Driver Management Co LLC Sent A Letter To The Board Of Directors Of First Foundation Inc.

$FFWM

Mr. Max Briggs
Lead Director
c/o Ms. Kelly Rentzel
Executive Vice President, General Counsel and Secretary
First Foundation Inc.
200 Crescent Court, Suite 1400
Dallas, TX 75201

Mr. Briggs,

On December 30, 2022, Driver Opportunity Partners I LP (together with Driver Management Company LLC, its general partner, “Driver”) nominated two highly qualified women (the (“Nominees”) for election to the board of directors (the “Board”) of First Foundation Inc. (“FFWM”) at its 2023 annual meeting of shareholders. Driver nominated the Nominees due to its concerns about the adequacy of the Board’s oversight of FFWM’s business and senior management team. In a nutshell, FFWM appears particularly unprepared—both in terms of the composition of its balance sheet and the dexterity of its management team—to adjust to the impact of higher interest rates and quantitative tightening. That unpreparedness became abundantly clear when FFWM released its third quarter earnings on October 25, 2022. From October 24, 2022 to December 31, 2022, FFWM’s stock price declined by 20.39%, compared to a 0.27% increase for the KBW Nasdaq Bank Index.¹

Since the third quarter earnings release, when FFWM should have been taking affirmative steps to attempt to restore investor confidence, there has been a maelstrom of changes in the composition of FFWM’s senior management team, leading to even greater doubts about FFWM’s ability to successfully navigate through current economic conditions. Based on my experience with requesting (pursuant to FFWM’s bylaws) a routine questionnaire in connection with nominating the Nominees, it appears that FFWM management is strained past the point of functioning.

On January 13, 2023, the Dallas Morning News published an article regarding our nomination of the Nominees. Since then, I have been besieged calls and messages from former FFWM employees who have painted a picture of extreme dysfunction and disconnection within FFWM’s senior management ranks. I might add that no one at FFWM has bothered to contact us to determine what our concerns are, leaving me to conclude that either the Board and FFWM management understand too well the challenges facing FFWM or they just don’t care, both of which are equally concerning.

I have little confidence that Scott Kavanaugh and his management team (as currently constituted) is capable of repositioning FFWM under the best of circumstances, let alone while simultaneously facing a proxy fight. To the extent that the Board would like to avoid a proxy fight, please do not hesitate to contact me at ac@drivermgmtco.com to arrange a time to discuss how the Board might be reconstituted in order to better preserve and increase shareholder value and what other steps might be taken towards that end.

 Driver Management Company LLC   /s/ J. Abbott R. Cooper

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¹ Source: S&P Capital IQ.

Item 2: On January 18, 2023, Driver Management sent the following letter to the Company’s Chief Executive Officer, Scott Kavanaugh:

January 18, 2023

Mr. Scott Kavanaugh
Chief Executive Officer
First Foundation Inc.
200 Crescent Court, Suite 1400
Dallas, TX 75201

Via email

Mr. Kavanaugh,

Your assistant enquired whether I am interest in having a conversation, which I am, but seemed to indicate that such a conversation should not happen until First Foundation has released its fourth quarter and year end financial results. We have nominated two highly qualified women for election to First Foundation’s board at the 2023 annual meeting and, in the absence of any prior outreach from First Foundation, have been focused on preparing a preliminary proxy statement to be filed with the Securities and Exchange Commission.

If you would like to wait until after First Foundation releases earning for a conversation, that is, obviously your decision. We believe change in the composition of the First Foundation board is sorely needed and, based on our experience to date, can only assume that will happen by way of a contested director election at the 2023 annual meeting.

To the extent you are not available until after First Foundation releases its fourth quarter and year end financial results, I suggest that Max Briggs respond to my letter of January 17, 2023 in the meantime, since, in any event, this should be a matter for board consideration.

 Driver Management Company LLC  

 /s/ J. Abbott R. Cooper

Source:

https://www.sec.gov/Archives/edgar/data/1413837/000092189523000156/dfan14a12447008_01202023.htm