First Foundation Inc.

Where It Passes

Where It Falls Short

• Valuation0% pass✓ 7✗ 19▾

  No clean pass — all 12 investors flag at least one valuation criterion

  Price / 3-yr avg EPS

  ✗Graham<= 15x

  Price-to-Tangible-Book Ratio0.6x

  ✓Graham<= 1.5x

  P/E x P/TBV

  ✗Graham<= 22.5

  Basic earnings-growth PEG (dividends excluded)

  ✗Lynch< 1.0 (ideally < 0.5)

  Price / EPS

  ✗Dreman< 12x✗Templeton< 12x (fixed ceiling; proxy for the market's cheapest 40%)

  Price / (CFO / Shares)N/A (negative CFPS)

  ✗Dreman< 8x

  Price / Tangible Book Value per Share0.6x

  ✓Dreman< 1.2x✓SchlossP/TBV <= 1.00x (app cutoff)

  Valuation ReasonablenessOE Yield=-31.5%

  ✗MungerP/E < 25 or Owner Earnings Yield > 5%

  P/E or FCF YieldFCF Yield=-7.2%

  ✗PabraiP/E < 15 or FCF Yield > 10%

  P/B or P/E vs. Historical AverageP/B=0.5x

  ✓MarksP/E < 15 or P/B < 2.0

  Discount to Intrinsic ValueN/A (negative normalized EPS)

  ✗Marks>= 20% below intrinsic value

  Price / FCF per ShareN/A (negative FCF)

  ✗Ackman<= 25

  Price vs. Trailing Low

  ✗Templeton<= 120% of trailing low (certified split-adjusted live window)

  Price / Book Value per Share0.5x

  ✓Templeton< 1.5x✓SchlossP/B <= 0.80x (app cutoff)

  Net income / market capitalization-31.71%; #4830/6340 (top 76.2%)

  ✗AsnessTop 30% of eligible cross-section✗OshaughnessyTop 10% of eligible cross-section

  Positive book equity / market capitalization+1.8652; #720/6449 (top 11.2%)

  ✓AsnessTop 30% of eligible cross-section

  Price / Diluted EPS

  ✗NeffP/E <= 15x (app proxy for a P/E 40%-60% below the market)

  (EPS CAGR % + Dividend Yield %) / P/E

  ✗Neff> 0.7 (Neff's published traditional edge)

  Book Value per Share Change

  ✗SchlossLatest BVPS >= earliest BVPS over >= 3 years (app rule)

  Revenue / market capitalization+1.1057; #1664/5247 (top 31.7%)

  ✗OshaughnessyTop 10% of eligible cross-section

  (Operating cash flow - capex) / market capitalization-7.20%; #3110/4519 (top 68.8%)

  ✗OshaughnessyTop 10% of eligible cross-section

  Trailing six-month price return through the evaluation date

  ✗OshaughnessyTop 10% of eligible cross-section
• Efficiency0% pass✗ 3▾

  All 3 investors flag FFWM's efficiency

  Revenue / Total Assets Change YoY0.05x -> 0.05x

  ✗PiotroskiImproved YoY

  Reinvestment Rate x ROICN/A (non-positive net income)

  ✗AkreReinvestment Rate * ROIC > 10%

  ROE (5-year)0/5 years above 12% (latest -17.0%)

  ✗SleepROE > 12% in a majority of years
• Profitability13% pass✓ 5✗ 30▾

  14 of 16 flag FFWM's profitability — Graham, Buffett, Lynch +11 more

  Positive EPS (10 years)11/15 years positive

  ✗GrahamPositive EPS every year for 10 years

  EPS Growth (3-yr avg, 10-yr window)

  ✗Graham>= 33% growth

  Net Income Positive (10+ years)11/15 years positive

  ✗BuffettPositive every year for 10+ years

  ROE (up to 5-year arithmetic mean)-5.5%

  ✗Buffett> 15% arithmetic mean (app rule)

