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Second Quarter 2026 Highlights:
DENVER--(BUSINESS WIRE)--FirstSun Capital Bancorp (“FirstSun”) (NASDAQ: FSUN) reported net loss of $(22.9) million for the second quarter of 2026 compared to net income of $26.4 million for the second quarter of 2025. Earnings per diluted share were $(0.49) for the second quarter of 2026 compared to $0.93 for the second quarter of 2025. Adjusted net income, a non-GAAP financial measure, was $21.0 million or $0.45 per diluted share for the second quarter of 2026 compared to $26.6 million or $0.94 per diluted share for the second quarter of 2025.
On April 1, 2026, we completed our merger with First Foundation and its results of operations are included in our consolidated financial results since the date of acquisition. Therefore, our second quarter and first half of 2026 results reflect increased levels of average balances, net interest income, and expenses compared to our prior quarter and first half of 2025. After purchase accounting adjustments, the acquisition added $11.2 billion of total assets, including $6.0 billion of net loans, as well as $10.5 billion of total liabilities, primarily consisting of $8.8 billion in deposits. We recorded preliminary goodwill of $9.1 million and core deposit intangibles and other intangibles of $90.2 million related to the acquisition. During the second quarter of 2026, we incurred $57.6 million in merger related expenses.
During the second quarter of 2026, we completed our previously announced balance sheet repositioning strategy, involving the sale or run-off of select First Foundation loans and securities and using proceeds from such sales and paydowns as well as other available cash and equivalents to reduce higher-cost funding sources. Our balance sheet repositioning strategy was designed to strengthen our capital position, enhance our credit profile, improve our liquidity, and support a more diversified, relationship-focused business model. Our balance sheet repositioning strategy resulted in the liquidation of assets, namely $1.2 billion in cash, $1.4 billion in securities, $1.3 billion in loans, the proceeds of which were used to reduce liabilities, namely $2.5 billion in deposits, and $1.4 billion in borrowings.
Neal Arnold, FirstSun’s Chief Executive Officer and President, commented, “The completion of the First Foundation acquisition in the second quarter marked a transformational milestone for our company. We have accelerated our growth strategy and expanded our footprint across some of the most dynamic markets in the country. In the second quarter, we also successfully completed the repositioning strategy and reduced the risk profile of the balance sheet we acquired. We believe the franchise is stronger, with less concentration risk, less liquidity risk, less interest rate sensitivity, and a stronger capital profile as a result of the repositioning actions. While we experienced a decline in our financial results this quarter due to two large loan charge-offs and the merger and integration expenses we incurred in conjunction with completing the First Foundation acquisition, we believe our core business remains strong and we believe we are well positioned for future success.
“I want to thank all of our teammates for their diligence, professionalism, and commitment to the hard work of integrating the businesses and continuing to serve our great clients and communities. We remain very excited about the growth opportunities across all of our markets as we continue building a premier regional bank.”
Share Repurchase Program
Our board of directors has authorized a share repurchase program to purchase up to $150.0 million of FirstSun’s common stock in open market transactions or privately negotiated transactions, including pursuant to a trading plan in accordance with Rule 10b5-1 and/or Rule 10b-18 under the Securities Exchange Act of 1934, as amended. The timing, pricing, and amount of any repurchases under the repurchase program will be determined by our management at its discretion based on a variety of factors, including, but not limited to, trading volume and market price of our common stock, corporate considerations, our financial performance, alternative uses for capital, general market and economic conditions, legal and regulatory requirements, and other factors. The repurchase program is authorized through June 30, 2027, although it may be modified, discontinued, or suspended at any time without prior notice. The repurchase program does not obligate FirstSun to purchase any shares.
Second Quarter 2026 Results
Net loss totaled $(22.9) million, or $(0.49) per diluted share, for the second quarter of 2026, compared to $21.6 million, or $0.76 per diluted share, for the prior quarter. Adjusted net income, a non-GAAP financial measure, totaled $21.0 million, or $0.45 per diluted share, for the second quarter of 2026, compared to $23.7 million, or $0.84 per diluted share, for the prior quarter.
