FSUN

FIRSTSUN CAPITAL BANCORP

NASDAQ · FINANCIALS · NATIONAL COMMERCIAL BANKS

39.17

−0.18 −0.46%

USD · close Oct 30

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MKT CAP $1.1BP/E 19.9DIV YIELD —FCF YIELD 105.77%REV TTM —NET INCOME $46.7M −47.4%NET CASH —52W 30.16 – 41.11SEC XBRL · TTM TO Invalid Date

How FSUN rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025

Text kept

54%

of sentences unchanged

Added

195

new sentences

Dropped

183

sentences removed

Length

+1,282

words, now 21,964

New in FY2025

See “ CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS ” above in this report.
Risks Related to Our Pending Merger with First Foundation Combining FirstSun and First Foundation may be more difficult, costly or time-consuming than expected, and the anticipated benefits and cost savings of the merger and the bank merger may not be realized.
FirstSun and First Foundation have operated and, until the completion of the merger, must continue to operate, independently.
The success of the merger and the bank merger, including anticipated benefits and cost savings, will depend, in part, on our ability to successfully combine and integrate our businesses with First Foundation in a manner that permits growth opportunities and does not materially disrupt the existing customer relations or result in decreased revenues due to loss of customers.
In addition, the success of the merger will depend, in part, on the successful execution of the planned balance sheet repositioning strategy which contemplates the sale or disposition of certain assets of First Foundation and pay down or run off certain liabilities of First Foundation as part of the balance sheet repositioning (the “balance sheet repositioning”).
Execution of the balance sheet repositioning will inherently be subject to market conditions.
There is a risk that such conditions will be less favorable than anticipated when the parties entered into the merger agreement and that the balance sheet repositioning may not have the expected effects on our net interest margin, liquidity, or portfolio positioning for potential changes in interest rates.
If we are unable to successfully achieve these objectives, the anticipated benefits of the merger and the bank merger may not be realized fully or at all or may take longer to realize than expected.
In addition, the actual cost savings of the merger and the bank merger could be less than anticipated, and integration may result in additional and unforeseen expenses.
An inability to realize the full extent of the anticipated benefits of the merger, as well as any delays encountered in the integration process and the implementation of the balance sheet repositioning, could have an adverse effect upon the revenues, levels of expenses and operating results of the combined company, which may adversely affect the value of our common stock after the completion of the merger.
It is possible that the integration process could result in the loss of key employees, the disruption of either company’s ongoing businesses or inconsistencies in standards, controls, procedures and policies that adversely affect the combined company’s ability to maintain relationships with clients, customers, depositors and employees or to achieve the anticipated benefits and cost savings of the merger and the bank merger.
If we experience difficulties with the integration process, the anticipated benefits of the merger and the bank merger may not be realized fully or at all, or may take longer to realize than expected.
As with any merger of financial institutions, there also may be business disruptions that cause us and/or First Foundation to lose customers or cause customers to remove their accounts from us and/or First Foundation and move their business to competing financial institutions.
Integration efforts between the two companies will also divert management attention and resources.
These integration matters could have an adverse effect on each of us and First Foundation during this transition period and for an undetermined period after completion of the merger on the combined company.
Furthermore, the board of directors and executive leadership of the combined companies following the merger will consist of former directors and executive officers from each of FirstSun and First Foundation, as described in the merger agreement.
Combining the boards of directors and management teams of each company into a single board and a single management team could require the reconciliation of differing priorities and philosophies.
All regulatory approvals may not be received, may take longer than expected, or may impose conditions that are not presently anticipated or that could have an adverse effect on the combined company following the merger.
Before the merger and the bank merger may be completed, various approvals, consents and non-objections must be obtained.
While we have received approval for the bank merger from the Office of the Comptroller of the Currency, the merger and the bank merger remains subject to approval from the Federal Reserve Board and various other antitrust, insurance and other authorities in the United States.
