Second Quarter 2023 Highlights:
- Net income of $28.0 million, $1.11 per diluted share
- Net interest margin of 4.24%
- Return on average total assets of 1.49%
- Return on average stockholders’ equity of 13.54%
- Average deposit growth of 9.7% annualized
- Loan growth of 6.2% annualized
- 24.8% noninterest income to total revenue
DENVER--(BUSINESS WIRE)-- FirstSun Capital Bancorp (“FirstSun”) (OTCQX: FSUN) reported net income of $28.0 million for the second quarter of 2023 compared to net income of $0.4 million for the second quarter of 2022. Earnings per diluted share were $1.11 for the second quarter of 2023 compared to $0.02 for the second quarter of 2022. Earnings for the second quarter of 2022 were impacted by $16.8 million of merger costs, net of tax, or $0.66 per diluted share.
Neal Arnold, FirstSun’s President and Chief Executive Officer, commented, “We are very pleased with our record earnings this quarter and our continued strong results driven by our well diversified business mix. Highlights this quarter include a net interest margin of 4.24%, along with growth in both loans and deposits. We believe our growth amidst the difficult banking environment, including declining deposit trends and rising funding costs, will position us uniquely among our peers. Additionally, with growing concern about economic uncertainty and rising commercial real estate pressures, we are heartened by the vitality of the Southwest region that we operate in and our lower exposure to commercial real estate relative to our peers. Further, we believe our strong capital base, our granular deposit base, our securities portfolio positioning, our loan portfolio credit quality and our overall asset sensitive profile provides us with the flexibility to continue to deliver responsible growth in this slowing economic environment.”
Second Quarter 2023 Results
Net income totaled $28.0 million, or $1.11 per diluted share, during the second quarter of 2023, compared to $26.3 million, or $1.03 per diluted share, during the prior quarter. The return on average total assets was 1.49% in the second quarter of 2023, compared to 1.44% in the prior quarter, and the return on average stockholders’ equity was 13.54% in the second quarter of 2023, compared to 13.37% in the prior quarter.
Net Interest Income and Net Interest Margin
Net interest income totaled $73.8 million during the second quarter of 2023, a decrease of $0.3 million compared to the prior quarter. Our net interest margin decreased 15 basis points to 4.24% compared to the prior quarter. Results in the second quarter of 2023, compared to the prior quarter, were driven by an increase of 52 basis points in the cost of interest-bearing liabilities, partially offset by an increase of 24 basis points in yield on earning assets.
Average loans increased by $0.2 billion in the second quarter of 2023, compared to the prior quarter. Loan yield increased by 25 basis points to 6.13% in the second quarter of 2023, compared to the prior quarter, primarily due to the rising interest rate environment and its impact on variable rate loans in the loan portfolio and higher yields on new originations. Average interest-bearing deposits increased $0.2 billion in the second quarter of 2023, compared to the prior quarter. Total cost of deposits increased by 55 basis points to 1.94% in the second quarter of 2023, compared to the prior quarter, primarily due to an increase in deposit pricing as a result of the elevated interest rate environment and higher mix of certificates of deposits. Average FHLB borrowings increased $18.0 million in the second quarter of 2023, compared to the prior quarter. The cost of FHLB borrowings increased by 51 basis points to 5.19% in the second quarter of 2023, compared to the prior quarter, primarily due to the rising interest rate environment.
Asset Quality and Provision for Credit Losses
The provision for credit losses totaled $4.4 million during the second quarter of 2023, an increase of $1.1 million from $3.4 million in the prior quarter, primarily due to loan growth and deterioration on a specific customer relationship in our loan portfolio.
Net charge-offs during the second quarter of 2023 were $0.7 million, resulting in an annualized ratio of net charge-offs to average loans of 0.05%, compared to net charge-offs of $0.1 million, resulting in an annualized ratio of net-charge offs to average loans of 0.00% in the prior quarter. The allowance for credit losses as a percentage of total loans was 1.26% at June 30, 2023, an increase of three basis points from the prior quarter.
The ratio of nonperforming assets to total assets was 1.00% at June 30, 2023, compared to 0.51% at March 31, 2023.
Noninterest Income
Noninterest income totaled $24.3 million during the second quarter of 2023, an increase of $5.4 million from the prior quarter. Mortgage banking income increased $4.2 million during the second quarter of 2023, primarily due to an increase in fair value of our mortgage servicing rights portfolio. Total originations of mortgage loans held-for-sale were $236.2 million in the second quarter of 2023, or an increase of $38.4 million from the prior quarter. Other noninterest income increased $0.7 million during the second quarter of 2023, primarily due to an increase in loan syndication fees and customer accommodation swap fees. Noninterest income as a percentage of total revenue was 24.8%, an increase of 4.4% from the prior quarter.
Noninterest Expense
Noninterest expense totaled $58.0 million during the second quarter of 2023, an increase of $1.8 million from the prior quarter. Amortization of intangible assets increased $1.0 million from the prior quarter. Data processing and insurance expenses increased by $0.9 million and $0.7 million, respectively. These increases were partially offset by a $1.0 million decrease in salaries and employee benefits from the prior quarter primarily due to higher benefit costs generally incurred in the first quarter of each year.
The efficiency ratio for the second quarter of 2023 was 59.15% compared to 60.47% in the prior quarter.
Tax Rate
The effective tax rate was 21.5% in the second quarter of 2023, compared to 21.4% in the prior quarter.
Loans
Total loans were $6.2 billion at June 30, 2023, compared to $6.1 billion at March 31, 2023, an increase of $94.1 million in the second quarter of 2023, or 6.2% on an annualized basis, resulting primarily from growth in commercial and industrial and residential real estate balances.
Deposits
Average deposits were $6.0 billion for the second quarter of 2023, compared to $5.8 billion for the prior quarter, an increase of $140.9 million in the second quarter of 2023, or 9.7% on an annualized basis. Noninterest-bearing deposit accounts represented 27.1% of total deposits at June 30, 2023 and the loan-to-deposit ratio was 100.1% at June 30, 2023.
The ratio of total uninsured deposits to total deposits was estimated to be 32.5% at June 30, 2023, compared to 35.8% at March 31, 2023. The ratio of total uninsured and uncollateralized deposits to total deposits was estimated to be 24.1% at June 30, 2023, compared to 26.4% at March 31, 2023.1
1 Uninsured deposits and uninsured and uncollateralized deposits are reported for our wholly-owned subsidiary Sunflower Bank, N.A.