Return on average total assets was (0.54)% for the second quarter of 2026, compared to 1.04% for the prior quarter, and return on average stockholders’ equity was (4.92)% for the second quarter of 2026, compared to 7.47% for the prior quarter. Adjusted return on average total assets and adjusted return on average stockholders’ equity, each a non-GAAP financial measure, were 0.50% and 4.52% respectively for the second quarter of 2026 compared to 1.14% and 8.20% respectively for the prior quarter.
Net Interest Income and Net Interest Margin
Net interest income totaled $143.2 million for the second quarter of 2026, an increase of $60.4 million compared to the prior quarter. Our net interest margin decreased 67 basis points to 3.58% compared to the prior quarter.
Average loans, including loans held-for-sale, increased by $5.8 billion in the second quarter of 2026, compared to the prior quarter, due primarily to loans acquired from First Foundation. Loan yield decreased by 20 basis points to 6.16% in the second quarter of 2026, compared to the prior quarter, reflecting a change in portfolio mix resulting from the addition of lower-yielding primarily public finance and multifamily loans acquired from First Foundation. Average investment securities increased by $1.6 billion in the second quarter of 2026, compared to the prior quarter, due primarily to securities acquired from First Foundation. Investment securities yield increased by 150 basis points to 4.80% in the second quarter of 2026, compared to the prior quarter, primarily reflecting a change in portfolio mix resulting from the addition of higher-yielding fixed and floating investment securities acquired from First Foundation. Average interest-bearing cash and other assets increased by $700.9 million in the second quarter of 2026, compared to the prior quarter. Interest-bearing cash and other assets yield decreased by 16 basis points to 3.20% in the second quarter of 2026, compared to the prior quarter, primarily reflecting a change in the composition of interest-bearing cash and other assets resulting from the First Foundation acquisition.
Average interest-bearing deposits increased $6.4 billion in the second quarter of 2026, compared to the prior quarter, due primarily to deposits assumed from First Foundation. Total cost of interest-bearing deposits increased by 31 basis points to 2.77% in the second quarter of 2026, compared to the prior quarter, primarily reflecting the addition of higher-cost, non-core deposits acquired from First Foundation.
Asset Quality and Provision for Credit Losses
The provision for credit losses increased $32.2 million to $40.4 million for the second quarter of 2026, compared to the prior quarter, primarily related to the downgrades and write-downs of two C&I lending relationships.
Net charge-offs for the second quarter of 2026 were $42.4 million resulting in an annualized ratio of net charge-offs to average loans of 1.45%, compared to net charge-offs of $10.6 million, or an annualized ratio of net charge-offs to average loans of 0.63% for the prior quarter. The increase in charge-offs for the second quarter of 2026 was primarily related to two C&I loans. The first is an asset-based loan to a materials distributor with an outstanding principal balance of approximately $23.6 million at June 30, 2026. Based on current information, we believe the borrower made fraudulent misrepresentations about its accounts receivable, collateral and historical financial statements and, as a result, in the second quarter of 2026, we recognized an approximate $22.0 million charge-off on this loan, or an annualized net charge-off of 0.75%. The second is a loan to a technology company with an outstanding principal balance of approximately $16.0 million at June 30, 2026. Based on recent developments impacting the borrower’s business, including deterioration in the borrower’s financial performance in the second quarter, we recognized a $12.9 million charge-off on this loan in the second quarter of 2026.
In connection with the acquisition of First Foundation, we recorded an initial allowance for credit losses of $92.5 million using the gross up approach, comprised of a $39 million reserve for purchased credit deteriorated loans that exhibited a more-than-insignificant amount of credit deterioration since origination and a $53.5 million reserve on purchased seasoned loans. The allowance for credit losses as a percentage of loans outstanding was 1.50% at June 30, 2026, an increase of 30 basis points from the prior quarter. The ratio of nonperforming assets to total assets was 1.32% at June 30, 2026, compared to 0.82% at March 31, 2026.
