FirstSun Capital Bancorp Reports Fourth Quarter and Full Year 2023 Results

FirstSun Capital Bancorp (“FirstSun”) (OTCQX: FSUN) reported net income of $24.0 million for the fourth quarter of 2023 compared to net income of $24.6 million for the fourth quarter of 2022. Earnings per diluted share were $0.94 for the fourth quarter of 2023 compared to $0.96 for the fourth quarter of 2022.

Neal Arnold, FirstSun’s President and Chief Executive Officer, commented, “We are pleased to deliver another strong quarter of earnings driven by our well diversified business mix and the continued economic strength of the Southwest region. Highlights this quarter include a net interest margin of 4.08%, along with growth in both deposits and loans. We believe our performance amidst the difficult banking environment continues to position us uniquely amongst our peers. Our consistent focus on our C&I and consumer businesses as well as our service fee businesses has enabled us to continue to deliver strong, sustainable performance and ultimately a record earnings year for fiscal 2023. I want to thank all of our hard-working team members across all of our markets as their dedication to customer service has enabled us to deliver our record performance for the year.

We are also very excited about the strategic merger we announced last week with HomeStreet, Inc. We believe they further our ability to diversify our business and to deliver strong shareholder value. We look forward to expanding our geographic presence in the Southern California and Pacific Northwest markets. We will work together to thoughtfully integrate our two organizations.”

Fourth Quarter 2023 Results

Net income totaled $24.0 million, or $0.94 per diluted share, during the fourth quarter of 2023, compared to $25.2 million, or $1.00 per diluted share, during the prior quarter. The return on average total assets was 1.26% in the fourth quarter of 2023, compared to 1.34% in the prior quarter, and the return on average stockholders’ equity was 11.19% in the fourth quarter of 2023, compared to 12.03% in the prior quarter.

Net Interest Income and Net Interest Margin

Net interest income totaled $72.1 million during the fourth quarter of 2023, a decrease of $1.3 million compared to the prior quarter. Our net interest margin decreased 15 basis points to 4.08% compared to the prior quarter. Results in the fourth quarter of 2023, compared to the prior quarter, were driven by an increase of 27 basis points in the cost of interest-bearing liabilities, partially offset by an increase of seven basis points in yield on earning assets.

Average loans, including loans held-for-sale, increased by $99.7 million in the fourth quarter of 2023, compared to the prior quarter. Loan yield increased by seven basis points to 6.51% in the fourth quarter of 2023, compared to the prior quarter, primarily due to higher yields on new originations as compared to amortizing and maturing balances. Average interest-bearing deposits increased $176.8 million in the fourth quarter of 2023, compared to the prior quarter. Total cost of deposits increased by 29 basis points to 2.93% in the fourth 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 $10.2 million in the fourth quarter of 2023, compared to the prior quarter. The cost of FHLB borrowings increased by 24 basis points to 5.64% in the fourth 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 $6.6 million during the fourth quarter of 2023, an increase of $2.7 million from $3.9 million in the prior quarter, primarily due to loan growth and a charge-off on a specific customer relationship in our loan portfolio.

Net charge-offs during the fourth quarter of 2023 were $4.7 million, primarily due to deterioration on a specific customer relationship in our loan portfolio, resulting in an annualized ratio of net charge-offs to average loans of 0.30%, compared to net charge-offs of $2.3 million, or an annualized ratio of net-charge offs to average loans of 0.15% in the prior quarter. The allowance for credit losses as a percentage of total loans was 1.28% at December 31, 2023, an increase of one basis point from the prior quarter.

The ratio of nonperforming assets to total assets was 0.85% at December 31, 2023, compared to 0.63% at September 30, 2023.

Noninterest Income

Noninterest income totaled $17.2 million during the fourth quarter of 2023, a decrease of $1.4 million from the prior quarter. Mortgage banking income decreased $2.5 million during the fourth quarter of 2023, primarily due to a decrease in the fair value of our mortgage servicing rights portfolio, net of derivative activity. Other noninterest income increased $1.2 million during the fourth quarter of 2023, primarily due to a gain on the disposal of an other real estate owned property in the quarter. Noninterest income as a percentage of total revenue¹ was 19.3%, a decrease of 1.0% from the prior quarter.

Noninterest Expense

Noninterest expense totaled $52.3 million during the fourth quarter of 2023, a decrease of $3.9 million from the prior quarter, primarily due to a decrease in salary and employee benefits of $3.8 million as a result of lower levels of variable compensation.

The efficiency ratio for the fourth quarter of 2023 was 58.58% compared to 61.02% in the prior quarter.

Tax Rate

The effective tax rate was 21.0% in the fourth quarter of 2023, compared to 21.1% in the prior quarter.

