FirstSun Capital sees 2Q adversely affected by charge-offs

FirstSun Capital Bancorp reported that its second-quarter performance was adversely affected by elevated charge-offs, a trend that continued from the prior quarter. Despite strong loan growth, the company faced increased credit risk, which led to higher provisions for credit losses. In the first quarter of 2026, net charge-offs reached $10.6 million, driven largely by two large loans—one to a telecom company and another to an auto finance lender—accounting for more than $10 million of the total charge-offs. This marked a significant increase from $631,000 in the same period of the previous year.

The company also raised its provision for credit losses to $8.3 million in the first quarter, more than double the amount from the prior year. CEO Neal Arnold acknowledged the challenges, stating that the bank is "provisioning on the front end for some extraordinary loan growth," while also noting deteriorating value realization in the event of loss.

Loan growth remained a key highlight, with total loans held for investment reaching $6.9 billion at the end of March 2026, a 7% increase from the prior year. However, the combination of robust loan growth and credit challenges contributed to a mixed earnings report, with adjusted earnings per share falling short of analyst expectations.

The company’s acquisition of First Foundation in April 2026 further expanded its footprint and added scale, but it also brought additional complexity in managing credit risk amid rapid growth.