Firstsun Capital Bancorp

10/28/2024 | Press release | Distributed by Public on 10/28/2024 15:17

FirstSun Capital Bancorp Reports Third Quarter 2024 Results Form 8 K

FirstSun Capital Bancorp Reports Third Quarter 2024 Results
Third Quarter 2024 Highlights:
•Net income of $22.4 million, $0.79 per diluted share (excluding merger costs, $23.7 million, $0.84 per diluted share, see the "Non-GAAP Financial Measures and Reconciliations" below)
•Net interest margin of 4.10%
•Return on average total assets of 1.13% (excluding merger costs, 1.19%, see the "Non-GAAP Financial Measures and Reconciliations" below)
•Return on average stockholders' equity of 8.79% (excluding merger costs, 9.27%, see the "Non-GAAP Financial Measures and Reconciliations" below)
•Loan growth of 6.7% annualized
•Deposit growth of 1.8% annualized
•22.5% noninterest income to total revenue1
Denver, Colorado - October 28, 2024 - FirstSun Capital Bancorp ("FirstSun") (NASDAQ: FSUN) reported net income of $22.4 million for the third quarter of 2024 compared to net income of $25.2 million for the third quarter of 2023. Earnings per diluted share were $0.79 for the third quarter of 2024 compared to $1.00 for the third quarter of 2023. Earnings for the third quarter of 2024 were negatively impacted by $1.2 million of merger costs, net of tax, or $0.05 per diluted share.
Neal Arnold, FirstSun's Chief Executive Officer and President, commented, "Our results this quarter continue to demonstrate the underlying strength of our core franchise. Our revenue growth was rooted in a very strong net interest margin of 4.10% and we realized growth in both loans and deposits. We remain focused on continuing to responsibly grow the business and expand our client relationships across all of the markets we serve through our expansive suite of banking services. We appreciate all the hard work of our teams across the organization this year."
Third Quarter 2024 Results

Net income totaled $22.4 million, or $0.79 per diluted share, for the third quarter of 2024, compared to $24.6 million, or $0.88 per diluted share, for the prior quarter. Net income was negatively impacted by $1.2 million in merger costs, net of tax, or $0.05 per diluted share, compared to $0.6 million in merger costs, net of tax, or $0.02 per diluted share, for the prior quarter. The return on average total assets was 1.13% for the third quarter of 2024, compared to 1.26% for the prior quarter, and the return on average stockholders' equity was 8.79% for the third quarter of 2024, compared to 10.03% for the prior quarter. Third quarter of 2024 merger costs, net of tax, negatively impacted return on average total assets by 0.06% and return on average stockholders' equity by 0.48%. Second quarter of 2024 merger costs, net of tax, negatively impacted return on average total assets by 0.03% and return on average stockholders' equity by 0.25%.

1Total revenue is net interest income plus noninterest income.