Loans

Loans were $6.3 billion at December 31, 2023, compared to $6.2 billion at September 30, 2023, an increase of $87.6 million in the fourth quarter of 2023, or 5.7% on an annualized basis.

Deposits

Average deposits were $6.5 billion for the fourth quarter of 2023, compared to $6.3 billion for the prior quarter, an increase of $120.4 million in the fourth quarter of 2023, or 7.6% on an annualized basis. Noninterest-bearing deposit accounts represented 24.0% of total deposits at December 31, 2023 and the loan-to-deposit ratio was 98.3% at December 31, 2023.

The ratio of total uninsured deposits to total deposits was estimated to be 31.2% at December 31, 2023, compared to 32.0% at September 30, 2023. The ratio of total uninsured and uncollateralized deposits to total deposits was estimated to be 25.1% at December 31, 2023, compared to 25.4% at September 30, 2023.²

Capital

Capital ratios remain strong and above “well-capitalized” thresholds. As of December 31, 2023, our common equity tier 1 risk-based capital ratio was 11.10%, total risk-based capital ratio was 13.25% and tier 1 leverage ratio was 10.52%. Book value per common share was $35.14 at December 31, 2023, an increase of $1.31 from September 30, 2023. Tangible book value per common share, a non-GAAP financial measure, was $30.96 at December 31, 2023, an increase of $1.36 from September 30, 2023.

Full Year 2023 Results

Full Year Highlights:

• Net income of $103.5 million, $4.08 per diluted share
• Net interest margin of 4.23%
• Return on average total assets of 1.38%
• Return on average stockholders’ equity of 12.50%
• Average deposit growth of 9.65%
• Loan growth of 6.01%
• 21.2% fee revenue to total revenue¹

Net income totaled $103.5 million, or $4.08 per diluted share, in 2023, compared to $59.2 million, or $2.48 per diluted share, in 2022. Net income included merger costs, net of tax, of $17.0 million in 2022. The return on average total assets was 1.38% in 2023, compared to 0.88% in 2022, and the return on average stockholders’ equity was 12.50% in 2023, compared to 8.55% in 2022. The unfavorable impact in 2022 of merger costs, net of tax, to return on average total assets was 0.25% and to return on average stockholders’ equity was 2.46%.

Net Interest Income and Net Interest Margin

Net interest income totaled $293.4 million in 2023, an increase of $51.8 million compared to 2022. Our net interest margin increased 36 basis points to 4.23% in 2023, compared to 2022. Results in 2023, compared to the prior year, were driven by an increase of 169 basis points in yield on earning assets, partially offset by an increase of 187 basis points in the cost of interest-bearing liabilities.

Average loans, including loans held-for-sale, increased by $962.2 million in 2023, compared to 2022. Loan yield increased by 149 basis points to 6.24% in 2023, compared to 2022, 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 deposits increased $698.8 million in 2023, compared to 2022. Total cost of deposits increased by 192 basis points to 2.27% in 2023, compared to 2022, primarily due to increased pricing on our deposit products as a result of the rising interest rate environment. Average FHLB borrowings increased $54.4 million in 2023, compared to 2022. The cost of FHLB borrowings increased by 216 basis points to 5.05% in 2023, compared to 2022, primarily due to the rising interest rate environment.

Asset Quality and Provision for Credit Losses

The provision for credit losses totaled $18.2 million in 2023, an increase of $0.2 million compared to the prior year or an increase of $3.1 million when excluding the $2.9 million merger related provision for credit losses in 2022 related to certain non-impaired loans acquired at a premium valuation. The adjusted increase of $3.1 million is primarily due to loan growth and charge-offs on two specific customer relationships in our loan portfolio.

Net charge-offs in 2023 were $7.8 million, or a ratio of net charge-offs to average loans of 0.13%, compared to net (recoveries) of $(0.3) million, or a ratio of net (recoveries) to average loans of (0.01)%, in 2022. The increase in net charge-offs (recoveries) in 2023 is primarily due to deterioration on two specific customer relationships in our loan portfolio.

The allowance for credit losses as a percentage of total loans was 1.28% at December 31, 2023, compared to 1.12% at December 31, 2022.

On January 1, 2023, we adopted ASU 2016-13, Financial Instruments - Credit Losses (Topic 326), which increased our allowance for credit losses as a percentage of total loans to 1.20% at adoption, or an eight basis point increase from 1.12% at December 31, 2022. The increase in our allowance for credit losses was a result of changing from an “incurred loss” model, which encompasses allowances for current known and incurred losses within the portfolio, to an “expected loss” model, which encompasses allowances for losses expected to be recognized over the life of the portfolio.

The ratio of nonperforming assets to total assets was 0.85% at December 31, 2023, compared to 0.48% at December 31, 2022.

