FirstSun Capital (FSUN) Q2 2026 earnings summary

Executive summary

• Completed acquisition/merger with First Foundation on April 1, 2026, adding $11.2B in assets, $6.0B in loans, and $8.8B in deposits, expanding into Southern California and Southwest Florida and enhancing franchise scale and wealth management capabilities.

• Executed significant balance sheet repositioning, including downsizing $3.9B–$5.0B in assets and funding, and selling $1.4B in securities and $1.3B in loans, improving liquidity and risk profile.

• Net loss of $22.9M for Q2 2026, driven by $57.6M in merger-related expenses and large C&I loan charge-offs, with adjusted net income of $21.0M.

• Announced and authorized a $150M share repurchase program through June 2027.

• Achieved 65% of targeted annualized cost savings from the acquisition by Q2.

Financial highlights

• Net interest income rose to $143.2M in Q2 2026, with net interest margin declining to 3.58% from 4.25% in Q1.

• Noninterest income was $40.9M, up $13.9M YoY, representing 22.2% of total revenue, with strong mortgage and wealth management contributions.

• Noninterest expense increased to $171.7M, up $103.6M YoY, mainly due to merger costs.

• Efficiency ratio was 93.25% (adjusted 61.99%) for Q2 2026.

• Allowance for credit losses to loans at 1.50%, up from 1.20% at Q1 end.

Outlook and guidance

• Expect low single-digit loan and deposit growth through year-end 2026, with NIM projected to rise into the high-3.80s in early 2027.

• Adjusted efficiency ratio forecasted in the mid-to-low 60s for H2 2026, improving to high-50s/low-60s in 2027.

• CET1 ratio expected in the 11.75–12% range; share repurchase program to provide capital flexibility.

• Management expects further cost savings and business synergies from the acquisition.

• Net charge-offs to average loans expected in the high 50s basis points for 2026, normalizing in 2027.