FirstSun Capital Bancorp Reports First Quarter 2023 Results

May 1, 2023

First Quarter 2023 Highlights:

  • Net income of $26.3 million, $1.03 per diluted share
  • Net interest margin of 4.39%
  • Return on average total assets of 1.44%
  • Return on average stockholders’ equity of 13.37%
  • Loan growth of 10.1% annualized
  • 20.3% fee revenue to total revenue

FirstSun Capital Bancorp (“FirstSun”) (OTCQX: FSUN) reported net income of $26.3 million for the first quarter of 2023 compared to net income of $7.7 million for the first quarter of 2022. Earnings per diluted share were $1.03 for the first quarter of 2023 compared to $0.41 for the first quarter of 2022. Earnings for the first quarter of 2022 were impacted by $0.3 million of merger costs, net of tax, or $0.01 per diluted share.

Neal Arnold, FirstSun’s President and Chief Executive Officer, commented, “We are very pleased with our strong operating results this quarter amidst a more challenging banking environment. Highlights this quarter include net interest margin of 4.39%, steady loan growth, deposit stability and continued credit quality strength. Our industry has recently been reminded of the benefits of a well-diversified and balanced business mix as well as the importance of asset/liability management. We believe our diversified business model with its emphasis across our commercial and industrial business and consumer clients, our balanced mix of spread and service-based revenues, our geographic diversity, along with our disciplined and conservative balance sheet management provides a stable platform for responsible growth and favorable performance even in difficult times. Additionally, we believe our strong capital base, our granular and stable deposit base, our securities portfolio positioning and our overall asset sensitive profile provides us with flexibility as the competition for deposits increases in this environment.”

First Quarter 2023 Results

Net income totaled $26.3 million, or $1.03 per diluted share, during the first quarter of 2023, compared to $24.6 million, or $0.96 per diluted share, during the prior quarter. The return on average total assets was 1.44% in the first quarter of 2023, compared to 1.38% in the prior quarter, and the return on average stockholders’ equity was 13.37% in the first quarter of 2023, compared to 12.89% in the prior quarter.

Net Interest Income and Net Interest Margin

Net interest income totaled $74.1 million during the first quarter of 2023, an increase of $0.8 million compared to the prior quarter. Our net interest margin decreased 6 basis points to 4.39% compared to the prior quarter. Results in the first quarter of 2023, compared to the prior quarter, were driven by an increase of 45 basis points in yield on earning assets, offset by an increase of 71 basis points in the cost of interest-bearing liabilities.

Average loans increased by $0.2 billion in the first quarter of 2023, compared to the prior quarter. Loan yield increased by 42 basis points to 5.88% in the first 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 $0.3 billion in the first quarter of 2023, compared to the prior quarter. Total cost of deposits increased by 74 basis points to 1.39% in the first quarter of 2023, compared to the prior quarter, primarily due to an increase in deposit pricing as a result of the rising interest rate environment. Average FHLB borrowings decreased $17.8 million in the first quarter of 2023, compared to the prior quarter. The cost of FHLB borrowings increased by 88 basis points to 4.68% in the first 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 $3.4 million during the first quarter of 2023, a decrease of $2.2 million from the $5.6 million in the prior quarter, primarily due to slower loan growth and generally neutral macroeconomic indicators relative to the prior quarter.

Net charge-offs during the first quarter of 2023 were $0.1 million, resulting in a negligible ratio of net charge-offs to average loans annualized, compared to net charge-offs (recoveries) of $(0.6) million, or a ratio of net charge-offs (recoveries) to average loans of (0.04)% annualized, in the prior quarter. The allowance for credit losses as a percentage of total loans was 1.23% at March 31, 2023, or an increase of 11 basis points from the prior quarter.

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 0.51% at March 31, 2023, compared to 0.48% at December 31, 2022.

Noninterest Income

Noninterest income totaled $18.9 million during the first quarter of 2023, an increase of $0.3 million from the prior quarter. Mortgage banking income increased $1.2 million during the first quarter of 2023, primarily due to an increase in fair value of our interest rate lock commitments from the prior quarter. Total originations of mortgage loans held-for-sale increased by $9.9 million, or 5.3%, in the first quarter of 2023 from the prior quarter. Other noninterest income decreased $0.8 million during the first quarter of 2023, primarily due to a decrease in loan syndication fees and customer accommodation swap fees. Noninterest income as a percentage of total revenue totaled 20.3%, which is unchanged from the prior quarter.