Noninterest Income

Noninterest income totaled $79.1 million during 2023, a decrease of $10.5 million from 2022. Mortgage banking income decreased $14.9 million in 2023, primarily due to a decrease in net sale gains and fees from mortgage loan originations as the volume of mortgage loan sales decreased from the prior year. Service charges on deposits increased $3.1 million in 2023, primarily due to growth in treasury management services provided to our business customers, as compared to 2022. Noninterest income as a percentage of total revenue¹ totaled 21.2% in 2023, compared to 27.0% in 2022.

Noninterest Expense

Noninterest expense totaled $222.8 million in 2023, a decrease of $16.3 million from 2022, primarily due to merger costs of $18.8 million in 2022. The efficiency ratio for 2023 was 59.81% compared to 72.20% in 2022. The unfavorable impact of merger expenses to the efficiency ratio was 5.66% in 2022.

Tax Rate

The effective tax rate was 21.3% in 2023, compared to 20.0% in 2022.

Loans

Loans were $6.3 billion at December 31, 2023 compared to $5.9 billion at December 31, 2022, an increase of $355.3 million or 6.01%.

Deposits

Average deposits were $6.2 billion for the year ending December 31, 2023, compared to $5.6 billion for the prior year, an increase of $541.5 million or 9.65%. Noninterest-bearing deposit accounts represented 24.0% of total deposits at December 31, 2023 and the loan-to-deposit ratio was 98.3% at December 31, 2023.

The ratio of total uninsured deposits to total deposits was estimated to be 31.2% at December 31, 2023. The ratio of total uninsured and uncollateralized deposits to total deposits was estimated to be 25.1% at December 31, 2023.²

Capital

Capital ratios remain strong and above “well-capitalized” thresholds. As of December 31, 2023, our common equity tier 1 risk-based capital ratio was 11.10%, total risk-based capital ratio was 13.25% and tier 1 leverage ratio was 10.52%. Book value per common share was $35.14 at December 31, 2023, an increase of $4.06 from December 31, 2022. Tangible book value per common share, a non-GAAP financial measure, was $30.96 at December 31, 2023, an increase of $4.27 from December 31, 2022.

Non-GAAP Financial Measures

This press release 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 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 $7.9 billion as of December 31, 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.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This communication contains “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. In general, forward-looking statements can be identified through use of words such as “may,” “believe,” “expect,” “anticipate,” “intend,” “will,” “should,” “plan,” “estimate,” “predict,” “continue,” “forward” and “potential” or the negative of these terms or other comparable terminology, and include statements related to the expected timing, completion and benefits of the proposed merger with HomeStreet, Inc. (“HomeStreet”) (the “Merger”). Forward-looking statements are not historical facts and represent management’s beliefs, based upon information available at the time the statements are made, with regard to the matters addressed; they are not guarantees of future performance. Actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. Forward-looking statements are subject to numerous assumptions, risks and uncertainties that change over time and could cause actual results or financial conditions to differ materially from those expressed in or implied by such statements.

Factors that could cause or contribute to such differences include, but are not limited to, (1) expected cost savings, synergies and other financial benefits from the Merger not being realized within the expected time frames and costs or difficulties relating to integration matters being greater than expected, (2) the ability of HomeStreet to obtain the necessary approval by its shareholders, (3) the ability of FirstSun and HomeStreet to obtain required governmental approvals of the Merger, and (4) the failure of the closing conditions in the merger agreement with HomeStreet to be satisfied, or any unexpected delay in closing the Merger. Further information regarding additional factors that could affect the forward-looking statements can be found in the cautionary language included under the headings “Cautionary Note Regarding Forward-Looking Statements” (in the case of FirstSun), “Forward-Looking Statements” (in the case of HomeStreet), and “Risk Factors” in FirstSun’s and HomeStreet’s Annual Reports on Form 10-K for the year ended December 31, 2022, and other documents subsequently filed by FirstSun and HomeStreet with the SEC.