Capital
Capital ratios remain strong and above “well-capitalized” thresholds. As of June 30, 2023, our common equity tier 1 risk-based capital ratio was 10.40%, total risk-based capital ratio was 12.52% and tier 1 leverage ratio was 10.00%. Book value per common share was $33.02 at June 30, 2023, an increase of $0.96 from March 31, 2023. Tangible book value per common share, a non-GAAP financial measure, was $28.76 at June 30, 2023, an increase of $1.04 from March 31, 2023.
Non-GAAP Financial Measures
This press release (including the tables within the “Non-GAAP Financial Measures and Reconciliations” section) contains financial measures determined by methods other than in accordance with principles generally accepted in the United States (“GAAP”). FirstSun management uses these non-GAAP financial measures in their analysis of FirstSun’s performance and the efficiency of its operations. Management believes these non-GAAP measures provide a greater understanding of ongoing operations, enhance comparability of results with prior periods and demonstrate the effects of significant items in the current period. FirstSun believes a meaningful analysis of its financial performance requires an understanding of the factors underlying that performance. FirstSun management believes investors may find these non-GAAP financial measures useful. These non-GAAP financial measures, however, should not be viewed as a substitute for financial measures determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Below is a listing of the non-GAAP measures used in this press release:
- Tangible common stockholders’ equity;
- Tangible assets;
- Tangible common stockholders’ equity to tangible assets;
- Tangible common stockholders’ equity to tangible assets, reflecting net unrealized losses on HTM securities, net of tax;
- Tangible book value per common share;
- Net income excluding merger costs;
- Return on average total assets excluding merger costs;
- Return on average stockholders’ equity excluding merger costs;
- Efficiency ratio excluding merger related expenses;
- Diluted earnings per share excluding merger related costs; and
- Fully tax equivalent (“FTE”) net interest income and net interest margin on FTE basis.
The tables beginning within the “Non-GAAP Financial Measures and Reconciliations” section provide a reconciliation of each non-GAAP financial measure contained in this press release to the most comparable GAAP equivalent.
About FirstSun Capital Bancorp
FirstSun Capital Bancorp, headquartered in Denver, Colorado, is the financial holding company for Sunflower Bank, N.A., which operates as Sunflower Bank, First National 1870 and Guardian Mortgage. Sunflower Bank provides a full range of relationship-focused services to meet personal, business and wealth management financial objectives, with a branch network in five states and mortgage capabilities in 43 states. FirstSun had total consolidated assets of $7.8 billion as of June 30, 2023.
First National 1870 and Guardian Mortgage are divisions of Sunflower Bank, N.A. To learn more, visit ir.firstsuncb.com, SunflowerBank.com, FirstNational1870.com or GuardianMortgageOnline.com.
Summary Data:
As of and for the quarter ended |
As of and for the six months ended |
||||||||||||||||||
($ in thousands, except per share amounts) |
June 30, 2023 |
March 31, 2023 |
June 30, 2022 |
June 30, 2023 |
June 30, 2022 |
||||||||||||||
Net interest income |
$ |
73,835 |
$ |
74,117 |
$ |
58,585 |
$ |
147,952 |
$ |
99,870 |
|||||||||
Provision for credit losses |
4,422 |
3,360 |
5,000 |
7,782 |
8,700 |
||||||||||||||
Noninterest income |
24,290 |
18,931 |
22,302 |
43,221 |
45,995 |
||||||||||||||
Noninterest expense |
58,043 |
56,266 |
75,668 |
114,309 |
128,135 |
||||||||||||||
Income before income taxes |
35,660 |
33,422 |
219 |
69,082 |
9,030 |
||||||||||||||
Provision for income taxes |
7,654 |
7,141 |
(211 |
) |
14,795 |
931 |
|||||||||||||
Net income |
28,006 |
26,281 |
430 |
54,287 |
8,099 |
||||||||||||||
Net income, excluding merger costs (1) |
28,006 |
26,281 |
17,208 |
54,287 |
25,130 |
||||||||||||||
Diluted earnings per share |
$ |
1.11 |
$ |
1.03 |
$ |
0.02 |
$ |
2.14 |
$ |
0.36 |
|||||||||
Diluted earnings per share, excluding merger costs (1) |
$ |
1.11 |
$ |
1.03 |
$ |
0.68 |
$ |
2.14 |
$ |
1.13 |
|||||||||
Return on average total assets |
1.49 |
% |
1.44 |
% |
0.02 |
% |
1.46 |
% |
0.25 |
% |
|||||||||
Return on average total assets, excluding merger costs (1) |
1.49 |
% |
1.44 |
% |
0.96 |
% |
1.46 |
% |
0.78 |
% |
|||||||||
Return on average stockholders' equity |
13.54 |
% |
13.37 |
% |
0.23 |
% |
13.46 |
% |
2.54 |
% |
|||||||||
Return on average stockholders’ equity, excluding merger costs (1) |
