Firstsun Capital Bancorp(FSUN) - 2024 Q2 - Quarterly Report

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$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$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$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].