Summary Data:
	As of and for the quarter ended												As of and for the year ended
($ in thousands, except per share amounts)	December 31, 2023				September 30, 2023				December 31, 2022				December 31, 2023				December 31, 2022
Net interest income	$	72,069			$	73,410			$	73,276			$	293,431			$	241,632
Provision for credit losses		6,575				3,890				5,600				18,247				18,050
Noninterest income		17,221				18,650				18,618				79,092				89,566
Noninterest expense		52,308				56,176				55,443				222,793				239,126
Income before income taxes		30,407				31,994				30,851				131,483				74,022
Provision for income taxes		6,393				6,762				6,281				27,950				14,840
Net income		24,014				25,232				24,570				103,533				59,182
Net income, excluding merger costs (1)		24,014				25,232				24,570				103,533				76,213
Diluted earnings per share	$	0.94			$	1.00			$	0.96			$	4.08			$	2.48
Diluted earnings per share, excluding merger costs (1)	$	0.94			$	1.00			$	0.96			$	4.08			$	3.20
Return on average total assets		1.26	%			1.34	%			1.38	%			1.38	%			0.88	%
Return on average total assets, excluding merger costs (1)		1.26	%			1.34	%			1.38	%			1.38	%			1.13	%
Return on average stockholders' equity		11.19	%			12.03	%			12.89	%			12.50	%			8.55	%
Return on average stockholders’ equity, excluding merger costs (1)		11.19	%			12.03	%			12.89	%			12.50	%			11.01	%
Net interest margin		4.08	%			4.23	%			4.45	%			4.23	%			3.87	%
Net interest margin (FTE basis) (1)		4.15	%			4.30	%			4.52	%			4.29	%			3.95	%
Efficiency ratio		58.58	%			61.02	%			60.33	%			59.81	%			72.20	%
Efficiency ratio, excluding merger related expenses (1)		58.58	%			61.02	%			60.33	%			59.81	%			66.54	%
Noninterest income to total revenue (2)		19.3	%			20.3	%			20.3	%			21.2	%			27.0	%
Total assets	$	7,879,724			$	7,756,875			$	7,430,322			$	7,879,724			$	7,430,322
Total loans held-for-sale		54,212				51,465				57,323				54,212				57,323
Total loans held-for-investment		6,267,096				6,179,522				5,911,832				6,267,096				5,911,832
Total deposits		6,374,103				6,339,847				5,765,062				6,374,103				5,765,062
Total stockholders' equity		877,197				843,719				774,536				877,197				774,536
Loan to deposit ratio		98.3	%			97.5	%			102.5	%			98.3	%			102.5	%
Book value per common share	$	35.14			$	33.83			$	31.08			$	35.14			$	31.08
Tangible book value per common share (1)	$	30.96			$	29.60			$	26.69			$	30.96			$	26.69

(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 year ended
($ in thousands, except per share amounts)	December 31, 2023				September 30, 2023				December 31, 2022				December 31, 2023				December 31, 2022
Total interest income	$	109,974			$	106,775			$	85,165			$	413,684			$	266,817
Total interest expense		37,905				33,365				11,889				120,253				25,185
Net interest income		72,069				73,410				73,276				293,431				241,632
Provision for credit losses		6,575				3,890				5,600				18,247				18,050
Net interest income after provision for credit losses		65,494				69,520				67,676				275,184				223,582
Noninterest income:
Service charges on deposits		5,497				5,475				5,100				21,345				18,211
Credit and debit card fees		2,966				2,996				3,003				12,000				11,511
Trust and investment advisory fees		1,356				1,398				1,398				5,693				6,806
Mortgage banking income, net		4,883				7,413				6,268				31,384				46,285
Other noninterest income		2,519				1,368				2,849				8,670				6,753
Total noninterest income		17,221				18,650				18,618				79,092				89,566
Noninterest expense:
Salaries and benefits		30,158				33,968				32,378				133,231				134,359
Occupancy and equipment		8,221				8,216				7,707				32,559				30,509
Amortization of intangible assets		829				899				2,018				4,822				4,215
Merger related expenses		—				—				—				—				18,751
Other noninterest expenses		13,100				13,093				13,340				52,181				51,292
Total noninterest expense		52,308				56,176				55,443				222,793				239,126
Income before income taxes		30,407				31,994				30,851				131,483				74,022
Provision for income taxes		6,393				6,762				6,281				27,950				14,840
Net income	$	24,014			$	25,232			$	24,570			$	103,533			$	59,182
Earnings per share - basic	$	0.96			$	1.01			$	0.99			$	4.15			$	2.55
Earnings per share - diluted	$	0.94			$	1.00			$	0.96			$	4.08			$	2.48