13.54 |
% |
13.37 |
% |
9.19 |
% |
13.46 |
% |
7.89 |
% |
|||||||||
Net interest margin |
4.24 |
% |
4.39 |
% |
3.56 |
% |
4.31 |
% |
3.34 |
% |
|||||||||
Net interest margin (FTE basis) (1) |
4.32 |
% |
4.46 |
% |
3.64 |
% |
4.39 |
% |
3.43 |
% |
|||||||||
Efficiency ratio |
59.15 |
% |
60.47 |
% |
93.55 |
% |
59.79 |
% |
87.84 |
% |
|||||||||
Efficiency ratio, excluding merger related expenses (1) |
59.15 |
% |
60.47 |
% |
70.74 |
% |
59.79 |
% |
74.99 |
% |
|||||||||
Noninterest income to total revenue |
24.8 |
% |
20.3 |
% |
27.6 |
% |
22.6 |
% |
31.5 |
% |
|||||||||
Total assets |
$ |
7,797,344 |
$ |
7,610,456 |
$ |
7,060,692 |
$ |
7,797,344 |
$ |
7,060,692 |
|||||||||
Total loans held-for-sale |
56,350 |
66,255 |
61,253 |
56,350 |
61,253 |
||||||||||||||
Total loans held-for-investment |
6,155,090 |
6,060,975 |
5,387,928 |
6,155,090 |
5,387,928 |
||||||||||||||
Total deposits |
6,150,418 |
5,994,266 |
5,933,022 |
6,150,418 |
5,933,022 |
||||||||||||||
Total stockholders' equity |
823,635 |
799,050 |
727,542 |
823,635 |
727,542 |
||||||||||||||
Period end loan-to-deposit ratio |
100.1 |
% |
101.1 |
% |
90.8 |
% |
100.1 |
% |
90.8 |
% |
|||||||||
Book value per common share |
$ |
33.02 |
$ |
32.06 |
$ |
29.28 |
$ |
33.02 |
$ |
29.28 |
|||||||||
Tangible book value per common share (1) |
$ |
28.76 |
$ |
27.72 |
$ |
24.76 |
$ |
28.76 |
$ |
24.76 |
|||||||||
(1) Represents a non-GAAP financial measure. See the tables within the “Non-GAAP Financial Measures and Reconciliations” section for a reconciliation of each non-GAAP measure to the most comparable GAAP equivalent. |
|||||||||||||||||||
Condensed Consolidated Statements of Income (Unaudited):
As of and for the quarter ended |
As of and for the six months ended |
||||||||||||||||||
($ in thousands, except per share amounts) |
June 30, 2023 |
March 31, 2023 |
June 30, 2022 |
June 30, 2023 |
June 30, 2022 |
||||||||||||||
Total interest income |
$ |
102,032 |
$ |
94,903 |
$ |
63,228 |
$ |
196,935 |
$ |
107,889 |
|||||||||
Total interest expense |
28,197 |
20,786 |
4,643 |
48,983 |
8,019 |
||||||||||||||
Net interest income |
73,835 |
74,117 |
58,585 |
147,952 |
99,870 |
||||||||||||||
Provision for credit losses |
4,422 |
3,360 |
5,000 |
7,782 |
8,700 |
||||||||||||||
Net interest income after provision for credit losses |
69,413 |
70,757 |
53,585 |
140,170 |
91,170 |
||||||||||||||
Noninterest income: |
|||||||||||||||||||
Service charges on deposits |
5,358 |
5,015 |
4,379 |
10,373 |
8,304 |
||||||||||||||
Credit and debit card fees |
3,057 |
2,981 |
2,990 |
6,038 |
5,405 |
||||||||||||||
Trust and investment advisory fees |
1,478 |
1,461 |
1,909 |
2,939 |
3,856 |
||||||||||||||
Mortgage banking income, net |
11,659 |
7,429 |
11,671 |
19,088 |
26,232 |
||||||||||||||
Other noninterest income |
2,738 |
2,045 |
1,353 |
4,783 |
2,198 |
||||||||||||||
Total noninterest income |
24,290 |
18,931 |
22,302 |
43,221 |
45,995 |
||||||||||||||
Noninterest expense: |
|||||||||||||||||||
Salaries and benefits |
34,056 |
35,049 |
35,248 |
69,105 |
69,473 |
||||||||||||||
Occupancy and equipment |
7,948 |
8,174 |
7,753 |
16,122 |
14,586 |
||||||||||||||
Amortization of intangible assets |
2,050 |
1,044 |
935 |
3,094 |
1,262 |
||||||||||||||
Merger related expenses |
— |
— |
18,448 |
— |
18,751 |
||||||||||||||
Other noninterest expenses |
13,989 |
11,999 |
13,284 |
25,988 |
24,063 |
||||||||||||||
Total noninterest expense |
58,043 |
56,266 |
75,668 |
114,309 |
128,135 |
||||||||||||||
Income before income taxes |
35,660 |
33,422 |
219 |
69,082 |
9,030 |
||||||||||||||
Provision (benefit) for income taxes |
7,654 |
7,141 |
(211 |
) |
14,795 |
931 |
|||||||||||||
Net income |
$ |
28,006 |
$ |
26,281 |
$ |
430 |
$ |
54,287 |
$ |
8,099 |
|||||||||
Earnings per share - basic |
$ |
1.12 |
$ |
1.05 |
$ |
0.02 |
$ |
2.18 |
$ |
0.38 |
|||||||||
Earnings per share - diluted |
$ |
1.11 |
$ |
1.03 |
$ |
0.02 |
$ |
2.14 |
$ |
0.36 |
|||||||||
Condensed Consolidated Balance Sheets as of (Unaudited):
($ in thousands) |
June 30, 2023 |
March 31, 2023 |
June 30, 2022 |
||||||||
Assets |
|||||||||||
Cash and cash equivalents |
$ |
492,735 |
$ |
388,349 |
$ |
510,701 |
|||||
Securities available-for-sale, at fair value |
515,956 |
532,650 |
578,751 |
||||||||
Securities held-to-maturity |
37,883 |
38,470 |
39,803 |
||||||||
Loans held-for-sale, at fair value |
56,350 |
66,255 |
61,253 |
||||||||
Loans |
6,155,090 |
6,060,975 |
5,387,928 |
||||||||
Allowance for credit losses |
(77,362 |
) |
(74,459 |
) |
(56,077 |
) |
|||||
Loans, net |
6,077,728 |
5,986,516 |
5,331,851 |
||||||||
Mortgage servicing rights, at fair value |
78,390 |
73,424 |
66,047 |
||||||||
