Firstsun Capital Bancorp · NASDAQ:FSUN

Firstsun Capital Bancorp — Merger or Acquisition (February 2024)

44 slides from Firstsun Capital Bancorp's merger presentation, Feb 5, 2024

  1. Slide 1: Transformational Strategic Merger

    TRANSFORMATIONAL STRATEGIC MERGER E n h a n c i n g V a l u e f o r O u r S h a r e h o l d e r s , C u s t o m e r s a n d C o m m u n i t i e s F E B R U A R Y 2 0 2 4 P o s i t i o n e d f o r G r o w t h i n a C h a l l e n g i n g O p e r a t i n g E n v i r o n m e n t

  2. Slide 2: Disclaimer & Forward Looking Statements

    2 DISCLAIMER & FORWARD LOOKING STATEMENTS FORWARD-LOOKING STATEMENTS This communication contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. In general, forward-looking statements may be identified by words such as “expect,” “anticipate,”

  3. Slide 3: Disclaimer & Forward Looking Statements (Continued)

    3 DISCLAIMER & FORWARD LOOKING STATEMENTS (CONTINUED) NO OFFER OR SOLICIATION This document is not a proxy statement or solicitation or a proxy, consent or authorization with respect to any securities or in respect of the proposed transaction of any vote or approval and shall not constitute an offer

  4. Slide 4: Table of Contents

    4 Table of Contents I. Introduction II. HomeStreet Overview III. FirstSun Overview IV. Combined Franchise V. Conclusion VI. Appendix

  5. Slide 5: Introduction

    Introduction Sy [nl

  6. Slide 6: Introduction to Executive Management

    6 INTRODUCTION TO EXECUTIVE MANAGEMENT Neal E. Arnold President & CEO, FirstSun Robert A. Cafera CFO, FirstSun Mark K. Mason President & CEO, HomeStreet John M. Michel CFO, HomeStreet ✓ President and CEO of Sunflower since 2018 ✓ He served as Executive Vice President & CFO of Fifth Third Bancorp and

  7. Slide 7: A Volatile Environment Created Opportunity

    7 Potential $5-$15 Billion Asset Size Public Bank Partner Universe Source: S&P Global Market Intelligence. Note: $5 to $15 billion banks data measured as of most recent quarter reported, includes HMST but excludes all other merger targets. A VOLATILE ENVIRONMENT CREATED OPPORTUNITY ✓ High quality co

  8. Slide 8: Creating a Premier Regional Banking Franchise

    8 CREATING A PREMIER REGIONAL BANKING FRANCHISE MATERIALLY ACCELERATES EACH COMPANY’S OPERATING LEVERAGE TRAJECTORY Best-in-Class Operating Metrics ~1.4% Pro Forma ROAA ~17% Pro Forma ROATCE FSUN Branches HMST Branches Pro Forma Key Highlights Combination of Two Top-Tier Core Deposit Franchises Well

  9. Slide 9: HomeStreet Overview

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  10. Slide 10: HomeStreet Key Highlights

    10 HOMESTREET KEY HIGHLIGHTS ✓ High quality diversified core deposit franchise ✓ Long-tenured, sticky core deposit base ✓ Diversified high quality real estate lending franchise for both single family and multifamily residential and diversified CRE ✓ Best-in-class credit: granular portfolio with low

  11. Slide 11: High Quality Core Deposit Franchise

    11 (30%) (7%) West Coast Region & Business Model Peers HMST 7% 28% HMST West Coast Region & Business Model Peers 60% 40% 59% 25% 12% 4% Source: S&P Global Market Intelligence, Company Documents. (1) Per deposit tape as of 11/30/2023. (2) Per FDIC data as of 6/30/2023. (3) Non-reciprocal deposits exc

  12. Slide 12: Long-Tenured, Sticky Core Deposit Base

    12 15% 19% 2013 2023 $1,703 $3,557 2013 2023 $323 $1,307 2013 2023 Source: S&P Global Market Intelligence. FDIC data as of 6/30 of their respective years. Note: Branch data excludes branches with zero deposits and the headquarters branch. Time deposits is bank level regulatory data. LONG-TENURED, ST

