Michael Comparato’s Post

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President (NYSE: FBRT); Head of Commercial Real Estate at BSP/Franklin Templeton

First Foundation Bank next in line? Received a massively dilutive lifeline from Fortress, but another example of the absurd amount of leverage in the banking system that the general public simply does not appreciate… First Foundation at its peak had a $1.6b mkt cap and $13.6 billion in assets. That’s 9:1 leverage; again at PEAK equity valuation. The mkt cap is now $280m, a mere 49:1x leverage. Most investors would laugh any company running at 9:1 leverage out of the room, but because it’s a “bank…” How the riskiest companies in the world (banks), that are run on one day loans (deposits), are viewed as financial juggernauts is baffling. The FDIC is going to need a bigger boat.

Clay Barnes

Real Estate Structured Finance

6mo

First Foundation's problems are NIM.........

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Dillon Freeman, CFA

Direct Multifamily Bridge & DSCR Loans | CRE Mortgage Broker

6mo

Balance sheet leverage isn’t calculated on market cap, it’s calculated on the book value of equity…

Jonathan Perles

CRE Brokerage | Healthcare Consulting

6mo

Good insight and we’re actively seeking distressed CRE loans. In my opinion, banks don’t want a run on deposits so their treading very lightly on selling off portfolios.

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Jon Vaccaro

Managing Partner at V20 Group, LLC and V4 Partners, LLC

6mo

More carnage coming! We are in the 2nd inning.

Anthony Delcau

President at United Developers Inc.

5mo

Very informative

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Toby Cobb

Managing Partner & Co-Founder at 3650 Capital

6mo

Well said Michael!

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