FirstSun Capital (FSUN) Q2 2024 earnings summary

Executive summary

• Net income for Q2 2024 was $24.6 million ($0.88 per diluted share), down from $28.0 million in Q2 2023, impacted by $0.6 million in merger costs; excluding merger costs, net income was $25.2 million ($0.90 per share).

• Return on average assets was 1.26% (1.29% excluding merger costs) and return on equity was 10.03% (10.28% excluding merger costs) for Q2 2024, both lower year-over-year.

• Loan and deposit growth were 3.3% and 10.8% annualized, respectively, in Q2 2024.

• Uplisted to Nasdaq on July 12, 2024, enhancing capital market access.

• The pending merger with HomeStreet, Inc. is expected to close in Q4 2024, expanding the combined entity to $17 billion in assets and 129 branches.

Financial highlights

• Net interest income for Q2 2024 was $72.9 million, a 1.3% decrease year-over-year but up $2.1 million sequentially, as higher interest income was offset by increased deposit costs.

• Net interest margin was 4.02% in Q2 2024, down from 4.24% year-over-year but up 3 bps sequentially.

• Noninterest income was $23.3 million in Q2 2024, down $1.0 million year-over-year but up $0.5 million sequentially.

• Noninterest expense rose to $63.9 million in Q2 2024, up $5.8 million year-over-year, mainly due to higher salaries, benefits, and merger-related costs.

• Provision for credit losses was $1.2 million in Q2 2024, down from $4.4 million in Q2 2023 and $16.5 million in the prior quarter.

Outlook and guidance

• The HomeStreet merger is expected to close in Q4 2024, with anticipated cost savings and strategic gains, though integration risks remain.

• Management remains focused on responsible growth and enhancing shareholder value amid a challenging environment.

• Management does not expect mortgage banking revenue to return to prior levels in the near term due to market conditions.