Net Interest Income and Net Interest Margin
Net interest income totaled $76.2 million for the third quarter of 2024, an increase of $3.3 million compared to the prior quarter. Our net interest margin increased eight basis points to 4.10% compared to the prior quarter. Results for the third quarter of 2024, compared to the prior quarter, were primarily driven by an increase of nine basis points in the yield on earning assets, partially offset by an increase of five basis points in the cost of interest-bearing liabilities.
Average loans, including loans held-for-sale, increased by $75.8 million in the third quarter of 2024, compared to the prior quarter. Loan yield increased by 12 basis points to 6.71% in the third quarter of 2024, compared to the prior quarter, primarily due to higher yields on new originations as compared to amortizing and maturing balances. Average interest-bearing deposits increased $59.1 million in the third quarter of 2024, compared to the prior quarter. Total cost of interest-bearing deposits increased by five basis points to 3.16% in the third quarter of 2024, compared to the prior quarter, primarily due to continued intense competition for deposits amidst the elevated interest rate environment. Average FHLB borrowings increased $4.8 million in the third quarter of 2024, compared to the prior quarter. The cost of FHLB borrowings decreased by six basis points to 5.61% in the third quarter of 2024, compared to the prior quarter.
Asset Quality and Provision for Credit Losses
The provision for credit losses totaled $5.0 million for the third quarter of 2024, an increase of $3.8 million from $1.2 million for the prior quarter, primarily due to loan growth and deterioration on a specific customer relationship in our loan portfolio.
Net charge-offs for the third quarter of 2024 were $1.4 million resulting in an annualized ratio of net charge-offs to average loans of 0.09%, compared to net charge-offs of $2.0 million, or an annualized ratio of net-charge offs to average loans of 0.13% for the prior quarter. The allowance for credit losses as a percentage of total loans was 1.29% at September 30, 2024, an increase of four basis points from the prior quarter.
The ratio of nonperforming assets to total assets was 0.86% at September 30, 2024, compared to 0.84% at June 30, 2024.
Noninterest Income
Noninterest income totaled $22.1 million for the third quarter of 2024, a decrease of $1.2 million from the prior quarter. Mortgage banking income decreased $2.2 million for the third quarter of 2024, primarily due to a decrease in revenue related to net sale gains and fees from mortgage loan originations, including fair value changes in the held-for-sale portfolio and hedging and a decrease in the change in fair value of our MSR asset, net of hedging activity.
Other noninterest income increased $1.0 million for the third quarter of 2024, primarily due to an increase in income from loan syndication fees and an increase in the fair value of investments related to our deferred compensation plan. Noninterest income as a percentage of total revenue2 was 22.5%, a decrease of 1.7% from the prior quarter.
Noninterest Expense
Noninterest expense totaled $64.7 million for the third quarter of 2024, an increase of $0.8 million from the prior quarter, primarily due to an increase in merger related expenses of $0.6 million from the prior quarter.
The efficiency ratio for the third quarter of 2024 was 65.83% compared to 66.42% for the prior quarter. Merger costs negatively affected the efficiency ratio for the third quarter of 2024 by 1.67%, up from a negative impact of 1.09% for the prior quarter.
2Total revenue is net interest income plus noninterest income.
2

Tax Rate
The effective tax rate was 21.5% for the third quarter of 2024, compared to 21.0% for the prior quarter.
Loans
Loans were $6.4 billion at September 30, 2024 compared to $6.3 billion at June 30, 2024, an increase of $0.1 billion in the third quarter of 2024, or 6.7% on an annualized basis. Growth in the third quarter in commercial and industrial (C&I), owner occupied commercial real estate and residential real estate loans were partially offset by a decline in non-owner occupied commercial real estate and construction and land loans.
Deposits
Deposits were $6.6 billion at September 30, 2024 and June 30, 2024, increasing by $30.4 million in the third quarter of 2024, or 1.8% on an annualized basis. Deposit growth of $107.4 million in interest-bearing demand accounts and $103.4 million in savings accounts and money market accounts in the third quarter were partially offset by a decline of $171.4 million in certificate of deposit accounts. Average deposits were $6.6 billion for the third quarter of 2024, compared to $6.5 billion for the prior quarter, an increase of $0.1 billion in the third quarter of 2024, or 6.8% on an annualized basis. Noninterest-bearing deposit accounts represented 23.4% of total deposits at September 30, 2024 and the loan-to-deposit ratio was 96.9% at September 30, 2024.
The ratio of total uninsured deposits to total deposits was estimated to be 32.7% at September 30, 2024, compared to 32.1% at June 30, 2024. The ratio of total uninsured and uncollateralized deposits to total deposits was estimated to be 26.8% at September 30, 2024, compared to 25.5% at June 30, 2024.3
Capital
Capital ratios remain strong and above "well-capitalized" thresholds. As of September 30, 2024, our common equity tier 1 risk-based capital ratio was 13.06%, total risk-based capital ratio was 15.25% and tier 1 leverage ratio was 11.96%. Book value per share was $37.38 at September 30, 2024, an increase of $1.07 from June 30, 2024. Tangible book value per share, a non-GAAP financial measure, was $33.68 at September 30, 2024, an increase of $1.12 from June 30, 2024.

3Uninsured deposits and uninsured and uncollateralized deposits are reported for our wholly-owned subsidiary Sunflower Bank, N.A.
3