Premises and equipment, net |
84,483 |
86,430 |
89,674 |
||||||||
Other real estate owned and foreclosed assets, net |
10,139 |
6,358 |
5,391 |
||||||||
Goodwill |
93,483 |
93,483 |
93,483 |
||||||||
Intangible assets, net |
12,712 |
14,762 |
18,760 |
||||||||
All other assets |
337,485 |
323,759 |
264,978 |
||||||||
Total assets |
$ |
7,797,344 |
$ |
7,610,456 |
$ |
7,060,692 |
|||||
Liabilities and Stockholders' Equity |
|||||||||||
Liabilities: |
|||||||||||
Deposits: |
|||||||||||
Noninterest-bearing demand deposit accounts |
$ |
1,667,247 |
$ |
1,764,440 |
$ |
1,942,078 |
|||||
Interest-bearing deposit accounts: |
|||||||||||
Interest-bearing demand accounts |
379,779 |
238,658 |
165,287 |
||||||||
Savings accounts and money market accounts |
2,441,349 |
2,705,315 |
3,204,704 |
||||||||
NOW accounts |
48,270 |
45,192 |
50,126 |
||||||||
Certificate of deposit accounts |
1,613,773 |
1,240,661 |
570,827 |
||||||||
Total deposits |
6,150,418 |
5,994,266 |
5,933,022 |
||||||||
Securities sold under agreements to repurchase |
32,861 |
31,645 |
70,838 |
||||||||
Federal Home Loan Bank advances |
570,585 |
577,285 |
159,968 |
||||||||
Other borrowings |
80,511 |
80,373 |
79,959 |
||||||||
Other liabilities |
139,334 |
127,837 |
89,363 |
||||||||
Total liabilities |
6,973,709 |
6,811,406 |
6,333,150 |
||||||||
Stockholders' equity: |
|||||||||||
Preferred stock |
— |
— |
— |
||||||||
Common stock |
2 |
2 |
2 |
||||||||
Additional paid-in capital |
461,856 |
461,174 |
460,263 |
||||||||
Retained earnings |
408,276 |
380,270 |
306,714 |
||||||||
Accumulated other comprehensive loss, net |
(46,499 |
) |
(42,396 |
) |
(39,437 |
) |
|||||
Total stockholders' equity |
823,635 |
799,050 |
727,542 |
||||||||
Total liabilities and stockholders' equity |
$ |
7,797,344 |
$ |
7,610,456 |
$ |
7,060,692 |
|||||
Share Data as of and for the periods ended:
As of and for the quarter ended |
As of and for the six months ended |
||||||||||||||||||
June 30, 2023 |
March 31, 2023 |
June 30, 2022 |
June 30, 2023 |
June 30, 2022 |
|||||||||||||||
Weighted average common shares outstanding, basic |
24,933,664 |
24,923,259 |
24,760,282 |
24,928,485 |
21,570,924 |
||||||||||||||
Weighted average common shares outstanding, diluted |
25,206,359 |
25,487,582 |
25,458,311 |
25,368,702 |
22,195,814 |
||||||||||||||
Period end common shares outstanding |
24,941,468 |
24,920,984 |
24,850,954 |
24,941,468 |
24,850,954 |
||||||||||||||
Book value per common share |
$ |
33.02 |
$ |
32.06 |
$ |
29.28 |
$ |
33.02 |
$ |
29.28 |
|||||||||
Tangible book value per common share (1) |
$ |
28.76 |
$ |
27.72 |
$ |
24.76 |
$ |
28.76 |
$ |
24.76 |
|||||||||
Consolidated Capital Ratios as of:
June 30, 2023 |
March 31, 2023 |
June 30, 2022 |
||||||
Stockholders' equity to total assets |
10.56 |
% |
10.50 |
% |
10.30 |
% |
||
Tangible common stockholders' equity to tangible assets (1) |
9.33 |
% |
9.21 |
% |
8.86 |
% |
||
Tangible common stockholders' equity to tangible assets reflecting net unrealized losses on HTM securities, net of tax (1) (2) |
9.28 |
% |
9.16 |
% |
8.82 |
% |
||
Tier 1 leverage ratio |
10.00 |
% |
9.86 |
% |
8.89 |
% |
||
Common equity tier 1 risk-based capital ratio |
10.40 |
% |
10.11 |
% |
9.59 |
% |
||
Tier 1 risk-based capital ratio |
10.40 |
% |
10.11 |
% |
9.59 |
% |
||
Total risk-based capital ratio |
12.52 |
% |
12.19 |
% |
11.60 |
% |
||
(1) Represents a non-GAAP financial measure. See the tables within the “Non-GAAP Financial Measures and Reconciliations” section for a reconciliation of each non-GAAP measure to the most comparable GAAP equivalent. (2) Tangible common stockholders’ equity and tangible assets have been adjusted to reflect net unrealized losses on held-to-maturity securities, net of tax. |
||||||||
Summary of Net Interest Margin:
For the quarter ended June 30, 2023 |
For the quarter ended March 31, 2023 |
For the quarter ended June 30, 2022 |
|||||||||||||||||||||||||||||||
(In thousands) |
Average Balance |
Interest |
Average Yield/Rate |
Average Balance |
Interest |
Average Yield/Rate |
Average Balance |
Interest |
Average Yield/Rate |
||||||||||||||||||||||||
Interest Earning Assets |
|||||||||||||||||||||||||||||||||
Loans held-for-sale |
$ |
63,988 |
$ |
969 |
6.06 |
% |
$ |
50,129 |
$ |
654 |
5.22 |
% |
$ |
70,430 |
$ |
1,269 |
7.21 |
% |
|||||||||||||||
Loans held-for-investment (1) |
6,156,845 |
94,351 |
6.13 |
% |
5,978,860 |
87,947 |
5.88 |
% |
5,264,355 |
57,316 |
4.35 |
% |
|||||||||||||||||||||
Investment securities |
563,902 |
4,227 |
3.00 |
% |
570,682 |
4,164 |
2.92 |
% |
651,180 |
3,333 |
2.05 |
% |
|||||||||||||||||||||
Interest-bearing cash and other assets |
176,672 |
2,485 |
5.63 |
% |
156,262 |