Condensed Consolidated Balance Sheets as of (Unaudited):
($ in thousands)	December 31, 2023				September 30, 2023				December 31, 2022
Assets
Cash and cash equivalents	$	479,362			$	443,887			$	343,526
Securities available-for-sale, at fair value		516,757				495,992				536,973
Securities held-to-maturity		36,983				37,410				38,901
Loans held-for-sale, at fair value		54,212				51,465				57,323
Loans		6,267,096				6,179,522				5,911,832
Allowance for credit losses		(80,398	)			(78,666	)			(65,917	)
Loans, net		6,186,698				6,100,856				5,845,915
Mortgage servicing rights, at fair value		76,701				81,036				74,097
Premises and equipment, net		84,842				83,733				87,079
Other real estate owned and foreclosed assets, net		4,100				8,395				6,358
Goodwill		93,483				93,483				93,483
Intangible assets, net		10,984				11,813				15,806
All other assets		335,602				348,805				330,861
Total assets	$	7,879,724			$	7,756,875			$	7,430,322
Liabilities and Stockholders' Equity
Liabilities:
Deposits:
Noninterest-bearing demand deposit accounts	$	1,530,506			$	1,610,650			$	1,820,490
Interest-bearing deposit accounts:
Interest-bearing demand accounts		534,540				440,845				212,357
Savings and money market accounts		2,446,632				2,476,097				2,759,969
NOW accounts		56,819				35,686				50,224
Certificate of deposit accounts		1,805,606				1,776,569				922,022
Total deposits		6,374,103				6,339,847				5,765,062
Securities sold under agreements to repurchase		24,693				25,868				36,721
Federal Home Loan Bank advances		389,468				330,000				643,885
Other borrowings		75,313				75,180				80,235
Other liabilities		138,950				142,261				129,883
Total liabilities		7,002,527				6,913,156				6,655,786
Stockholders' equity:
Preferred stock		—				—				—
Common stock		2				2				2
Additional paid-in capital		462,680				462,507				460,720
Retained earnings		457,522				433,508				357,797
Accumulated other comprehensive loss, net		(43,007	)			(52,298	)			(43,983	)
Total stockholders' equity		877,197				843,719				774,536
Total liabilities and stockholders' equity	$	7,879,724			$	7,756,875			$	7,430,322

Share Data:
	As of and for the quarter ended												As of and for the year ended
	December 31, 2023				September 30, 2023				December 31, 2022				December 31, 2023				December 31, 2022
Weighted average common shares outstanding, basic		24,953,764				24,942,389				24,907,643				24,938,359				23,245,598
Weighted average common shares outstanding, diluted		25,472,017				25,357,807				25,525,026				25,387,196				23,838,471
Period end common shares outstanding		24,960,639				24,942,645				24,920,984				24,960,639				24,920,984
Book value per common share	$	35.14			$	33.83			$	31.08			$	35.14			$	31.08
Tangible book value per common share (1)	$	30.96			$	29.60			$	26.69			$	30.96			$	26.69

Consolidated Capital Ratios as of:
	December 31, 2023			September 30, 2023			December 31, 2022
Stockholders' equity to total assets	11.13	%		10.88	%		10.42	%
Tangible common stockholders' equity to tangible assets (1)	9.94	%		9.65	%		9.09	%
Tangible common stockholders' equity to tangible assets reflecting net unrealized losses on HTM securities, net of tax (1) (2)	9.90	%		9.59	%		9.03	%
Tier 1 leverage ratio	10.52	%		10.37	%		9.71	%
Common equity tier 1 risk-based capital ratio	11.10	%		10.79	%		9.94	%
Tier 1 risk-based capital ratio	11.10	%		10.79	%		9.94	%
Total risk-based capital ratio	13.25	%		12.93	%		11.99	%

(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 December 31, 2023											For the quarter ended September 30, 2023											For the quarter ended December 31, 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)			6,280,362				102,151			6.51	%			6,180,684				99,565			6.44	%			5,811,271				79,275			5.46	%
Investment securities			538,348				4,415			3.28	%			545,257				4,226			3.10	%			573,592				3,933			2.74	%
Interest-bearing cash and other assets			247,978				3,408			5.50	%			221,559				2,984			5.39	%			204,964				1,957			3.82	%
Total earning assets			7,066,688				109,974			6.22	%			6,947,500				106,775			6.15	%			6,589,827				85,165			5.17	%
Other assets			563,368											557,988											553,870
Total assets		$	7,630,056										$	7,505,488										$	7,143,697
Interest-bearing liabilities
Demand and NOW deposits		$	510,982			$	4,403			3.45	%		$	466,837			$	3,813			3.27	%		$	213,491			$	927			1.74	%
Savings deposits			457,679				1,060			0.93	%			439,172				680			0.62	%			492,837				348			0.28	%
Money market deposits			2,063,383				9,362			1.82	%			2,026,028				7,997			1.58	%			2,412,289				3,126			0.52	%
Certificates of deposits			1,825,325				20,726			4.54	%			1,748,515				18,406			4.21	%			647,819				1,733			1.07	%
Total deposits			4,857,369				35,551			2.93	%			4,680,552				30,896			2.64	%			3,766,436				6,134			0.65	%
Repurchase agreements			23,457				62			1.06	%			26,549				65			0.98	%			38,795				45			0.46	%
Total deposits and repurchase agreements			4,880,826				35,613			2.92	%			4,707,101				30,961			2.63	%			3,805,231				6,179			0.65	%
FHLB borrowings			74,146				1,045			5.64	%			84,332				1,139			5.40	%			471,880				4,477			3.80	%
Other long-term borrowings			75,249				1,247			6.62	%			78,680				1,265			6.44	%			80,162				1,233			6.15	%
Total interest-bearing liabilities			5,030,221				37,905			3.01	%			4,870,113				33,365			2.74	%			4,357,273				11,889			1.09	%
Noninterest-bearing deposits			1,597,672											1,654,090											1,923,401
Other liabilities			143,416											142,027											100,671
Stockholders' equity			858,747											839,258											762,352
Total liabilities and stockholders' equity		$	7,630,056										$	7,505,488										$	7,143,697
Net interest income						$	72,069										$	73,410										$	73,276
Net interest spread							3.21	%										3.41	%										4.08	%
Net interest margin							4.08	%										4.23	%										4.45	%
Net interest margin (on FTE basis) (2)							4.15	%										4.30	%										4.52	%

