to arrive at our consolidated totals for the following periods:

(dollars in thousands)	Banking		Wealth Management		Other			Total
Quarter ended March 31, 2019:
Interest income	$	60,544	$	—	$	—		$	60,544
Interest expense		19,482		—		15			19,497
Net interest income		41,062		—		(15	)		41,047
Provision for loan losses		540		—		—			540
Noninterest income		2,994		5,731		(260	)		8,465
Noninterest expense		26,587		5,518		840			32,945
Income (loss) before taxes on income	$	16,929	$	213	$	(1,115	)	$	16,027

Quarter ended March 31, 2018:
Interest income	$	43,319	$	—	$	—		$	43,319
Interest expense		8,520		—		531			9,051
Net interest income		34,799		—		(531	)		34,268
Provision for loan losses		1,688		—		—			1,688
Noninterest income		2,557		6,414		11			8,982
Noninterest expense		21,811		5,817		1,360			28,988
Income (loss) before taxes on income	$	13,857	$	597	$	(1,880	)	$	12,574

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Acquisitions - Additional Information (Details) - Premier Business Bank - USD ($) $ / shares in Units, $ in Millions		3 Months Ended
	Jun. 01, 2018	Mar. 31, 2019	Mar. 31, 2018
Business Acquisition [Line Items]
Acquisition date	Jun. 01, 2018
Common stock issued in exchange for acquisition, shares	5,234,593
Stock value per share, acquisition date	$ 19.39
Goodwill	$ 61.0
Deferred income tax asset, operating loss carry-forward and other tax attributes		$ 3.8
Business combination, value of deposit	$ 6.7
Finite-lived intangible asset, amortized period		10 years
Acquisition date			Jan. 01, 2018
Increase in net income, pro forma adjustment			$ 0.4

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Acquisitions - Schedule of Assets Acquired and Liabilities Assumed (Details) - Premier Business Bank $ in Thousands	Jun. 01, 2018 USD ($)
PBB Book Value
Assets Acquired:
Cash and cash equivalents	$ 47,582
Securities AFS	10,072
Loans, net of deferred fees	537,885
Allowance for loan losses	(3,011)
Premises and equipment, net	3,811
Investment in FHLB stock	3,229
Deferred taxes	1,451
REO	934
Goodwill and Core deposit intangible	634
Other assets	6,634
Total assets acquired	609,221
Liabilities Assumed:
Deposits	477,366
Borrowings	79,911
Accounts payable and other liabilities	5,204
Total liabilities assumed	562,481
Excess of assets acquired over liabilities assumed	46,740
Total	609,221
Fair Value Adjustments
Assets Acquired:
Securities AFS	(90)
Loans, net of deferred fees	(14,986)
Allowance for loan losses	3,011
Premises and equipment, net	(1,536)
Deferred taxes	2,398
REO	(109)
Goodwill and Core deposit intangible	66,615
Other assets	(566)
Total assets acquired	54,737
Liabilities Assumed:
Deposits	219
Borrowings	(341)
Accounts payable and other liabilities	100
Total liabilities assumed	(22)
Excess of assets acquired over liabilities assumed	54,759
Total	54,737
Fair Value
Assets Acquired:
Cash and cash equivalents	47,582
Securities AFS	9,982
Loans, net of deferred fees	522,899
Premises and equipment, net	2,275
Investment in FHLB stock	3,229
Deferred taxes	3,849
REO	825
Goodwill and Core deposit intangible	67,249
Other assets	6,068
Total assets acquired	663,958
Liabilities Assumed:
Deposits	477,585
Borrowings	79,570
Accounts payable and other liabilities	5,304
Total liabilities assumed	562,459
Excess of assets acquired over liabilities assumed	101,499
Total	663,958
Consideration:
Stock issued	$ 101,499

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Acquisitions - Pro Forma Summarized Income Statement Data (Details) - Premier Business Bank $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2018 USD ($) $ / shares
Business Acquisition [Line Items]
Net interest income	$ 41,063
Provision for loan losses	1,688
Noninterest income	9,524
Noninterest expenses	32,868
Income before taxes	16,031
Taxes on income	4,624
Net income	$ 11,407
Net income per share:
Basic | $ / shares	$ 0.26
Diluted | $ / shares	$ 0.26