  Operating Margin (10-yr trend)

  ✗BuffettStable or rising over 10 years

  Free Cash Flow Proxy$-154.1M

  ✗BuffettPositive and growing

  Earnings Variance (10-yr CoV)

  ✗BuffettCoV < 0.3

  Retained Earnings Effectiveness

  ✗Buffett$1 retained -> > $1 market value created

  Basic earnings-growth PEG (dividends excluded)

  ✗Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR

  ✗Lynch15-30% (Fast Grower); > 0% to pass

  ROE-17.0%

  ✗Lynch> 15%

  Net Income / Total Assets-1.30%

  ✗PiotroskiROA > 0

  ROA Change YoY-0.73% -> -1.30% (delta: -0.57%)

  ✗PiotroskiCurrent ROA > Prior ROA

  (CFO / Total Assets) vs ROACFO/Assets=-0.27%, ROA=-1.30%

  ✓PiotroskiCFO/Assets > ROA

  Pre-Tax Income / Revenue-13.2%

  ✗Dreman>= 8%

  Net Income / Shareholders' Equity-17.0%

  ✗Dreman> 12%

  Return on Equity-17.0%

  ✗Munger> 15%✗AkreROE > 20% (3-year avg)

  Margin of SafetyP/TBV=0.6x

  ✓PabraiP/TBV < 1.5 or P/E < 15

  ROE (high and growing)FY2023: ROE=-21.5%; FY2024: ROE=-8.8%; FY2025: ROE=-17.0%

  ✗AkreLatest 3 consecutive FYs: ROE > 15% in each

  Discount to Intrinsic ValueN/A (negative normalized EPS)

  ✗Marks>= 20% below intrinsic value

  Positive Net Income Frequency11/14 years positive

  ✓MarksPositive net income in >= 7 of last 10 years

  Operating Income / Revenue

  ✗Ackman>= 15%

  Net Income / Shareholders Equity-17.0%

  ✗Ackman>= 15%

  5-Year EPS CAGR

  ✗Templeton> 0% (5-year EPS CAGR)

  Operating Margin Trend

  ✗TempletonNon-negative operating-margin trend over 3 years

  Revenue growth vs. gross and operating margin trend

  ✗SleepRevenue rising; gross margin flat or falling; operating margin holding

  ROE (5-year)0/5 years above 12% (latest -17.0%)

  ✗SleepROE > 12% in a majority of years

  Net income / market capitalization-31.71%; #4830/6340 (top 76.2%)

  ✗AsnessTop 30% of eligible cross-section✗OshaughnessyTop 10% of eligible cross-section

  Gross profit / total assets

  ✗AsnessTop 30% of eligible cross-section

  Net income / positive book equity-17.00%; #3621/5226 (top 69.3%)

  ✗AsnessTop 30% of eligible cross-section

  Negative 5-year standard deviation of ROA-0.0108; #886/5884 (top 15.1%)

  ✓AsnessTop 30% of eligible cross-section

  3-5 Year Diluted EPS CAGR20.2% over 5 years

  ✗Neff7%-20% annualized

  Positive Diluted-EPS Years7/10 years positive

  ✓Schloss>= 70% positive over 5-10 observed years (app rule)
• Growth13% pass✓ 3✗ 9▾

  7 of 8 flag FFWM's growth — Graham, Lynch, Dreman +4 more

  EPS Growth (3-yr avg, 10-yr window)

  ✗Graham>= 33% growth

  Basic earnings-growth PEG (dividends excluded)

  ✗Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR

  ✗Lynch15-30% (Fast Grower); > 0% to pass

  EPS Growth Direction

  ✗DremanPositive over recent years

  EPS CAGR

  ✗Dreman> 5% annualized

  Positive Net Income Frequency11/14 years positive

  ✓MarksPositive net income in >= 7 of last 10 years

  3yr Median Revenue Growth6.5%

  ✓Ackman>= 5%

  Positive EPS Growth Frequency2/5 years with positive EPS growth

  ✗AckmanPositive EPS growth in >= 3 of last 5 years

  5-Year EPS CAGR

  ✗Templeton> 0% (5-year EPS CAGR)