Noninterest Expense

Noninterest expense totaled $56.3 million during the first quarter of 2023, an increase of $0.8 million from the prior quarter. Salaries and employee benefits increased $2.7 million from the prior quarter primarily due to higher benefit costs generally incurred in the first quarter of each year. Occupancy and equipment expenses increased $0.5 million from the prior quarter primarily due to the impact of adoption in the prior quarter of ASU 2016-02, Leases. Amortization of intangible assets decreased $1.0 million from the prior quarter. Other noninterest expenses decreased $1.3 million from the prior quarter primarily due to data processing and loan appraisal, servicing, and collection expenses as we experienced a lesser level of transaction volume in the first quarter of 2023.

The efficiency ratio for the first quarter of 2023 was 60.47% compared to 60.33% in the prior quarter.

Tax Rate

The effective tax rate was 21.4% in the first quarter of 2023, compared to 20.4% in the prior quarter.

Loans

Total loans were $6.1 billion at March 31, 2023, compared to $5.9 billion at December 31, 2022, an increase of $149.1 million in the first quarter of 2023, or 10.1% on an annualized basis, resulting primarily from growth in commercial and industrial and residential real estate balances.

Deposits

Average deposits were $5.8 billion for the first quarter of 2023, compared to $5.7 billion for the prior quarter, an increase of $0.1 billion in the first quarter of 2023, or 10.2% on an annualized basis. Noninterest-bearing deposit accounts represented 29.4% of total deposits at March 31, 2023 and the loan-to-deposit ratio was 101.1% at March 31, 2023.

Total uninsured and uncollateralized deposits were approximately 25.5% at March 31, 2023, compared to 41.6% at December 31, 2022.

Capital

Capital ratios remain strong and above “well-capitalized” thresholds. As of March 31, 2023, our common equity tier 1 risk-based capital ratio was 10.11%, total risk-based capital ratio was 12.19% and tier 1 leverage ratio was 9.86%. Book value per common share was $32.06 at March 31, 2023, an increase of $0.98 from December 31, 2022. Tangible book value per common share, a non-GAAP financial measure, was $27.72 at March 31, 2023, an increase of $1.03 from December 31, 2022.

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 $7.6 billion as of March 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.

Summary Data:

 

As of and for the quarter ended

($ in thousands, except per share amounts)

March 31,
2023

 

December 31,
2022

 

March 31,
2022

Net interest income

$

74,117

 

 

$

73,276

 

 

$

41,285

 

Provision for credit losses

 

3,360

 

 

 

5,600

 

 

 

3,700

 

Noninterest income

 

18,931

 

 

 

18,618

 

 

 

23,693

 

Noninterest expense

 

56,266

 

 

 

55,443

 

 

 

52,467

 

Income before income taxes

 

33,422

 

 

 

30,851

 

 

 

8,811

 

Provision for income taxes

 

7,141

 

 

 

6,281

 

 

 

1,142

 

Net income

 

26,281

 

 

 

24,570

 

 

 

7,669

 

Net income, excluding merger costs (1)

 

26,281

 

 

 

24,570

 

 

 

7,922

 

Diluted earnings per share

$

1.03

 

 

$

0.96

 

 

$

0.41

 

Diluted earnings per share, excluding merger costs (1)

$

1.03

 

 

$

0.96

 

 

$

0.42

 

Return on average total assets

 

1.44

%

 

 

1.38

%

 

 

0.54

%

Return on average total assets, excluding merger costs (1)

 

1.44

%

 

 

1.38

%

 

 

0.56

%

Return on average stockholders' equity

 

13.37

%

 

 

12.89

%

 

 

5.85

%

Return on average stockholders’ equity, excluding merger costs (1)

 

13.37

%

 

 

12.89

%

 

 

6.04

%

Net interest margin

 

4.39

%

 

 

4.45

%

 

 

3.08

%

Net interest margin (FTE basis) (1)

 

4.46

%

 

 

4.52

%

 

 

3.17

%

Efficiency ratio

 

60.47

%

 

 

60.33

%

 

 

80.75

%

Efficiency ratio, excluding merger related expenses (1)

 

60.47

%

 

 

60.33

%

 

 

80.28

%

Fee revenue to total revenue

 

20.35

%

 

 

20.26

%

 