Noninterest Income
Noninterest income totaled $40.9 million for the second quarter of 2026, an increase of $13.8 million from the prior quarter. Income from trust and investment advisory fees increased $7.9 million for the second quarter of 2026 from the prior quarter, primarily due to higher assets under management associated with the acquisition of First Foundation. Income from mortgage banking services increased $1.6 million for the second quarter of 2026 from the prior quarter, primarily due to an increase in loan originations sold and corresponding capitalized servicing rights as well as slower balance runoff in the servicing portfolio. Other noninterest income increased $3.3 million for the second quarter of 2026 from the prior quarter, primarily due to an increase in the fair value of investments related to our deferred compensation plan partially offset by a write-down of an OREO property.
Noninterest income as a percentage of total revenue1 was 22.2% for the second quarter of 2026, a decrease of 2.5% from the prior quarter.
Noninterest Expense
Noninterest expense totaled $171.7 million for the second quarter of 2026, an increase of $96.4 million from the prior quarter. Merger related expenses increased $54.9 million in the second quarter of 2026 from the prior quarter. Salary and employee benefits increased $21.4 million in the second quarter of 2026 from the prior quarter, primarily due to an increase in headcount associated with the acquisition of First Foundation. Other noninterest expense increased $8.1 million in the second quarter of 2026 from the prior quarter, primarily due to higher data processing and FDIC insurance expenses associated with our increased scale following the acquisition of First Foundation.
The efficiency ratio for the second quarter of 2026 was 93.25% compared to 68.52% for the prior quarter. The adjusted efficiency ratio, a non-GAAP financial measure, for the second quarter of 2026 was 61.99% compared to 66.08% for the prior quarter.
Tax Rate
The effective tax rate was 18.3% for the second quarter of 2026, compared to 18.1% for the prior quarter.
Loans
Loans were $11.6 billion at June 30, 2026, compared to $6.9 billion at March 31, 2026, an increase of $4.6 billion, or 267.5% on an annualized basis, due primarily to the acquisition of First Foundation. Loans, excluding the impact of acquired First Foundation loans, net of repositioning, a non-GAAP financial measure, decreased $105.5 million in the second quarter of 2026, or 6.0% on an annualized basis from the prior quarter. See “Non-GAAP Financial Measures and Reconciliations” below.
Deposits
Deposits were $13.4 billion at June 30, 2026, compared to $7.1 billion at March 31, 2026, an increase of $6.3 billion in the second quarter of 2026, or 358.3% on an annualized basis, due primarily to the acquisition of First Foundation. Deposits, excluding the impact of acquired First Foundation deposits, net of repositioning, a non-GAAP financial measure, increased $83.9 million in the second quarter of 2026, or 4.8% on an annualized basis from the prior quarter. See “Non-GAAP Financial Measures and Reconciliations” below.
Average deposits were $14.5 billion for the second quarter of 2026, compared to $7.0 billion for the prior quarter, an increase of $7.4 billion or 424.8% on an annualized basis. Average deposits, excluding the impact of acquired First Foundation deposits, net of repositioning, a non-GAAP financial measure, increased $226.5 million in the second quarter of 2026, or 12.9% on an annualized basis from the prior quarter. See “Non-GAAP Financial Measures and Reconciliations” below.
Noninterest-bearing deposit accounts represented 19.9% of total deposits at June 30, 2026 and our loan to deposit ratio was 86.2% at June 30, 2026.
The ratio of total uninsured deposits to total deposits was estimated to be 31.6% at June 30, 2026. The ratio of total uninsured and uncollateralized deposits to total deposits was estimated to be 28.0% at June 30, 2026.2
Capital
Capital ratios remain strong and above “well-capitalized” thresholds. As of June 30, 2026, our common equity tier 1 risk-based capital ratio was 11.95%, total risk-based capital ratio was 14.13% and tier 1 leverage ratio was 9.47%. Book value per share was $39.29 at June 30, 2026, a decrease of $2.79 from March 31, 2026. Tangible book value per share, a non-GAAP financial measure, was $35.16 at June 30, 2026, a decrease of $3.41 from March 31, 2026. See “Non-GAAP Financial Measures and Reconciliations” below.
