FirstSun Capital Bancorp Reports Third Quarter 2023 Results

Rhea-AI Summary

FirstSun Capital Bancorp reported net income of $25.2 million for the third quarter of 2023, compared to $26.5 million for the same period last year. Earnings per diluted share were $1.00, down from $1.04 in Q3 2022. Net interest margin remained stable at 4.23%. Average deposit growth was 24.0% annualized, while loan growth was 1.6% annualized. Noninterest income accounted for 20.3% of total revenue. The company's capital ratios remain strong and above 'well-capitalized' thresholds.

Positive

• FirstSun Capital Bancorp reported a stable net interest margin of 4.23% in Q3 2023, amidst declining trends in the banking industry. Average deposit growth was 24.0% annualized, indicating strong customer demand. The company's capital ratios remain strong and above 'well-capitalized' thresholds.

Negative

• FirstSun Capital Bancorp's net income for Q3 2023 decreased to $25.2 million from $26.5 million in the same period last year. Earnings per diluted share also declined to $1.00 from $1.04 in Q3 2022.

Third Quarter 2023 Highlights:

• Net income of $25.2 million, $1.00 per diluted share
• Net interest margin of 4.23%
• Return on average total assets of 1.34%
• Return on average stockholders’ equity of 12.03%
• Average deposit growth of 24.0% annualized
• Loan growth of 1.6% annualized
• 20.3% noninterest income to total revenue¹

DENVER--(BUSINESS WIRE)-- FirstSun Capital Bancorp (“FirstSun”) (OTCQX: FSUN) reported net income of $25.2 million for the third quarter of 2023 compared to net income of $26.5 million for the third quarter of 2022. Earnings per diluted share were $1.00 for the third quarter of 2023 compared to $1.04 for the third quarter of 2022.

Neal Arnold, FirstSun’s President and Chief Executive Officer, commented, “We are pleased to deliver another strong quarter as our focus on growing our C&I and consumer relationships across all of our Southwest markets continues to yield favorable results. Among the highlights this quarter were our strong deposit growth and a stable net interest margin of 4.23%, amidst sharply declining trends in the banking industry as a whole. We believe our balanced business mix, our consistent focus on carefully growing our C&I and consumer businesses as well as our service fee businesses, along with our strong capital base and loan portfolio credit quality, provides us with the flexibility to continue to be opportunistic in this environment adding business relationships across the footprint. I want to thank all of our hard-working employees across all of our markets as their dedication to customer service has continued to drive our business growth and success this year.”

Third Quarter 2023 Results

Net income totaled $25.2 million, or $1.00 per diluted share, during the third quarter of 2023, compared to $28.0 million, or $1.11 per diluted share, during the prior quarter. The return on average total assets was 1.34% in the third quarter of 2023, compared to 1.49% in the prior quarter, and the return on average stockholders’ equity was 12.03% in the third quarter of 2023, compared to 13.54% in the prior quarter.

Net Interest Income and Net Interest Margin

Net interest income totaled $73.4 million during the third quarter of 2023, a decrease of $0.4 million compared to the prior quarter. Our net interest margin decreased one basis point to 4.23% compared to the prior quarter. Results in the third quarter of 2023, compared to the prior quarter, were driven by an increase of 42 basis points in the cost of interest-bearing liabilities, partially offset by an increase of 29 basis points in yield on earning assets.

Average loans, including loans held-for-sale, decreased by $40.1 million in the third quarter of 2023, compared to the prior quarter. Loan yield increased by 31 basis points to 6.44% in the third quarter of 2023, compared to the prior quarter, primarily due to the rising interest rate environment and its impact on variable rate loans in the loan portfolio and higher yields on new originations. Average interest-bearing deposits increased $0.4 billion in the third quarter of 2023, compared to the prior quarter. Total cost of deposits increased by 70 basis points to 2.64% in the third quarter of 2023, compared to the prior quarter, primarily due to rising deposit costs as a result of the elevated interest rate environment and an increasing mix of certificates of deposits. Average FHLB borrowings decreased $0.4 billion in the third quarter of 2023, compared to the prior quarter. The cost of FHLB borrowings increased by 21 basis points to 5.40% in the third quarter of 2023, compared to the prior quarter, primarily due to the rising interest rate environment.

Asset Quality and Provision for Credit Losses

The provision for credit losses totaled $3.9 million during the third quarter of 2023, a decrease of $0.5 million from $4.4 million in the prior quarter, primarily due to slower loan growth.

Net charge-offs during the third quarter of 2023 were $2.3 million, resulting in an annualized ratio of net charge-offs to average loans of 0.15%, compared to net charge-offs of $0.7 million, resulting in an annualized ratio of net-charge offs to average loans of 0.05% in the prior quarter. The allowance for credit losses as a percentage of total loans was 1.27% at September 30, 2023, an increase of one basis point from the prior quarter.