 

36.46

%

Total assets

$

7,610,456

 

 

$

7,430,322

 

 

$

5,733,748

 

Total loans held-for-sale

 

66,255

 

 

 

57,323

 

 

 

57,700

 

Total loans held-for-investment

 

6,060,975

 

 

 

5,911,832

 

 

 

4,315,031

 

Total deposits

 

5,994,266

 

 

 

5,765,062

 

 

 

4,946,482

 

Total stockholders' equity

 

799,050

 

 

 

774,536

 

 

 

515,541

 

Period end loan-to-deposit ratio

 

101.11

%

 

 

102.55

%

 

 

87.23

%

Book value per common share

$

32.06

 

 

$

31.08

 

 

$

28.10

 

Tangible book value per common share (1)

$

27.72

 

 

$

26.69

 

 

$

25.87

 

(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.

Condensed Consolidated Statements of Income (Unaudited):

 

As of and for the quarter ended

($ in thousands, except per share amounts)

March 31,
2023

 

December 31,
2022

 

March 31,
2022

Total interest income

$

94,903

 

$

85,165

 

$

44,661

Total interest expense

 

20,786

 

 

11,889

 

 

3,376

Net interest income

 

74,117

 

 

73,276

 

 

41,285

Provision for credit losses

 

3,360

 

 

5,600

 

 

3,700

Net interest income after provision for credit losses

 

70,757

 

 

67,676

 

 

37,585

Noninterest income:

 

 

 

 

 

Service charges on deposits

 

5,015

 

 

5,100

 

 

3,925

Credit and debit card fees

 

2,981

 

 

3,003

 

 

2,415

Trust and investment advisory fees

 

1,461

 

 

1,398

 

 

1,947

Mortgage banking income, net

 

7,429

 

 

6,268

 

 

14,561

Other noninterest income

 

2,045

 

 

2,849

 

 

845

Total noninterest income

 

18,931

 

 

18,618

 

 

23,693

Noninterest expense:

 

 

 

 

 

Salaries and benefits

 

35,049

 

 

32,378

 

 

34,225

Occupancy and equipment

 

8,174

 

 

7,707

 

 

6,833

Amortization of intangible assets

 

1,044

 

 

2,018

 

 

327

Merger related expenses

 

 

 

 

 

303

Other noninterest expenses

 

11,999

 

 

13,340

 

 

10,779

Total noninterest expense

 

56,266

 

 

55,443

 

 

52,467

Income before income taxes

 

33,422

 

 

30,851

 

 

8,811

Provision for income taxes

 

7,141

 

 

6,281

 

 

1,142

Net income

$

26,281

 

$

24,570

 

$

7,669

Earnings per share - basic

$

1.05

 

$

0.99

 

$

0.42

Earnings per share - diluted

$

1.03

 

$

0.96

 

$

0.41

Condensed Consolidated Balance Sheets as of (Unaudited):

($ in thousands)

March 31,
2023

 

December 31,
2022

 

March 31,
2022

Assets

 

 

 

 

 

Cash and cash equivalents

$

388,349

 

 

$

343,526

 

 

$

487,689

 

Securities available-for-sale, at fair value

 

532,650

 

 

 

536,973

 

 

 

556,723

 

Securities held-to-maturity

 

38,470

 

 

 

38,901

 

 

 

16,799

 

Loans held-for-sale, at fair value

 

66,255

 

 

 

57,323

 

 

 

57,700

 

Loans

 

6,060,975

 

 

 

5,911,832

 

 

 

4,315,031

 

Allowance for credit losses

 

(74,459

)

 

 

(65,917

)

 

 

(50,509

)

Loans, net

 

5,986,516

 

 

 

5,845,915

 

 

 

4,264,522

 

Mortgage servicing rights, at fair value

 

73,424

 

 

 

74,097

 

 

 

60,481

 

Premises and equipment, net

 

86,430

 

 

 

87,079

 

 

 

52,198

 

Other real estate owned and foreclosed assets, net

 

6,358

 

 

 

6,358

 

 

 

5,162

 

Goodwill

 

93,483

 

 

 

93,483

 

 

 

33,050

 

Intangible assets, net

 

14,762

 

 

 

15,806

 

 

 

7,923

 

All other assets

 

323,759

 

 

 

330,861

 

 

 

191,501

 

Total assets

$

7,610,456

 

 

$

7,430,322

 