  13. Slide 13: Best-in-Class Credit: Granular Portfolio with Low Historical Loss Content

    13 12.6% 1.3% 6.8% Peer MedianFSUNHMST (0.00%) 0.05% 0.11% HMST FSUN Peer Median 140% 140% 212% HMST FSUN Peer Median 1% 3% 5% 14% 20% 20% 22% 2023 2024 2025 2026 2027 2028 2029 8% 9% 23% 51% 10% BEST-IN-CLASS CREDIT: GRANULAR PORTFOLIO WITH LOW HISTORICAL LOSS CONTENT Source: S&P Global Market Inte

  14. Slide 14: Fee Income Businesses Provide Material Hedge Against a Declining Rate Environment

    14 32% 42% 41% 39% 44% 42% 33% 30% 33% 22% 18% 13% 15% 17% 19% 21% 24% 1.79% 1.53% 0.67% 0.66% 0.87% 1.29% 1.59% 1.31% 1.53% 1.92% 2.91% 3.01% 3.82% 3.57% 3.59% 4.18% 4.52% 19Q4 20Q1 20Q2 20Q3 20Q4 21Q1 21Q2 21Q3 21Q4 22Q1 22Q2 22Q3 22Q4 23Q1 23Q2 23Q3 23Q4 HMST Fee income / Revenue 10 Year UST. FEE

  15. Slide 15: Strong Culture and Tenured Employee Base with Extensive M&A Experience

    15 Source: S&P Global Market Intelligence; Company documents; FDIC. Note: FDIC data as of 6/30/2023. STRONG CULTURE AND TENURED EMPLOYEE BASE WITH EXTENSIVE M&A EXPERIENCE America's Best Banks – 2022 Best Small Bank in WA Best-In-Class Mortgage Lender – 2022 #1 in the nation Top 5 Corp. Philanthropi

  16. Slide 16: Positioned in Many of the Largest Markets

    16 # 1 Southern California (ex. San Diego) (2) P 2 Dallas, Texas P 3 Houston, Texas P 4 Phoenix, Arizona P 5 Ontario, California P 6 San Francisco, California 7 Seattle, Washington P 8 Minneapolis, Minnesota 9 San Diego, California P 10 Denver, Colorado P $107 $86 $93 $74 Seattle Southern California

  17. Slide 17: Material Synergized Earnings Power

    17 $33 $94 $127 $10 $65 ($13) $39 ($6) Standalone Net Income Securities Rate Mark Loan Rate Mark Other Marks Adjusted Net Income Cost Savings (net of Durbin) All Other impacts Fully Synergized Earnings Combination Unlocks Significant Synergized Earnings MATERIAL SYNERGIZED EARNINGS POWER Source: S&P

  18. Slide 18: FirstSun Overview

    FirstSun Overview Sy [nl :

  19. Slide 19: FirstSun Key Highlights: The Playbook

    19 FIRSTSUN KEY HIGHLIGHTS: THE PLAYBOOK ✓ Balance between organic growth and strategic M&A ✓ Invested heavily in building out the local banking teams with a track record of success ✓ Focused go-to-market strategy: regional model with business line overlay ✓ C&I focused with select industry expertis

  20. Slide 20: Balance Between Organic Growth and Strategic M&A

    20 $3.6 $4.3 $1.7 $1.9 $3.7 $3.9 $4.2 $5.0 $5.7 $7.4 $7.9 2015 2016 2017 2018 2019 2020 2021 2022 2023 BALANCE BETWEEN ORGANIC GROWTH AND STRATEGIC M&A Asset Growth Over Time Source: S&P Global Market Intelligence. Note: Financial data as of December 31, 2023. (1) FTE basis. $ in billions Company Hi

  21. Slide 21: Invested Heavily in Building Out the Business Development Team

    21 846 962 979 1,059 1,042 1,149 1,122 2017 2018 2019 2020 2021 2022 2023 Metro TX Loans: $2,428 Deposits: $1,482 Branches: 19 FTE: 145 Legend INVESTED HEAVILY IN BUILDING OUT THE BUSINESS DEVELOPMENT TEAM $138 $39 FSUN Peers Source: S&P Global Market Intelligence. Note: 2023Q4 BHC data used. Peer g

  22. Slide 22: Focused Go-To-Market Strategy: Regional Model with Business Line Overlay

    22 Source: S&P Global Market Intelligence; Company documents. Note: Financial data as of December 31, 2023. Company data as of December 31 for each respective year. (1) Consists of business development in Dallas, Houston, Austin and San Antonio, excludes impact of Pioneer acquisition. FOCUSED GO-TO-