The ratio of nonperforming assets to total assets was 0.63% at September 30, 2023, compared to 1.00% at June 30, 2023.

Noninterest Income

Noninterest income totaled $18.7 million during the third quarter of 2023, a decrease of $5.6 million from the prior quarter. Mortgage banking income decreased $4.2 million during the third quarter of 2023, primarily due to lesser fair value gains on our mortgage servicing rights portfolio, net of derivative activity. Other noninterest income decreased $1.4 million during the third quarter of 2023, primarily due to a write-down of an other real estate owned property and a decrease in customer accommodation swap transaction fees. Noninterest income as a percentage of total revenue¹ was 20.3%, a decrease of 4.5% from the prior quarter.

Noninterest Expense

Noninterest expense totaled $56.2 million during the third quarter of 2023, a decrease of $1.9 million from the prior quarter. Amortization of intangible assets decreased $1.2 million from the prior quarter. Other noninterest expense decreased $0.9 million primarily due to lower legal and professional fees.

The efficiency ratio for the third quarter of 2023 was 61.02% compared to 59.15% in the prior quarter.

Tax Rate

The effective tax rate was 21.1% in the third quarter of 2023, compared to 21.5% in the prior quarter.

Loans

Loans were $6.2 billion at September 30, 2023, compared to $6.2 billion at June 30, 2023, an increase of $24.4 million in the third quarter of 2023, or 1.6% on an annualized basis.

Deposits

Average deposits were $6.3 billion for the third quarter of 2023, compared to $6.0 billion for the prior quarter, an increase of $358.7 million in the third quarter of 2023, or 24.0% on an annualized basis. Noninterest-bearing deposit accounts represented 25.4% of total deposits at September 30, 2023 and the loan-to-deposit ratio was 97.5% at September 30, 2023.

The ratio of total uninsured deposits to total deposits was estimated to be 32.0% at September 30, 2023, compared to 32.5% at June 30, 2023. The ratio of total uninsured and uncollateralized deposits to total deposits was estimated to be 25.4% at September 30, 2023, compared to 24.1% at June 30, 2023.²

Capital

Capital ratios remain strong and above “well-capitalized” thresholds. As of September 30, 2023, our common equity tier 1 risk-based capital ratio was 10.79%, total risk-based capital ratio was 12.93% and tier 1 leverage ratio was 10.37%. Book value per common share was $33.83 at September 30, 2023, an increase of $0.81 from June 30, 2023. Tangible book value per common share, a non-GAAP financial measure, was $29.60 at September 30, 2023, an increase of $0.84 from June 30, 2023.

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 principles generally accepted in the United States (“GAAP”). FirstSun management uses these non-GAAP financial measures in their analysis of FirstSun’s performance and the efficiency of its 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. FirstSun believes a meaningful analysis of its financial performance requires an understanding of the factors underlying that performance. FirstSun 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:

• Tangible common stockholders’ equity;
• Tangible assets;
• Tangible common stockholders’ equity to tangible assets;
• Tangible common stockholders’ equity to tangible assets, reflecting net unrealized losses on HTM securities, net of tax;
• Tangible book value per common share;
• Net income excluding merger costs;
• Return on average total assets excluding merger costs;
• Return on average stockholders’ equity excluding merger costs;
• Efficiency ratio excluding merger related expenses;
• Diluted earnings per share excluding merger related costs; and
• Fully tax equivalent (“FTE”) net interest income and net interest margin on FTE basis.

The tables beginning within the “Non-GAAP Financial Measures and Reconciliations” section provide a reconciliation of each non-GAAP financial measure contained in this press release to the most comparable GAAP equivalent.

About FirstSun Capital Bancorp

FirstSun Capital Bancorp, headquartered in Denver, Colorado, is the financial holding company for Sunflower Bank, N.A., which operates as Sunflower Bank, First National 1870 and Guardian Mortgage. Sunflower Bank provides a full range of relationship-focused services to meet personal, business and wealth management financial objectives, with a branch network in five states and mortgage capabilities in 43 states. FirstSun had total consolidated assets of $7.8 billion as of September 30, 2023.

First National 1870 and Guardian Mortgage are divisions of Sunflower Bank, N.A. To learn more, visit ir.firstsuncb.com, SunflowerBank.com, FirstNational1870.com or GuardianMortgageOnline.com.

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.