 

$

5,733,748

 

Liabilities and Stockholders' Equity

 

 

 

 

 

Liabilities:

 

 

 

 

 

Deposits:

 

 

 

 

 

Noninterest-bearing demand deposit accounts

$

1,764,440

 

 

$

1,820,490

 

 

$

1,662,980

 

Interest-bearing deposit accounts:

 

 

 

 

 

Interest-bearing demand accounts

 

238,658

 

 

 

212,357

 

 

 

155,388

 

Savings accounts and money market accounts

 

2,705,315

 

 

 

2,759,969

 

 

 

2,742,393

 

NOW accounts

 

45,192

 

 

 

50,224

 

 

 

74,106

 

Certificate of deposit accounts

 

1,240,661

 

 

 

922,022

 

 

 

311,615

 

Total deposits

 

5,994,266

 

 

 

5,765,062

 

 

 

4,946,482

 

Securities sold under agreements to repurchase

 

31,645

 

 

 

36,721

 

 

 

69,627

 

Federal Home Loan Bank advances

 

577,285

 

 

 

643,885

 

 

 

40,000

 

Other borrowings

 

80,373

 

 

 

80,235

 

 

 

87,799

 

Other liabilities

 

127,837

 

 

 

129,883

 

 

 

74,299

 

Total liabilities

 

6,811,406

 

 

 

6,655,786

 

 

 

5,218,207

 

Stockholders' equity:

 

 

 

 

 

Preferred stock

 

 

 

 

 

 

 

 

Common stock

 

2

 

 

 

2

 

 

 

2

 

Additional paid-in capital

 

461,174

 

 

 

460,720

 

 

 

262,071

 

Treasury stock

 

 

 

 

 

 

 

(38,148

)

Retained earnings

 

380,270

 

 

 

357,797

 

 

 

306,284

 

Accumulated other comprehensive loss, net

 

(42,396

)

 

 

(43,983

)

 

 

(14,668

)

Total stockholders' equity

 

799,050

 

 

 

774,536

 

 

 

515,541

 

Total liabilities and stockholders' equity

$

7,610,456

 

 

$

7,430,322

 

 

$

5,733,748

 

Share Data as of and for the periods ended:

 

As of and for the quarter ended

 

March 31,
2023

 

December 31,
2022

 

March 31,
2022

Weighted average common shares outstanding, basic

 

24,923,259

 

 

24,907,643

 

 

18,346,288

Weighted average common shares outstanding, diluted

 

25,487,582

 

 

25,525,026

 

 

18,899,852

Period end common shares outstanding

 

24,924,023

 

 

24,920,984

 

 

18,346,288

Book value per common share

$

32.06

 

$

31.08

 

$

28.10

Tangible book value per common share (1)

$

27.72

 

$

26.69

 

$

25.87

Consolidated Capital Ratios as of:

 

March 31,
2023

 

December 31,
2022

 

March 31,
2022

Stockholders' equity to total assets

10.50

%

 

10.42

%

 

8.99

%

Tangible common stockholders' equity to tangible assets (1)

9.21

%

 

9.09

%

 

8.34

%

Tangible common stockholders' equity to tangible assets reflecting net unrealized losses on HTM securities, net of tax (1) (2)

9.16

%

 

9.03

%

 

8.34

%

Tier 1 leverage ratio

9.86

%

 

9.71

%

 

8.42

%

Common equity tier 1 risk-based capital ratio

10.11

%

 

9.94

%

 

9.27

%

Tier 1 risk-based capital ratio

10.11

%

 

9.94

%

 

9.27

%

Total risk-based capital ratio

12.19

%

 

11.99

%

 

11.74

%

(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

March 31, 2023

 

For the quarter ended

December 31, 2022

 

For the quarter ended

March 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 held-for-sale

 

$

50,129

 

$

654

 

 

5.22

%

 

$

51,835

 

$

606

 

 

4.68

%

 

$

60,895

 

$

694

 

 

4.56

%

Loans held-for-investment (1)

 

 

5,978,860

 

 

87,947

 

 

5.88

%

 

 

5,759,436

 

 

78,669

 

 

5.46

%

 

 

4,123,920

 

 

41,164

 

 

3.99

%

Investment securities

 

 

570,682

 

 

4,164

 

 

2.92

%

 

 

573,592

 

 

3,933

 

 

2.74

%

 

 