Non-GAAP Financial Measures
This press release (including the tables beginning on page 15) contains financial measures determined by methods other than in accordance with principles generally accepted in the United States ("GAAP"). FirstSun management uses these non-GAAP financial measures in their analysis of FirstSun's performance and the efficiency of its operations. Management believes these non-GAAP measures provide a greater understanding of ongoing operations, enhance comparability of results with prior periods and demonstrate the effects of significant items in the current period. FirstSun believes a meaningful analysis of its financial performance requires an understanding of the factors underlying that performance. FirstSun management believes investors may find these non-GAAP financial measures useful. These non-GAAP financial measures, however, should not be viewed as a substitute for financial measures determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Below is a listing of the non-GAAP measures used in this press release:
•Tangible stockholders' equity;
•Tangible assets;
•Tangible stockholders' equity to tangible assets;
•Tangible stockholders' equity to tangible assets, reflecting net unrealized losses on HTM securities, net of tax;
•Tangible book value per share;
•Net income excluding merger costs;
•Return on average total assets excluding merger costs;
•Return on average stockholders' equity excluding merger costs;
•Efficiency ratio excluding merger related expenses;
•Diluted earnings per share excluding merger related costs; and
•Fully tax equivalent ("FTE") net interest income and net interest margin on FTE basis.
The tables beginning on page 15 provide a reconciliation of each non-GAAP financial measure contained in this press release to the most comparable GAAP equivalent.
About FirstSun Capital Bancorp
FirstSun Capital Bancorp, headquartered in Denver, Colorado, is the financial holding company for Sunflower Bank, N.A., which operates as Sunflower Bank, First National 1870 and Guardian Mortgage. Sunflower Bank provides a full range of relationship-focused services to meet personal, business and wealth management financial objectives, with a branch network in five states and mortgage capabilities in 43 states. FirstSun had total consolidated assets of $8.1 billion as of September 30, 2024.
First National 1870 and Guardian Mortgage are divisions of Sunflower Bank, N.A. To learn more, visit ir.firstsuncb.com, SunflowerBank.com, FirstNational1870.com or GuardianMortgageOnline.com.

4

Summary Data:
As of and for the quarter ended
($ in thousands, except per share amounts) September 30,
2024
June 30,
2024
March 31,
2024
December 31,
2023
September 30,
2023
Net interest income $ 76,158 $ 72,899 $ 70,806 $ 72,069 $ 73,410
Provision for credit losses 5,000 1,200 16,500 6,575 3,890
Noninterest income 22,075 23,274 22,808 17,221 18,650
Noninterest expense 64,664 63,875 61,828 52,308 56,176
Income before income taxes 28,569 31,098 15,286 30,407 31,994
Provision for income taxes 6,147 6,538 2,990 6,393 6,762
Net income 22,422 24,560 12,296 24,014 25,232
Net income, excluding merger costs (1) 23,655 25,181 14,592 24,014 25,232
Weighted average common shares outstanding, basic 27,612,538 27,430,761 27,019,625 24,953,764 24,942,389
Weighted average common shares outstanding, diluted 28,212,809 28,031,956 27,628,941 25,472,017 25,357,807
Diluted earnings per share $ 0.79 $ 0.88 $ 0.45 $ 0.94 $ 1.00
Diluted earnings per share, excluding merger costs (1) $ 0.84 $ 0.90 $ 0.53 $ 0.94 $ 1.00
Return on average total assets 1.13 % 1.26 % 0.64 % 1.26 % 1.34 %
Return on average total assets, excluding merger costs (1) 1.19 % 1.29 % 0.76 % 1.26 % 1.34 %
Return on average stockholders' equity 8.79 % 10.03 % 5.15 % 11.19 % 12.03 %
Return on average stockholders' equity, excluding merger costs (1) 9.27 % 10.28 % 6.11 % 11.19 % 12.03 %
Net interest margin 4.10 % 4.02 % 3.99 % 4.08 % 4.23 %
Net interest margin (FTE basis) (1) 4.16 % 4.08 % 4.06 % 4.15 % 4.30 %
Efficiency ratio 65.83 % 66.42 % 66.05 % 58.58 % 61.02 %
Efficiency ratio, excluding merger related expenses (1) 64.16 % 65.33 % 63.39 % 58.58 % 61.02 %
Noninterest income to total revenue (2) 22.5 % 24.2 % 24.4 % 19.3 % 20.3 %
Total assets $ 8,138,487 $ 7,999,295 $ 7,781,601 $ 7,879,724 $ 7,756,875
Total loans held-for-sale 72,247 66,571 56,813 54,212 51,465
Total loans held-for-investment 6,443,756 6,337,162 6,284,868 6,267,096 6,179,522
Total deposits 6,649,880 6,619,525 6,445,388 6,374,103 6,339,847
Total stockholders' equity 1,034,085 996,599 964,662 877,197 843,719
Loan to deposit ratio 96.9 % 95.7 % 97.5 % 98.3 % 97.5 %
Period end common shares outstanding 27,665,918 27,443,246 27,442,943 24,960,639 24,942,645
Book value per share $ 37.38 $ 36.31 $ 35.15 $ 35.14 $ 33.83
Tangible book value per share (1) $ 33.68 $ 32.56 $ 31.37 $ 30.96 $ 29.60
(1) Represents a non-GAAP financial measure. See the tables beginning on page 15 for a reconciliation of each non-GAAP measure to the most comparable GAAP equivalent.
(2) Total revenue is net interest income plus noninterest income.
5