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Fair Value Measurements - Recorded Amounts of Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Investment securities available for sale	$ 788,160	$ 809,569
Investment in equity securities	399	352
Other
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Investment securities available for sale	1,505	1,470
Interest Rate Swaps
Derivatives:
Derivative liabilities	10,196	5,175
Agency Mortgage-backed Securities
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Investment securities available for sale	701,612	721,669
Beneficial interest - FHLMC securitizations
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Investment securities available for sale	30,616	32,086
Fair Value on Recurring Basis
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Investment in equity securities	399	352
Total assets at fair value on a recurring basis	788,559	809,921
Fair Value on Recurring Basis | Other
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Investment securities available for sale	1,505	1,470
Fair Value on Recurring Basis | Interest Rate Swaps
Derivatives:
Derivative liabilities	10,196	5,175
Fair Value on Recurring Basis | Agency Mortgage-backed Securities
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Investment securities available for sale	701,612	721,669
Fair Value on Recurring Basis | Beneficial interest - FHLMC securitizations
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Investment securities available for sale	30,616	32,086
Fair Value on Recurring Basis | Corporate Bonds
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Investment securities available for sale	54,427	54,344
Fair Value Measurement Level 1
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Investment securities available for sale	499	497
Investment in equity securities	399	352
Fair Value Measurement Level 1 | Fair Value on Recurring Basis
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Investment in equity securities	399	352
Total assets at fair value on a recurring basis	898	849
Fair Value Measurement Level 1 | Fair Value on Recurring Basis | Other
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Investment securities available for sale	499	497
Fair Value Measurement Level 2
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Investment securities available for sale	757,045	443,844
Fair Value Measurement Level 2 | Interest Rate Swaps
Derivatives:
Derivative liabilities	10,196	5,175
Fair Value Measurement Level 2 | Fair Value on Recurring Basis
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Total assets at fair value on a recurring basis	757,045	443,844
Fair Value Measurement Level 2 | Fair Value on Recurring Basis | Other
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Investment securities available for sale	1,006	973
Fair Value Measurement Level 2 | Fair Value on Recurring Basis | Interest Rate Swaps
Derivatives:
Derivative liabilities	10,196	5,175
Fair Value Measurement Level 2 | Fair Value on Recurring Basis | Agency Mortgage-backed Securities
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Investment securities available for sale	701,612	388,527
Fair Value Measurement Level 2 | Fair Value on Recurring Basis | Corporate Bonds
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Investment securities available for sale	54,427	54,344
Fair Value Measurement Level 3
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Investment securities available for sale	30,616	365,228
Fair Value Measurement Level 3 | Fair Value on Recurring Basis
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Total assets at fair value on a recurring basis	30,616	365,228
Fair Value Measurement Level 3 | Fair Value on Recurring Basis | Agency Mortgage-backed Securities
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Investment securities available for sale		333,142
Fair Value Measurement Level 3 | Fair Value on Recurring Basis | Beneficial interest - FHLMC securitizations
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Investment securities available for sale	$ 30,616	$ 32,086

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Fair Value Measurements - Additional Information (Details)	3 Months Ended
	Mar. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Impaired loans measured at nonrecurring basis	When the fair value of the collateral is based on an observable market price or a current appraised value, we measure the impaired loan at nonrecurring Level 2. When an appraised value is not available, or management determines the fair value of the collateral is further impaired below the appraised value and there is no observable market price or a discounted cash flow has been used to determine the fair value, we measure the impaired loan at nonrecurring Level 3.
Real estate owned (“REO”)	$ 465,000	$ 815,000
Fair Value Measurement Level 3
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Total collateral dependent impaired loans	21,900,000	12,800,000
Reserves related to impaired loans	0	0
Real estate owned (“REO”)	$ 500,000	$ 800,000
Fair Value Measurement Level 3 | Prepayment Rate
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Alternative investment measurement input	0.15	0.15
Fair Value Measurement Level 3 | Minimum | Discount Rate
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Alternative investment measurement input	0.040	0.040
Fair Value Measurement Level 3 | Maximum | Discount Rate
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Alternative investment measurement input	0.10	0.10

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Fair Value Measurements - Carrying Amounts and Estimated Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018	Mar. 31, 2018	Dec. 31, 2017
ASSETS
Cash and cash equivalents	$ 80,693	$ 67,312	$ 177,356	$ 120,394
Securities AFS	788,160	809,569
Loans held for sale	613,528	507,643
Loans, net	4,316,865	4,274,669
Investment in FHLB stock	22,734	20,307
Investment in equity securities	399	352
Liabilities:
Deposits	4,568,702	4,532,968
Borrowings	800,000	708,000
Assets Fair Value:
Cash and cash equivalents	80,693	67,312
Securities AFS	788,160	809,569
Loans held for sale	607,631	517,273
Loans, net	4,361,565	4,408,788
Investment in FHLB stock	22,734	20,307
Investment in equity securities	399	352
Liabilities Fair Value:
Deposits	4,562,059	4,526,393
Borrowings	800,000	708,000
Fair Value Measurement Level 1
ASSETS
Securities AFS	499	497
Investment in equity securities	399	352
Assets Fair Value:
Cash and cash equivalents	80,693	67,312
Securities AFS	499	497
Investment in equity securities	399	352
Liabilities Fair Value:
Deposits	2,598,436	2,582,758
Fair Value Measurement Level 2
ASSETS
Securities AFS	757,045	443,844
Investment in FHLB stock	22,734	20,307
Assets Fair Value:
Securities AFS	757,045	443,844
Loans held for sale	607,631	517,273
Investment in FHLB stock	22,734	20,307
Liabilities Fair Value:
Deposits	1,963,623	1,943,635
Borrowings	795,000	703,000
Fair Value Measurement Level 3
ASSETS
Securities AFS	30,616	365,228
Assets Fair Value:
Securities AFS	30,616	365,228
Loans, net	4,361,565	4,408,788
Liabilities Fair Value:
Borrowings	5,000	5,000
Interest Rate Swaps
Liabilities:
Derivative liabilities	10,196	5,175
Liabilities Fair Value:
Derivative liabilities	10,196	5,175
Interest Rate Swaps | Fair Value Measurement Level 2
Liabilities:
Derivative liabilities	10,196	5,175
Liabilities Fair Value:
Derivative liabilities	$ 10,196	$ 5,175