Summary Data:
		As of and for the quarter ended												As of and for the nine months ended
($ in thousands, except per share amounts)		September 30, 2023				June 30, 2023				September 30, 2022				September 30, 2023				September 30, 2022
Net interest income		$	73,410			$	73,835			$	68,486			$	221,362			$	168,356
Provision for credit losses			3,890				4,422				3,750				11,672				12,450
Noninterest income			18,650				24,290				24,953				61,871				70,948
Noninterest expense			56,176				58,043				55,548				170,485				183,683
Income before income taxes			31,994				35,660				34,141				101,076				43,171
Provision for income taxes			6,762				7,654				7,628				21,557				8,559
Net income			25,232				28,006				26,513				79,519				34,612
Net income, excluding merger costs (1)			25,232				28,006				26,513				79,519				51,643
Diluted earnings per share		$	1.00			$	1.11			$	1.04			$	3.13			$	1.49
Diluted earnings per share, excluding merger costs (1)		$	1.00			$	1.11			$	1.04			$	3.13			$	2.22
Return on average total assets			1.34	%			1.49	%			1.52	%			1.42	%			0.70	%
Return on average total assets, excluding merger costs (1)			1.34	%			1.49	%			1.52	%			1.42	%			1.04	%
Return on average stockholders' equity			12.03	%			13.54	%			14.50	%			12.97	%			6.90	%
Return on average stockholders’ equity, excluding merger costs (1)			12.03	%			13.54	%			14.50	%			12.97	%			10.29	%
Net interest margin			4.23	%			4.24	%			4.26	%			4.28	%			3.66	%
Net interest margin (FTE basis) (1)			4.30	%			4.32	%			4.31	%			4.36	%			3.75	%
Efficiency ratio			61.02	%			59.15	%			59.45	%			60.19	%			76.76	%
Efficiency ratio, excluding merger related expenses (1)			61.02	%			59.15	%			59.45	%			60.19	%			68.92	%
Noninterest income to total revenue (2)			20.3	%			24.8	%			26.7	%			21.8	%			29.6	%
Total assets		$	7,756,875			$	7,797,344			$	7,052,917			$	7,756,875			$	7,052,917
Total loans held-for-sale			51,465				56,350				67,535				51,465				67,535
Total loans held-for-investment			6,179,522				6,155,090				5,556,686				6,179,522				5,556,686
Total deposits			6,339,847				6,150,418				5,760,418				6,339,847				5,760,418
Total stockholders' equity			843,719				823,635				750,653				843,719				750,653
Loan to deposit ratio			97.5	%			100.1	%			96.5	%			97.5	%			96.5	%
Book value per common share		$	33.83			$	33.02			$	30.14			$	33.83			$	30.14
Tangible book value per common share (1)		$	29.60			$	28.76			$	25.67			$	29.60			$	25.67

(1)		Represents a non-GAAP financial measure. See the tables within the “Non-GAAP Financial Measures and Reconciliations” section for a reconciliation of each non-GAAP measure to the most comparable GAAP equivalent.
(2)		Total revenue is net interest income plus noninterest income.

Condensed Consolidated Statements of Income (Unaudited):
		As of and for the quarter ended												As of and for the nine months ended
($ in thousands, except per share amounts)		September 30, 2023				June 30, 2023				September 30, 2022				September 30, 2023				September 30, 2022
Total interest income		$	106,775			$	102,032			$	73,763			$	303,710			$	181,652
Total interest expense			33,365				28,197				5,277				82,348				13,296
Net interest income			73,410				73,835				68,486				221,362				168,356
Provision for credit losses			3,890				4,422				3,750				11,672				12,450
Net interest income after provision for credit losses			69,520				69,413				64,736				209,690				155,906
Noninterest income:
Service charges on deposits			5,475				5,358				4,807				15,848				13,111
Credit and debit card fees			2,996				3,057				3,103				9,034				8,508
Trust and investment advisory fees			1,398				1,478				1,552				4,337				5,408
Mortgage banking income, net			7,413				11,659				13,785				26,501				40,017
Other noninterest income			1,368				2,738				1,706				6,151				3,904
Total noninterest income			18,650				24,290				24,953				61,871				70,948
Noninterest expense:
Salaries and benefits			33,968				34,056				32,508				103,073				101,981
Occupancy and equipment			8,216				7,948				8,216				24,338				22,802
Amortization of intangible assets			899				2,050				935				3,993				2,197
Merger related expenses			—				—				—				—				18,751
Other noninterest expenses			13,093				13,989				13,889				39,081				37,952
Total noninterest expense			56,176				58,043				55,548				170,485				183,683
Income before income taxes			31,994				35,660				34,141				101,076				43,171
Provision for income taxes			6,762				7,654				7,628				21,557				8,559
Net income		$	25,232			$	28,006			$	26,513			$	79,519			$	34,612
Earnings per share - basic		$	1.01			$	1.12			$	1.07			$	3.19			$	1.53
Earnings per share - diluted		$	1.00			$	1.11			$	1.04			$	3.13			$	1.49

