UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q __________________________________ ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 333-258176 __________________________________ FIRSTSUN CAPITAL BANCORP (Exact name of registrant as specified in its charter) ________________ ...

Financial Data and Key Metrics Changes - The company achieved net income of $23.6 million, representing earnings per share of $0.83 and a return on assets (ROA) of 1.2% [5] - Net interest margin remained strong at 4.07%, marking ten consecutive quarters above 4% [14] - Total new loan fundings totaled $399 million in Q1, up 48% from the previous quarter and up 37% year-over-year [11] - Deposits increased by approximately $200 million or 12% annualized [11] Business Line Data and Key Metrics Changes - Loan growth was primarily driven by the commercial and industrial (C&I) portfolio, which saw a 7% annualized increase [10] - Service fee income represented 22.6% of total revenues, with a slight increase over the last quarter [5] - Consumer deposit service revenues decreased by 9% due to lower NSF activity [17] Market Data and Key Metrics Changes - The company noted strong loan growth in high-growth markets, particularly in the C&I sector [10] - The credit quality remained stable, with nonperforming loans as a percentage of total loans increasing to 1.21% [20] - The company experienced a decline in its commercial real estate portfolio, impacting overall loan growth [10] Company Strategy and Development Direction - The company aims to focus on relationship-based banking and is optimistic about growth opportunities in its markets [6][8] - There is a commitment to maintaining a strong capital position and sound credit risk management [9] - The company is open to opportunistic M&A but remains cautious about potential risks in the current market environment [22][66] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the U.S. economy, particularly in their operational regions [8] - There is an acknowledgment of macroeconomic uncertainties impacting consumer investment and spending [15] - The company expects mid-single-digit growth for both loans and deposits for the full year [13] Other Important Information - The provision expense for the first quarter was $3.8 million, resulting in an allowance for credit loss ratio of 1.42% [19] - The company anticipates net charge-offs for the full year to be in the high teens to low 20s range in basis points [21] - The tangible book value per share improved to $34.88, with a CET1 ratio of 13.26% [21] Q&A Session Summary Question: What are the drivers behind the lower expense guidance for 2025? - The lower expense guidance is linked to macroeconomic uncertainty and a slowdown in mortgage activity, impacting variable compensation [26][27] Question: How does the current environment impact thoughts around M&A? - The company remains opportunistic regarding M&A but is cautious about taking on risks that could jeopardize shareholder value [28][66] Question: Can you provide insights on loan growth and competition? - Loan growth remains strong, particularly in the C&I space, with competitive pricing and a robust pipeline for Q2 [36][39] Question: What is the outlook for deposit costs and growth in Southern California? - The company expects stable deposit costs but acknowledges competitive pressures; Southern California efforts have seen strong deposit growth [40][43] Question: Can you elaborate on the higher nonaccrual loan mentioned? - The nonaccrual loan was a $13 million credit with cross-border exposure in the manufacturing sector, contributing to the increase in nonperforming loans [70][71]

FirstSun Capital (FSUN) Q1 2025 Earnings Call April 29, 2025 11:00 AM ET Company Participants Ed Jacques - Director of Investor Relations & Business DevelopmentNeal Arnold - CEO, President, COO & DirectorRobert Cafera - Senior EVP & CFOWoody Lay - Vice PresidentTim Mitchell - Equity Research AssociateMatt Olney - Managing Director Conference Call Participants Matthew Clark - MD & Senior Research Analyst Operator Good morning, and welcome to the First Sun Capital Bancorp First Quarter twenty twenty five Earn ...

FirstSun Capital Bancorp NASDAQ: FSUN 1Q2025 Earnings Presentation April 28, 2025 Disclaimers Forward Looking Statements This presentation contains forward-looking information and statements by FirstSun Capital Bancorp (the "Company") within the meaning of the Private Securities Litigation Reform Act of 1995. Forward- looking statements are generally identifiable by the use of words such as "believe," "expect," "anticipate," "plan," "project," "intend," "estimate," "may," "will," "would," "could," "should", ...

FirstSun Capital Bancorp Reports First Quarter 2025 Results First Quarter 2025 Highlights: Denver, Colorado – April 28, 2025 – FirstSun Capital Bancorp ("FirstSun") (NASDAQ: FSUN) reported net income of $23.6 million for the first quarter of 2025 compared to net income of $12.3 million for the first quarter of 2024. Earnings per diluted share were $0.83 for the first quarter of 2025 compared to $0.45 for the first quarter of 2024. Adjusted net income, a non-GAAP financial measure, was $14.6 million or $0.53 ...