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Securities - Summary of AFS Securities Portfolio (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Schedule Of Available For Sale Securities [Line Items]
Amortized cost	$ 790,863	$ 811,198
Gross Unrealized gains	6,184	14,292
Gross Unrealized losses	(8,887)	(15,921)
Estimated Fair Value	788,160	809,569
Other
Schedule Of Available For Sale Securities [Line Items]
Amortized cost	1,465	1,458
Gross Unrealized gains	41	15
Gross Unrealized losses	(1)	(3)
Estimated Fair Value	1,505	1,470
Agency Mortgage-backed Securities
Schedule Of Available For Sale Securities [Line Items]
Amortized cost	704,262	723,597
Gross Unrealized gains	4,338	11,883
Gross Unrealized losses	(6,988)	(13,811)
Estimated Fair Value	701,612	721,669
Beneficial interest - FHLMC securitizations
Schedule Of Available For Sale Securities [Line Items]
Amortized cost	31,136	32,143
Gross Unrealized gains	1,308	1,756
Gross Unrealized losses	(1,828)	(1,813)
Estimated Fair Value	30,616	32,086
Corporate Bonds
Schedule Of Available For Sale Securities [Line Items]
Amortized cost	54,000	54,000
Gross Unrealized gains	497	638
Gross Unrealized losses	(70)	(294)
Estimated Fair Value	$ 54,427	$ 54,344

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Securities - Additional Information (Details) - USD ($) $ in Millions	Mar. 31, 2019	Dec. 31, 2018
Schedule Of Available For Sale Securities [Line Items]
Loans pledged as collateral	$ 3,100.0
Weighted average yield, total	5.25%	5.25%
US Treasury Securities | Other
Schedule Of Available For Sale Securities [Line Items]
Loans pledged as collateral	$ 0.5
Agency Mortgage-backed Securities
Schedule Of Available For Sale Securities [Line Items]
Loans pledged as collateral	$ 78.0
Agency Mortgage-backed Securities and Beneficial interests in FHLMC securitization
Schedule Of Available For Sale Securities [Line Items]
Weighted average yield, total	2.92%

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Securities - Schedule of Securities in a Continuous Unrealized Loss Position Aggregated by Investment Category and Length of Time (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Schedule Of Available For Sale Securities [Line Items]
Less than 12 months, Fair Value	$ 3,930	$ 39,135
Less than 12 months, Unrealized Loss	(70)	(305)
12 months or more, Fair Value	363,097	394,686
12 months or more, Unrealized Loss	(8,817)	(15,616)
Total, Fair Value	367,027	433,821
Total, Unrealized Loss	(8,887)	(15,921)
Other
Schedule Of Available For Sale Securities [Line Items]
12 months or more, Fair Value	299	497
12 months or more, Unrealized Loss	(1)	(3)
Total, Fair Value	299	497
Total, Unrealized Loss	(1)	(3)
Agency Mortgage-backed Securities
Schedule Of Available For Sale Securities [Line Items]
12 months or more, Fair Value	356,193	387,151
12 months or more, Unrealized Loss	(6,988)	(13,811)
Total, Fair Value	356,193	387,151
Total, Unrealized Loss	(6,988)	(13,811)
Corporate Bonds
Schedule Of Available For Sale Securities [Line Items]
Less than 12 months, Fair Value	3,930	38,706
Less than 12 months, Unrealized Loss	(70)	(294)
Total, Fair Value	3,930	38,706
Total, Unrealized Loss	(70)	(294)
Beneficial interests in FHLMC securitization
Schedule Of Available For Sale Securities [Line Items]
Less than 12 months, Fair Value		429
Less than 12 months, Unrealized Loss		(11)
12 months or more, Fair Value	6,605	7,038
12 months or more, Unrealized Loss	(1,828)	(1,802)
Total, Fair Value	6,605	7,467
Total, Unrealized Loss	$ (1,828)	$ (1,813)

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Securities - Scheduled Maturities of Securities AFS Other than Mortgage Backed Securities and the Related Weighted Average Yield (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Schedule Of Available For Sale Securities [Line Items]
Amortized cost, less than one year	$ 500	$ 500
Amortized cost, five through ten years	54,965	54,958
Amortized cost, total	$ 55,465	$ 55,458
Weighted average yield, less than one year	1.03%	1.03%
Weighted average yield, five through ten years	5.29%	5.29%
Weighted average yield, total	5.25%	5.25%
Estimated fair value, less than one year	$ 499	$ 497
Estimated fair value, five through ten years	55,433	55,317
Estimated fair value, total	55,932	55,814
Other
Schedule Of Available For Sale Securities [Line Items]
Amortized cost, less than one year	500	500
Amortized cost, five through ten years	965	958
Amortized cost, total	1,465	1,458
Estimated fair value, less than one year	499	497
Estimated fair value, five through ten years	1,006	973
Estimated fair value, total	1,505	1,470
Corporate Bonds
Schedule Of Available For Sale Securities [Line Items]
Amortized cost, five through ten years	54,000	54,000
Amortized cost, total	54,000	54,000
Estimated fair value, five through ten years	54,427	54,344
Estimated fair value, total	$ 54,427	$ 54,344

