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- **Strategic Merger:** FirstSun acquires First Foundation for $1.2 billion, targeting Southern California growth and risk reduction.
- **Balance Sheet Restructuring:** $3.4 billion pre-closing runoff reduces CRE concentration to 238% and NIM to 4.0%.
- **Accretive Growth:** 30% EPS accretion by 2027, with 3-year TBV earn-back and 12.7% CET1 capital.
- **Key Risks:** Execution of repositioning plan, credit quality in multifamily portfolio, and regulatory approvals.
- **Opportunities:** Wealth management expansion, treasury management growth, and residential mortgage deployment in Southern California.

**【Management Opening Remarks】**
- Announced merger with First Foundation Inc., combining FirstSun's capital strength with First Foundation's Southern California branch network and wealth management platform.
- Transaction valued at $1.2 billion, with FirstSun acquiring 100% of First Foundation's shares.
- Key rationale: strategic fit in Southern California, risk reduction through balance sheet restructuring, and accretive growth opportunities.

**【CEO Commentary】**
- **Neal Arnold (FirstSun CEO):**
  - Emphasized the merger's ability to double FirstSun's size while reducing risk (e.g., CRE concentration from 325% to 238%).
  - Highlighted Southern California's deposit growth potential and the wealth management platform's fee income upside.
  - Noted the merger accelerates First Foundation's existing restructuring plans, with $3.4 billion in balance sheet repositioning pre-closing.
- **Tom Schaefer (First Foundation CEO):**
  - Highlighted FirstSun's proven playbook for commercial and retail banking, aligning with Southern California's growth markets.
  - Expected synergies from integrating First Foundation's multifamily portfolio with FirstSun's treasury management expertise.

**【CFO Financial Commentary】**
- **Rob Cafera (FirstSun CFO):**
  - Pro forma CET1 capital of 10.5% post-closing, with no new capital required.
  - Projected 30% EPS accretion by 2027, with a 3-year TBV earn-back period.
  - Detailed repositioning plan: $3.4 billion in asset/liability runoff, reducing wholesale funding to 10% and NIM from 1.6% to 4.0%.
  - Fee income growth drivers: wealth management expansion, treasury management, and residential mortgage deployment.

**【Q&A Highlights】**
- **Execution Risk:**
  - Repositioning to occur pre-closing, with $3.4 billion runoff completed by Q2 2026. Liquidity hedging strategies in place to mitigate market risk.
- **Capital Management:**
  - CET1 expected to rise to 12.7% by 2027, with plans for future capital returns (e.g., dividends, buybacks) post-organic growth stabilization.
- **Credit Performance:**
  - Q3 2025 provision expense of $10 million driven by one-off CNI loss; non-performing loans at 1.04%, stable from Q2.
- **Cost Savings:**
  - $35 million in pre-tax cost synergies (70% from personnel, 30% from FDIC and professional services), with potential upside.
- **NDFI Exposure:**
  - Post-repositioning, NDFI at 5-6% of assets, focused on consumer credit, mortgage intermediaries, and business credit intermediaries.


Firstsun Capital Bancorp (FSUN) Q3 2025 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

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Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

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Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

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Other Comprehensive Income

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Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

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Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

FSUN

FSUN fundamentals

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