Loan Portfolio and Credit Quality - Non-owner occupied commercial real estate loans accounted for 66.7% of the Company's risk-based capital, representing 11.8% of total loans as of December 31, 2024[58] - Owner-occupied commercial real estate loans associated with office space totaled $186.3 million, or 2.9% of total loans as of December 31, 2024[58] - The average FICO score for mortgage loans was 743 in 2024, indicating a focus on quality borrower credit profiles[64] - Consumer loans typically have shorter terms, lower balances, and higher risks of default compared to residential real estate mortgage loans[61] - Commercial real estate loans are often larger and involve greater risks, with adverse developments potentially increasing credit risk[58] - The Company maintains a diversified loan portfolio to manage credit risk, with tailored underwriting criteria for various loan products[73] - The bank's portfolio segments include commercial and industrial loans, residential real estate loans, and public finance loans, among others[478] - Loans that do not share similar risk characteristics are evaluated individually for credit losses based on discounted cash flows or the fair value of collateral[485] - Management estimates the ACL using relevant information, including historical credit loss experience and macroeconomic indicators such as unemployment rates and property values[476] Financial Performance - Net income for 2024 was $75,628 thousand, a decrease of 27.0% compared to $103,533 thousand in 2023[442] - Total interest income rose to $459,540 thousand in 2024, an increase of 11.1% from $413,684 thousand in 2023[442] - Provision for credit losses increased to $27,550 thousand in 2024, up from $18,247 thousand in 2023, reflecting a rise of 51.0%[442] - Total deposits grew to $6,672,260 thousand in 2024, compared to $6,374,103 thousand in 2023, marking an increase of 4.67%[441] - Noninterest income increased to $89,792 thousand in 2024, up from $79,092 thousand in 2023, a growth of 13.5%[442] - Basic earnings per share decreased to $2.76 in 2024 from $4.15 in 2023, a decline of 33.5%[442] - Total stockholders' equity rose to $1,041,366 thousand in 2024, compared to $877,197 thousand in 2023, an increase of 18.7%[441] - Interest expense on deposits increased significantly to $150,651 thousand in 2024, up from $101,355 thousand in 2023, a rise of 48.5%[442] Regulatory Compliance and Risk Management - The Dodd-Frank Act continues to impact financial institutions, mandating new regulations that could materially affect business operations[93] - The bank holding company is required to maintain a common equity Tier 1 (CET1) risk-based capital ratio of 4.5%[120] - The total risk-based capital ratio must be at least 8% to meet regulatory requirements[120] - The leverage ratio is mandated to be a minimum of 4%[120] - A capital conservation buffer of 2.5% is required under Basel III, bringing the effective CET1 capital ratio to 7.0%[121] - The bank must maintain a Tier 1 risk-based capital ratio of 6% and a total risk-based capital ratio of 10.5% to avoid restrictions on capital distributions[121] - The bank holding company must guarantee compliance of any undercapitalized subsidiary up to 5% of the institution's total assets[112] - The Federal Reserve can require a bank holding company to divest subsidiaries if deemed necessary for financial stability[109] - The bank is subject to comprehensive capital adequacy requirements under Basel III, which apply to all state and national banks regardless of size[119] Employee Engagement and Compensation - The total number of employees as of December 31, 2024, was 1,142, with 1,127 being full-time equivalent employees[81] - The company offers a competitive compensation and benefits package, including a 401(k) plan with employer matching contributions, healthcare benefits, and tuition reimbursement[82] - Employee engagement surveys are conducted to identify strengths and areas for improvement, ensuring continued satisfaction and retention of employees[85] Strategic Initiatives and Market Position - The Company aims to grow its commercial and industrial loan portfolio, emphasizing tailored programs to meet client needs[54] - The terminated merger with HomeStreet was agreed upon on November 18, 2024, indicating a strategic shift in the company's growth plans[453] - The company has fully transitioned from the use of LIBOR on all contracts as of December 31, 2024, following the FASB's standards associated with the cessation of LIBOR[496] Cash Flow and Asset Management - Cash flows from operating activities decreased to $101,120,000 in 2024 from $125,176,000 in 2023, representing a decline of 19.2%[450] - Net cash provided by operating