2,138 |
5.47 |
% |
591,208 |
1,310 |
0.89 |
% |
|||||||||||||||||||||
Total earning assets |
6,961,407 |
102,032 |
5.86 |
% |
6,755,933 |
94,903 |
5.62 |
% |
6,577,173 |
63,228 |
3.85 |
% |
|||||||||||||||||||||
Other assets |
556,105 |
553,961 |
585,760 |
||||||||||||||||||||||||||||||
Total assets |
$ |
7,517,512 |
$ |
7,309,894 |
$ |
7,162,933 |
|||||||||||||||||||||||||||
Interest-bearing liabilities |
|||||||||||||||||||||||||||||||||
Demand and NOW deposits |
$ |
332,695 |
$ |
2,124 |
2.55 |
% |
$ |
227,170 |
$ |
1,234 |
2.17 |
% |
$ |
219,502 |
$ |
229 |
0.42 |
% |
|||||||||||||||
Savings deposits |
448,059 |
491 |
0.44 |
% |
470,000 |
445 |
0.38 |
% |
516,045 |
133 |
0.10 |
% |
|||||||||||||||||||||
Money market deposits |
2,107,379 |
5,874 |
1.11 |
% |
2,296,469 |
5,068 |
0.88 |
% |
2,774,713 |
1,172 |
0.17 |
% |
|||||||||||||||||||||
Certificates of deposits |
1,392,847 |
12,240 |
3.52 |
% |
1,073,006 |
7,432 |
2.77 |
% |
581,803 |
638 |
0.44 |
% |
|||||||||||||||||||||
Total deposits |
4,280,980 |
20,729 |
1.94 |
% |
4,066,645 |
14,179 |
1.39 |
% |
4,092,063 |
2,172 |
0.21 |
% |
|||||||||||||||||||||
Repurchase agreements |
33,673 |
68 |
0.80 |
% |
29,672 |
30 |
0.41 |
% |
56,247 |
15 |
0.11 |
% |
|||||||||||||||||||||
Total deposits and repurchase agreements |
4,314,653 |
20,797 |
1.93 |
% |
4,096,317 |
14,209 |
1.39 |
% |
4,148,310 |
2,187 |
0.21 |
% |
|||||||||||||||||||||
FHLB borrowings |
472,105 |
6,121 |
5.19 |
% |
454,081 |
5,317 |
4.68 |
% |
184,100 |
771 |
1.67 |
% |
|||||||||||||||||||||
Other long-term borrowings |
80,440 |
1,279 |
6.36 |
% |
80,300 |
1,260 |
6.28 |
% |
82,154 |
1,685 |
8.21 |
% |
|||||||||||||||||||||
Total interest-bearing liabilities |
4,867,198 |
28,197 |
2.32 |
% |
4,630,698 |
20,786 |
1.80 |
% |
4,414,564 |
4,643 |
0.42 |
% |
|||||||||||||||||||||
Noninterest-bearing deposits |
1,694,961 |
1,768,381 |
1,923,870 |
||||||||||||||||||||||||||||||
Other liabilities |
128,118 |
124,543 |
75,768 |
||||||||||||||||||||||||||||||
Stockholders' equity |
827,235 |
786,272 |
748,731 |
||||||||||||||||||||||||||||||
Total liabilities and stockholders' equity |
$ |
7,517,512 |
$ |
7,309,894 |
$ |
7,162,933 |
|||||||||||||||||||||||||||
Net interest income |
$ |
73,835 |
$ |
74,117 |
$ |
58,585 |
|||||||||||||||||||||||||||
Net interest spread |
3.54 |
% |
3.82 |
% |
3.43 |
% |
|||||||||||||||||||||||||||
Net interest margin |
4.24 |
% |
4.39 |
% |
3.56 |
% |
|||||||||||||||||||||||||||
Net interest margin (on FTE basis) (2) |
4.32 |
% |
4.46 |
% |
3.64 |
% |
|||||||||||||||||||||||||||
(1) Includes nonaccrual loans. |
|||||||||||||||||||||||||||||||||
(2) Represents a non-GAAP financial measure. See the tables within the “Non-GAAP Financial Measures and Reconciliations” section for a reconciliation of each non-GAAP measure to the most comparable GAAP equivalent. |
|||||||||||||||||||||||||||||||||
For the six months ended |
||||||||||||||||||||||
June 30, 2023 |
June 30, 2022 |
|||||||||||||||||||||
(In thousands) |
Average Balance |
Interest |
Average Yield/Rate |
Average Balance |
Interest |
Average Yield/Rate |
||||||||||||||||
Interest Earning Assets |
||||||||||||||||||||||
Loans held-for-sale |
$ |
57,097 |
$ |
1,623 |
5.68 |
% |
$ |
65,689 |
$ |
1,963 |
5.98 |
% |
||||||||||
Loans held-for-investment (1) |
6,068,344 |
182,298 |
6.01 |
% |
4,697,288 |
98,480 |
4.19 |
% |
||||||||||||||
Investment securities |
567,273 |
8,391 |
2.96 |
% |
616,947 |
5,608 |
1.82 |
% |
||||||||||||||
Interest-bearing cash and other assets |
166,523 |
4,623 |
5.55 |
% |
591,839 |
1,838 |
0.62 |
% |
||||||||||||||
Total earning assets |
6,859,237 |
196,935 |
5.74 |
% |
5,971,763 |
107,889 |
3.61 |
% |
||||||||||||||
Other assets |
555,040 |
450,652 |
||||||||||||||||||||
Total assets |
$ |
7,414,277 |
$ |
6,422,415 |
||||||||||||||||||
Interest-bearing liabilities |
||||||||||||||||||||||
Demand and NOW deposits |
$ |
280,224 |
$ |
3,358 |
2.40 |
% |
$ |
221,251 |
$ |
353 |
0.32 |
% |
||||||||||
Savings deposits |
458,969 |
936 |
0.41 |
% |
492,510 |
224 |
0.09 |
% |
||||||||||||||
Money market deposits |
2,201,401 |
10,942 |
0.99 |
% |
2,541,968 |
2,012 |
0.16 |
% |
||||||||||||||
Certificates of deposits |
1,233,810 |
19,672 |
3.19 |
% |
450,604 |
1,157 |
0.51 |
% |
||||||||||||||
Total deposits |
4,174,404 |
34,908 |
1.67 |
% |
3,706,333 |
3,746 |
0.20 |
% |
||||||||||||||
Repurchase agreements |
31,683 |
98 |
0.62 |
% |
63,795 |
23 |
0.07 |
% |
||||||||||||||
Total deposits and repurchase agreements |
4,206,087 |
35,006 |
1.66 |
% |
3,770,128 |
3,769 |
0.20 |
% |
||||||||||||||
FHLB borrowings |
463,142 |
11,438 |
4.94 |
% |
112,562 |
919 |
1.63 |
% |
||||||||||||||
Other long-term borrowings |