Condensed Consolidated Balance Sheets as of (Unaudited):
($ in thousands)		September 30, 2023				June 30, 2023				September 30, 2022
Assets
Cash and cash equivalents		$	443,887			$	492,735			$	325,039
Securities available-for-sale, at fair value			495,992				515,956				551,165
Securities held-to-maturity			37,410				37,883				39,148
Loans held-for-sale, at fair value			51,465				56,350				67,535
Loans			6,179,522				6,155,090				5,556,686
Allowance for credit losses			(78,666	)			(77,362	)			(59,678	)
Loans, net			6,100,856				6,077,728				5,497,008
Mortgage servicing rights, at fair value			81,036				78,390				73,850
Premises and equipment, net			83,733				84,483				88,490
Other real estate owned and foreclosed assets, net			8,395				10,139				5,391
Goodwill			93,483				93,483				93,483
Intangible assets, net			11,813				12,712				17,825
All other assets			348,805				337,485				293,983
Total assets		$	7,756,875			$	7,797,344			$	7,052,917
Liabilities and Stockholders' Equity
Liabilities:
Deposits:
Noninterest-bearing demand deposit accounts		$	1,610,650			$	1,667,247			$	1,946,215
Interest-bearing deposit accounts:
Interest-bearing demand accounts			440,845				379,779				160,082
Savings and money market accounts			2,476,097				2,441,349				3,008,433
NOW accounts			35,686				48,270				46,128
Certificate of deposit accounts			1,776,569				1,613,773				599,560
Total deposits			6,339,847				6,150,418				5,760,418
Securities sold under agreements to repurchase			25,868				32,861				51,256
Federal Home Loan Bank advances			330,000				570,585				310,872
Other borrowings			75,180				80,511				80,097
Other liabilities			142,261				139,334				99,621
Total liabilities			6,913,156				6,973,709				6,302,264
Stockholders' equity:
Preferred stock			—				—				—
Common stock			2				2				2
Additional paid-in capital			462,507				461,856				460,530
Retained earnings			433,508				408,276				333,227
Accumulated other comprehensive loss, net			(52,298	)			(46,499	)			(43,106	)
Total stockholders' equity			843,719				823,635				750,653
Total liabilities and stockholders' equity		$	7,756,875			$	7,797,344			$	7,052,917

Share Data:
		As of and for the quarter ended									As of and for the nine months ended
		September 30, 2023			June 30, 2023			September 30, 2022			September 30, 2023			September 30, 2022
Weighted average common shares outstanding, basic			24,942,389			24,933,664			24,877,607			24,933,168			22,685,496
Weighted average common shares outstanding, diluted			25,357,807			25,206,359			25,494,315			25,365,297			23,281,933
Period end common shares outstanding			24,942,645			24,941,468			24,906,032			24,942,645			24,906,032
Book value per common share		$	33.83		$	33.02		$	30.14		$	33.83		$	30.14
Tangible book value per common share (1)		$	29.60		$	28.76		$	25.67		$	29.60		$	25.67

Consolidated Capital Ratios as of:
		September 30, 2023			June 30, 2023			September 30, 2022
Stockholders' equity to total assets		10.88	%		10.56	%		10.64	%
Tangible common stockholders' equity to tangible assets (1)		9.65	%		9.33	%		9.21	%
Tangible common stockholders' equity to tangible assets reflecting net unrealized losses on HTM securities, net of tax (1) (2)		9.59	%		9.28	%		9.16	%
Tier 1 leverage ratio		10.37	%		10.00	%		9.55	%
Common equity tier 1 risk-based capital ratio		10.79	%		10.40	%		9.99	%
Tier 1 risk-based capital ratio		10.79	%		10.40	%		9.99	%
Total risk-based capital ratio		12.93	%		12.52	%		12.06	%

(1)		Represents a non-GAAP financial measure. See the tables within the “Non-GAAP Financial Measures and Reconciliations” section for a reconciliation of each non-GAAP measure to the most comparable GAAP equivalent.
(2)		Tangible common stockholders’ equity and tangible assets have been adjusted to reflect net unrealized losses on held-to-maturity securities, net of tax.

