Firstsun Capital Bancorp(US:FSUN)2025-08-08 20:13Financial Performance - Net income for Q2 2025 was $26.4 million, an increase from $24.6 million in Q2 2024, with diluted earnings per share rising to $0.93 from $0.88[158]. - For the six months ended June 30, 2025, net income reached $50.0 million, compared to $36.9 million for the same period in 2024, with diluted earnings per share increasing from $1.32 to $1.77[159]. - Income before income taxes for the six months ended June 30, 2025, increased to $60.4 million, up from $48.1 million in 2024, reflecting a growth of 25.4%[167]. - Adjusted net income (non-GAAP) for the three months ended June 30, 2025, was $26,386 thousand, up from $25,181 thousand in 2024, representing a year-over-year increase of 4.8%[165]. - Income before income taxes increased by $2.9 million to $4.6 million for Q2 2025, compared to $1.7 million in Q2 2024, driven by higher revenue from mortgage banking services and net interest income[168]. Revenue and Income Sources - Net interest income for Q2 2025 was $78.5 million, up from $72.9 million in Q2 2024, while noninterest income increased to $27.1 million from $23.3 million[160]. - Noninterest income accounted for 25.6% of total revenue in Q2 2025, up from 24.2% in Q2 2024[162]. - Revenue from mortgage banking services rose by $2.3 million to $13.9 million for Q2 2025, compared to $11.6 million in Q2 2024, due to increased loan originations sold and mortgage servicing income[168]. - Income from mortgage banking services for the six months ended June 30, 2025, increased by $1.8 million to $22.3 million compared to $20.5 million in the same period in 2024[220]. Assets and Loans - Total assets as of June 30, 2025, were $8.44 billion, compared to $7.99 billion a year earlier, reflecting growth in total loans held-for-investment to $6.51 billion from $6.34 billion[160]. - Total average loans grew to $6.6 billion at June 30, 2025, an increase of $0.2 billion or 3.7% compared to June 30, 2024, driven by organic growth in the loan portfolio[190]. - Total loans held-for-investment increased to $6.5 billion at June 30, 2025, compared to $6.4 billion at December 31, 2024, marking a 1.7% growth[237]. - Identifiable assets for the Banking segment increased to $7.1 billion at June 30, 2025, from $6.9 billion at June 30, 2024, driven by organic growth in the loan portfolio[166]. Deposits and Funding - Deposit growth was 13.2% annualized, with total deposits reaching $7.10 billion compared to $6.62 billion in the prior year[161]. - Total deposits increased by $0.4 billion to $7.1 billion as of June 30, 2025, compared to December 31, 2024[250]. - Average total deposits for the three months ended June 30, 2025, were $6.9 billion with an average rate paid of 2.15%, compared to $6.5 billion and 2.39% for the same period in 2024[257]. - Total consumer deposits rose to $3.6 billion, up from $3.4 billion, while total business deposits increased to $3.1 billion from $2.8 billion[250]. Credit Quality and Losses - Provision for credit losses increased to $4.5 million for the second quarter of 2025, up from $0.2 million in the same period of 2024, indicating a significant rise due to credit quality deterioration[166]. - The company recorded net charge-offs of $13,547,000 for the three months ended June 30, 2025, with a provision for credit losses of $4,750,000[245]. - The allowance for credit losses stands at $82,993,000, which is 1.28% of total loans, compared to 1.25% in the previous year[245]. - The company maintains policies to monitor and maintain the credit quality of its loan portfolio, with elevated approval required for exceptions[247]. Expenses and Efficiency - Total noninterest expense (GAAP) for the three months ended June 30, 2025, was $68,110 thousand, compared to $63,875 thousand in 2024, an increase of 3.9%[165]. - Noninterest expenses increased by $4.2 million to $68.1 million for Q2 2025, compared to $63.9 million in Q2 2024, reflecting a 6.6% increase[223]. - Salary and employee benefits increased by $2.6 million to $18.1 million for the six months ended June 30, 2025, compared to $15.6 million for the same period in 2024, due to higher variable compensation[170]. - The efficiency ratio improved to 64.52% in Q2 2025 from 66.42% in Q2 2024, indicating better cost management[162]. Interest Rates and Economic Impact - Interest rate changes significantly affect net interest margin more than general inflation rates[270]. - A +300 basis point increase in interest rates is projected to result in an 8.0% increase in net interest income for 2025[272]. - A +200 basis point increase in interest rates is expected to yield a 5.5% increase in net interest income for 2025[272]. - The economic value of equity is projected to decrease by 6.0% with a +300 basis point increase in interest rates for 2025[272].