80,370 |
2,539 |
6.32 |
% |
84,161 |
3,331 |
7.91 |
% |
||||||||||||||
Total interest-bearing liabilities |
4,749,599 |
48,983 |
2.06 |
% |
3,966,851 |
8,019 |
0.40 |
% |
||||||||||||||
Noninterest-bearing deposits |
1,731,468 |
1,745,967 |
||||||||||||||||||||
Other liabilities |
126,343 |
72,403 |
||||||||||||||||||||
Stockholders' equity |
806,867 |
637,194 |
||||||||||||||||||||
Total liabilities and stockholders' equity |
$ |
7,414,277 |
$ |
6,422,415 |
||||||||||||||||||
Net interest income |
$ |
147,952 |
$ |
99,870 |
||||||||||||||||||
Net interest spread |
3.68 |
% |
3.21 |
% |
||||||||||||||||||
Net interest margin |
4.31 |
% |
3.34 |
% |
||||||||||||||||||
Net interest margin (on FTE basis) (2) |
4.39 |
% |
3.43 |
% |
||||||||||||||||||
(1) Includes nonaccrual loans. |
||||||||||||||||||||||
(2) Represents a non-GAAP financial measure. See the tables within the “Non-GAAP Financial Measures and Reconciliations” section for a reconciliation of each non-GAAP measure to the most comparable GAAP equivalent. |
||||||||||||||||||||||
Deposits:
($ in thousands) |
June 30, 2023 |
March 31, 2023 |
June 30, 2023 vs March 31, 2023 % change |
June 30, 2022 |
June 30, 2023 vs June 30, 2022 % change |
||||||||||||
Consumer |
|||||||||||||||||
Noninterest bearing deposit accounts |
$ |
375,583 |
$ |
399,008 |
(5.87 |
)% |
$ |
397,354 |
(5.48 |
)% |
|||||||
Interest-bearing deposit accounts: |
|||||||||||||||||
Demand and NOW deposits |
34,731 |
25,284 |
37.36 |
% |
27,183 |
27.77 |
% |
||||||||||
Savings deposits |
378,193 |
407,173 |
(7.12 |
)% |
453,051 |
(16.52 |
)% |
||||||||||
Money market deposits |
1,174,883 |
1,296,099 |
(9.35 |
)% |
1,667,482 |
(29.54 |
)% |
||||||||||
Certificates of deposits |
1,095,754 |
759,726 |
44.23 |
% |
491,945 |
122.74 |
% |
||||||||||
Total interest-bearing deposit accounts |
2,683,561 |
2,488,282 |
7.85 |
% |
2,639,661 |
1.66 |
% |
||||||||||
Total consumer deposits |
$ |
3,059,144 |
$ |
2,887,290 |
5.95 |
% |
$ |
3,037,015 |
0.73 |
% |
|||||||
Business |
|||||||||||||||||
Noninterest bearing deposit accounts |
$ |
1,291,664 |
$ |
1,365,432 |
(5.40 |
)% |
$ |
1,544,724 |
(16.38 |
)% |
|||||||
Interest-bearing deposit accounts: |
|||||||||||||||||
Demand and NOW deposits |
393,318 |
258,566 |
52.12 |
% |
188,230 |
108.96 |
% |
||||||||||
Savings deposits |
55,994 |
59,308 |
(5.59 |
)% |
58,293 |
(3.94 |
)% |
||||||||||
Money market deposits |
832,279 |
942,735 |
(11.72 |
)% |
1,025,878 |
(18.87 |
)% |
||||||||||
Certificates of deposits |
518,019 |
480,935 |
7.71 |
% |
78,882 |
556.70 |
% |
||||||||||
Total interest-bearing deposit accounts |
1,799,610 |
1,741,544 |
3.33 |
% |
1,351,283 |
33.18 |
% |
||||||||||
Total business customer deposits |
$ |
3,091,274 |
$ |
3,106,976 |
(0.51 |
)% |
$ |
2,896,007 |
6.74 |
% |
|||||||
Total deposits |
$ |
6,150,418 |
$ |
5,994,266 |
2.61 |
% |
$ |
5,933,022 |
3.66 |
% |
|||||||
Balance Sheet Ratios:
June 30, 2023 |
March 31, 2023 |
June 30, 2022 |
||||||
Cash to total assets (1) |
6.20 |
% |
4.10 |
% |
4.40 |
% |
||
Loan to deposit ratio |
100.08 |
% |
101.11 |
% |
90.81 |
% |
||
Uninsured deposits to total deposits (2) |
32.5 |
% |
35.8 |
% |
41.4 |
% |
||
Uninsured and uncollateralized deposits to total deposits (2) |
24.1 |
% |
26.4 |
% |
33.9 |
% |
||
Wholesale borrowings to total liabilities (3) |
8.2 |
% |
8.5 |
% |
2.5 |
% |
||
Wholesale deposits and borrowings to total liabilities (3) (4) |
14.9 |
% |
15.4 |
% |
3.2 |
% |
||
(1) Cash consists of cash and amounts due from banks and interest-bearing deposits with other financial institutions. (2) Uninsured deposits and uninsured and uncollateralized deposits are reported for our wholly-owned subsidiary Sunflower Bank, N.A. and are estimated. (3) Wholesale borrowings consists of FHLB overnight borrowings and term advances. (4) Wholesale deposits consists of brokered deposits included in our condensed consolidated balance sheets within certificate of deposit balances. |
||||||||
Loan Portfolio:
($ in thousands) |
June 30, 2023 |
March 31, 2023 |
June 30, 2023 vs March 31, 2023 % change |
June 30, 2022 |
June 30, 2023 vs June 30, 2022 % change |
||||||||||||
Commercial and industrial |
$ |
2,474,531 |
$ |
2,418,771 |
2.3 |
% |
$ |
1,972,681 |
25.4 |
% |
|||||||
Commercial real estate: |
|||||||||||||||||
Non-owner occupied |
723,365 |
709,977 |
1.9 |
% |
863,664 |
(16.2 |
)% |
||||||||||
Owner occupied |
643,191 |
659,999 |
(2.5 |
)% |
624,433 |
3.0 |
% |
||||||||||
Construction and land |
316,399 |
320,193 |
(1.2 |
)% |
262,785 |
20.4 |
% |
||||||||||
Multifamily |
100,464 |
103,767 |
(3.2 |
)% |
78,316 |
28.3 |
% |
||||||||||
Total commercial real estate |
1,783,419 |
