First Foundation Inc. reported a net loss of $82.2 million, or $1.23 per share, for the third quarter of 2024. This loss was primarily due to a $117.5 million LOCOM adjustment associated with the reclassification of $1.9 billion of multifamily loans to held for sale. Excluding this adjustment and other items, the adjusted net income attributable to common shareholders was $2.7 million, or $0.04 per share.
The company's net interest income for the quarter was $49.1 million, an increase from $43.8 million in the prior quarter, but a decrease from $52.1 million in the third quarter of 2023. The net interest margin (NIM) improved sequentially to 1.50% from 1.36% in the second quarter of 2024. The cost of deposits decreased by 8 basis points from the prior quarter to 3.41%.
Total loans stood at $9.9 billion, down from $10.1 billion in the previous quarter, while deposits decreased to $10.3 billion from $10.8 billion. Despite the net loss, First Foundation's total risk-based capital ratio increased to 14.21% from 12.60% in the prior quarter, and it maintained a strong liquidity position of $4.3 billion. Commercial and industrial (C&I) loans accounted for 90% of total fundings for the quarter, indicating a shift in lending focus.
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