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Loans - Summary of Loans (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Accounts Notes And Loans Receivable [Line Items]
Total loans	$ 4,326,201	$ 4,283,623
Premiums, discounts and deferred fees and expenses	9,864	10,046
Loans, net of deferred fees	4,336,065	4,293,669
Residential Properties
Accounts Notes And Loans Receivable [Line Items]
Total loans	2,891,682	2,861,763
Commercial Real Estate
Accounts Notes And Loans Receivable [Line Items]
Total loans	902,060	869,169
Commercial and Industrial Loans
Accounts Notes And Loans Receivable [Line Items]
Total loans	454,849	449,805
Consumer Loans
Accounts Notes And Loans Receivable [Line Items]
Total loans	17,693	22,699
Land
Accounts Notes And Loans Receivable [Line Items]
Total loans	59,917	80,187
Real Estate Loans
Accounts Notes And Loans Receivable [Line Items]
Total loans	3,853,659	3,811,119
Real Estate Loans | Residential Properties
Accounts Notes And Loans Receivable [Line Items]
Total loans	2,891,682	2,861,763
Real Estate Loans | Commercial Real Estate
Accounts Notes And Loans Receivable [Line Items]
Total loans	902,060	869,169
Real Estate Loans | Land
Accounts Notes And Loans Receivable [Line Items]
Total loans	59,917	80,187
Multifamily | Real Estate Loans | Residential Properties
Accounts Notes And Loans Receivable [Line Items]
Total loans	1,987,690	1,956,935
Single Family | Real Estate Loans | Residential Properties
Accounts Notes And Loans Receivable [Line Items]
Total loans	$ 903,992	$ 904,828

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Loans - Additional Information (Details) - USD ($) $ in Millions	Mar. 31, 2019	Dec. 31, 2018
Receivables [Abstract]
Loans acquired	$ 11.1	$ 13.3

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Loans - Carrying Amount of Purchased Credit Impaired Loans (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Accounts Notes And Loans Receivable [Line Items]
Total impaired loans	$ 10,372	$ 13,571
Unaccreted discount on purchased credit impaired loans	(4,861)	(6,490)
Receivables Acquired with Deteriorated Credit Quality
Accounts Notes And Loans Receivable [Line Items]
Total	5,511	7,081
Residential Properties
Accounts Notes And Loans Receivable [Line Items]
Total impaired loans	371	451
Commercial Real Estate | Receivables Acquired with Deteriorated Credit Quality
Accounts Notes And Loans Receivable [Line Items]
Total	3,704	5,463
Commercial and Industrial Loans
Accounts Notes And Loans Receivable [Line Items]
Total impaired loans	1,434	1,150
Commercial and Industrial Loans | Receivables Acquired with Deteriorated Credit Quality
Accounts Notes And Loans Receivable [Line Items]
Total	1,005	809
Consumer Loans
Accounts Notes And Loans Receivable [Line Items]
Total impaired loans	9	10
Land | Receivables Acquired with Deteriorated Credit Quality
Accounts Notes And Loans Receivable [Line Items]
Total	802	809
Real Estate Loans
Accounts Notes And Loans Receivable [Line Items]
Total impaired loans	8,929	12,411
Real Estate Loans | Commercial Real Estate
Accounts Notes And Loans Receivable [Line Items]
Total impaired loans	7,477	10,871
Real Estate Loans | Land
Accounts Notes And Loans Receivable [Line Items]
Total impaired loans	$ 1,081	$ 1,089

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Loans - Accretable Yield or Income Expected to be Collected on Purchased Credit Impaired Loans (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2019	Dec. 31, 2018
Receivables [Abstract]
Beginning balance	$ 767	$ 850
Accretion of income	(80)	(1,509)
Acquisition		1,887
Disposals	(51)	(461)
Ending balance	$ 636	$ 767

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Loans - Summary of Delinquent and Nonaccrual Loans (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Accounts Notes And Loans Receivable [Line Items]
Total Past Due and Nonaccrual	$ 21,341	$ 28,030
90 Days or More Past Due and Still Accruing		1,035
Nonaccrual Past Due and Still Accruing	15,537	11,516
Current	4,304,860	4,255,593
Total loans	$ 4,326,201	$ 4,283,623
Percentage of Total Loans Due 30-59 Days	0.10%	0.35%
Percentage of Total Loans Due 60-89 Days	0.03%	0.01%
Percentage of Total Loans Due 90 Days or More		0.02%
Percentage of Total Loans Due Nonaccrual	0.36%	0.27%
Percentage of Total Loans	0.49%	0.65%
Residential Properties
Accounts Notes And Loans Receivable [Line Items]
Total loans	$ 2,891,682	$ 2,861,763
Commercial Real Estate
Accounts Notes And Loans Receivable [Line Items]
Total loans	902,060	869,169
Commercial and Industrial Loans
Accounts Notes And Loans Receivable [Line Items]
Total Past Due and Nonaccrual	15,627	21,936
90 Days or More Past Due and Still Accruing		536
Nonaccrual Past Due and Still Accruing	10,496	8,559
Current	439,222	427,869
Total loans	454,849	449,805
Consumer Loans
Accounts Notes And Loans Receivable [Line Items]
Total Past Due and Nonaccrual	9	9
Nonaccrual Past Due and Still Accruing		2
Current	17,684	22,690
Total loans	17,693	22,699
Land
Accounts Notes And Loans Receivable [Line Items]
Total loans	59,917	80,187
30-59 Days
Accounts Notes And Loans Receivable [Line Items]
Total Past Due and Nonaccrual	4,526	15,055
30-59 Days | Commercial and Industrial Loans
Accounts Notes And Loans Receivable [Line Items]
Total Past Due and Nonaccrual	4,521	12,541
30-59 Days | Consumer Loans
Accounts Notes And Loans Receivable [Line Items]
Total Past Due and Nonaccrual	5
60-89 Days
Accounts Notes And Loans Receivable [Line Items]
Total Past Due and Nonaccrual	1,278	424
60-89 Days | Commercial and Industrial Loans
Accounts Notes And Loans Receivable [Line Items]
Total Past Due and Nonaccrual	610	300
60-89 Days | Consumer Loans
Accounts Notes And Loans Receivable [Line Items]
Total Past Due and Nonaccrual	4	7
Real Estate Loans
Accounts Notes And Loans Receivable [Line Items]
Total loans	3,853,659	3,811,119
Real Estate Loans | Residential Properties
Accounts Notes And Loans Receivable [Line Items]
Total Past Due and Nonaccrual	2,475	1,224
90 Days or More Past Due and Still Accruing		499
Nonaccrual Past Due and Still Accruing	1,811	651
Current	2,889,207	2,860,539
Total loans	2,891,682	2,861,763
Real Estate Loans | Commercial Real Estate
Accounts Notes And Loans Receivable [Line Items]
Total Past Due and Nonaccrual	2,533	2,164
Nonaccrual Past Due and Still Accruing	2,533	1,607
Current	899,527	867,005
Total loans	902,060	869,169
Real Estate Loans | Land
Accounts Notes And Loans Receivable [Line Items]
Total Past Due and Nonaccrual	697	2,697
Nonaccrual Past Due and Still Accruing	697	697
Current	59,220	77,490
Total loans	59,917	80,187
Real Estate Loans | 30-59 Days | Residential Properties
Accounts Notes And Loans Receivable [Line Items]
Total Past Due and Nonaccrual		74
Real Estate Loans | 30-59 Days | Commercial Real Estate
Accounts Notes And Loans Receivable [Line Items]
Total Past Due and Nonaccrual		440
Real Estate Loans | 30-59 Days | Land
Accounts Notes And Loans Receivable [Line Items]
Total Past Due and Nonaccrual		2,000
Real Estate Loans | 60-89 Days | Residential Properties
Accounts Notes And Loans Receivable [Line Items]
Total Past Due and Nonaccrual	$ 664
Real Estate Loans | 60-89 Days | Commercial Real Estate
Accounts Notes And Loans Receivable [Line Items]
Total Past Due and Nonaccrual		$ 117