1,793,936 |
(0.6 |
)% |
1,829,198 |
(2.5 |
)% |
||||||||||
Residential real estate |
1,082,991 |
1,046,047 |
3.5 |
% |
840,264 |
28.9 |
% |
||||||||||
Public Finance |
611,748 |
597,850 |
2.3 |
% |
602,905 |
1.5 |
% |
||||||||||
Consumer |
39,909 |
40,806 |
(2.2 |
)% |
44,423 |
(10.2 |
)% |
||||||||||
Other |
162,492 |
163,565 |
(0.7 |
)% |
98,457 |
65.0 |
% |
||||||||||
Total loans, net of deferred costs, fees, premiums, and discounts |
$ |
6,155,090 |
$ |
6,060,975 |
1.6 |
% |
$ |
5,387,928 |
14.2 |
% |
|||||||
Asset Quality:
As of and for the quarter ended |
As of and for the six months ended |
||||||||||||||||||
($ in thousands) |
June 30, 2023 |
March 31, 2023 |
June 30, 2022 |
June 30, 2023 |
June 30, 2022 |
||||||||||||||
Net charge-offs (recoveries) |
$ |
717 |
$ |
54 |
$ |
(568 |
) |
$ |
771 |
$ |
170 |
||||||||
Allowance for credit losses |
$ |
77,362 |
$ |
74,459 |
$ |
56,077 |
$ |
77,362 |
$ |
56,077 |
|||||||||
Nonperforming loans, including nonaccrual loans, and accrual loans greater than 90 days past due (1) |
$ |
67,840 |
$ |
32,833 |
$ |
29,621 |
$ |
67,840 |
$ |
29,621 |
|||||||||
Nonperforming assets (1) |
$ |
77,979 |
$ |
39,191 |
$ |
35,012 |
$ |
77,979 |
$ |
35,012 |
|||||||||
Ratio of net charge-offs (recoveries) to average loans outstanding |
0.05 |
% |
— |
% |
(0.04 |
)% |
0.03 |
% |
0.01 |
% |
|||||||||
Allowance for credit losses to total loans outstanding |
1.26 |
% |
1.23 |
% |
1.04 |
% |
1.26 |
% |
1.04 |
% |
|||||||||
Allowance for credit losses to total nonperforming loans (1) |
114.04 |
% |
226.78 |
% |
189.32 |
% |
114.04 |
% |
189.32 |
% |
|||||||||
Nonperforming loans to total loans (1) |
1.10 |
% |
0.54 |
% |
0.55 |
% |
1.10 |
% |
0.55 |
% |
|||||||||
Nonperforming assets to total assets (1) |
1.00 |
% |
0.51 |
% |
0.50 |
% |
1.00 |
% |
0.50 |
% |
|||||||||
(1) On January 1, 2023, we adopted ASU 2022-02, whereby we no longer recognize or account for TDRs. The loans previously classified as accrual TDRs are no longer considered nonperforming. We have adjusted prior periods to reflect this change in accounting. |
|||||||||||||||||||
Non-GAAP Financial Measures and Reconciliations:
As of and for the quarter ended |
As of and for the six months ended |
||||||||||||||||||
($ in thousands, except share and per share amounts) |
June 30, 2023 |
March 31, 2023 |
June 30, 2022 |
June 30, 2023 |
June 30, 2022 |
||||||||||||||
Tangible common stockholders’ equity: |
|||||||||||||||||||
Total common stockholders' equity (GAAP) |
$ |
823,635 |
$ |
799,050 |
$ |
727,542 |
$ |
823,635 |
$ |
727,542 |
|||||||||
Less: Goodwill and other intangible assets: |
|||||||||||||||||||
Goodwill |
(93,483 |
) |
(93,483 |
) |
(93,483 |
) |
(93,483 |
) |
(93,483 |
) |
|||||||||
Other intangible assets |
(12,712 |
) |
(14,762 |
) |
(18,760 |
) |
(12,712 |
) |
(18,760 |
) |
|||||||||
Total tangible common stockholders' equity (non-GAAP) (1) |
$ |
717,440 |
$ |
690,805 |
$ |
615,299 |
$ |
717,440 |
$ |
615,299 |
|||||||||
Tangible assets: |
|||||||||||||||||||
Total assets (GAAP) |
$ |
7,797,344 |
$ |
7,610,456 |
$ |
7,060,692 |
$ |
7,797,344 |
$ |
7,060,692 |
|||||||||
Less: Goodwill and other intangible assets: |
|||||||||||||||||||
Goodwill |
(93,483 |
) |
(93,483 |
) |
(93,483 |
) |
(93,483 |
) |
(93,483 |
) |
|||||||||
Other intangible assets |
(12,712 |
) |
(14,762 |
) |
(18,760 |
) |
(12,712 |
) |
(18,760 |
) |
|||||||||
Total tangible assets (non-GAAP) |
$ |
7,691,149 |
$ |
7,502,211 |
$ |
6,948,449 |
$ |
7,691,149 |
$ |
6,948,449 |
|||||||||
Tangible common stockholders’ equity to tangible assets: |
|||||||||||||||||||
Common stockholders' equity to total assets (GAAP) |
10.56 |
% |
10.50 |
% |
10.30 |
% |
10.56 |
% |
10.30 |
% |
|||||||||
Less: Impact of goodwill and other intangible assets |
(1.23 |
)% |
(1.29 |
)% |
(1.44 |
)% |
(1.23 |
)% |
(1.44 |
)% |
|||||||||
Tangible common stockholders' equity to tangible assets (non-GAAP) (1) |
9.33 |
% |
9.21 |
% |
8.86 |
% |
9.33 |
% |
8.86 |
% |
|||||||||
Tangible common stockholders’ equity to tangible assets, reflecting net unrealized losses on HTM securities, net of tax: |
|||||||||||||||||||
Total tangible common stockholders' equity (non-GAAP) |
$ |
717,440 |
$ |
690,805 |
$ |
615,299 |
$ |
717,440 |
$ |
615,299 |
|||||||||
Less: Net unrealized losses on HTM securities, net of tax |
(3,821 |
) |
(3,754 |
) |
(2,977 |
) |
(3,821 |
) |
(2,977 |
) |
|||||||||
Total tangible common stockholders’ equity less net unrealized losses on HTM securities, net of tax (non-GAAP) |
$ |
713,619 |
$ |
687,051 |
$ |
612,322 |
$ |
713,619 |
$ |
612,322 |
|||||||||
Total tangible assets (non-GAAP) |
$ |
7,691,149 |
$ |
7,502,211 |
$ |
6,948,449 |
$ |
7,691,149 |