Summary of Net Interest Margin:
		For the quarter ended September 30, 2023										For the quarter ended June 30, 2023										For the quarter ended September 30, 2022
(In thousands)		Average Balance			Interest				Average Yield/Rate			Average Balance			Interest				Average Yield/Rate			Average Balance			Interest				Average Yield/Rate
Interest Earning Assets
Loans (1)			6,180,684			99,565			6.44	%			6,220,833			95,320			6.13	%			5,512,846			68,270			4.95	%
Investment securities			545,257			4,226			3.10	%			563,902			4,227			3.00	%			613,325			3,644			2.38	%
Interest-bearing cash and other assets			221,559			2,984			5.39	%			176,672			2,485			5.63	%			308,482			1,849			2.40	%
Total earning assets			6,947,500			106,775			6.15	%			6,961,407			102,032			5.86	%			6,434,653			73,763			4.59	%
Other assets			557,988										556,105										519,663
Total assets		$	7,505,488									$	7,517,512									$	6,954,316
Interest-bearing liabilities
Demand and NOW deposits		$	466,837		$	3,813			3.27	%		$	332,695		$	2,124			2.55	%		$	202,290		$	495			0.98	%
Savings deposits			439,172			680			0.62	%			448,059			491			0.44	%			506,548			227			0.18	%
Money market deposits			2,026,028			7,997			1.58	%			2,107,379			5,874			1.11	%			2,617,452			1,632			0.25	%
Certificates of deposits			1,748,515			18,406			4.21	%			1,392,847			12,240			3.52	%			593,479			920			0.62	%
Total deposits			4,680,552			30,896			2.64	%			4,280,980			20,729			1.94	%			3,919,769			3,274			0.33	%
Repurchase agreements			26,549			65			0.98	%			33,673			68			0.80	%			51,264			51			0.40	%
Total deposits and repurchase agreements			4,707,101			30,961			2.63	%			4,314,653			20,797			1.93	%			3,971,033			3,325			0.33	%
FHLB borrowings			84,332			1,139			5.40	%			472,105			6,121			5.19	%			160,310			761			1.90	%
Other long-term borrowings			78,680			1,265			6.44	%			80,440			1,279			6.36	%			80,031			1,191			5.95	%
Total interest-bearing liabilities			4,870,113			33,365			2.74	%			4,867,198			28,197			2.32	%			4,211,374			5,277			0.50	%
Noninterest-bearing deposits			1,654,090										1,694,961										1,924,055
Other liabilities			142,027										128,118										87,338
Stockholders' equity			839,258										827,235										731,549
Total liabilities and stockholders' equity		$	7,505,488									$	7,517,512									$	6,954,316
Net interest income					$	73,410									$	73,835									$	68,486
Net interest spread						3.41	%									3.54	%									4.09	%
Net interest margin						4.23	%									4.24	%									4.26	%
Net interest margin (on FTE basis) (2)						4.30	%									4.32	%									4.31	%

(1)		Includes loans held-for-investment, including nonaccrual loans, and loans held-for-sale.
(2)		Represents a non-GAAP financial measure. See the tables within the “Non-GAAP Financial Measures and Reconciliations” section for a reconciliation of each non-GAAP measure to the most comparable GAAP equivalent.

		For the nine months ended
		September 30, 2023										September 30, 2022
(In thousands)		Average Balance			Interest				Average Yield/Rate			Average Balance			Interest				Average Yield/Rate
Interest Earning Assets
Loans (1)			6,144,057			283,486			6.15	%			5,015,680			168,713			4.48	%
Investment securities			559,855			12,617			3.00	%			615,726			9,252			2.00	%
Interest-bearing cash and other assets			187,468			7,607			5.41	%			496,349			3,687			0.99	%
Total earning assets			6,891,380			303,710			5.88	%			6,127,755			181,652			3.95	%
Other assets			553,628										473,909
Total assets		$	7,445,008									$	6,601,664
Interest-bearing liabilities
Demand and NOW deposits		$	343,112		$	7,171			2.79	%		$	214,862		$	848			0.53	%
Savings deposits			452,298			1,616			0.48	%			497,240			451			0.12	%
Money market deposits			2,142,301			18,939			1.18	%			2,567,406			3,644			0.19	%
Certificates of deposits			1,407,264			38,078			3.61	%			498,753			2,077			0.56	%
Total deposits			4,344,975			65,804			2.02	%			3,778,261			7,020			0.25	%
Repurchase agreements			29,953			163			0.73	%			59,572			74			0.17	%
Total deposits and repurchase agreements			4,374,928			65,967			2.01	%			3,837,833			7,094			0.25	%
FHLB borrowings			335,485			12,576			5.00	%			128,654			1,680			1.74	%
Other long-term borrowings			79,801			3,805			6.36	%			82,768			4,522			7.28	%
Total interest-bearing liabilities			4,790,214			82,348			2.29	%			4,049,255			13,296			0.44	%
Noninterest-bearing deposits			1,705,392										1,805,982
Other liabilities			131,628										77,436
Stockholders' equity			817,774										668,991
Total liabilities and stockholders' equity		$	7,445,008									$	6,601,664
Net interest income					$	221,362									$	168,356
Net interest spread						3.59	%									3.51	%
Net interest margin						4.28	%									3.66	%
Net interest margin (on FTE basis) (2)						4.36	%									3.75	%

(1)		Includes loans held-for-investment, including nonaccrual loans, and loans held-for-sale.
(2)		Represents a non-GAAP financial measure. See the tables within the “Non-GAAP Financial Measures and Reconciliations” section for a reconciliation of each non-GAAP measure to the most comparable GAAP equivalent.