  23. Slide 23: Fee Income Is a Major Focus: >20% of Revenue

    23 $43.0 $31.4 2019 2023 $3.8 $5.7 2019 2023 $18.9 $33.3 2019 2023 FEE INCOME IS A MAJOR FOCUS: >20% OF REVENUE Wealth/Trust Mortgage Banking TM/Deposit/Card Fees Source: S&P Global Market Intelligence. ($ in millions) ($ in millions) ($ in millions) • Treasury Management (TM) is the key driver of g

  24. Slide 24: Demonstrated Ability to Remix Post M&A Deal Closing

    24 $1,062 $757 $869 $1,037 2017Q2 CRE 2019Q2 CRE 2017Q2 C&I 2019Q2 C&I $2,597 $3,103 2022Q2 C&I 2023Q4 C&I 146% 169% 165% 159% 151% 2022Q1 2022Q2 2022Q3 2022Q4 2023Q1 256% 270% 251% 242% 225% 2017Q1 2017Q2 2017Q3 2017Q4 2018Q1 ($ in millions) DEMONSTRATED ABILITY TO REMIX POST M&A DEAL CLOSING Close

  25. Slide 25: Operating Leverage and Diversity of Revenue at Play

    25 1.4% 0.9% 2023 '19 - '23 Annual Average 21.2% 36.0% 2023 '19 - '23 Annual Average 4.3% 3.6% 2023 '19 - '23 Annual Average $21 $104 2019 2023 $170 $223 2019 2023 $196 $373 2019 2023 OPERATING LEVERAGE AND DIVERSITY OF REVENUE AT PLAY Net Income ($M) 4.1x Change Net Interest Margin(1) Revenue ($M)

  26. Slide 26: Combined Franchise

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  27. Slide 27: Combined Franchise Snapshot

    27 COMBINED FRANCHISE SNAPSHOT ✓ Total Assets: $7.9B ✓ Gross Loans: $6.3B ✓ Total Deposits: $6.4B ✓ CET1 ratio: 11.1% ✓ NIB/Total: 24% ✓ CRE ex Multi / TRBC: 140% ✓ Strong presence in major metro growth areas (TX, CO, AZ) and stable funding focused markets (KS, NM) TOGETHER ✓ Total Assets: $9.4B ✓ G

  28. Slide 28: Merger Structure & Consideration

    28 Merger Structure & Consideration ▪ Entities: FirstSun Capital Bancorp (“FirstSun” or “FSUN”), HomeStreet Inc. (“HomeStreet” or “HMST”) ▪ FirstSun will be the legal and accounting acquiror ▪ 100% common stock; FirstSun to issue shares to HomeStreet shareholders ▪ Exchange ratio: HomeStreet shareho

  29. Slide 29: Combined Snapshot: Funding and Lending

    29 Non-interest bearing transaction Interest-bearing transaction Time Savings and MMDA 22% 7% 38% 33% 8% 11% 20% 28% 28% 6% Source: S&P Global Market Intelligence, Company Documents. (1) Utilizes bank-level regulatory data as of December 31, 2023. (2) Excludes impact of purchase accounting adjustmen

  30. Slide 30: Go-To Market Strategy & Opportunity

    30 GO-TO MARKET STRATEGY & OPPORTUNITY Houston, TXSouthern California(2)Denver, CO Seattle, WA Dallas, TX Phoenix, AZ San Antonio , TX Ontario, CA Regional business model structure with line of business overlay Operations in 6 of the Top 10 Fastest Growth MSAs… … And With a Presence in 8 of the Top

  31. Slide 31: Combined Fee Income Profile: Diversified & Poised for Growth

    31 Resi Loan Servicing, Commerical Loan Sale & Other 8% TM / Deposit / Card / Wealth Fees 9% Residential Mortgage GoS 4% TM / Deposit / Card Fees 36% Wealth/Trust 5% Residential Mortgage GoS 19% Resi Loan Servicing, Commercial Loans / SBA 24% Other 16% COMBINED FEE INCOME PROFILE: DIVERSIFIED & POIS

  32. Slide 32: C&I Growth Engine Deployed into HomeStreet Markets

    32 $1.2 $1.8 $2.2 $2.9 $3.1 2019 2020 2021 2022 2023 Source: S&P Global Market Intelligence, FDIC. Note: FDIC data as of 6/30/2023. (1) Includes impact of Pioneer acquisition. FSUN has built a comprehensive C&I growth engine that can be deployed into HomeStreet’s attractive, large metro markets… 102