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Loans - Composition of TDRs by Accrual and Nonaccrual Status (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Accounts Notes And Loans Receivable [Line Items]
Troubled Debt Restructurings, Nonaccrual	$ 15,537	$ 11,516
Principal Reduction And Extended Maturity
Accounts Notes And Loans Receivable [Line Items]
Troubled Debt Restructurings, Accrual	1,245	1,264
Troubled Debt Restructurings, Nonaccrual	3,482	3,587
Troubled Debt Restructurings, Total	4,727	4,851
Principal Reduction And Extended Maturity | Commercial Real Estate Loans
Accounts Notes And Loans Receivable [Line Items]
Troubled Debt Restructurings, Accrual	1,245	1,264
Troubled Debt Restructurings, Nonaccrual	1,464	1,491
Troubled Debt Restructurings, Total	2,709	2,755
Principal Reduction And Extended Maturity | Commercial Loans
Accounts Notes And Loans Receivable [Line Items]
Troubled Debt Restructurings, Nonaccrual	2,018	2,096
Troubled Debt Restructurings, Total	$ 2,018	$ 2,096

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Loans - Schedule of Detail of Loans Modified as Troubled Debt Restructurings (Details) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2019 USD ($) Loan	Dec. 31, 2018 USD ($) Loan
Financing Receivable Modifications [Line Items]
Number of loans | Loan	1	4
Outstanding recorded investment, pre-modification	$ 49	$ 3,360
Outstanding recorded investment, post-modification	$ 49	$ 3,360
Commercial Real Estate Loans
Financing Receivable Modifications [Line Items]
Number of loans | Loan		1
Outstanding recorded investment, pre-modification		$ 1,264
Outstanding recorded investment, post-modification		$ 1,264
Commercial Loans
Financing Receivable Modifications [Line Items]
Number of loans | Loan	1	3
Outstanding recorded investment, pre-modification	$ 49	$ 2,096
Outstanding recorded investment, post-modification	$ 49	$ 2,096

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Allowance for Loan Losses - Bank's Allowance for Loan Losses (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Financing Receivable Allowance For Credit Losses [Line Items]
Beginning Balance	$ 19,000	$ 18,400
Provision for loan losses	540	1,688
Charge-offs	(548)	(88)
Recoveries	208
Ending Balance	19,200	20,000
Residential Properties
Financing Receivable Allowance For Credit Losses [Line Items]
Beginning Balance	9,216	9,715
Provision for loan losses	422	193
Ending Balance	9,638	9,908
Commercial Real Estate
Financing Receivable Allowance For Credit Losses [Line Items]
Beginning Balance	4,547	4,399
Provision for loan losses	(232)	(9)
Ending Balance	4,315	4,390
Commercial and Industrial Loans
Financing Receivable Allowance For Credit Losses [Line Items]
Beginning Balance	4,628	3,624
Provision for loan losses	503	1,557
Charge-offs	(543)	(88)
Recoveries	207
Ending Balance	4,795	5,093
Consumer Loans
Financing Receivable Allowance For Credit Losses [Line Items]
Beginning Balance	218	267
Provision for loan losses	(4)	7
Charge-offs	(5)
Recoveries	1
Ending Balance	210	274
Land
Financing Receivable Allowance For Credit Losses [Line Items]
Beginning Balance	391	395
Provision for loan losses	(149)	(60)
Ending Balance	$ 242	$ 335