$ |
6,948,449 |
|||||||||
Less: Net unrealized losses on HTM securities, net of tax |
(3,821 |
) |
(3,754 |
) |
(2,977 |
) |
(3,821 |
) |
(2,977 |
) |
|||||||||
Total tangible assets less net unrealized losses on HTM securities, net of tax (non-GAAP) |
$ |
7,687,328 |
$ |
7,498,457 |
$ |
6,945,472 |
$ |
7,687,328 |
$ |
6,945,472 |
|||||||||
Tangible common stockholders’ equity to tangible assets (non-GAAP) |
9.33 |
% |
9.21 |
% |
8.86 |
% |
9.33 |
% |
8.86 |
% |
|||||||||
Less: Net unrealized losses on HTM securities, net of tax |
0.05 |
% |
0.05 |
% |
0.04 |
% |
0.05 |
% |
0.04 |
% |
|||||||||
Tangible common stockholders’ equity to tangible assets reflecting net unrealized losses on HTM securities, net of tax (non-GAAP) |
9.28 |
% |
9.16 |
% |
8.82 |
% |
9.28 |
% |
8.82 |
% |
|||||||||
Tangible book value per common share: |
|||||||||||||||||||
Stockholders' equity (GAAP) |
$ |
823,635 |
$ |
799,050 |
$ |
727,542 |
$ |
823,635 |
$ |
727,542 |
|||||||||
Tangible stockholders' equity (non-GAAP) (1) |
$ |
717,440 |
$ |
690,805 |
$ |
615,299 |
$ |
717,440 |
$ |
615,299 |
|||||||||
Total common shares outstanding |
24,941,468 |
24,920,984 |
24,850,954 |
24,941,468 |
24,850,954 |
||||||||||||||
Book value per common share (GAAP) |
$ |
33.02 |
$ |
32.06 |
$ |
29.28 |
$ |
33.02 |
$ |
29.28 |
|||||||||
Tangible book value per common share (non-GAAP) |
$ |
28.76 |
$ |
27.72 |
$ |
24.76 |
$ |
28.76 |
$ |
24.76 |
|||||||||
Net income excluding merger costs: |
|||||||||||||||||||
Net income (GAAP) |
$ |
28,006 |
$ |
26,281 |
$ |
430 |
$ |
54,287 |
$ |
8,099 |
|||||||||
Add: Merger costs |
|||||||||||||||||||
Merger related expenses |
— |
— |
18,448 |
— |
18,751 |
||||||||||||||
Income tax effect on merger related expenses |
— |
— |
(4,033 |
) |
(4,083 |
) |
|||||||||||||
Total merger costs |
— |
— |
16,778 |
— |
17,031 |
||||||||||||||
Net income excluding merger costs (non-GAAP) |
$ |
28,006 |
$ |
26,281 |
$ |
17,208 |
$ |
54,287 |
$ |
25,130 |
|||||||||
Return on average total assets excluding merger costs: |
|||||||||||||||||||
Return on average total assets (ROAA) (GAAP) |
1.49 |
% |
1.44 |
% |
0.02 |
% |
1.46 |
% |
0.25 |
% |
|||||||||
Add: Impact of merger costs, net of tax |
— |
% |
— |
% |
0.94 |
% |
— |
% |
0.53 |
% |
|||||||||
ROAA excluding merger costs (non-GAAP) |
1.49 |
% |
1.44 |
% |
0.96 |
% |
1.46 |
% |
0.78 |
% |
|||||||||
Return on average stockholders’ equity excluding merger costs: |
|||||||||||||||||||
Return on average stockholders' equity (ROAE) (GAAP) |
13.54 |
% |
13.37 |
% |
0.23 |
% |
13.46 |
% |
2.54 |
% |
|||||||||
Add: Impact of merger costs, net of tax |
— |
% |
— |
% |
8.96 |
% |
— |
% |
5.35 |
% |
|||||||||
ROAE excluding merger costs (non-GAAP) |
13.54 |
% |
13.37 |
% |
9.19 |
% |
13.46 |
% |
7.89 |
% |
|||||||||
Efficiency ratio excluding merger related expenses: |
|||||||||||||||||||
Efficiency ratio (GAAP) |
59.15 |
% |
60.47 |
% |
93.55 |
% |
59.79 |
% |
87.84 |
% |
|||||||||
Less: Impact of merger related expenses |
— |
% |
— |
% |
22.81 |
% |
— |
% |
12.85 |
% |
|||||||||
Efficiency ratio excluding merger related expenses (non-GAAP) |
59.15 |
% |
60.47 |
% |
70.74 |
% |
59.79 |
% |
74.99 |
% |
|||||||||
Diluted earnings per share excluding merger costs: |
|||||||||||||||||||
Diluted earnings per share (GAAP) |
$ |
1.11 |
$ |
1.03 |
$ |
0.02 |
$ |
2.14 |
$ |
0.36 |
|||||||||
Add: Impact of merger costs, net of tax |
— |
— |
0.66 |
— |
0.77 |
||||||||||||||
Diluted earnings per share excluding merger costs (non-GAAP) |
$ |
1.11 |
$ |
1.03 |
$ |
0.68 |
$ |
2.14 |
$ |
1.13 |
|||||||||
Fully tax equivalent (“FTE”) net interest income and net interest margin on FTE basis: |
|||||||||||||||||||
Net interest income (GAAP) |
$ |
73,835 |
$ |
74,117 |
$ |
58,585 |
$ |
147,952 |
$ |
99,870 |
|||||||||
Gross income effect of tax exempt income |
1,288 |
1,242 |
1,284 |
2,530 |
2,605 |
||||||||||||||
FTE net interest income (non-GAAP) |
$ |
75,123 |
$ |
75,359 |
$ |
59,869 |
$ |
150,482 |
$ |
102,475 |
|||||||||
Average earning assets |
$ |
6,961,407 |
$ |
6,755,933 |
$ |
6,577,173 |
$ |
6,859,237 |
$ |
5,971,763 |
|||||||||
Net interest margin |
4.24 |
% |
4.39 |
% |
3.56 |
% |
4.31 |
% |
3.34 |
% |
|||||||||
Net interest margin on FTE basis (non-GAAP) |
4.32 |
% |
4.46 |
% |
3.64 |
% |
4.39 |
% |
3.43 |
% |
|||||||||
(1) For all periods presented tangible stockholders’ equity is the same as tangible common stockholders’ equity. |
|||||||||||||||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20230726762053/en/
Investor Relations: Kelly C. Rackley Corporate Secretary & Stockholder Relations Manager 303.962.0150 | stockholder.relations@sunflowerbank.com
Source: FirstSun Capital Bancorp