activities for 2024 was $101,120,000, down from $125,176,000 in 2023, a decline of 19%[447] - The net change in deposits was $298,497,000 in 2024, compared to $610,007,000 in 2023, indicating a decrease of 51.0%[450] - Proceeds from Federal Home Loan Bank advances increased significantly to $5,460,410,000 in 2024 from $2,041,468,000 in 2023, a rise of 167.5%[450] - Cash and cash equivalents at the end of the period increased to $615,917,000 in 2024 from $479,362,000 in 2023, a growth of 28.5%[450] Compliance and Legal Obligations - The company must file suspicious activity reports if it finds any relationships or transactions with persons on lists of suspected terrorists[148] - The Office of Foreign Assets Control (OFAC) mandates that banks must freeze or block transactions involving names on its lists[150] - The company is subject to enhanced due diligence requirements for managing private bank accounts for non-U.S. persons[149] - The bank must maintain a designated compliance officer and conduct ongoing employee training programs as part of its anti-money laundering program[144] - The company recognizes interest and/or penalties related to income tax matters in income tax expense, with no examinations by taxing authorities for years before 2021[506]

Financial Performance - Net income for Q4 2024 was $16.4 million, or $0.58 per diluted share, down from $24.0 million, or $0.94 per diluted share in Q4 2023[1][4] - Adjusted net income for Q4 2024 was $24.3 million, or $0.86 per diluted share[1][6] - Full year 2024 net income was $75.6 million, or $2.69 per diluted share, down from $103.5 million, or $4.08 per diluted share in 2023[1][21] - Net income decreased to $75,628,000 in 2024 from $103,533,000 in 2023, a decline of 27.0%[50] - Diluted earnings per share fell to $2.69 in 2024, down from $4.08 in 2023, representing a decrease of 34.2%[50] - Diluted earnings per share (GAAP) for Q4 2024 was $0.58, down from $0.94 in Q4 2023, indicating a decline of 38.3%[71] - Adjusted diluted earnings per share (non-GAAP) for Q4 2024 was $0.86, compared to $0.53 in Q4 2023, marking a 62.3% increase[71] Revenue and Income Sources - Total revenue for 2024 was $386.7 million, with net interest income of $296.9 million and noninterest income of $89.8 million[1][27] - Noninterest income totaled $21.6 million in Q4 2024, a decrease of $0.4 million from the prior quarter, with mortgage banking income increasing by $0.8 million[1][12] - Noninterest income increased to $89,792,000 in 2024, up from $79,092,000 in 2023, reflecting a growth of 13.5%[50] - Treasury management service fees increased by $3.1 million in 2024, contributing to noninterest income as a percentage of total revenue rising to 23.2% from 21.2% in 2023[29] Expenses and Efficiency - Noninterest expense totaled $264.0 million in 2024, an increase of $41.2 million from 2023, primarily due to a $21.8 million rise in salaries and benefits[29][30] - The efficiency ratio for 2024 was 68.28%, up from 59.81% in 2023, while the adjusted efficiency ratio was 64.13% compared to 59.81% in 2023[31] - The efficiency ratio for Q4 2024 was 74.66%, compared to 65.83% for the prior quarter[1][15] - Adjusted total noninterest expense for Q4 2024 is $62,793,000, compared to $52,308,000 in Q4 2023[73] Asset and Deposit Growth - Average deposits increased by $48.7 million in Q4 2024, or 3.0% on an annualized basis, totaling $6.6 billion[1][18] - Average deposits rose to $6.5 billion for the year ending December 31, 2024, an increase of $354.9 million or 5.8% from 2023[34] - Total deposits increased to $6,672,260 as of December 31, 2024, from $6,374,103 a year prior, marking a growth of 4.68%[54] - Total consolidated assets were reported at $8.1 billion as of December 31, 2024[40] - Total assets increased to $8,097,387,000 in 2024, up from $7,879,724,000 in 2023, a growth of 2.8%[50] Credit Quality and Losses - The provision for credit losses was $4.9 million in Q4 2024, influenced by macroeconomic factors and specific customer relationship deterioration[1][9] - Provision for credit losses rose significantly to $27,550,000 in 2024, compared to $18,247,000 in 2023, indicating an increase of 51.3%[50] - The allowance for credit losses as a percentage of total loans was 1.38% at December 31, 2024, an increase from 1.28% at December 31, 2023[1][26] - Nonperforming loans, including nonaccrual loans, rose to $69,050 thousand as of December 31, 2024, up from $65,824 thousand on September 30, 2024, indicating a 3.7% increase[69] Capital Ratios and Book Value - The common equity tier 1 risk-based capital ratio was 13.18% as of December 31, 2024, indicating strong capital ratios above "well-capitalized" thresholds[35] - Book value per share increased to $37.58 at December 31, 2024, up by $2.44 from the previous year[35] - Tangible book value per share (non-GAAP) increased to $33.94 as of December 31, 2024, from $30.96 a year earlier, representing a 9.6% increase[71] - Total stockholders' equity (GAAP) increased to $1,041,366 thousand as of December 31, 2024, up from $877,197 thousand a year earlier, representing an 18.7% year-over-year growth[71] Future Outlook and Strategy - The company plans to expand into the San Diego and Los Angeles markets, indicating future growth strategies[43]