582,333

 

 

2,275

 

 

1.56

%

Interest-bearing cash and other assets

 

 

156,262

 

 

2,138

 

 

5.47

%

 

 

204,964

 

 

1,957

 

 

3.82

%

 

 

592,478

 

 

528

 

 

0.36

%

Total earning assets

 

 

6,755,933

 

 

94,903

 

 

5.62

%

 

 

6,589,827

 

 

85,165

 

 

5.17

%

 

 

5,359,626

 

 

44,661

 

 

3.33

%

Other assets

 

 

553,961

 

 

 

 

 

 

553,870

 

 

 

 

 

 

314,043

 

 

 

 

Total assets

 

$

7,309,894

 

 

 

 

 

$

7,143,697

 

 

 

 

 

$

5,673,669

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Demand and NOW deposits

 

$

227,170

 

$

1,234

 

 

2.17

%

 

$

213,491

 

$

927

 

 

1.74

%

 

$

223,020

 

$

124

 

 

0.22

%

Savings deposits

 

 

470,000

 

 

445

 

 

0.38

%

 

 

492,837

 

 

348

 

 

0.28

%

 

 

468,713

 

 

91

 

 

0.08

%

Money market deposits

 

 

2,296,469

 

 

5,068

 

 

0.88

%

 

 

2,412,289

 

 

3,126

 

 

0.52

%

 

 

2,306,638

 

 

840

 

 

0.15

%

Certificates of deposits

 

 

1,073,006

 

 

7,432

 

 

2.77

%

 

 

647,819

 

 

1,733

 

 

1.07

%

 

 

317,948

 

 

519

 

 

0.65

%

Total deposits

 

 

4,066,645

 

 

14,179

 

 

1.39

%

 

 

3,766,436

 

 

6,134

 

 

0.65

%

 

 

3,316,319

 

 

1,574

 

 

0.19

%

Repurchase agreements

 

 

29,672

 

 

30

 

 

0.41

%

 

 

38,795

 

 

45

 

 

0.46

%

 

 

71,425

 

 

8

 

 

0.04

%

Total deposits and repurchase agreements

 

 

4,096,317

 

 

14,209

 

 

1.39

%

 

 

3,805,231

 

 

6,179

 

 

0.65

%

 

 

3,387,744

 

 

1,582

 

 

0.19

%

FHLB borrowings

 

 

454,081

 

 

5,317

 

 

4.68

%

 

 

471,880

 

 

4,477

 

 

3.80

%

 

 

40,229

 

 

148

 

 

1.48

%

Other long-term borrowings

 

 

80,300

 

 

1,260

 

 

6.28

%

 

 

80,162

 

 

1,233

 

 

6.15

%

 

 

86,191

 

 

1,646

 

 

7.63

%

Total interest-bearing liabilities

 

 

4,630,698

 

 

20,786

 

 

1.80

%

 

 

4,357,273

 

 

11,889

 

 

1.09

%

 

 

3,514,164

 

 

3,376

 

 

0.38

%

Noninterest-bearing deposits

 

 

1,768,381

 

 

 

 

 

 

1,923,401

 

 

 

 

 

 

1,566,088

 

 

 

 

Other liabilities

 

 

124,543

 

 

 

 

 

 

100,671

 

 

 

 

 

 

68,999

 

 

 

 

Stockholders' equity

 

 

786,272

 

 

 

 

 

 

762,352

 

 

 

 

 

 

524,418

 

 

 

 

Total liabilities and stockholders' equity

 

$

7,309,894

 

 

 

 

 

$

7,143,697

 

 

 

 

 

$

5,673,669

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

 

 

$

74,117

 

 

 

 

 

 

$

73,276

 

 

 

 

 

 

$

41,285

 

 

 

Net interest spread

 

 

 

 

3.82

%

 

 

 

 

 

 

4.08

%

 

 

 

 

 

 

2.95

%

 

 

Net interest margin

 

 

 

 

4.39

%

 

 

 

 

 

 

4.45

%

 

 

 

 

 

 

3.08

%

 

 

Net interest margin (on FTE basis) (2)

 

 

 

 

4.46

%

 

 

 

 

 

 

4.52

%

 

 

 

 

 

 

3.17

%

 

 

(1) Includes nonaccrual loans.