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Allowance for Loan Losses - Balance in Allowance for Loan Losses and Recorded Investment in Loans by Impairment (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Financing Receivable Impaired [Line Items]
Allowance for Loan Losses, Individually Evaluated for Impairment	$ 624	$ 416
Allowance for Loan Losses, Collectively Evaluated for Impairment	18,576	18,584
Total Allowance for Loan Losses	19,200	19,000
Unaccreted Credit Component Other Loans	3,671	4,223
Loans, Individually Evaluated for Impairment	21,948	12,778
Loans, Collectively Evaluated for Impairment	4,298,742	4,263,764
Total loans	4,326,201	4,283,623
Unaccreted Credit Component Other Loans	608,847	619,895
Receivables Acquired with Deteriorated Credit Quality
Financing Receivable Impaired [Line Items]
Loans, Purchased Impaired	5,511	7,081
Residential Properties
Financing Receivable Impaired [Line Items]
Allowance for Loan Losses, Collectively Evaluated for Impairment	9,638	9,216
Total Allowance for Loan Losses	9,638	9,216
Unaccreted Credit Component Other Loans	1,524	1,724
Loans, Individually Evaluated for Impairment	1,811	651
Loans, Collectively Evaluated for Impairment	2,889,871	2,861,112
Total loans	2,891,682	2,861,763
Unaccreted Credit Component Other Loans	234,595	241,698
Commercial Real Estate
Financing Receivable Impaired [Line Items]
Allowance for Loan Losses, Individually Evaluated for Impairment	117	126
Allowance for Loan Losses, Collectively Evaluated for Impairment	4,198	4,421
Total Allowance for Loan Losses	4,315	4,547
Unaccreted Credit Component Other Loans	1,589	1,779
Loans, Individually Evaluated for Impairment	8,944	2,871
Loans, Collectively Evaluated for Impairment	889,412	860,835
Total loans	902,060	869,169
Unaccreted Credit Component Other Loans	280,393	275,516
Commercial Real Estate | Receivables Acquired with Deteriorated Credit Quality
Financing Receivable Impaired [Line Items]
Loans, Purchased Impaired	3,704	5,463
Commercial and Industrial Loans
Financing Receivable Impaired [Line Items]
Allowance for Loan Losses, Individually Evaluated for Impairment	507	290
Allowance for Loan Losses, Collectively Evaluated for Impairment	4,288	4,338
Total Allowance for Loan Losses	4,795	4,628
Unaccreted Credit Component Other Loans	509	633
Loans, Individually Evaluated for Impairment	10,496	8,559
Loans, Collectively Evaluated for Impairment	443,348	440,437
Total loans	454,849	449,805
Unaccreted Credit Component Other Loans	55,921	61,183
Commercial and Industrial Loans | Receivables Acquired with Deteriorated Credit Quality
Financing Receivable Impaired [Line Items]
Loans, Purchased Impaired	1,005	809
Consumer Loans
Financing Receivable Impaired [Line Items]
Allowance for Loan Losses, Collectively Evaluated for Impairment	210	218
Total Allowance for Loan Losses	210	218
Unaccreted Credit Component Other Loans	2	3
Loans, Collectively Evaluated for Impairment	17,693	22,699
Total loans	17,693	22,699
Unaccreted Credit Component Other Loans	314	366
Land
Financing Receivable Impaired [Line Items]
Allowance for Loan Losses, Collectively Evaluated for Impairment	242	391
Total Allowance for Loan Losses	242	391
Unaccreted Credit Component Other Loans	47	84
Loans, Individually Evaluated for Impairment	697	697
Loans, Collectively Evaluated for Impairment	58,418	78,681
Total loans	59,917	80,187
Unaccreted Credit Component Other Loans	37,624	41,132
Land | Receivables Acquired with Deteriorated Credit Quality
Financing Receivable Impaired [Line Items]
Loans, Purchased Impaired	$ 802	$ 809

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Allowance for Loan Losses - Additional Information (Details) - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2019	Dec. 31, 2018
Receivables [Abstract]
Allowance of purchase impaired loans	0.60%	0.68%
Additional allowance on credit impaired loans	$ 300,000	$ 400,000
Interest income recognized on impaired loans	$ 0	$ 0

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Allowance for Loan Losses - Risk Category of Loans by Class of Loans (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Accounts Notes And Loans Receivable [Line Items]
Total loans	$ 4,326,201	$ 4,283,623
Residential Properties
Accounts Notes And Loans Receivable [Line Items]
Total loans	2,891,682	2,861,763
Commercial Real Estate
Accounts Notes And Loans Receivable [Line Items]
Total loans	902,060	869,169
Commercial and Industrial Loans
Accounts Notes And Loans Receivable [Line Items]
Total loans	454,849	449,805
Consumer Loans
Accounts Notes And Loans Receivable [Line Items]
Total loans	17,693	22,699
Land
Accounts Notes And Loans Receivable [Line Items]
Total loans	59,917	80,187
Pass
Accounts Notes And Loans Receivable [Line Items]
Total loans	4,283,779	4,236,469
Pass | Residential Properties
Accounts Notes And Loans Receivable [Line Items]
Total loans	2,886,943	2,857,666
Pass | Commercial Real Estate
Accounts Notes And Loans Receivable [Line Items]
Total loans	880,599	845,672
Pass | Commercial and Industrial Loans
Accounts Notes And Loans Receivable [Line Items]
Total loans	440,126	431,751
Pass | Consumer Loans
Accounts Notes And Loans Receivable [Line Items]
Total loans	17,693	22,699
Pass | Land
Accounts Notes And Loans Receivable [Line Items]
Total loans	58,418	78,681
Special Mention
Accounts Notes And Loans Receivable [Line Items]
Total loans	10,542	24,193
Special Mention | Residential Properties
Accounts Notes And Loans Receivable [Line Items]
Total loans	2,928	3,446
Special Mention | Commercial Real Estate
Accounts Notes And Loans Receivable [Line Items]
Total loans	6,696	13,024
Special Mention | Commercial and Industrial Loans
Accounts Notes And Loans Receivable [Line Items]
Total loans	918	7,723
Substandard
Accounts Notes And Loans Receivable [Line Items]
Total loans	9,932	10,183
Substandard | Commercial Real Estate
Accounts Notes And Loans Receivable [Line Items]
Total loans	5,821	7,602
Substandard | Commercial and Industrial Loans
Accounts Notes And Loans Receivable [Line Items]
Total loans	3,309	1,772
Substandard | Land
Accounts Notes And Loans Receivable [Line Items]
Total loans	802	809
Impaired
Accounts Notes And Loans Receivable [Line Items]
Total loans	21,948	12,778
Impaired | Residential Properties
Accounts Notes And Loans Receivable [Line Items]
Total loans	1,811	651
Impaired | Commercial Real Estate
Accounts Notes And Loans Receivable [Line Items]
Total loans	8,944	2,871
Impaired | Commercial and Industrial Loans
Accounts Notes And Loans Receivable [Line Items]
Total loans	10,496	8,559
Impaired | Land
Accounts Notes And Loans Receivable [Line Items]
Total loans	$ 697	$ 697