Financial Performance - Net income for Q3 2024 was $22.4 million, or $0.79 per diluted share, down from $25.2 million, or $1.00 per diluted share in Q3 2023[218]. - Total revenue for the nine months ended September 30, 2024, was impacted by a $10.6 million provision for credit loss, resulting in net income of $59.3 million, or $2.12 per diluted share[218]. - Net income for the three months ended September 30, 2024, was $22,422 thousand, a decrease from $25,232 thousand in the same period of 2023, indicating a decline of 11.4%[220]. - Net income (GAAP) for the three months ended September 30, 2024, was $22,422 thousand, down from $25,232 thousand in the same period last year[223]. - Noninterest income rose to $22,075,000 for Q3 2024, an increase of $3,425,000 from $18,650,000 in Q3 2023, marking a growth of approximately 18.4%[274]. Asset and Loan Growth - Total assets increased to $8,138,487 thousand as of September 30, 2024, up from $7,756,875 thousand in the previous year, representing a growth of 4.9%[220]. - Total loans, excluding loans held-for-sale, reached $6,443,756 thousand as of September 30, 2024, compared to $6,179,522 thousand a year earlier, marking an increase of 4.3%[220]. - Total deposits increased to $5,010,117 thousand in 2024, with a total interest expense of $39,585 thousand, compared to $4,680,552 thousand and $30,896 thousand in 2023, reflecting a rise in average yield to 3.16% from 2.64%[262]. - Total deposits as of September 30, 2024, were $6.58 billion, an increase of 3.9% compared to $6.33 billion as of December 31, 2023[324]. Interest Income and Margin - The net interest margin for Q3 2024 was reported at 4.10%[218]. - Net interest income for the three months ended September 30, 2024, was $76,158 thousand, an increase from $73,410 thousand for the same period in 2023, representing a growth of 3.8%[220]. - Net interest income for Q3 2024 was $76.2 million, an increase of $2.7 million or 3.7% compared to Q3 2023[251]. - The net interest margin for the nine months ended September 30, 2024, was 4.04%, a decrease of 24 basis points from 4.28% in the same period of 2023[259]. Credit Losses and Provisions - Provision for credit losses increased by $12.0 million to $24.4 million for the nine months ended September 30, 2024, compared to $12.4 million for the same period in 2023, an increase of 96.8%[228]. - Provision for credit losses was $5.0 million for Q3 2024, up from $3.9 million in Q3 2023[245]. - The allowance for credit losses was increased due to ongoing evaluations of credit quality and specific customer relationships in the loan portfolio[270]. - The total allowance for credit losses was $83,159,000 as of September 30, 2024, compared to $80,398,000 as of December 31, 2023[318]. Merger and Corporate Actions - The merger with HomeStreet is pending regulatory approvals, which have not yet been obtained, potentially affecting the merger's completion[215]. - FirstSun raised an initial $80 million in common stock to support the merger with HomeStreet, with plans to increase this amount[216]. - The company reported merger-related expenses of $5.2 million for the nine months ended September 30, 2024, with no such expenses in the same period in 2023[293]. Efficiency and Ratios - The efficiency ratio for the three months ended September 30, 2024, was 65.83%, compared to 61.02% in the same period of 2023, indicating a decline in operational efficiency[220]. - Return on average total assets decreased to 1.13% in Q3 2024 from 1.34% in Q3 2023, while return on average stockholders' equity fell to 8.79% from 12.03%[218]. - The total risk-based capital to risk-weighted assets ratio was 15.25% as of September 30, 2024, compared to 12.93% a year earlier, indicating a strong capital position[220]. Market and Economic Conditions - The company expects revenue from mortgage banking activities to remain below prior year levels due to elevated interest rates and low housing inventory[279]. - The data indicates a significant variability in net interest income based on interest rate changes, highlighting potential risks and opportunities[350]. - The yield curve shape remains unchanged despite the interest rate adjustments[350].