(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 year ended
		December 31, 2023											December 31, 2022
(In thousands)		Average Balance				Interest				Average Yield/Rate			Average Balance				Interest				Average Yield/Rate
Interest Earning Assets
Loans (1)			6,178,414				385,637			6.24	%			5,216,212				247,988			4.75	%
Investment securities			554,433				17,032			3.07	%			605,119				13,185			2.18	%
Interest-bearing cash and other assets			202,720				11,015			5.43	%			422,890				5,644			1.33	%
Total earning assets			6,935,567				413,684			5.96	%			6,244,221				266,817			4.27	%
Other assets			556,083											494,065
Total assets		$	7,491,650										$	6,738,286
Interest-bearing liabilities
Demand and NOW deposits		$	385,424			$	11,574			3.00	%		$	214,516			$	1,775			0.83	%
Savings deposits			453,654				2,676			0.59	%			496,131				799			0.16	%
Money market deposits			2,122,410				28,301			1.33	%			2,528,308				6,770			0.27	%
Certificates of deposits			1,512,638				58,804			3.89	%			536,325				3,810			0.71	%
Total deposits			4,474,126				101,355			2.27	%			3,775,280				13,154			0.35	%
Repurchase agreements			28,316				225			0.80	%			54,335				119			0.22	%
Total deposits and repurchase agreements			4,502,442				101,580			2.26	%			3,829,615				13,273			0.35	%
FHLB borrowings			269,613				13,621			5.05	%			215,166				6,221			2.89	%
Other long-term borrowings			78,654				5,052			6.42	%			82,111				5,691			6.93	%
Total interest-bearing liabilities			4,850,709				120,253			2.48	%			4,126,892				25,185			0.61	%
Noninterest-bearing deposits			1,678,240											1,835,578
Other liabilities			134,599											83,292
Stockholders' equity			828,102											692,524
Total liabilities and stockholders' equity		$	7,491,650										$	6,738,286
Net interest income						$	293,431										$	241,632
Net interest spread							3.48	%										3.66	%
Net interest margin							4.23	%										3.87	%
Net interest margin (on FTE basis) (2)							4.29	%										3.95	%

(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)	December 31, 2023				September 30, 2023				December 31, 2023 vs September 30, 2023 % change			December 31, 2022				December 31, 2023 vs December 31, 2022 % change
Consumer
Noninterest bearing deposit accounts	$	360,168			$	366,366			(1.69	)%		$	416,709			(13.57	)%
Interest-bearing deposit accounts:
Demand and NOW deposits		36,162				33,340			8.46	%			25,940			39.41	%
Savings deposits		343,291				356,890			(3.81	)%			418,101			(17.89	)%
Money market deposits		1,196,645				1,149,365			4.11	%			1,375,671			(13.01	)%
Certificates of deposits		1,437,537				1,366,255			5.22	%			662,831			116.88	%
Total interest-bearing deposit accounts		3,013,635				2,905,850			3.71	%			2,482,543			21.39	%
Total consumer deposits	$	3,373,803			$	3,272,216			3.10	%		$	2,899,252			16.37	%
Business
Noninterest bearing deposit accounts	$	1,170,338			$	1,244,284			(5.94	)%		$	1,403,781			(16.63	)%
Interest-bearing deposit accounts:
Demand and NOW deposits		555,197				443,191			25.27	%			236,641			134.62	%
Savings deposits		80,802				85,234			(5.20	)%			33,753			139.39	%
Money market deposits		825,811				859,516			(3.92	)%			907,379			(8.99	)%
Certificates of deposits		87,407				77,228			13.18	%			40,874			113.84	%
Total interest-bearing deposit accounts		1,549,217				1,465,169			5.74	%			1,218,647			27.13	%
Total business deposits	$	2,719,555			$	2,709,453			0.37	%		$	2,622,428			3.70	%
Wholesale deposits (1)	$	280,745			$	358,178			(21.62	)%		$	243,382			15.35	%
Total deposits	$	6,374,103			$	6,339,847			0.54	%		$	5,765,062			10.56	%

