What First Foundation, Inc. told the SEC could break it.

First Foundation's banking, investment-advisory and wealth-management operations are geographically concentrated, with approximately 87.5% of loans at December 31, 2025 made to borrowers in California (73%), Florida (8%), Texas (5%), Nevada (1%) and Hawaii (0.5%); its real-estate collateral and multifamily/non-owner-occupied CRE exposure are concentrated in California, where it raised its loss-given-default floor from 5% to 10% in response to declining rental-property prices and rising vacancy — so a downturn in those markets (especially California real estate) would disproportionately raise credit losses.

“As of December 31, 2025, approximately 87.5% of the loans in our loan portfolio were made to borrowers who live and/or conduct business in California (73%), Florida (8%), Texas (5%), Nevada (1%), and Hawaii (0.5%).”

First Foundation's capital and earnings are pressured by interest-rate risk and prior capital needs: it is 'liability sensitive,' so its net interest margin is exposed to rate changes (with asset/liability repricing lags), and in July 2024 it completed a dilutive capital raise selling 11,308,676 common shares at $4.10 (versus a $6.47 pre-announcement price) plus a new Series A convertible preferred at $4,100/share; reliance on such capital raises and rate-sensitive margins constrains profitability and shareholder value.

“the Company sold and issued to the investors: (a) 11,308,676 shares of common stock at a purchase price per share of $ 4.10 (on July 1, 2024, the day before the announcement of the July 2024 Capital Raise, the closing price of the common stock was $ 6.47 )”

First Foundation has agreed to merge with and into FirstSun Capital Bancorp (it received Federal Reserve and OCC regulatory approval in March 2026); because the exchange ratio determining the FirstSun shares issued per FFI share does not automatically adjust for changes in FirstSun's trading price, the value of the merger consideration FFI shareholders receive will vary with FirstSun's stock price between announcement and closing, and the transaction remains subject to shareholder approval and other conditions — creating deal-value and completion risk.

“The exchange ratio determining the number of shares of FirstSun common stock to be issued in the Merger in exchange for each share of FFI common stock will not automatically adjust based on the trading price of FirstSun common stock, and the market value of those shares may vary from the closing price of FirstSun common stock on the date the Merger was announced”

First Foundation is subject to extensive federal/state bank regulation: Dodd-Frank restrictions limit fee and noninterest income, it must comply with the Community Reinvestment Act and fair-lending laws (with sanctions for non-compliance), Bank Secrecy Act/anti-money-laundering statutes, OFAC economic/trade sanctions (which can block accounts and even bar merger approvals), and the Volcker Rule; changes in or violations of these rules could raise costs, limit income and, given its pending merger, affect required regulatory approvals.

“We are subject to numerous laws designed to protect consumers, including the Community Reinvestment Act and fair lending laws, and failure to comply with these laws could lead to a wide variety of sanctions.”