Financial Performance - Net income for Q3 2024 was $22.4 million, or $0.79 per diluted share, down from $25.2 million, or $1.00 per diluted share in Q3 2023[1] - Net income for the quarter was $22,422,000, down from $24,560,000 in the previous quarter[23] - Net income for the quarter was $22,422 thousand, down from $25,232 thousand year-over-year, reflecting a decrease of 3.2%[27] - Diluted earnings per share decreased to $0.79 from $0.88 in the previous quarter[23] - Earnings per share (basic) decreased to $0.81 from $1.01, a decline of 19.8% year-over-year[27] - The company reported an income before income taxes of $28,569 thousand, down from $31,994 thousand, a decrease of 10.3%[27] - Net income (GAAP) for the quarter was $22,422,000, compared to $24,560,000 in the previous quarter and $12,296,000 a year ago[47] - Diluted earnings per share (GAAP) decreased to $0.79 for the quarter, down from $0.88 in the previous quarter and $1.00 a year ago[49] Interest Income and Margin - Net interest margin increased to 4.10%, with net interest income totaling $76.2 million, an increase of $3.3 million from the prior quarter[5] - Net interest income for the quarter ended September 30, 2024, was $76,158,000, an increase from $72,899,000 in the previous quarter[23] - Total interest income for the quarter ended September 30, 2024, was $118,932 thousand, an increase from $106,775 thousand in the same quarter last year, representing a growth of 11.5%[27] - Net interest margin improved to 4.10% for the quarter, up from 4.02% in the previous quarter[49] Loan and Deposit Growth - Loan growth was 6.7% annualized, with total loans reaching $6.4 billion, up from $6.3 billion in the previous quarter[14] - Deposit growth was 1.8% annualized, with total deposits at $6.6 billion, reflecting an increase of $30.4 million in Q3 2024[15] - Total loans held-for-investment increased to $6,443,756,000 from $6,337,162,000 in the previous quarter[23] - Total deposits rose to $6,649,880,000 from $6,619,525,000 in the previous quarter[23] - Total loans, net of deferred costs, fees, premiums, and discounts reached $6,443,756 thousand as of September 30, 2024, up from $6,337,162 thousand on June 30, 2024[42] - Total deposits reached $6,649,880 thousand, reflecting a 4.9% increase compared to $6,339,847 thousand a year ago[31] Credit Losses and Allowance - The provision for credit losses increased to $5.0 million, up from $1.2 million in the prior quarter, driven by loan growth and specific customer relationship deterioration[7] - Provision for credit losses increased significantly to $5,000,000 from $1,200,000 in the previous quarter[23] - The allowance for credit losses as a percentage of total loans was 1.29%, an increase of four basis points from the prior quarter[8] - The allowance for credit losses increased to $83,159 thousand as of September 30, 2024, up from $78,960 thousand on June 30, 2024[43] - Nonperforming loans increased to $65,824 thousand as of September 30, 2024, compared to $62,558 thousand on June 30, 2024[43] Efficiency and Capital Ratios - The efficiency ratio improved to 65.83%, compared to 66.42% in the prior quarter, despite merger costs impacting the ratio[12] - Common equity tier 1 risk-based capital ratio was 13.06%, indicating strong capital ratios above "well-capitalized" thresholds[16] - The common equity tier 1 risk-based capital ratio improved to 13.06% from 10.79% a year earlier, indicating stronger capital position[33] - The total risk-based capital ratio increased to 15.25%, up from 12.93% in September 2023, showing enhanced financial stability[33] Asset Growth - Total assets reached $8,138,487,000, up from $7,999,295,000 in the previous quarter[23] - Total assets increased to $8,138,487,000 as of September 30, 2024, compared to $7,999,295,000 as of June 30, 2024, reflecting a growth of 1.7%[45] - Total stockholders' equity (GAAP) as of September 30, 2024, is $1,034,085,000, an increase from $996,599,000 as of June 30, 2024, representing a growth of 3.9%[45] - Stockholders' equity increased to $1,034,085 thousand, up from $843,719 thousand, marking a growth of 22.6% year-over-year[31] Future Outlook - The company plans to continue expanding its market presence and investing in new technologies to drive future growth[32]