Deposits:
($ in thousands)		September 30, 2023			June 30, 2023			September 30, 2023 vs June 30, 2023 % change			September 30, 2022			September 30, 2023 vs September 30, 2022 % change
Consumer
Noninterest bearing deposit accounts		$	366,366		$	375,583		(2.45	)%		$	419,977		(12.77	)%
Interest-bearing deposit accounts:
Demand and NOW deposits			33,340			34,731		(4.01	)%			26,612		25.28	%
Savings deposits			356,890			378,193		(5.63	)%			445,956		(19.97	)%
Money market deposits			1,149,365			1,174,883		(2.17	)%			1,538,567		(25.30	)%
Certificates of deposits			1,366,255			1,095,754		24.69	%			531,400		157.10	%
Total interest-bearing deposit accounts			2,905,850			2,683,561		8.28	%			2,542,535		14.29	%
Total consumer deposits		$	3,272,216		$	3,059,144		6.97	%		$	2,962,512		10.45	%
Business
Noninterest bearing deposit accounts		$	1,244,284		$	1,291,664		(3.67	)%		$	1,526,238		(18.47	)%
Interest-bearing deposit accounts:
Demand and NOW deposits			443,191			393,318		12.68	%			179,598		146.77	%
Savings deposits			85,234			30,904		175.80	%			34,490		147.13	%
Money market deposits			859,516			832,279		3.27	%			964,386		(10.87	)%
Certificates of deposits			77,228			77,604		(0.48	)%			49,670		55.48	%
Total interest-bearing deposit accounts			1,465,169			1,334,105		9.82	%			1,228,144		19.30	%
Total business deposits		$	2,709,453		$	2,625,769		3.19	%		$	2,754,382		(1.63	)%
Wholesale deposits (1)		$	358,178		$	465,505		(23.06	)%		$	43,524		722.94	%
Total deposits		$	6,339,847		$	6,150,418		3.08	%		$	5,760,418		10.06	%

(1)		Wholesale deposits consist of brokered deposits included in our condensed consolidated balance sheets within certificates of deposits and savings and money market accounts.

Balance Sheet Ratios:
		September 30, 2023			June 30, 2023			September 30, 2022
Cash to total assets (1)		5.60	%		6.20	%		2.10	%
Loan to deposit ratio		97.5	%		100.1	%		96.5	%
Uninsured deposits to total deposits (2)		32.0	%		32.5	%		42.7	%
Uninsured and uncollateralized deposits to total deposits (2)		25.4	%		24.1	%		31.8	%
Wholesale deposits and borrowings to total liabilities (3)		10.0	%		14.9	%		5.6	%

(1)		Cash consists of cash and amounts due from banks and interest-bearing deposits with other financial institutions.
(2)		Uninsured deposits and uninsured and uncollateralized deposits are reported for our wholly-owned subsidiary Sunflower Bank, N.A.
(3)		Wholesale deposits consist of brokered deposits included in our condensed consolidated balance sheets within certificates of deposits and savings and money market accounts. Wholesale borrowings consist of FHLB overnight and term advances.

Loan Portfolio:
($ in thousands)		September 30, 2023			June 30, 2023			September 30, 2023 vs June 30, 2023 % change			September 30, 2022			September 30, 2023 vs September 30, 2022 % change
Commercial and industrial		$	2,459,358		$	2,474,531		(0.6	)%		$	2,049,294		20.0	%
Commercial real estate:
Non-owner occupied			767,135			723,365		6.1	%			821,262		(6.6	)%
Owner occupied			631,352			643,191		(1.8	)%			657,853		(4.0	)%
Construction and land			329,433			316,399		4.1	%			293,201		12.4	%
Multifamily			114,535			100,464		14.0	%			90,380		26.7	%
Total commercial real estate			1,842,455			1,783,419		3.3	%			1,862,696		(1.1	)%
Residential real estate			1,059,074			1,082,991		(2.2	)%			912,776		16.0	%
Public Finance			602,844			611,748		(1.5	)%			591,171		2.0	%
Consumer			37,681			39,909		(5.6	)%			43,146		(12.7	)%
Other			178,110			162,492		9.6	%			97,603		82.5	%
Total loans, net of deferred costs, fees, premiums, and discounts		$	6,179,522		$	6,155,090		0.4	%		$	5,556,686		11.2	%

