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FIRSTSUN CAPITAL BANCORP (FSUN)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 delivered solid core banking performance: total revenue $107.3M, NIM 4.07%, ROAA 1.09%, and ROATCE 9.20% while loans grew 10.6% annualized and deposits 0.3% annualized .
  • EPS was $0.82 and service fees were 24.5% of revenue; credit costs elevated (provision $10.1M; NCO ratio 0.55%), largely tied to a specific C&I relationship .
  • Against S&P Global consensus, EPS missed by ~$0.07 (consensus $0.8875 vs. actual $0.82)* and revenue missed (consensus $106.7M vs. S&P “actual” $97.2M*), although the company-reported total revenue was $107.3M; taxonomy differences likely explain the gap* (Values retrieved from S&P Global).
  • Strategic catalyst: announced merger with First Foundation and detailed a $3.4B downsizing/repositioning to de-risk liquidity, rate sensitivity, and credit, targeting CET1 ~10.5% at close and pro forma CRE concentration ~238% .
  • Subsequent event: redeemed $40M 6.000% subordinated notes on Oct 1, 2025, supporting future funding cost flexibility .

What Went Well and What Went Wrong

What Went Well

  • Strong core earnings mix and margin durability: NIM held at 4.07% for the 12th straight quarter; total revenue increased sequentially to $107.3M, with service fees contributing 24.5% .
  • Loan growth momentum: loans rose $174.6M (10.6% annualized), driven by C&I (+$165.9M) and multifamily (+$49.0M); L/D ratio a manageable 94.0% .
  • Management confidence and strategic expansion: “The quarter was highlighted by a consistently strong net interest margin of 4.07%, healthy loan growth of 10.6% and a diversified revenue mix… We remain focused on the great opportunity provided by the robust business environment across our high growth southwestern and western footprint” — Neal Arnold .

What Went Wrong

  • Elevated credit costs: provision $10.1M; NCOs $9.1M (0.55% annualized), primarily from a specific C&I write-down; NPAs/Assets rose to 0.98% (from 0.80% in Q2) .
  • Noninterest income and expenses mixed: noninterest income decreased $0.7M QoQ on mortgage FV impacts; expenses rose $0.8M QoQ on salaries/benefits and headcount, keeping efficiency ratio mid-60s .
  • Deposit growth muted in the quarter (0.3% annualized), with continued mix shift away from CDs; cost of interest-bearing deposits rose 3 bps QoQ to 2.81% .

Financial Results

Core Financials vs Prior Periods

MetricQ3 2024Q2 2025Q3 2025
Total Revenue ($USD Millions)$98.233 (NII $76.158 + Noninterest $22.075) $105.572 (NII $78.499 + Noninterest $27.073) $107.286 (NII $80.953 + Noninterest $26.333)
Diluted EPS ($)$0.79 $0.93 $0.82
Net Interest Margin (%)4.08% 4.07% 4.07%
ROAA (%)1.12% 1.28% 1.09%
ROATCE (%)9.94% 10.91% 9.20%
Efficiency Ratio (%)65.83% 64.52% 64.22%
Loan-to-Deposit Ratio (%)96.9% 91.6% 94.0%
Service Fees to Revenue (%)22.5% 25.6% 24.5%

Estimates vs Actuals (S&P Global)

MetricQ3 2025 Consensus*Q3 2025 ActualResult
EPS ($)0.8875*0.82 Miss (~$0.07)*
Revenue ($USD)106.731M*97.186M* (Company-reported total revenue $107.3M) Miss*

Values retrieved from S&P Global.

Segment Breakdown – Loans (EOP)

Category ($000s)Q3 2024Q2 2025Q3 2025
Commercial & Industrial$2,678,859 $2,651,646 $2,945,697
CRE – Non-owner occupied$821,434 $705,749 $725,425
CRE – Owner occupied$698,398 $662,120 $668,172
Construction & Land$333,457 $383,969 $343,803
Multifamily$95,125 $134,520 $183,504
Residential Real Estate$1,172,459 $1,226,760 $1,209,742
Public Finance$536,776 $524,441 $516,247
Consumer$45,067 $43,080 $38,931
Other$62,181 $174,781 $50,108
Total Loans$6,443,756 $6,507,066 $6,681,629

KPIs and Asset Quality

KPIQ3 2024Q2 2025Q3 2025
Net Charge-offs to Avg Loans (%)0.09% 0.83% 0.55%
Allowance for Credit Losses ($000s)$83,159 $82,993 $84,040
ACL to Total Loans (%)1.29% 1.28% 1.26%
Nonperforming Loans ($000s)$65,824 $54,841 $69,641
NPAs to Total Assets (%)0.86% 0.80% 0.98%
CET1 Ratio (%)13.06% 13.78% 13.79%