Financial Performance - Net income for Q2 2024 was $24.6 million, or $0.88 per diluted share, down from $28.0 million, or $1.11 per diluted share in Q2 2023[216]. - For the six months ended June 30, 2024, net income was $36.9 million, or $1.32 per diluted share, compared to $54.3 million, or $2.14 per diluted share for the same period in 2023[216]. - Net income for the three months ended June 30, 2024, was $24,560,000, down 12.97% from $28,006,000 for the same period in 2023[218]. - Net income (GAAP) for the year was $36,856 thousand, down from $54,287 thousand, indicating a decrease of 32.06%[221]. - Diluted earnings per share (GAAP) decreased to $0.88 for the three months ended June 30, 2024, from $1.11 in the same period in 2023[223]. Interest Income and Margin - Net interest margin for Q2 2024 was 4.02%, with a return on average total assets of 1.26% and return on average stockholders' equity of 10.03%[216]. - Net interest income for the three months ended June 30, 2024, was $72,899,000, a decrease of 1.27% from $73,835,000 for the same period in 2023[218]. - Net interest income for Q2 2024 was $72.9 million, a decrease of $0.9 million or 1.3% compared to Q2 2023[242]. - Net interest margin was 4.02% for Q2 2024, down from 4.24% in Q2 2023, reflecting a 22 basis point decrease[251]. - Net interest margin for the six months ended June 30, 2024, was 4.00%, down from 4.31% for the same period in 2023, a decrease of 31 basis points[256]. Loan and Deposit Growth - Loan growth for Q2 2024 was 3.3% annualized, while deposit growth was 10.8% annualized[216]. - Total loans, excluding loans held-for-sale, increased to $6,337,162,000 as of June 30, 2024, compared to $6,155,090,000 as of June 30, 2023, representing a growth of 2.95%[218]. - Total deposits rose to $4,951,013 thousand in Q2 2024, compared to $4,280,980 thousand in Q2 2023, marking an increase of approximately 15.66%[259]. - Total deposits increased to $24,150,000 for the three months ended June 30, 2024, up from $11,021,000 in the same period of 2023, a rise of 119.5%[265]. Credit Quality and Losses - A provision for credit loss of $10.6 million negatively impacted net income for the six months ended June 30, 2024[216]. - Provision for credit losses was $1.2 million in Q2 2024, down from $4.4 million in Q2 2023[242]. - The allowance for credit losses to loans was 1.25% as of June 30, 2024, unchanged from the same period in 2023, indicating stable credit quality[218]. - Nonaccrual loans totaled $62.464 million as of June 30, 2024, up from $37.327 million as of December 31, 2023[318]. Merger and Capital Structure - The merger with HomeStreet, Inc. is expected to close in Q4 2024, resulting in total assets of approximately $17 billion and 129 branch locations[213]. - The merger agreement includes an initial capital raise of $80 million, which was later increased to support the merger[214]. - The company has entered into an upfront securities purchase agreement, issuing 2.46 million shares for $80.0 million as part of a merger agreement with HomeStreet[331]. Operational Efficiency - Efficiency ratio for the three months ended June 30, 2024, was 66.42%, compared to 59.15% for the same period in 2023, indicating a decline in operational efficiency[218]. - Noninterest expenses increased by $5.8 million to $63.9 million for Q2 2024, compared to $58.0 million in Q2 2023, primarily driven by a $5.8 million increase in salary and employee benefits due to higher headcount and variable compensation[286]. Regulatory and Market Risks - Interest rate risk is a primary market risk affecting net interest income, with a potential decrease of 9.5% in net interest income under a +300 basis points scenario for 2024[348]. - The company is subject to various regulatory capital requirements and routinely analyzes its capital structure[333].