Non-GAAP Financial Measures
This press release (including the tables within the “Non-GAAP Financial Measures and Reconciliations” section) contains financial measures determined by methods other than in accordance with accounting principles generally accepted in the United States (“GAAP”). Our management uses these non-GAAP financial measures in their analysis of our performance and the efficiency of our operations. Management believes these non-GAAP measures provide a greater understanding of ongoing operations, enhance comparability of results with prior periods and demonstrate the effects of significant items in the current period. We believe a meaningful analysis of our financial performance requires an understanding of the factors underlying that performance. Our management believes investors may find these non-GAAP financial measures useful. These non-GAAP financial measures, however, should not be viewed as a substitute for financial measures determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Below is a listing of the non-GAAP measures used in this press release:
The tables beginning within the “Non-GAAP Financial Measures and Reconciliations” section provide a reconciliation of the non-GAAP financial measures contained in this press release to the most comparable GAAP equivalent.
1 Total revenue is net interest income plus noninterest income.
2 Uninsured deposits and uninsured and uncollateralized deposits are reported for our wholly-owned subsidiary Sunflower Bank, N.A. |
About FirstSun
FirstSun Capital Bancorp (“FirstSun”) (NASDAQ: FSUN), headquartered in Denver, Colorado, is the financial holding company for wholly owned subsidiaries including Sunflower Bank, N.A. and First Foundation Advisors. Through its subsidiaries and affiliated entities, FirstSun provides a full range of relationship-focused services to meet personal, business, and wealth management financial objectives, with depository branches in ten states and mortgage capabilities in 44 states. FirstSun had total consolidated assets of $15.7 billion as of June 30, 2026.
To learn more visit ir.firstsuncb.com or SunflowerBank.com.
Investor Earnings Conference Call
FirstSun will host a conference call on Tuesday, July 28, 2026 at 11:00 a.m. (ET) to discuss its second quarter 2026 financial results.
Participants may join by phone by dialing (833) 461-5787 for toll-free within the US and (585) 542-9983 for all other locations. The conference Meeting ID is 239801426. The numbers for international participants are available here: https://help.events.q4inc.com/eahc/international-dial-in-numbers.
An audio replay of the live call, and the accompanying presentation slides, will be available following the live event on the “Events & Presentations page” of FirstSun’s website at https://ir.firstsuncb.com/overview/default.aspx.
Deposits Classification
Previously, deposit amounts related to certain NOW accounts with limited monthly transaction activity were able to be reclassified to money market accounts to reduce reserve requirements at the Federal Reserve. As there is no longer any impact to reserve requirements across different deposit products, we have discontinued this product reclassification practice and have revised the presentation of those deposits to conform to the current presentation for periods prior to March 31, 2026.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are forward-looking statements. Examples of forward-looking statements include, but are not limited to, statements regarding our markets, our merger with First Foundation, including our belief regarding the benefits of the merger and our recently completed balance sheet repositioning on our franchise, the strength of our core business, our ability to drive growth, and that we are well positioned for future success. These statements reflect management’s current expectations and are not guarantees of future performance. Words such as “focus,” “confident,” “may,” “will,” “believe,” “anticipate,” “expect,” “intend,” “opportunity,” “continue,” “should,” “could,” “excited,” “progress” and variations of such words and similar expressions are intended to identify such forward-looking statements. Forward-looking statements are subject to risks, uncertainties and assumptions that are difficult to predict with regard to timing, extent, likelihood and degree of occurrence, which could cause actual results to differ materially from anticipated results. Such risks, uncertainties and assumptions, include, among others, the following: changes in interest rates and their related impact on macroeconomic conditions, customer behavior, our funding costs and our loan and securities portfolios; the quality or composition of our loan or investment portfolios and changes therein; failure to maintain our mortgage production flow to secondary markets; the sufficiency of liquidity and changes in our capital position; the inability of our infrastructure initiatives to reduce expenses; increased deposit volatility; potential regulatory developments; U.S. and global trade policies and tensions, including change in, or the imposition of, tariffs and/or trade barriers and the economic impacts, volatility and uncertainty resulting therefrom; ongoing geopolitical conflicts, including hostilities involving Iran and the Middle East, which may contribute to volatility in energy prices, inflation, financial markets, cybersecurity threats, and broader macroeconomic conditions, any of which could adversely affect our borrowers, deposit base, liquidity, capital and results of operation; the possibility that the anticipated benefits of the First Foundation merger, including anticipated cost savings and strategic gains, are not realized when expected or at all; the integration of the businesses and operations of FirstSun and First Foundation may take longer than anticipated or be more costly than anticipated or have unanticipated adverse results relating to the combined company’s business; the diversion of management’s attention from ongoing business operations and opportunities due to the First Foundation merger; other factors, many of which are beyond our control.