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Allowance for Loan Losses - Individual Evaluation of Impaired Loans and Related Allowance (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Financing Receivable Modifications [Line Items]
Unpaid Principal Balance, With No Allowance Recorded	$ 17,322	$ 9,498
Recorded Investment, With No Allowance Recorded	16,973	9,498
Unpaid Principal Balance, With an Allowance Recorded	4,995	3,280
Recorded Investment, With an Allowance Recorded	4,975	3,280
Related Allowance, With an Allowance Recorded	624	416
Land
Financing Receivable Modifications [Line Items]
Unpaid Principal Balance, With No Allowance Recorded	697	697
Recorded Investment, With No Allowance Recorded	697	697
Residential Properties
Financing Receivable Modifications [Line Items]
Unpaid Principal Balance, With No Allowance Recorded	1,835	651
Recorded Investment, With No Allowance Recorded	1,811	651
Commercial Real Estate
Financing Receivable Modifications [Line Items]
Unpaid Principal Balance, With No Allowance Recorded	7,816	1,607
Recorded Investment, With No Allowance Recorded	7,699	1,607
Unpaid Principal Balance, With an Allowance Recorded	1,245	1,264
Recorded Investment, With an Allowance Recorded	1,245	1,264
Related Allowance, With an Allowance Recorded	117	126
Commercial and Industrial Loans
Financing Receivable Modifications [Line Items]
Unpaid Principal Balance, With No Allowance Recorded	6,974	6,543
Recorded Investment, With No Allowance Recorded	6,766	6,543
Unpaid Principal Balance, With an Allowance Recorded	3,750	2,016
Recorded Investment, With an Allowance Recorded	3,730	2,016
Related Allowance, With an Allowance Recorded	$ 507	$ 290

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Allowance for Loan Losses - Weighted Average Annualized Balance of Recorded Investment and Interest Income on Impaired Loans (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2019	Dec. 31, 2018
Financing Receivable Modifications [Line Items]
Average Recorded Investment	$ 18,274	$ 12,852
Interest Income after Impairment	74	90
Residential Properties
Financing Receivable Modifications [Line Items]
Average Recorded Investment	1,151	276
Commercial Real Estate
Financing Receivable Modifications [Line Items]
Average Recorded Investment	6,927	3,459
Interest Income after Impairment	74	90
Commercial and Industrial Loans
Financing Receivable Modifications [Line Items]
Average Recorded Investment	9,499	$ 9,117
Land
Financing Receivable Modifications [Line Items]
Average Recorded Investment	$ 697

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Loan Sales And Mortgage Servicing Rights - Additional Information (Details) - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Loan Sales And Mortgage Servicing Rights [Line Items]
Gain on sale of loans		$ 545,000
Mortgage servicing rights		$ 317,000
FFB
Loan Sales And Mortgage Servicing Rights [Line Items]
Gain on sale of loans	$ 0		$ 400,000
Sale of multifamily loans through securitization			674,000,000
Mortgage servicing rights	6,100,000		6,400,000
Loans serviced for others	1,300,000,000		1,300,000,000
Servicing fees earned on loans	$ 400,000		$ 1,100,000

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Deposits - Summary of Outstanding Balance of Deposits and Average Rates (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Deposits [Abstract]
Demand deposits, Noninterest-bearing	$ 1,114,596	$ 1,074,661
Demand deposits, Interest-bearing	307,854	317,380
Money market and savings	1,175,986	1,190,717
Certificates of deposits	1,970,266	1,950,210
Total	$ 4,568,702	$ 4,532,968
Demand deposits, Noninterest-bearing, Weighted Average Rate		0.00%
Demand deposits, Interest-bearing, Weighted Average Rate	0.79%	0.798%
Money market and savings, Weighted Average Rate	1.18%	1.115%
Certificates of deposits, Weighted Average Rate	2.276%	2.142%
Total, Weighted Average Rate	1.338%	1.27%

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Deposits - Additional Information (Details) - USD ($) $ in Millions	Mar. 31, 2019	Dec. 31, 2018
Deposits [Abstract]
Certificates of deposits of $250,000 or more, maturities within one year	$ 376	$ 332
Certificates of deposits of $250,000 or more, maturities after one year	22	28
Certificates of deposits of $250,000 or more, total	398	360
Certificates of deposit of less than $ 250,000, maturities within one year	1,500	1,500
Certificates of deposit of less than $ 250,000, maturities after one year	51	53
Certificates of deposit of less than $250,000, total	$ 636,000	$ 1,600