Guidance Changes

MetricPeriodPrevious Guidance (Q2 2025)Current Guidance (Q3 2025)Change
Loans (EOP)FY 2025Mid single-digit growth Mid single-digit growth Maintained
Deposits (EOP)FY 2025Mid single-digit growth Mid single-digit growth Maintained
Net Interest Income vs 2024 ($296.9M)FY 2025Mid single-digit growth; two 25bp cuts Mid single-digit growth; two 25bp cuts Maintained
Noninterest Income vs 2024 ($89.8M)FY 2025High single to low double-digit growth High single to low double-digit growth Maintained
Noninterest Expense vs 2024 adj ($248.0M)FY 2025Mid to high single-digit growth Mid to high single-digit growth Maintained
Efficiency RatioFY 2025Mid 60s average Mid 60s average Maintained
Net Charge-offs / Avg LoansFY 2025High 30s to low 40s bps Low 40s bps Slightly higher range
Tax RateFY 202520–22% 20–22% Maintained
CET1 RatioFY 2025Consistent Consistent Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1, Q2)Current Period (Q3 2025)Trend
Macro/rates and NIMQ1/Q2: Expect 2 cuts in 2H; NIM ~4% and deposit beta ~40–50% NIM steady at 4.07%; expecting two cuts before YE Stable
Credit costs/asset qualityQ1: NPL inflow with cross-border mfg credit; low NCOs ; Q2: telecom/public finance charge-offs; NCO 0.83% Provision $10.1M; NCO 0.55%; NPLs/Assets up; specific C&I deterioration Mixed (elevated but improving vs Q2)
Deposit mix/pricingQ1/Q2: strong MMDA growth; CDs declining; deposit growth robust Deposit growth muted; continued mix shift; cost of IB deposits +3 bps QoQ Softer growth; improving mix
Southern California expansionQ1: new branches LA/San Diego ; Q2: ~$200M loans/deposits; self-funded Merger would add 16 SoCal branches; largest metro footprint Accelerating
M&A/First FoundationQ1/Q2: opportunistic stance Announced merger; $3.4B reposition plan; pro forma CET1 ~10.5%; CRE ~238%; 35% cost saves; revenue synergies not in model Major strategic shift
Regulatory/approvalQ2: opportunistic outlook; capital strong Extensive OCC/Fed engagement; bigger/faster/clearer restructuring to facilitate approval Constructive

Management Commentary

  • “The quarter was highlighted by a consistently strong net interest margin of 4.07%, healthy loan growth of 10.6% and a diversified revenue mix with service fees to total revenue of 24.5%… We remain focused on the great opportunity provided by the robust business environment across our high growth southwestern and western footprint” — Neal Arnold, CEO .
  • On the merger rationale and strategy: “We believe Southern California Branch Franchise Network gives our team… a significant opportunity… We also think that First Foundation significantly changes the profile of our fee income given their wealth management platform” — Neal Arnold .
  • On de-risking and repositioning: “It entails $3.4 billion in total downsizing focused on lowering the level of non-relationship rate-sensitive elements… position the pro forma company at an approximate 10% wholesale funding level… pro forma CET1 at ~10.5%” — Rob Cafera, CFO .
  • Capital outlook: “We expect to be accreting a significant amount of capital… we do expect some future capital management strategies being employed that we haven’t historically employed” — Rob Cafera .

Q&A Highlights

  • Repositioning mechanics/timing: Management plans bulk sales/securitizations and natural run-off, largely concurrent with close (target early Q2 2026), with hedges to mitigate execution risk .
  • Cost saves: ~35% targeted, ~70% from people, plus professional services (FDIC-related) and back-office footprint optimization; branches/wealth platforms are strategic and remain intact .
  • NDFI/SNC reduction: Target combined exposure ~5–6% of loans post-repositioning, diversified across consumer, mortgage, and business credit intermediaries .
  • Credit outlook: Q3 provision included specific reserve in auto finance; two C&I charge-offs (largest fully reserved prior), expecting FY NCOs low 40s bps given market valuation/pricing pressures .
  • Strategic narrative: Revenue synergies (wealth, treasury, RESI mortgage) are meaningful but not modeled; branch footprint underutilized, margin provides flexibility to drive deposit growth .

Estimates Context

  • EPS missed consensus (EPS $0.82 vs. $0.8875*), reflecting heavier credit costs and slightly lower noninterest income in the quarter . Values retrieved from S&P Global.
  • Revenue missed consensus on S&P’s taxonomy (S&P “actual” $97.2M* vs. $106.7M* consensus), while company-reported total revenue was $107.3M (NII + noninterest); investors should reconcile taxonomy differences when benchmarking banks* . Values retrieved from S&P Global.
  • Street models likely need to reflect higher FY NCOs (low 40s bps guide) and modest near-term deposit growth offset by favorable mix shift .

Key Takeaways for Investors

  • Core margin resilience continues: 4.07% NIM, stable through the rate cycle; focus on deposit mix (lower CDs, higher MMDA) supports funding costs into 2026 .
  • Credit costs are elevated but manageable: provisioning largely tied to specific C&I exposures; ACL coverage remains ~1.26% of loans; monitor NPL trajectory and exit valuations .
  • Strategic upside from the First Foundation merger: accelerated SoCal and Florida expansion, fee income diversification (wealth), and deposit scale; near-term execution risk mitigated by detailed repositioning plan .
  • Guidance steady: loans/deposits mid-single-digit, efficiency mid-60s, tax 20–22%; NCO guide nudged to low 40s bps, suggesting cautious asset quality stance .
  • Capital remains a strength: CET1 13.79% (legacy), TBV/share up to $36.92; subsequent $40M sub debt redemption improves future funding flexibility .
  • Near-term trading lens: mixed print (EPS miss vs stable margin and organic loan growth); stock narrative likely driven by merger approval milestones, de-risking progress, and deposit remix traction .
  • Medium-term thesis: pro forma profitability accretion (2027 targets), improved rate sensitivity and liquidity, and revenue synergies (wealth/treasury/RESI) not yet modeled offer upside potential .

Notes

  • We searched for and read: Q3 2025 8-K earnings press release and investor presentation (full), Q3 2025 earnings call transcript (full versions), and prior Q1 and Q2 quarterly materials for trend analysis – – –.
  • No additional Q3 2025 press releases were found beyond the earnings press release embedded in the 8-K filing .
  • All estimate comparisons are anchored on S&P Global consensus; values marked with * and disclaimer above.