(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)

March 31,
2023

 

December 31,
2022

 

March 31, 2023

vs

December 31, 2022

% change

 

March 31,
2022

 

March 31, 2023

vs

March 31, 2022

% change

Consumer

 

 

 

 

 

 

 

 

 

Noninterest bearing deposit accounts

$

399,008

 

$

416,709

 

(4.25

) %

 

$

361,475

 

10.38

%

Interest-bearing deposit accounts:

 

 

 

 

 

 

 

 

 

Demand and NOW deposits

 

25,284

 

 

25,940

 

(2.53

) %

 

 

28,083

 

(9.97

) %

Savings deposits

 

407,173

 

 

418,101

 

(2.61

) %

 

 

421,397

 

(3.38

) %

Money market deposits

 

1,296,099

 

 

1,375,671

 

(5.78

) %

 

 

1,463,495

 

(11.44

) %

Certificates of deposits

 

759,726

 

 

662,831

 

14.62

%

 

 

291,105

 

160.98

%

Total interest-bearing deposit accounts

 

2,488,282

 

 

2,482,543

 

0.23

%

 

 

2,204,080

 

12.89

%

Total consumer deposits

$

2,887,290

 

$

2,899,252

 

(0.41

) %

 

$

2,565,555

 

12.54

%

Business

 

 

 

 

 

 

 

 

 

Noninterest bearing deposit accounts

$

1,365,432

 

$

1,403,781

 

(2.73

) %

 

$

1,301,505

 

4.91

%

Interest-bearing deposit accounts:

 

 

 

 

 

 

 

 

 

Demand and NOW deposits

 

258,566

 

 

236,641

 

9.27

%

 

 

201,411

 

28.38

%

Savings deposits

 

59,308

 

 

58,818

 

0.83

%

 

 

54,438

 

8.95

%

Money market deposits

 

942,735

 

 

907,379

 

3.90

%

 

 

803,063

 

17.39

%

Certificates of deposits

 

480,935

 

 

259,191

 

85.55

%

 

 

20,510

 

2244.88

%

Total interest-bearing deposit accounts

 

1,741,544

 

 

1,462,029

 

19.12

%

 

 

1,079,422

 

61.34

%

Total business customer deposits

$

3,106,976

 

$

2,865,810

 

8.42

%

 

$

2,380,927

 

30.49

%

Total deposits

$

5,994,266

 

$

5,765,062

 

3.98

%

 

$

4,946,482

 

21.18

%

Balance Sheet Ratios:

 

March 31,
2023

 

December 31,
2022

 

March 31,
2022

Cash to total assets (1)

4.6

%

 

4.1

%

 

7.10

%

Loan to deposit ratio

101.11

%

 

102.55

%

 

87.23

%

Uninsured and uncollateralized deposits to total deposits (2)

25.5

%

 

41.6

%

 

51.3

%

Wholesale borrowings to total liabilities (3)

8.48

%

 

9.67

%

 

0.77

%

Tangible common stockholders' equity to tangible assets (4)

9.21

%

 

9.09

%

 

8.34

%

Tangible common stockholders' equity to tangible assets, reflecting net unrealized losses on HTM securities, net of tax (4) (5)

9.16

%

 

9.03

%

 

8.34

%

 

(1) Cash consists of cash and amounts due from banks and interest-bearing deposits in other financial institutions.

(2) Uninsured and uncollateralized deposits are estimated.

(3) Wholesale borrowings consists of FHLB overnight borrowings and term advances.

(4) 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.

(5) Tangible common stockholders’ equity and tangible assets have been adjusted to reflect net unrealized losses on held-to-maturity securities, net of tax.

Loan Portfolio:

($ in thousands)

March 31, 2023

 

December 31, 2022

 

March 31, 2023

vs

December 31, 2022

% change

 

March 31, 2022

 

March 31, 2023

vs

March 31, 2022

% change

Commercial and industrial

$

2,418,771

 

$

2,310,929

 

4.7

%

 

$

1,819,705

 

32.9

%

Commercial real estate:

 

 

 

 

 

 

 

 

 

Non-owner occupied

 

709,977

 

 

779,546

 

(8.9

) %

 

 

624,729

 

13.6

%

Owner occupied

 

659,999

 

 

636,272

 

3.7

%

 

 

445,654

 

48.1

%

Construction and land

 

320,193

 

 

327,817

 

(2.3

) %

 

 

144,122

 

122.2

%

Multifamily

 

103,767

 

 

