Company announces strategic merger and forecasts robust growth
FirstSun Capital Bancorp (FirstSun) has announced its financial results for the fourth quarter of 2023, revealing a net income of $24.0 million compared to $24.6 million in the same period of 2022. Earnings per diluted share stood at $0.94 for Q4 2023, down from $0.96 in Q4 2022.
Neal Arnold, president and CEO of FirstSun, attributed the results to the company’s diversified business model and the economic vigor of the Southwest region. He highlighted achievements such as a net interest margin of 4.08% and growth in deposits and loans.
“We believe our performance amid the difficult banking environment continues to position us uniquely among our peers,” said Arnold. “Our consistent focus on our C&I and consumer businesses as well as our service fee businesses has enabled us to continue to deliver strong, sustainable performance and ultimately a record earnings year for fiscal 2023.”
Arnold also expressed enthusiasm over the announced merger with HomeStreet, Inc., which he described as enhancing business diversification and shareholder value.
“We look forward to expanding our geographic presence in the Southern California and Pacific Northwest markets. We will work together to thoughtfully integrate our two organizations,” noted Arnold.
FirstSun Capital Bancorp financial results
Net income for Q4 2023 totaled $24.0 million with earnings per diluted share at $0.94, compared to $25.2 million and $1.00 respectively in the prior quarter. Return on average total assets decreased to 1.26% from 1.34%, and return on average stockholders’ equity fell to 11.19% from 12.03% in the prior quarter.
Net interest income for Q4 2023 was $72.1 million, a slight decrease from the prior quarter, resulting in a net interest margin of 4.08%. This decline was attributed to increased costs of interest-bearing liabilities offset by higher yields on earning assets.
Loan growth, including loans held-for-sale, saw a $99.7 million increase, with loan yield rising to 6.51%. Average interest-bearing deposits increased by $176.8 million compared to the prior quarter. Meanwhile, the total cost of deposits rose to 2.93%, primarily due to the rising interest rate environment.
The provision for credit losses in Q4 2023 totaled $6.6 million, up from $3.9 million in the prior quarter, driven by loan growth and charge-offs on specific customer relationships. Net charge-offs were $4.7 million, resulting in an annualized ratio of 0.30%, compared to $2.3 million, or 0.15%, respectively in the prior quarter.
Noninterest income decreased to $17.2 million, attributed to a decline in the fair value of the company’s mortgage servicing rights portfolio. Noninterest expense was $52.3 million, primarily due to lower levels of variable compensation, resulting in an efficiency ratio of 58.58%.
The effective tax rate for Q4 2023 was 21.0%, unchanged from the prior quarter.
For the full year 2023, FirstSun reported net income of $103.5 million, or $4.08 per diluted share, compared to $59.2 million, or $2.48 per diluted share, in 2022. Net interest income rose to $293.4 million with a net interest margin of 4.23%. Average deposit growth reached 9.65%, while loans increased by 6.01%.
Capital ratios remained strong, exceeding “well-capitalized” thresholds, with book value per common share increasing to $35.14 and tangible book value per common share reaching $30.96 by December 31, 2023.
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