Asset Quality:
		As of and for the quarter ended												As of and for the nine months ended
($ in thousands)		September 30, 2023				June 30, 2023				September 30, 2022				September 30, 2023				September 30, 2022
Net charge-offs (recoveries)		$	2,296			$	717			$	149			$	3,067			$	319
Allowance for credit losses		$	78,666			$	77,362			$	59,678			$	78,666			$	59,678
Nonperforming loans, including nonaccrual loans, and accrual loans greater than 90 days past due (1)		$	40,743			$	67,840			$	34,031			$	40,743			$	34,031
Nonperforming assets (1)		$	49,138			$	77,979			$	39,422			$	49,138			$	39,422
Ratio of net charge-offs (recoveries) to average loans outstanding			0.15	%			0.05	%			0.01	%			0.07	%			0.01	%
Allowance for credit losses to total loans outstanding			1.27	%			1.26	%			1.07	%			1.27	%			1.07	%
Allowance for credit losses to total nonperforming loans (1)			193.08	%			114.04	%			175.36	%			193.08	%			175.36	%
Nonperforming loans to total loans (1)			0.66	%			1.10	%			0.61	%			0.66	%			0.61	%
Nonperforming assets to total assets (1)			0.63	%			1.00	%			0.56	%			0.63	%			0.56	%

(1)		On January 1, 2023, we adopted ASU 2022-02, whereby we no longer recognize or account for TDRs. The loans previously classified as accrual TDRs are no longer considered nonperforming. We have adjusted prior periods to reflect this change in accounting.

