Finance

FirstSun Swings to Profit After First Foundation Integration Costs

The Tip Desk · October 27, 2026 · 3 min read

Net income was $38.4 million, or $0.82 a share, as merger-related expenses fell and the net interest margin recovered to 3.82%.

FirstSun Capital Bancorp (FSUN), the Denver-based financial holding company, reported net income of $38.4 million, or $0.82 a share, in the third quarter of 2026, reversing a second-quarter net loss of $22.9 million, or $0.49 a share. Adjusted net income was $48.2 million, or $1.03 a share. Return on average stockholders’ equity was 8.23%.

The swing tracked the unwind of First Foundation integration costs. Noninterest expense fell $45.2 million to $126.6 million. Merger-related expenses were $13.2 million after $57.6 million in the second quarter. Salary and employee benefits declined $5.4 million, which the company attributed primarily to merger-related workforce reductions. The efficiency ratio improved to 70.43% from 93.25%. The adjusted efficiency ratio was 63.06%.

Net interest income was $140.3 million. The net interest margin expanded 24 basis points to 3.82% after a 67 basis point compression to 3.58% in the second quarter. Loan yield rose 17 basis points to 6.33%, which the company said reflected second-quarter sales of lower-yielding multifamily and public finance loans acquired from First Foundation and variable-rate repricing. Investment securities yield fell 28 basis points to 4.52% on lower purchase-accounting discount accretion. Total cost of interest-bearing deposits decreased 2 basis points to 2.75% after the bank disposed of higher-cost certificates of deposit acquired from First Foundation.

Average loans, including loans held-for-sale, decreased $1.0 billion from the second quarter, primarily due to $1.3 billion of loan sales late in the second quarter as part of merger-related balance sheet repositioning. Average interest-bearing deposits fell $1.3 billion. Average investment securities decreased $0.2 billion after $1.4 billion of securities sales in the second quarter.

The provision for credit losses was $4.4 million, primarily reflecting specific reserves on two commercial real estate loans, partially offset by a smaller loan portfolio. The second-quarter provision of $40.4 million had reflected downgrades and write-downs of two commercial and industrial relationships. Net charge-offs were $3.3 million, or 0.11% of average loans on an annualized basis, related to one C&I and one multifamily relationship acquired from First Foundation. The allowance for credit losses was 1.52% of loans outstanding at September 30, 2026. Nonperforming assets were 1.46% of total assets.

Noninterest income was $39.4 million, or 21.9% of total revenue. Mortgage banking services fell $3.2 million on lower originations sold and MSR fair-value changes, net of hedging. Other noninterest income rose $1.0 million on higher swap and loan syndication revenue.

Loans were $11.5 billion at September 30, 2026, an annualized 3.8% decline, on commercial real estate paydowns in multifamily, non-owner occupied and owner-occupied properties and lower public finance, partially offset by higher C&I. Deposits were $13.0 billion. Noninterest-bearing accounts were 20.6% of total deposits. The loan-to-deposit ratio was 88.3%. Uninsured deposits at FirstSun’s subsidiary Sunflower Bank, N.A., were estimated at 33.2% of the bank’s total deposits.

Common equity tier 1 risk-based capital was 11.99%. Total risk-based capital was 14.29% and the tier 1 leverage ratio was 10.33%. Book value per share was $39.75. Tangible book value per share was $35.60. The company repurchased 1,245,224 shares for $49.7 million. Chief Executive Officer Neal Arnold said the company completed the First Foundation core system conversion in late September.

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