102,068

 

1.7

%

 

 

66,112

 

57.0

%

Total commercial real estate

 

1,793,936

 

 

1,845,703

 

(2.8

) %

 

 

1,280,617

 

40.1

%

Residential real estate

 

1,046,047

 

 

1,003,931

 

4.2

%

 

 

501,230

 

108.7

%

Public Finance

 

597,850

 

 

590,284

 

1.3

%

 

 

624,187

 

(4.2

) %

Consumer

 

40,806

 

 

42,588

 

(4.2

) %

 

 

17,981

 

126.9

%

Other

 

163,565

 

 

118,397

 

38.1

%

 

 

71,311

 

129.4

%

Total loans, net of deferred costs, fees, premiums, and discounts

$

6,060,975

 

$

5,911,832

 

2.5

%

 

$

4,315,031

 

40.5

%

Asset Quality:

 

As of and for the quarter ended

($ in thousands)

March 31,
2023

 

December 31,
2022

 

March 31,
2022

Net charge-offs (recoveries)

$

54

 

 

$

(639

)

 

$

738

 

Allowance for credit losses

$

74,459

 

 

$

65,917

 

 

$

50,509

 

Nonperforming loans, including nonaccrual loans, and accrual loans greater than 90 days past due (1)

$

32,833

 

 

$

29,067

 

 

$

25,365

 

Nonperforming assets

$

39,191

 

 

$

35,425

 

 

$

30,527

 

Ratio of net charge-offs (recoveries) to average loans outstanding

 

%

 

 

(0.04

) %

 

 

0.07

%

Allowance for credit losses to total loans outstanding

 

1.23

%

 

 

1.12

%

 

 

1.17

%

Allowance for credit losses to total nonperforming loans

 

226.78

%

 

 

226.78

%

 

 

199.13

%

Nonperforming loans to total loans

 

0.54

%

 

 

0.49

%

 

 

0.59

%

Nonperforming assets to total assets

 

0.51

%

 

 

0.48

%

 

 

0.53

%

(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

($ in thousands, except share and per share amounts)

March 31,
2023

 

December 31,
2022

 

March 31,
2022

Tangible common stockholders’ equity:

Total common stockholders' equity (GAAP)

$

799,050

 

 

$

774,536

 

 

$

515,541

 

Less: Goodwill and other intangible assets:

 

 

 

 

 

Goodwill

 

(93,483

)

 

 

(93,483

)

 

 

(33,050

)

Other intangible assets

 

(14,762

)

 

 

(15,806

)

 

 

(7,923

)

Total tangible common stockholders' equity (non-GAAP) (1)

$

690,805

 

 

$

665,247

 

 

$

474,568

 

Tangible assets:

Total assets (GAAP)

$

7,610,456

 

 

$

7,430,322

 

 

$

5,733,748

 

Less: Goodwill and other intangible assets:

 

 

 

 

 

Goodwill

 

(93,483

)

 

 

(93,483

)

 

 

(33,050

)

Other intangible assets

 

(14,762

)

 

 

(15,806

)

 

 

(7,923

)

Total tangible assets (non-GAAP)

$

7,502,211

 

 

$

7,321,033

 

 

$

5,692,775

 

Tangible common stockholders’ equity to tangible assets:

Common stockholders' equity to total assets (GAAP)

 

10.50

%

 

 

10.42

%

 

 

8.99

%

Less: Impact of goodwill and other intangible assets

 

(1.29

) %

 

 

(1.33

) %

 

 

(0.65

) %

Tangible common stockholders' equity to tangible assets (non-GAAP) (1)

 

9.21

%

 

 

9.09

%

 

 

8.34

%

Tangible common stockholders’ equity to tangible assets, reflecting net unrealized losses on HTM securities, net of tax:

Total tangible common stockholders' equity (non-GAAP)

$

690,805

 

 

$

665,247

 

 

$

474,568

 

Less: Net unrealized losses on HTM securities, net of tax

 

(3,754

)

 

 

(4,295

)

 

 

(79

)

Total tangible common stockholders’ equity less net unrealized losses on HTM securities, net of tax (non-GAAP)

$

687,051

 

 

$

660,952

 

 

$

474,489

 

Total tangible assets (non-GAAP)

$

7,502,211

 

 

$

7,321,033

 

 

$

5,692,775

 

Less: Net unrealized losses on HTM securities, net of tax

 

