Firstsun Capital Bancorp · NASDAQ:FSUN
Firstsun Capital Bancorp — Merger or Acquisition (January 2024)
27 slides from Firstsun Capital Bancorp's merger presentation, Jan 16, 2024
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 J A N U A R Y 1 6 , 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
Slide 2: Forward-Looking Statements
2 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,” “believe,” “intend,” “estimate,” “plan,”
Slide 3: Disclaimer & Forward Looking (Continued)
3 DISCLAIMER & FORWARD LOOKING (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 to sell or
Slide 4: Presenters and Agenda
4 Neal E. Arnold CEO, FirstSun Robert A. Cafera CFO, FirstSun Presenters Agenda V. IV. III. II. I. Mark K. Mason CEO, HomeStreet VI. Transaction Overview & Industrial Logic Pro Forma Company Snapshot Key Financial Impacts Integration & Due Diligence Conclusion Appendix John M. Michel CFO, HomeStreet
Slide 5: Transaction Overview & Industrial Logic
5 Transaction Overview & Industrial Logic
Slide 6: Creating a Premier Regional Banking Franchise
6 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 Key Highlights $17B Pro Forma Assets(1) 5.6x 2025 Pro Forma Price / Earnings(2) 3
Slide 7: Merger Structure & Consideration
7 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 sharehol
Slide 8: Well-Positioned in the Most Attractive Markets
8 # 1 Southern California (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 # 1 Orlando, Florida 2 Charlotte, North Carolina 3 Tampa, Flo
Slide 9: Combined Commercial Capability
9 COMBINED COMMERCIAL CAPABILITY 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 Bankers Across 6 Re
Slide 10: HomeStreet Synergized Earnings Power
10 $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 HOMESTREET, INC. SYNERGIZED EARNINGS POWER Sou
Slide 11: Together, We Are a Superior Performance Banking Franchise
11 3.9% TOGETHER, WE ARE A SUPERIOR PERFORMANCE BANKING FRANCHISE Compelling Valuation Dynamics Pro Forma Financial Performance Relative to $15-$30B Asset Banks(3) 1.4% 17% 4.2% Source: S&P Global Market Intelligence, Factset. Note: Market and estimate data as of January 12, 2024. (1) Utilizes HMST
Slide 12: Pro Forma Company Snapshot
12 Pro Forma Company Snapshot
Slide 13: Combined Deposit Franchise
13 Consumer Business Washington Texas Kansas California Colorado New Mexico Other (AZ, HI, OR) 28% 15% 13% 12% 12% 10% 10% Composition by type Composition by geography(4)(5) ✓ Core deposits well balanced across pro forma footprint and both retail and commercial franchises ✓ Combined entity uninsured
Slide 14: Diversified Pro Forma Loan Portfolio
14 ✓ Pro forma loan portfolio is highly diversified and provides upside growth potential in multiple verticals and expertise from each entity – HMST multifamily is reduced from 51% of standalone loans to ~29% pro forma(1,4) ✓ Both companies bring a portfolio with a strong history of credit quality a
Slide 15: Robust, Complementary and Well-Balanced Revenue Streams
15 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”) September 30, 2023. (1) Full year 2025 data shown for combined company metric, excludes the impact of identified reven
Slide 16: Key Financial Impacts
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Slide 17: Key Model Impacts and Assumptions
17 KEY MODEL IMPACTS AND ASSUMPTIONS Source: Company documents. ▪ 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
Slide 18: Recently Closed M&A Comps and Capital Ratios
18 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 Rate Mark EffectLegend: CET1 Capital Ratio Tangible Common Equ
Slide 19: Positioned for Upside Market Performance
19 POSITIONED FOR UPSIDE MARKET PERFORMANCE Source: S&P Global Market Intelligence; FactSet. Note: Market data as of January 12, 2024. (1) Pro forma ratios are estimates at deal closing estimates at closing including purchase accounting and other merger adjustments. (2) Nationwide major exchange-tra
Slide 20: Integration & Due Diligence
20 Integration & Due Diligence
Slide 21: Extensive Due Diligence Conducted on Both Banks
21 EXTENSIVE DUE DILIGENCE CONDUCTED ON BOTH BANKS Diligence focus areas included: Credit Deposit & Borrowings Treasury Risk Management Legal / Compliance Commercial Banking Retail Banking Capital Accounting & Tax Technology & Operations Audit Human Resources Comprehensive Mutual Due Diligence Proce
Slide 22: Conclusion
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Slide 23: Compelling Investment Thesis
23 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
Slide 24: FirstSun: Three Key Tenets of Our Franchise Growth & Evolution
24 1.11% 1.34% 1.10% 0.95% 2019 - 2023 YTD Average 2023 YTD FSUN $2-$10BN Peers FIRSTSUN: THREE KEY TENETS OF OUR FRANCHISE GROWTH & EVOLUTION $1.7 $1.9 $3.7 $3.9 $4.2 $5.0 $5.7 $7.4 $7.8 2015 2016 2017 2018 2019 2020 2021 2022 2023Q3 Expansion into High Growth Markets via M&A and Organic Growth FSU
Slide 25: Appendix
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Slide 26: Pro Forma Tangible Book Value
26 $ 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
Slide 27: Earnings Per Share Accretion
27 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
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