New Lead takes position at First Foundation
Thomas C. Shafer, the newly appointed CEO of First Foundation Inc. and First Foundation Bank, brings a wealth of banking experience to his new role. Shafer's tenure at Chemical Bank, where he served as president and CEO from 2017 to 2019, is a testament to his leadership skills.
Before joining First Foundation, Shafer also served as the president and CEO of First Place Bank, which was acquired by Talmer. He later served as president and COO of Talmer Bank and Trust, which was acquired by Chemical Bank.
Shafer's appointment as CEO of First Foundation is not related to any disagreements with the company. It is effective immediately, and he will join the boards of the company and the bank. Shafer's compensation package includes an annual base salary of $1.09 million, a yearly bonus based on performance targets, and restricted stock units that will vest in two installments over three years.
Under Shafer’s guidance, First Foundation is expected to undergo significant changes. The bank has reported a loss of $82.2 million for the third quarter, and Shafer's focus will be on improving net interest margins, projected between 2.1-2.2%, and reducing risk exposure.
One of Shafer's first moves as CEO was to sell roughly $858 million in commercial real estate (CRE) loans at a discount, using the proceeds to pay down expensive deposits. This strategic move is aimed at improving the bank's margin and managing risk.
Max Briggs, First Foundation's board chairman, expressed confidence in Shafer's ability to achieve the company's strategic objectives. Briggs stated, "Thomas's extensive banking experience and proven track record of leading banks through strategic turnarounds make him the ideal candidate to lead First Foundation."
Investors, led by Fortress Investment Group, provided $228 million to First Foundation to strengthen its balance sheet. This investment occurred in July 2022, and it is expected to optimize the bank's balance sheet and position it for future growth.
Shafer's leadership style involves strategic asset sales, deposit cost reduction, margin improvement, and enhancement of operational efficiency. His appointment marks a new chapter for First Foundation and its banking subsidiary, and it is expected that he will lead the bank towards improved profitability and a stronger financial footing in the evolving banking environment.
"Under Thomas C. Shafer's leadership, First Foundation is set to make significant changes in its business strategy, with a focus on improving personal-finance metrics such as net interest margins and reducing risk exposure, as indicated by his strategic sale of $858 million in commercial real estate loans."
"Investors, including Fortress Investment Group, have shown confidence in Shafer's abilities, providing $228 million to First Foundation to optimize its balance sheet and position the bank for future growth in the investing landscape, signifying a new direction for First Foundation Inc. and First Foundation Bank."