(3,754

)

 

 

(4,295

)

 

 

(79

)

Total tangible assets less net unrealized losses on HTM securities, net of tax (non-GAAP)

$

7,498,457

 

 

$

7,316,738

 

 

$

5,692,696

 

Tangible common stockholders’ equity to tangible assets (non-GAAP)

 

9.21

%

 

 

9.09

%

 

 

8.34

%

Less: Net unrealized losses on HTM securities, net of tax

 

0.05

%

 

 

0.06

%

 

 

%

Tangible common stockholders’ equity to tangible assets reflecting net unrealized losses on HTM securities, net of tax (non-GAAP)

 

9.16

%

 

 

9.03

%

 

 

8.34

%

Tangible book value per common share:

Stockholders' equity (GAAP)

$

799,050

 

 

$

774,536

 

 

$

515,541

 

Tangible stockholders' equity (non-GAAP) (1)

$

690,805

 

 

$

665,247

 

 

$

474,568

 

Total common shares outstanding

 

24,924,023

 

 

 

24,920,984

 

 

 

18,346,288

 

Book value per common share (GAAP)

$

32.06

 

 

$

31.08

 

 

$

28.10

 

Tangible book value per common share (non-GAAP)

$

27.72

 

 

$

26.69

 

 

$

25.87

 

Net income excluding merger costs:

Net income (GAAP)

$

26,281

 

 

$

24,570

 

 

$

7,669

 

Add: Merger costs

 

 

 

 

 

Merger related expenses

 

 

 

 

 

 

 

303

 

Income tax effect on merger related expenses

 

 

 

 

 

 

 

(50

)

Total merger costs

 

 

 

 

 

 

 

253

 

Net income excluding merger costs (non-GAAP)

$

26,281

 

 

$

24,570

 

 

$

7,922

 

Return on average total assets excluding merger costs:

Return on average total assets (ROAA) (GAAP)

 

1.44

%

 

 

1.38

%

 

 

0.54

%

Add: Impact of merger costs, net of tax

 

%

 

 

%

 

 

0.02

%

ROAA excluding merger costs (non-GAAP)

 

1.44

%

 

 

1.38

%

 

 

0.56

%

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

Return on average stockholders’ equity excluding merger costs:

Return on average stockholders' equity (ROAE) (GAAP)

 

13.37

%

 

 

12.89

%

 

 

5.85

%

Add: Impact of merger costs, net of tax

 

%

 

 

%

 

 

0.19

%

ROAE excluding merger costs (non-GAAP)

 

13.37

%

 

 

12.89

%

 

 

6.04

%

Efficiency ratio excluding merger related expenses:

Efficiency ratio (GAAP)

 

60.47

%

 

 

60.33

%

 

 

80.75

%

Less: Impact of merger related expenses

 

%

 

 

%

 

 

0.47

%

Efficiency ratio excluding merger related expenses (non-GAAP)

 

60.47

%

 

 

60.33

%

 

 

80.28

%

Diluted earnings per share excluding merger costs:

Diluted earnings per share (GAAP)

$

1.03

 

 

$

0.96

 

 

$

0.41

 

Add: Impact of merger costs, net of tax

 

 

 

 

 

 

 

0.01

 

Diluted earnings per share excluding merger costs (non-GAAP)

$

1.03

 

 

$

0.96

 

 

$

0.42

 

Fully tax equivalent (“FTE”) net interest income and net interest margin on FTE basis:

Net interest income (GAAP)

$

74,117

 

 

$

73,276

 

 

$

41,285

 

Gross income effect of tax exempt income

 

1,242

 

 

 

1,218

 

 

 

1,321

 

FTE net interest income (non-GAAP)

$

75,359

 

 

$

74,494

 

 

$

42,606

 

Average earning assets

$

6,755,933

 

 

$

6,589,827

 

 

$

5,359,626

 

Net interest margin

 

4.39

%

 

 

4.45

%

 

 

3.08

%

Net interest margin on FTE basis (non-GAAP)

 

4.46

%

 

 

4.52

%

 

 

3.17

%

 

Investor Relations:
Kelly C. Rackley
Corporate Secretary & Stockholder Relations Manager
303.962.0150 | stockholder.relations@sunflowerbank.com

Media Relations:
Jeanne Lipson
Vice President, Marketing
915.881.6785

Source: FirstSun Capital Bancorp