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Borrowings - Additional Information (Details)	3 Months Ended	12 Months Ended
	Mar. 31, 2019 USD ($) Institution	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)	Apr. 30, 2019	Jan. 01, 2019
Debt Instrument [Line Items]
Overnight FHLB advances	$ 795,000,000	$ 703,000,000
Long-term line of credit	0
FHLB advances interest rates					2.56%
Loans pledged as collateral	3,100,000,000
Federal Home Loan Bank, maximum borrowing capacity	2,300,000,000
FHLB advances	795,000,000
Federal Home Loan Bank, additional credit available	231,000,000
Unsecured debt	$ 120,000,000
Number of financial institutions | Institution	5
Federal Home Loan Bank unused lines of credit	$ 1,500,000,000	1,500,000,000
FHLB, average daily balance of borrowings outstanding	636,000,000	557,000,000
Secured debt	57,000,000
Minimum
Debt Instrument [Line Items]
Unsecured debt	20,000,000
Maximum
Debt Instrument [Line Items]
Unsecured debt	25,000,000
Revolving Credit Facility
Debt Instrument [Line Items]
Line of credit, borrowing capacity			$ 75,000,000
Line of credit maturity period			5 years
Revolving Credit Facility | 90 Day LIBOR
Debt Instrument [Line Items]
Debt instrument basis point rate			3.50%
FFI
Debt Instrument [Line Items]
Long-term line of credit	$ 5,000,000	$ 5,000,000
Line of credit facility, Interest rate	6.30%
Subsequent Event
Debt Instrument [Line Items]
FHLB advances interest rates				2.58%

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Leases - Additional Information (Details) - USD ($) $ in Thousands		3 Months Ended
	Jan. 01, 2019	Mar. 31, 2019
Lessee Lease Description [Line Items]
Lease expiration year		2026
Operating lease, options to renew description		Certain leases include options to renew, with renewal terms that can extend the lease term.
Operating lease, existence of options to renew		true
Right of use asset		$ 20,015
Operating lease liability		$ 21,644
ASU 2016-02
Lessee Lease Description [Line Items]
Right of use asset	$ 21,100
Operating lease liability	22,700
Deferred rent liability eliminated	$ 1,600

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Leases - Schedule of Supplemental Lease Information (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2019 USD ($)
Balance Sheet:
Operating lease asset classified as other assets	$ 20,015
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List]	us-gaap:OtherAssets
Operating lease liability classified as other liabilities	$ 21,644
Operating Lease, Liability, Statement of Financial Position [Extensible List]	us-gaap:OtherLiabilities
Income Statement:
Operating lease cost classified as occupancy and equipment expense	$ 1,188
Weighted average lease term, in years	3 years 1 month 13 days
Weighted average discount rate	5.53%
Operating cash flows	$ 1,497

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Leases - Summary of Maturity of Remaining Lease Liabilities (Details) $ in Thousands	Mar. 31, 2019 USD ($)
Leases [Abstract]
2019	$ 4,591
2020	6,052
2021	5,511
2022	4,607
2023 and after	3,893
Total future minimum lease payments	24,654
Discount on cash flows	(3,010)
Total lease liability	$ 21,644

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Earnings Per Share - Computation of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Earnings Per Share [Abstract]
Net income, Basic	$ 11,259	$ 8,976
Basic common shares outstanding	44,540,865	38,577,271
Earnings per share, Basic	$ 0.25	$ 0.23
Net income, Diluted	$ 11,259	$ 8,976
Effect of contingent shares issuable	1,592	1,592
Effect of options and restricted stock	255,849	545,869
Diluted common shares outstanding	44,798,306	39,124,732
Earnings per share, Diluted	$ 0.25	$ 0.23

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Segment Reporting - Additional Information (Details) - Segment	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Segment Reporting [Abstract]
Reportable business segments	2	2

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Segment Reporting - Key Operating Results of Business Segments (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Segment Reporting Information [Line Items]
Interest income	$ 60,544	$ 43,319
Interest expense	19,497	9,051
Net interest income	41,047	34,268
Provision for loan losses	540	1,688
Noninterest income	8,465	8,982
Noninterest expense	32,945	28,988
Income before taxes on income	16,027	12,574
Operating Segments | Banking
Segment Reporting Information [Line Items]
Interest income	60,544	43,319
Interest expense	19,482	8,520
Net interest income	41,062	34,799
Provision for loan losses	540	1,688
Noninterest income	2,994	2,557
Noninterest expense	26,587	21,811
Income before taxes on income	16,929	13,857
Operating Segments | Wealth Management
Segment Reporting Information [Line Items]
Noninterest income	5,731	6,414
Noninterest expense	5,518	5,817
Income before taxes on income	213	597
Other
Segment Reporting Information [Line Items]
Interest expense	15	531
Net interest income	(15)	(531)
Noninterest income	(260)	11
Noninterest expense	840	1,360
Income before taxes on income	$ (1,115)	$ (1,880)

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Subsequent Events - Additional Information (Details) - Subsequent Event	May 02, 2019 $ / shares
Subsequent Event [Line Items]
Dividends payable, date declared	May 02, 2019
Dividends payable, amount per share	$ 0.05
Dividends payable, date to be paid	Jun. 17, 2019
Dividends payable, date of reord	Jun. 03, 2019