Other approvals, waivers or consents from regulators may also be required.
In determining whether to grant these approvals, the regulators consider a variety of factors, including the regulatory standing of each party.
These approvals could be delayed or not obtained at all, including due to: an adverse development in either party’s regulatory standing or in any other factors considered by regulators when granting such approvals; governmental, political or community group inquiries, investigations or opposition; or changes in legislation or the political environment generally.
These regulators also could impose conditions on the completion of the merger or the bank merger or require changes to the terms of the merger or the bank merger.
Such conditions or changes could have the effect of delaying or preventing completion of the merger or the bank merger or imposing additional costs on or limiting the revenues of the combined company following the merger and the bank merger, any of which might have an adverse effect on the combined company following the merger.
Additionally, the completion of the merger is conditioned on the absence of certain orders, injunctions or decrees by any court or regulatory agency of competent jurisdiction that would prohibit or make illegal the completion of any of the transactions contemplated by the merger agreement.
In addition, despite the parties’ commitments to use their reasonable best efforts to comply with conditions imposed by regulators, under the terms of the merger agreement, neither we nor First Foundation will be required, and neither party will be permitted without the prior written consent of the other party, to take actions or agree to conditions that would reasonably be expected to have a material adverse effect on the combined company, after giving effect to the merger.
The success of the merger and the bank merger and integration of FirstSun and First Foundation will depend on a number of uncertain factors.
The success of the merger and the bank merger will depend on a number of factors, including, without limitation: • our ability to integrate the branches acquired from First Foundation in the merger into our current operations; • our ability to implement the balance sheet repositioning strategy; • our ability to limit the outflow of deposits held by First Foundation customers to successfully retain and manage interest-earning assets (i.e., loans) acquired in the merger; • our ability to control the incremental non-interest expense acquired in the merger in a manner that enables us to maintain a favorable overall efficiency ratio; • our ability to retain and attract the appropriate personnel to staff and manage the combined business; • our ability to retain the customer relationships acquired in the merger; and • our ability to earn acceptable levels of interest and non-interest income, including fee income.
Integrating our business with the business of First Foundation will be an operation of substantial size and expense, and may be affected by general market and economic conditions or government actions affecting the financial industry generally.
Integration efforts will also likely divert our management’s attention and resources.
No assurance can be given that we will be able to integrate First Foundation successfully, and the integration process could result in the loss of key employees, the disruption of ongoing business or inconsistencies in standards, controls, procedures and policies that adversely affect our ability to maintain relationships with clients, customers, depositors and employees, or to achieve the anticipated benefits of the merger and the bank merger.
We may also encounter unexpected difficulties or costs during the integration that could adversely affect our earnings and financial condition, perhaps materially.
Additionally, no assurance can be given that the operation of the combined business will not adversely affect our existing profitability, that we will be able to achieve results in the future similar to those achieved by our existing banking business or that we will be able to manage any growth resulting from the merger and the bank merger effectively.
The merger agreement may be terminated in accordance with its terms and the merger and other transactions contemplated by the merger agreement may not be completed.
If the merger is not completed, we will have incurred substantial expenses without realizing the expected benefits of the merger.
The merger agreement is subject to a number of conditions which must be fulfilled in order to complete the merger.
These conditions to the closing may not be fulfilled in a timely manner or at all, and, accordingly, the merger may not be completed.
In addition, the parties can mutually decide to terminate the merger agreement at any time, including after stockholder approval, or we or First Foundation may elect to terminate the merger agreement in certain other circumstances.
We and First Foundation have incurred and will incur substantial expenses in connection with the negotiation and completion of the transactions contemplated by the merger agreement.