(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:
	December 31, 2023			September 30, 2023			December 31, 2022
Cash to total assets (1)	6.00	%		5.60	%		4.10	%
Loan to deposit ratio	98.3	%		97.5	%		102.6	%
Uninsured deposits to total deposits (2)	31.2	%		32.0	%		41.6	%
Uninsured and uncollateralized deposits to total deposits (2)	25.1	%		25.4	%		28.7	%
Wholesale deposits and borrowings to total liabilities (3)	9.6	%		10.0	%		13.3	%

(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. and are estimated.
(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)	December 31, 2023				September 30, 2023				December 31, 2023 vs September 30, 2023 % change			December 31, 2022				December 31, 2023 vs December 31, 2022 % change
Commercial and industrial	$	2,467,688			$	2,459,358			0.3	%		$	2,310,929			6.8	%
Commercial real estate:
Non-owner occupied		812,235				767,135			5.9	%			779,546			4.2	%
Owner occupied		635,365				631,352			0.6	%			636,272			(0.1	)%
Construction and land		345,430				329,433			4.9	%			327,817			5.4	%
Multifamily		103,066				114,535			(10.0	)%			102,068			1.0	%
Total commercial real estate		1,896,096				1,842,455			2.9	%			1,845,703			2.7	%
Residential real estate		1,110,610				1,059,074			4.9	%			1,003,931			10.6	%
Public Finance		602,913				602,844			—	%			590,284			2.1	%
Consumer		36,371				37,681			(3.5	)%			42,588			(14.6	)%
Other		153,418				178,110			(13.9	)%			118,397			29.6	%
Total loans, net of deferred costs, fees, premiums, and discounts	$	6,267,096			$	6,179,522			1.4	%		$	5,911,832			6.0	%

Asset Quality:
	As of and for the quarter ended												As of and for the year ended
($ in thousands)	December 31, 2023				September 30, 2023				December 31, 2022				December 31, 2023				December 31, 2022
Net charge-offs (recoveries)	$	4,743			$	2,296			$	(639	)		$	7,810			$	(320	)
Allowance for credit losses	$	80,398			$	78,666			$	65,917			$	80,398			$	65,917
Nonperforming loans, including nonaccrual loans, and accrual loans greater than 90 days past due (1)	$	63,143			$	40,743			$	29,067			$	63,143			$	29,067
Nonperforming assets (1)	$	67,243			$	49,138			$	35,425			$	67,243			$	35,425
Ratio of net charge-offs (recoveries) to average loans outstanding		0.30	%			0.15	%			(0.04	)%			0.13	%			(0.01	)%
Allowance for credit losses to total loans outstanding		1.28	%			1.27	%			1.12	%			1.28	%			1.12	%
Allowance for credit losses to total nonperforming loans (1)		127.33	%			193.08	%			226.78	%			127.33	%			226.78	%
Nonperforming loans to total loans (1)		1.01	%			0.66	%			0.49	%			1.01	%			0.49	%
Nonperforming assets to total assets (1)		0.85	%			0.63	%			0.48	%			0.85	%			0.48	%