We caution readers that the foregoing list of factors is not exclusive, is not necessarily in order of importance and readers should not place undue reliance on any forward-looking statements. Additional information concerning additional factors that could materially affect the forward-looking statements in this press release can be found in the cautionary language included under the headings “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” in FirstSun’s Annual Report on Form 10-K for the year ended December 31, 2025 and other documents subsequently filed by FirstSun with the SEC. Further, any forward-looking statement speaks only as of the date on which it is made and we do not intend to and disclaim any obligation to update or revise any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events, except as required by law.
Summary Data:
| As of and for the three months ended | ||||||||||||||||||
($ in thousands, except per share amounts) |
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, | ||||||||||
Net interest income | $ | 143,195 |
|
| $ | 82,779 |
|
| $ | 83,461 |
|
| $ | 80,953 |
|
| $ | 78,499 |
|
Provision for credit losses |
| 40,400 |
|
|
| 8,250 |
|
|
| 6,200 |
|
|
| 10,100 |
|
|
| 4,500 |
|
Noninterest income |
| 40,948 |
|
|
| 27,175 |
|
|
| 26,744 |
|
|
| 26,333 |
|
|
| 27,073 |
|
Noninterest expense |
| 171,712 |
|
|
| 75,341 |
|
|
| 72,041 |
|
|
| 68,901 |
|
|
| 68,110 |
|
(Loss) income before income taxes |
| (27,969 | ) |
|
| 26,363 |
|
|
| 31,964 |
|
|
| 28,285 |
|
|
| 32,962 |
|
(Benefit) provision for income taxes |
| (5,119 | ) |
|
| 4,780 |
|
|
| 7,157 |
|
|
| 5,111 |
|
|
| 6,576 |
|
Net (loss) income |
| (22,850 | ) |
|
| 21,583 |
|
|
| 24,807 |
|
|
| 23,174 |
|
|
| 26,386 |
|
Adjusted net income1 |
| 21,021 |
|
|
| 23,673 |
|
|
| 26,923 |
|
|
| 23,412 |
|
|
| 26,601 |
|
Weighted average common shares outstanding, basic |
| 46,673,555 |
|
|
| 27,851,041 |
|
|
| 27,839,044 |
|
|
| 27,801,255 |
|
|
| 27,783,710 |
|
Weighted average common shares outstanding, diluted |
| 46,673,555 |
|
|
| 28,316,608 |
|
|
| 28,262,530 |
|
|
| 28,291,778 |
|
|
| 28,232,319 |
|
Diluted (loss) earnings per share | $ | (0.49 | ) |
| $ | 0.76 |
|
| $ | 0.88 |
|
| $ | 0.82 |
|
| $ | 0.93 |
|
Adjusted diluted earnings per share1 |
| 0.45 |
|
|
| 0.84 |
|
|
| 0.95 |
|
|
| 0.83 |
|
|
| 0.94 |
|
Return on average total assets |
| (0.54 | )% |
|
| 1.04 | % |
|
| 1.17 | % |
|
| 1.09 | % |
|
| 1.28 | % |
Adjusted return on average total assets1 |
| 0.50 | % |
|
| 1.14 | % |