and 155 more.

Gone since FY2024

See “ CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS ” above in this annual report.
Risks Related to Our Business Economic and Geographic-Related Risks Our business may be adversely affected by economic conditions.
Generally, in periods of economic downturns, including periods of rising interest rates and recessions, our realized credit losses increase, our deposit and funding costs increase, demand for our products and services declines, and the credit quality of our loan portfolio declines.
Some elements of the business environment that affect our financial performance include short-term and long-term interest rates, the prevailing yield curve, inflation, monetary supply, fluctuations in the debt and equity capital markets, and the strength of the domestic economy and the local economies in the markets in which we operate.
Unfavorable market conditions can result in a deterioration of the credit quality of borrowers, an increase in the number of loan delinquencies, defaults and charge-offs, foreclosures, additional provisions for credit losses, adverse asset values, a reduction in assets under management or administration, and an increase in our deposit and funding costs.
A component of our loan portfolio is secured by real estate.
A decline in real estate values can negatively impact our ability to recover our investment should the borrower become delinquent.
Loans secured by stock or other collateral may be adversely impacted by a downturn in the economy and other factors that could reduce the recoverability of our investment.
Unsecured loans are dependent on the solvency of the borrower, which can deteriorate, leaving us with a risk of loss.
Unfavorable or uncertain economic and market conditions can be caused by declines in economic growth, business activity or investor or business confidence, limitations on the availability of or increases in the cost of credit and capital, increases in inflation or interest rates, high unemployment, natural disasters, epidemics and pandemics (such as COVID-19), state or local government insolvency, or a combination of these or other factors.
More specifically, the market conditions in the markets in which we have a presence may be different from, and could be worse than, the economic conditions in the United States as a whole.
Inflationary pressures caused the Federal Reserve to increase interest rates in 2022 and 2023, although the Federal Reserve began reducing interest rates in 2024.
Increases in interest rates in the past have led to recessions of various lengths and intensities and might lead to such a recession in the near future.
Such a recession or any other adverse changes in business and economic conditions generally or specifically in the markets in which we operate could affect our business, including causing one or more of the following negative developments: • an increase in our deposit and funding costs; • a decrease in the demand for loans, mortgage banking products and services and other products and services we offer; • a decrease in our deposit account balances as customers move funds to seek to obtain maximum federal deposit insurance coverage or to seek higher interest rates; • a decrease in the value of the collateral securing our residential or commercial real estate loans; • a permanent impairment of our assets; or • an increase in the number of customers or other counterparties who default on their loans or other obligations to us, which could result in a higher level of NPAs, net charge-offs and provision for credit losses.
The Federal Reserve has shifted its focus to limiting inflationary and other potentially adverse economic effects or market conditions, which signals the potential for a continued period of economic uncertainty.
In addition, there are continuing concerns related to, among other things, the level of U.S. government debt and fiscal actions that may be taken to address that debt, the potential impacts of artificial intelligence, potential pandemic risks, the potential resurgence of economic and political tensions with China, the Middle East or the Russian invasion of Ukraine, the growth of global trade and commerce, trade policies, tariffs, a U.S. withdrawal from or significant renegotiation of trade agreements, and trade wars, any of which may have a destabilizing effect on financial markets and economic activity.
Economic pressure on consumers and overall economic uncertainty may result in changes in consumer and business spending, borrowing and saving habits.
These economic conditions and/or other negative developments in the domestic or international credit markets may significantly affect the markets in which we do business, the value of our loans and investments, and our ongoing operations, costs and profitability.
Declines in real estate values and sales volumes and high unemployment or underemployment may also result in higher than expected loan delinquencies, increases in our levels of nonperforming and classified assets and a decline in demand for our products and services.
These negative events may cause us to incur losses and may adversely affect our capital, liquidity and financial condition.
Our trust and wealth management business may be negatively impacted by changes in general economic and market conditions because the performance of this businesses is directly affected by conditions in the financial and securities markets.
Risks Associated with Monetary Events Monetary policies and regulations of the Federal Reserve could adversely affect our business, financial condition and results of operations.
In addition to being affected by general economic conditions, our earnings and growth are affected by the policies of the Federal Reserve.
An important function of the Federal Reserve is to regulate the money supply and credit conditions.
Among the instruments used by the Federal Reserve to implement these objectives are open market purchases and sales of U.S. government securities, adjustments to the discount rate and changes in banks’ reserve requirements against bank deposits.
These instruments are used in varying combinations to influence overall economic growth and the distribution of credit, bank loans, investments and deposits.
Their use also affects interest rates charged on loans or paid on deposits.
The monetary policies and regulations of the Federal Reserve have had a significant effect on the operating results of commercial banks in the past and are expected to continue to do so in the future.
The effects of such policies upon our business, financial condition and results of operations cannot be predicted.
Lending Risks If we fail to effectively manage credit risk, our business and financial condition will suffer.
We evaluate the collectability of our loan portfolio and we maintain an allowance for credit losses on such loans that represents management’s best estimate of current expected losses in our loan portfolio considering available information, from internal and external sources, relevant to assessing exposure to credit loss over the contractual term of the loan portfolio.
As a result, the determination of the appropriate level of allowance for credit losses inherently involves a high degree of subjectivity and requires us to make significant estimates related to current and expected future credit risks and trends, all of which may undergo material changes.
Continuing deterioration in economic conditions, including the possibility of a recession, affecting borrowers; inflation; rising interest rates; new information regarding existing loans, credit commitments; the lingering effects of the COVID-19 pandemic or other global pandemics; natural disasters and risks related to climate change; and identification of additional problem loans, and other factors, both within and outside of our control, may require an increase in the allowance for credit losses on loans.
Furthermore, if any charge-offs related to loans in future periods exceed our allowance for credit losses on loans, we will need to recognize additional credit loss expense to increase the applicable allowance.
Any increase in the allowance for credit losses on loans will result in a decrease in net income and, possibly, capital, and may have a material adverse effect on our business, financial condition and results of operations.
At December 31, 2024, approximately 69.6% of our loan portfolio consisted of commercial and industrial and commercial real estate loans.
As of December 31, 2024, our commercial real estate loans were equal to 169.5% of our total risk-based capital.
As of December 31, 2024, approximately 49.5% of our loan portfolio had real estate as primary collateral (owner occupied, non-owner occupied, non-residential construction, multifamily, and residential).
At December 31, 2024, we had a total of approximately $74.2 million of nonperforming assets or approximately 0.92% of total assets.
Interest Rate Risks We are subject to interest rate risk, which could adversely affect our financial condition and profitability.

and 143 more.

Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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