Non-GAAP Financial Measures and Reconciliations:
		As of and for the quarter ended												As of and for the nine months ended
($ in thousands, except share and per share amounts)		September 30, 2023				June 30, 2023				September 30, 2022				September 30, 2023				September 30, 2022
Tangible common stockholders’ equity:
Total common stockholders' equity (GAAP)		$	843,719			$	823,635			$	750,653			$	843,719			$	750,653
Less: Goodwill and other intangible assets:
Goodwill			(93,483	)			(93,483	)			(93,483	)			(93,483	)			(93,483	)
Other intangible assets			(11,813	)			(12,712	)			(17,825	)			(11,813	)			(17,825	)
Total tangible common stockholders' equity (non-GAAP) (1)		$	738,423			$	717,440			$	639,345			$	738,423			$	639,345
Tangible assets:
Total assets (GAAP)		$	7,756,875			$	7,797,344			$	7,052,917			$	7,756,875			$	7,052,917
Less: Goodwill and other intangible assets:
Goodwill			(93,483	)			(93,483	)			(93,483	)			(93,483	)			(93,483	)
Other intangible assets			(11,813	)			(12,712	)			(17,825	)			(11,813	)			(17,825	)
Total tangible assets (non-GAAP)		$	7,651,579			$	7,691,149			$	6,941,609			$	7,651,579			$	6,941,609
Tangible common stockholders’ equity to tangible assets:
Common stockholders' equity to total assets (GAAP)			10.88	%			10.56	%			10.64	%			10.88	%			10.64	%
Less: Impact of goodwill and other intangible assets			(1.23	)%			(1.23	)%			(1.43	)%			(1.23	)%			(1.43	)%
Tangible common stockholders' equity to tangible assets (non-GAAP) (1)			9.65	%			9.33	%			9.21	%			9.65	%			9.21	%
Tangible common stockholders’ equity to tangible assets, reflecting net unrealized losses on HTM securities, net of tax:
Total tangible common stockholders' equity (non-GAAP)		$	738,423			$	717,440			$	639,345			$	738,423			$	639,345
Less: Net unrealized losses on HTM securities, net of tax			(5,001	)			(3,821	)			(3,810	)			(5,001	)			(3,810	)
Total tangible common stockholders’ equity less net unrealized losses on HTM securities, net of tax (non-GAAP)		$	733,422			$	713,619			$	635,535			$	733,422			$	635,535
Total tangible assets (non-GAAP)		$	7,651,579			$	7,691,149			$	6,941,609			$	7,651,579			$	6,941,609
Less: Net unrealized losses on HTM securities, net of tax			(5,001	)			(3,821	)			(3,810	)			(5,001	)			(3,810	)
Total tangible assets less net unrealized losses on HTM securities, net of tax (non-GAAP)		$	7,646,578			$	7,687,328			$	6,937,799			$	7,646,578			$	6,937,799
Tangible common stockholders’ equity to tangible assets (non-GAAP)			9.65	%			9.33	%			9.21	%			9.65	%			9.21	%
Less: Net unrealized losses on HTM securities, net of tax			(0.06	)%			(0.05	)%			(0.05	)%			(0.06	)%			(0.05	)%
Tangible common stockholders’ equity to tangible assets reflecting net unrealized losses on HTM securities, net of tax (non-GAAP)			9.59	%			9.28	%			9.16	%			9.59	%			9.16	%
Tangible book value per common share:
Stockholders' equity (GAAP)		$	843,719			$	823,635			$	750,653			$	843,719			$	750,653
Tangible stockholders' equity (non-GAAP) (1)		$	738,423			$	717,440			$	639,345			$	738,423			$	639,345
Total common shares outstanding			24,942,645				24,941,468				24,906,032				24,942,645				24,906,032
Book value per common share (GAAP)		$	33.83			$	33.02			$	30.14			$	33.83			$	30.14
Tangible book value per common share (non-GAAP)		$	29.60			$	28.76			$	25.67			$	29.60			$	25.67
Net income excluding merger costs:
Net income (GAAP)		$	25,232			$	28,006			$	26,513			$	79,519			$	34,612
Add: Merger costs
Merger related expenses			—				—				—				—				18,751
Income tax effect on merger related expenses			—				—				—				—				(4,083	)
Provision for loan loss on Pioneer loans marked at a premium			—				—				—				—				2,884
Income tax effect on provision for loan loss on Pioneer loans marked at a premium			—				—				—				—				(521	)
Total merger costs			—				—				—				—				17,031
Net income excluding merger costs (non-GAAP)		$	25,232			$	28,006			$	26,513			$	79,519			$	51,643
Return on average total assets excluding merger costs:
Return on average total assets (ROAA) (GAAP)			1.34	%			1.49	%			1.52	%			1.42	%			0.70	%
Add: Impact of merger costs, net of tax			—	%			—	%			—	%			—	%			0.34	%
ROAA excluding merger costs (non-GAAP)			1.34	%			1.49	%			1.52	%			1.42	%			1.04	%
Return on average stockholders’ equity excluding merger costs:
Return on average stockholders' equity (ROAE) (GAAP)			12.03	%			13.54	%			14.50	%			12.97	%			6.90	%
Add: Impact of merger costs, net of tax			—	%			—	%			—	%			—	%			3.39	%
ROAE excluding merger costs (non-GAAP)			12.03	%			13.54	%			14.50	%			12.97	%			10.29	%
Efficiency ratio excluding merger related expenses:
Efficiency ratio (GAAP)			61.02	%			59.15	%			59.45	%			60.19	%			76.76	%
Less: Impact of merger related expenses			—	%			—	%			—	%			—	%			(7.84	)%
Efficiency ratio excluding merger related expenses (non-GAAP)			61.02	%			59.15	%			59.45	%			60.19	%			68.92	%
Diluted earnings per share excluding merger costs:
Diluted earnings per share (GAAP)		$	1.00			$	1.11			$	1.04			$	3.13			$	1.49
Add: Impact of merger costs, net of tax			—				—				—				—				0.73
Diluted earnings per share excluding merger costs (non-GAAP)		$	1.00			$	1.11			$	1.04			$	3.13			$	2.22
Fully tax equivalent (“FTE”) net interest income and net interest margin on FTE basis:
Net interest income (GAAP)		$	73,410			$	73,835			$	68,486			$	221,362			$	168,356
Gross income effect of tax exempt income			1,286				1,288				1,236				3,816				3,841
FTE net interest income (non-GAAP)		$	74,696			$	75,123			$	69,722			$	225,178			$	172,197
Average earning assets		$	6,947,500			$	6,961,407			$	6,434,653			$	6,891,380			$	6,127,755
Net interest margin			4.23	%			4.24	%			4.26	%			4.28	%			3.66	%
Net interest margin on FTE basis (non-GAAP)			4.30	%			4.32	%			4.31	%			4.36	%			3.75	%

(1)

For all periods presented tangible stockholders’ equity is the same as tangible common stockholders’ equity.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20231026582779/en/

Investor Relations:

Kelly C. Rackley

Corporate Secretary & Stockholder Relations Manager

303.962.0150 | stockholder.relations@sunflowerbank.com

Source: FirstSun Capital Bancorp

FAQ

What was FirstSun Capital Bancorp's net income for Q3 2023?

FirstSun Capital Bancorp reported net income of $25.2 million for the third quarter of 2023.

What was the company's net interest margin in Q3 2023?

FirstSun Capital Bancorp's net interest margin remained stable at 4.23% in Q3 2023.

How much was the average deposit growth in Q3 2023?

FirstSun Capital Bancorp experienced average deposit growth of 24.0% annualized in Q3 2023.

Are the company's capital ratios strong?

Yes, FirstSun Capital Bancorp's capital ratios remain strong and above 'well-capitalized' thresholds.

Did the company's net income increase or decrease compared to the same period last year?

FirstSun Capital Bancorp's net income for Q3 2023 decreased to $25.2 million from $26.5 million in the same period last year.