|
| 1.27 | % |
|
| 1.10 | % |
|
| 1.29 | % |
Return on average stockholders' equity |
| (4.92 | )% |
|
| 7.47 | % |
|
| 8.58 | % |
|
| 8.22 | % |
|
| 9.74 | % |
Adjusted return on average stockholders' equity1 |
| 4.52 | % |
|
| 8.20 | % |
|
| 9.31 | % |
|
| 8.31 | % |
|
| 9.82 | % |
Return on average tangible stockholders' equity1 |
| (4.69 | )% |
|
| 8.31 | % |
|
| 9.58 | % |
|
| 9.20 | % |
|
| 10.91 | % |
Adjusted return on average tangible stockholders' equity1 |
| 5.86 | % |
|
| 9.10 | % |
|
| 10.38 | % |
|
| 9.30 | % |
|
| 11.00 | % |
Net interest margin |
| 3.58 | % |
|
| 4.25 | % |
|
| 4.18 | % |
|
| 4.07 | % |
|
| 4.07 | % |
Net interest margin (FTE basis)1 |
| 3.63 | % |
|
| 4.31 | % |
|
| 4.23 | % |
|
| 4.12 | % |
|
| 4.13 | % |
Efficiency ratio |
| 93.25 | % |
|
| 68.52 | % |
|
| 65.37 | % |
|
| 64.22 | % |
|
| 64.52 | % |
Adjusted efficiency ratio1 |
| 61.99 | % |
|
| 66.08 | % |
|
| 63.36 | % |
|
| 64.00 | % |
|
| 64.25 | % |
Noninterest income to total revenue2 |
| 22.2 | % |
|
| 24.7 | % |
|
| 24.3 | % |
|
| 24.5 | % |
|
| 25.6 | % |
Total assets | $ | 15,717,985 |
|
| $ | 8,565,123 |
|
| $ | 8,485,162 |
|
| $ | 8,495,437 |
|
| $ | 8,435,861 |
|
Loans held-for-sale |
| 140,706 |
|
|
| 144,407 |
|
|
| 100,539 |
|
|
| 85,250 |
|
|
| 90,781 |
|
Loans held-for-investment |
| 11,568,443 |
|
|
| 6,939,972 |
|
|
| 6,673,180 |
|
|
| 6,681,629 |
|
|
| 6,507,066 |
|
Total deposits |
| 13,418,004 |
|
|
| 7,087,513 |
|
|
| 7,107,356 |
|
|
| 7,105,415 |
|
|
| 7,100,164 |
|
Total stockholders' equity |
| 1,837,392 |
|
|
| 1,175,507 |
|
|
| 1,153,356 |
|
|
| 1,127,513 |
|
|
| 1,095,402 |
|
Loan to deposit ratio |
| 86.2 | % |
|
| 97.9 | % |
|
| 93.9 | % |
|
| 94.0 | % |
|
| 91.6 | % |
Period end common shares outstanding |
| 46,765,434 |
|
|
| 27,935,888 |
|
|
| 27,887,337 |
|
|
| 27,854,764 |
|
|
| 27,834,525 |
|
Book value per share | $ | 39.29 |
|
| $ | 42.08 |
|
| $ | 41.36 |
|
| $ | 40.48 |
|
| $ | 39.35 |
|
Tangible book value per share1 |
| 35.16 |
|
|
| 38.57 |
|
|
| 37.83 |
|
|
| 36.92 |
|
|
| 35.77 |
|
Investor Contact:
Ed Jacques
Director of Investor Relations & Business Development, FirstSun
Investor.Relations@firstsuncb.com
Media Contact:
Jeanne Lipson
Director of Marketing, Sunflower Bank
Jeanne.Lipson@SunflowerBank.com
| Jul-28 | |
| Jul-28 | |
| Jul-27 | |
| Jul-27 | |
| Jul-24 | |
| Jul-10 | |
| Jul-09 | |
| Jun-05 | |
| Jun-03 | |
| Apr-29 | |
| Apr-28 | |
| Apr-28 | |
| Apr-27 | |
| Apr-27 | |
| Apr-24 |
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