  33. Slide 33: Together, We Are a Superior Performance Banking Franchise

    33 4.8% 1.4% 17% 3.9% TOGETHER, WE ARE A SUPERIOR PERFORMANCE BANKING FRANCHISE Compelling Valuation Dynamics Pro Forma Financial Performance Relative to $15-$30B Asset Banks(3) Source: S&P Global Market Intelligence, Factset. Note: Market and estimate data as of January 30, 2024. (1) Utilizes HMST

  34. Slide 34: Robust, Complementary and Well-Balanced Revenue Streams

    34 ROBUST, COMPLEMENTARY AND WELL-BALANCED REVENUE STREAMS Source: S&P Global Market Intelligence, Company documents & FactSet. Note: Financial data as of last twelve months (“LTM”) December 31, 2023. (1) Full year 2025 data shown for combined company metric, excludes the impact of identified revenu

  35. Slide 35: Conclusion

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  36. Slide 36: FirstSun Is Highly Confident in Its Ability to Execute

    36 1.02% 1.38% 1.09% 0.94% 2020 - 2023 Average 2023 FSUN $2-$10B Peers 10.1% 7.6% FSUN $5-$10B Peers FIRSTSUN IS HIGHLY CONFIDENT IN ITS ABILITY TO EXECUTE TRACK RECORD OF FINANCIAL RESULTS OUTPERFORMANCE $1.12 $4.08 Pre-SGB EPS in 2015 FSUN 2023 GAAP EPS Build High Quality, Durable Profitability Wh

  37. Slide 37: Compelling Investment Thesis

    37 COMPELLING INVESTMENT THESIS Premier, differentiated regional bank positioned for growth Balanced franchise with a focus in the nation’s most attractive metro markets and complemented by funding from stable, granular markets Combined balance sheet well-positioned for either a rising rate or decli

  38. Slide 38: Positioned for Upside Market Performance

    38 POSITIONED FOR UPSIDE MARKET PERFORMANCE Source: S&P Global Market Intelligence; FactSet. Note: Market data utilizes 20-day VWAP as of January 30, 2024. (1) Pro forma ratios are estimates at deal closing and include purchase accounting and other merger adjustments. (2) Nationwide major exchange-t

  39. Slide 39: Pro Forma Cap Table & Investor Evolution

    39 3% 33% FSUN/HMST Index/Passive Institutional Peer Index/Passive Institutional x Legacy FSUN PE + <4.9% Ownership ($104M mkt cap) New FSUN PE/Institutional ($286M mkt cap) Hale Family, Board & Management ($399M mkt cap) Active Institutional ($219M mkt cap) Index/Passive Institutional ($44M mkt cap

  40. Slide 40: Appendix

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  41. Slide 41: Key Model Impacts and Assumptions

    41 Source: Company documents. KEY MODEL IMPACTS AND ASSUMPTIONS ▪ FSUN and HMST standalone projections based on management projections ▪ Pro Forma reflects management’s outlook for the combined company Earnings ▪ Represents approximately $55 million pre-tax or ~11% reduction of combined expense base

  42. Slide 42: Pro Forma Tangible Book Value

    42 $ millions Shares (mm) $ per share $ millions FirstSun Capital Bancorp (FSUN): (A) Stock Consideration to HomeStreet (HMST) $286.5 (1) Estimated Standalone Tangible Book Value at Close (6/30/24) $819.3 25.0 $32.82 Pro Forma: Estimated HMST Standalone Tangible Common Equity at Close (6/30/24) $534

  43. Slide 43: Earnings Per Share Accretion

    43 EARNINGS PER SHARE ACCRETION Sources: Company documents; S&P Global Market Intelligence. (1) Half year impact of combined Durbin amendment impact. (2) $82.8 million pre-tax CDI amortized over 10 years (sum-of-the-years digits method). (3) $420.0 million pre-tax loan interest rate mark accreted ov

  44. Slide 44: Impressive Capital Accretion & Durable Pro Forma Balance Sheet

    44 IMPRESSIVE CAPITAL ACCRETION & DURABLE PRO FORMA BALANCE SHEET Recently Closed M&A Comps 1.21% 1.11% 1.53% Peer Median 3.1% 13.9% Peer Median 6.5% 7.2% 7.5% 8.6% 7.6% 8.5% 8.6% 9.4% Q2-2024 2024 2025 Peer Median 8.7% 9.1% 9.3% 10.7% 11.8% 10.8% 10.8% 11.7% Q2-2024 2024 2025 Peer Median GAAP Basis

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