  Revenue growth vs. gross and operating margin trend

  ✗SleepRevenue rising; gross margin flat or falling; operating margin holding

  5-year Revenue CAGR17.3%

  ✓SleepCAGR > 7%

  3-5 Year Diluted EPS CAGR20.2% over 5 years

  ✗Neff7%-20% annualized
• Cash Flow20% pass✓ 3✗ 9▾

  8 of 10 flag FFWM's cash flow — Buffett, Lynch, Piotroski +5 more

  Free Cash Flow Proxy$-154.1M

  ✗BuffettPositive and growing

  FCF Positive and Growing$-35.2M

  ✗LynchPositive and growing

  Operating Cash Flow$-31.9M

  ✗PiotroskiCFO > 0

  (CFO / Total Assets) vs ROACFO/Assets=-0.27%, ROA=-1.30%

  ✓PiotroskiCFO/Assets > ROA

  Price / (CFO / Shares)N/A (negative CFPS)

  ✗Dreman< 8x

  P/E or FCF YieldFCF Yield=-7.2%

  ✗PabraiP/E < 15 or FCF Yield > 10%

  FCF Positive11/14 years FCF positive

  ✓MarksPositive FCF in majority of recent years

  (OCF - CapEx) / Market Cap-7.2%

  ✗Ackman>= 4%

  Price / FCF per ShareN/A (negative FCF)

  ✗Ackman<= 25

  Positive Operating Cash Flow frequency12/14 years positive

  ✓SleepPositive OCF in >= 70% of available years

  Operating Cash Flow - Capital Expenditures$-35.2M

  ✗Neff> $0 (app proxy for a strong fundamental case)

  (Operating cash flow - capex) / market capitalization-7.20%; #3110/4519 (top 68.8%)

  ✗OshaughnessyTop 10% of eligible cross-section
• Verdicts23% pass✓ 3✗ 10▾

  Split decision: 10 FAIL · 3 NEUTRAL · 2 PASS · 1 BUY

  Overall verdict

  ✗GrahamFAIL (2/7)✗BuffettFAIL (0/6)✗LynchFAIL (0/4)✗PiotroskiFAIL (F-Score 2)✗DremanFAIL (1/9)✗MungerFAIL (0/3)✗PabraiFAIL (1/3)✗AkreFAIL (1/5)•MarksNEUTRAL (3/4)✗AckmanFAIL (2/8)✓TempletonPASS (4/8)✓SleepPASS (3/6)•AsnessNEUTRAL (Not ranked)✗NeffFAIL (1/6)✓SchlossBUY (5/7)•OshaughnessyNEUTRAL (Not ranked)
• Debt & Leverage50% pass✓ 3✗ 2▾

  2 of 4 pass — Asness and Schloss object

  LT Debt / Total Assets Change0.00% -> 0.00%

  ✓PiotroskiDecreased YoY

  Total Debt / Shareholders' Equity0.26

  ✓Templeton< 1.0 (fixed cap; proxy for below-sector-median leverage)✓SchlossD/E < 1.00x

  Negative debt-to-equity (higher means less debt)-0.2630; #1892/4210 (top 44.9%)

  ✗AsnessTop 30% of eligible cross-section

  Current Assets / Current Liabilities

  ✗SchlossCurrent ratio >= 1.50x (app cutoff)
• Valuation models50% pass✓ 1✗ 1▾

  Models split on FFWM at $5.90 — fair values range $4.76–$13.66

  Akre fair value$13.66

  ✓Akre+56.8% margin vs $5.90

  Marks fair value$4.76

  ✗Marks-24.1% margin vs $5.90