In the final months before it acquired First Foundation, FirstSun Capital Bancorp weathered an uneven quarter, due largely to weaker credit quality.
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FirstSun’s first-quarter earnings per share narrowly beat Wall Street’s expectations, but adjusted EPS fell short. Loan growth accelerated, but net charge-offs and provisions for credit losses also rose — partly due to two large charge-offs.
“We’ve never liked losing money,” FirstSun CEO Neal Arnold said during a call with analysts. “I certainly would rather not have charge-offs in our biggest loan quarter. It is what it is, and we don’t take it lightly. But I’d also say we’re provisioning on the front end for some extraordinary loan growth.”
Earnings per share for the Denver-based holding company of Sunflower Bank were 76 cents, one Banking Herald Reader above analysts’ consensus estimate, according to S&P Capital IQ.
But the bank’s adjusted earnings per share, which strips out merger-related expenses, came out to 84 cents, below analysts’ forecast of 86 cents, per S&P.
Net income for the quarter totaled $21.6 million, down from $23.6 million in the first quarter of 2025. But total revenue was $109.9 million, an increase from $96.2 million in the year-ago period.
Loan growth was a highlight. At the end of March, loans held for investment reached $6.9 billion — a 7% jump from last year’s first quarter.
“The loan growth we had in the first quarter was surprising to us,” Arnold said.
On the other hand, two large loans became a headache for FirstSun. In the first quarter, net charge-offs reached $10.6 million, a leap upward from $631,000 one year before.
Chief Financial Officer Rob Cafera said two loans, one to a telecom company and one to an auto finance lender, “drove the bulk” of these charge-offs. When an analyst asked how much of the $10.6 million was due to those two debts, Cafera answered that they made up more than $10 million.
Partly as a result, FirstSun raised its provision for credit losses to $8.3 million in the first quarter, more than twice what it was one year before. Arnold said this decision was spurred by “a combination of factors.”
“We did see two loan charge-offs, and we’re seeing some deterioration in value realization in the event of loss,” Arnold said, “but the significant loan growth we saw in the first quarter materially impacted our higher provision expense.”
Arnold and Cafera also addressed the news that came one day after the end of the first quarter. On April 1, FirstSun announced that it had completed its
The merger doubled the size of FirstSun, which went from $8.6 billion of total assets to around $20 billion, and accelerated its retail buildout in Southern California. First Foundation added 16 branches to the successor bank’s network in the region, along with over a dozen more across the Southwest.
“We believe the acquisition represents a significant step forward in the continuing growth and evolution of this franchise,” Arnold said. “The combination enhances our presence in great, attractive, high-growth markets, and it further expands our regional footprint and gives us greater scale across our core businesses.”