(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 year ended
($ in thousands, except share and per share amounts)	December 31, 2023				September 30, 2023				December 31, 2022				December 31, 2023				December 31, 2022
Tangible common stockholders’ equity:
Total common stockholders' equity (GAAP)	$	877,197			$	843,719			$	774,536			$	877,197			$	774,536
Less: Goodwill and other intangible assets:
Goodwill		(93,483	)			(93,483	)			(93,483	)			(93,483	)			(93,483	)
Other intangible assets		(10,984	)			(11,813	)			(15,806	)			(10,984	)			(15,806	)
Total tangible common stockholders' equity (non-GAAP) (1)	$	772,730			$	738,423			$	665,247			$	772,730			$	665,247
Tangible assets:
Total assets (GAAP)	$	7,879,724			$	7,756,875			$	7,430,322			$	7,879,724			$	7,430,322
Less: Goodwill and other intangible assets:
Goodwill		(93,483	)			(93,483	)			(93,483	)			(93,483	)			(93,483	)
Other intangible assets		(10,984	)			(11,813	)			(15,806	)			(10,984	)			(15,806	)
Total tangible assets (non-GAAP)	$	7,775,257			$	7,651,579			$	7,321,033			$	7,775,257			$	7,321,033
Tangible common stockholders’ equity to tangible assets:
Common stockholders' equity to total assets (GAAP)		11.13	%			10.88	%			10.42	%			11.13	%			10.42	%
Less: Impact of goodwill and other intangible assets		(1.19	)%			(1.23	)%			(1.33	)%			(1.19	)%			(1.33	)%
Tangible common stockholders' equity to tangible assets (non-GAAP) (1)		9.94	%			9.65	%			9.09	%			9.94	%			9.09	%
Tangible common stockholders’ equity to tangible assets, reflecting net unrealized losses on HTM securities, net of tax:
Total tangible common stockholders' equity (non-GAAP)	$	772,730			$	738,423			$	665,247			$	772,730			$	665,247
Less: Net unrealized losses on HTM securities, net of tax		(3,629	)			(5,001	)			(4,295	)			(3,629	)			(4,295	)
Total tangible common stockholders’ equity less net unrealized losses on HTM securities, net of tax (non-GAAP)	$	769,101			$	733,422			$	660,952			$	769,101			$	660,952
Total tangible assets (non-GAAP)	$	7,775,257			$	7,651,579			$	7,321,033			$	7,775,257			$	7,321,033
Less: Net unrealized losses on HTM securities, net of tax		(3,629	)			(5,001	)			(4,295	)			(3,629	)			(4,295	)
Total tangible assets less net unrealized losses on HTM securities, net of tax (non-GAAP)	$	7,771,628			$	7,646,578			$	7,316,738			$	7,771,628			$	7,316,738
Tangible common stockholders’ equity to tangible assets (non-GAAP)		9.94	%			9.65	%			9.09	%			9.94	%			9.09	%
Less: Net unrealized losses on HTM securities, net of tax		(0.04	)%			(0.06	)%			(0.06	)%			(0.04	)%			(0.06	)%
Tangible common stockholders’ equity to tangible assets reflecting net unrealized losses on HTM securities, net of tax (non-GAAP)		9.90	%			9.59	%			9.03	%			9.90	%			9.03	%
Tangible book value per common share:
Stockholders' equity (GAAP)	$	877,197			$	843,719			$	774,536			$	877,197			$	774,536
Tangible stockholders' equity (non-GAAP) (1)	$	772,730			$	738,423			$	665,247			$	772,730			$	665,247
Total common shares outstanding		24,960,639				24,942,645				24,920,984				24,960,639				24,920,984
Book value per common share (GAAP)	$	35.14			$	33.83			$	31.08			$	35.14			$	31.08
Tangible book value per common share (non-GAAP)	$	30.96			$	29.60			$	26.69			$	30.96			$	26.69
Net income excluding merger costs:
Net income (GAAP)	$	24,014			$	25,232			$	24,570			$	103,533			$	59,182
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)	$	24,014			$	25,232			$	24,570			$	103,533			$	76,213
Return on average total assets excluding merger costs:
Return on average total assets (ROAA) (GAAP)		1.26	%			1.34	%			1.38	%			1.38	%			0.88	%
Add: Impact of merger costs, net of tax		—	%			—	%			—	%			—	%			0.25	%
ROAA excluding merger costs (non-GAAP)		1.26	%			1.34	%			1.38	%			1.38	%			1.13	%
Return on average stockholders’ equity excluding merger costs:
Return on average stockholders' equity (ROAE) (GAAP)		11.19	%			12.03	%			12.89	%			12.50	%			8.55	%
Add: Impact of merger costs, net of tax		—	%			—	%			—	%			—	%			2.46	%
ROAE excluding merger costs (non-GAAP)		11.19	%			12.03	%			12.89	%			12.50	%			11.01	%
Efficiency ratio excluding merger related expenses:
Efficiency ratio (GAAP)		58.58	%			61.02	%			60.33	%			59.81	%			72.20	%
Less: Impact of merger related expenses		—	%			—	%			—	%			—	%			(5.66	)%
Efficiency ratio excluding merger related expenses (non-GAAP)		58.58	%			61.02	%			60.33	%			59.81	%			66.54	%
Diluted earnings per share excluding merger costs:
Diluted earnings per share (GAAP)	$	0.94			$	1.00			$	0.96			$	4.08			$	2.48
Add: Impact of merger costs, net of tax		—				—				—				—				0.72
Diluted earnings per share excluding merger costs (non-GAAP)	$	0.94			$	1.00			$	0.96			$	4.08			$	3.20
Fully tax equivalent (“FTE”) net interest income and net interest margin on FTE basis:
Net interest income (GAAP)	$	72,069			$	73,410			$	73,276			$	293,431			$	241,632
Gross income effect of tax exempt income		1,270				1,286				1,218				5,086				5,059
FTE net interest income (non-GAAP)	$	73,339			$	74,696			$	74,494			$	298,517			$	246,691
Average earning assets	$	7,066,688			$	6,947,500			$	6,589,827			$	6,935,567			$	6,244,221
Net interest margin		4.08	%			4.23	%			4.45	%			4.23	%			3.87	%
Net interest margin on FTE basis (non-GAAP)		4.15	%			4.30	%			4.52	%			4.29	%			3.95	%

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

 

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The Firstsun Capital Bancorp Stock at the time of publication of the news with a fall of -0,14 % to 36,00USD on Nasdaq OTC stock exchange (26. Januar 2024, 23:20 Uhr).