FirstSun Capital (FSUN) Q1 2026 earnings summary

Executive summary

• Net income for Q1 2026 was $21.6 million ($0.76 per diluted share), with adjusted net income of $23.7 million ($0.84 per share), reflecting merger-related adjustments and strong operational performance.

• The acquisition of First Foundation closed April 1, 2026, with integration and balance sheet repositioning underway, expected to drive cost synergies and strategic growth in Southern California, Southwest Florida, and other high-growth markets.

• C&I lending and mortgage banking drove robust loan growth and noninterest income, with a diversified revenue mix and expanding wealth advisory platform.

Financial highlights

• Net interest income for Q1 2026 was $82.8 million, up 11.1% year-over-year, with a net interest margin of 4.25%, up 7 basis points sequentially and marking 14 consecutive quarters above 4%.

• Loan balances increased by $267 million, representing 16.2% annualized growth, while deposits declined 1.1% annualized.

• Noninterest income totaled $27.2 million, up $5.4 million year-over-year, comprising 24.7% of total revenue.

• Provision for credit losses was $8.3 million, with allowance for credit losses at 1.20% of loans.

• Efficiency ratio was 68.52% (adjusted 66.08%), reflecting ongoing investment and merger expenses.

Outlook and guidance

• Management expects stable loan and deposit balances post-repositioning through year-end, with growth resuming in 2027.

• Full-year 2026 net interest margin projected in the mid-3.80s%, with Q4 expected in the 3.90s%; noninterest income to total revenue expected in the low 20s% range.

• Adjusted efficiency ratio to operate in the mid-to-low 60s% for the next quarters, dropping to ~60% in Q4 and targeting 58% in 2027.

• CET1 ratio expected in the 10.70s% range post-repositioning, with a long-term target of 11%.

• Fully phased-in cost savings from the merger expected to slightly exceed the 35% target.