FirstSun Capital Bancorp Q4 FY2025 earnings call

• Fourth quarter highlighted strong revenue growth (up 10.8% annualized over last quarter), net interest margin at 4.18%, healthy average loan growth (8.5% annualized), and noninterest income to total revenue at 24.3%.
• Full year had $11.5 million of positive adjusted operating leverage. Focus on relationship-based banking and reinvesting in the franchise.
• Asset quality: Took a charge on a telecom loan, with credit conditions monitored; classified and nonperforming loan balances decreased from prior quarter.
• Pending merger with First Foundation: Teams making progress on integration planning and balance sheet optimization.

For the fourth quarter, adjusted net income was $26.9 million, adjusted diluted EPS was $0.95, and adjusted ROAA was 1.27%. Net interest margin was 4.18%, up 11 basis points from the third quarter. Average loan growth was 8.5% annualized. Noninterest income to total revenue was 24.3%. For the full year, there was $11.5 million of positive adjusted operating leverage. Total deposits increased over $400 million or approximately 6.5%. Net interest income grew 7% for the full year. Noninterest revenue grew approximately 13% for the full year. The allowance for credit loss as a percentage of loans was 1.27%, up 1 bp from Q3. TBV per share improved by $3.89 or roughly 11.5% to $37.83 and CET1 ratio was 14.12%.

• 2026 net interest income expected to have mid-single-digit growth with NIM stable relative to 2025.
• 2026 noninterest revenue expected to have low double-digit to low teens percentage growth.
• 2026 adjusted noninterest expense expected to have mid- to high single-digit percentage growth.
• 2026 allowance for credit losses to loans expected to stay in the mid- to high 120s in basis points with net charge-off ratio in the mid- to high 20s in basis points.

• Credit conditions monitoring: While no pervasive credit issues seen, continue to monitor credit conditions of portfolio.
• Macro factors: Actual results may differ from forward-looking statements due to various important factors including macroeconomic conditions.

Q: Regarding deposit costs, color on deposit pricing strategy and betas from here?

A: Interest-bearing deposit costs down 21 bps, will continue to move rates with macro environment, beta expected to be lighter than historical but not terribly so.

Q: Commentary on loan pricing, C&I spreads, and impact of acquisition from recent rate cuts?

A: Credit spreads holding in, no material changes; not seeing anything causing pause in acquisition expectations, progress on balance sheet repositioning in merger.

Q: Trajectory of margin excluding deal, impact of rate cuts?

A: Expect net interest margin to remain relatively stable, deposit pricing environment tightening, but feel good about stand-alone franchise operating at stable level.

Q: Expense guide, normal inflation vs hiring in Texas and Southern California?

A: Priority was building out Southern Cal, seeing more opportunity in Texas to add bankers, opportunistic on HR side.

Q: Spot rate on deposits at end of December and money market offering?

A: Total cost of deposits around 1.98% in Q4, end of December closer to 1.90%; MMDA promo offerings competitive, top tier around certain handle.