As of and for the nine months ended
($ in thousands, except per share amounts) September 30,
2024
September 30,
2023
Net interest income $ 219,863 $ 221,362
Provision for credit losses 22,700 11,672
Noninterest income 68,157 61,871
Noninterest expense 190,367 170,485
Income before income taxes 74,953 101,076
Provision for income taxes 15,675 21,557
Net income 59,278 79,519
Net income, excluding merger costs (1) 63,428 79,519
Weighted average common shares outstanding, basic 27,355,098 24,933,168
Weighted average common shares outstanding, diluted 27,976,215 25,365,297
Diluted earnings per share $ 2.12 $ 3.13
Diluted earnings per share, excluding merger costs (1) $ 2.27 $ 3.13
Return on average total assets 1.01 % 1.42 %
Return on average total assets, excluding merger costs (1) 1.08 % 1.42 %
Return on average stockholders' equity 8.02 % 12.97 %
Return on average stockholders' equity, excluding merger costs (1) 8.58 % 12.97 %
Net interest margin 4.04 % 4.28 %
Net interest margin (FTE basis) (1) 4.10 % 4.36 %
Efficiency ratio 66.10 % 60.19 %
Efficiency ratio, excluding merger related expenses (1) 64.30 % 60.19 %
Noninterest income to total revenue (2) 23.7 % 21.8 %
Total assets $ 8,138,487 $ 7,756,875
Total loans held-for-sale 72,247 51,465
Total loans held-for-investment 6,443,756 6,179,522
Total deposits 6,649,880 6,339,847
Total stockholders' equity 1,034,085 843,719
Loan to deposit ratio 96.9 % 97.5 %
Period end common shares outstanding 27,665,918 24,942,645
Book value per share $ 37.38 $ 33.83
Tangible book value per share (1) $ 33.68 $ 29.60
(1) Represents a non-GAAP financial measure. See the tables beginning on page 15 for a reconciliation of each non-GAAP measure to the most comparable GAAP equivalent.
(2) Total revenue is net interest income plus noninterest income.
6

Condensed Consolidated Statements of Income (Unaudited):
For the quarter ended
For the nine months ended
($ in thousands, except per share amounts) September 30,
2024
September 30,
2023
September 30,
2024
September 30,
2023
Total interest income $ 118,932 $ 106,775 $ 343,501 $ 303,710
Total interest expense 42,774 33,365 123,638 82,348
Net interest income 76,158 73,410 219,863 221,362
Provision for credit losses 5,000 3,890 22,700 11,672
Net interest income after provision for credit losses 71,158 69,520 197,163 209,690
Noninterest income:
Service charges on deposits 6,240 5,475 17,954 15,848
Credit and debit card fees 2,806 2,996 8,616 9,034
Trust and investment advisory fees 1,395 1,398 4,351 4,337
Mortgage banking income, net 8,838 7,413 29,383 26,501
Other noninterest income 2,796 1,368 7,853 6,151
Total noninterest income 22,075 18,650 68,157 61,871
Noninterest expense:
Salaries and benefits 39,306 33,968 116,487 103,073
Occupancy and equipment 9,121 8,487 26,417 24,977
Amortization of intangible assets 651 899 2,118 3,993
Merger related expenses 1,633 - 5,168 -
Other noninterest expenses 13,953 12,822 40,177 38,442
Total noninterest expense 64,664 56,176 190,367 170,485
Income before income taxes 28,569 31,994 74,953 101,076
Provision for income taxes 6,147 6,762 15,675 21,557
Net income $ 22,422 $ 25,232 $ 59,278 $ 79,519
Earnings per share - basic $ 0.81 $ 1.01 $ 2.17 $ 3.19
Earnings per share - diluted $ 0.79 $ 1.00 $ 2.12 $ 3.13
7

For the quarter ended
($ in thousands, except per share amounts) September 30,
2024
June 30,
2024
March 31,
2024
December 31,
2023
September 30,
2023
Total interest income $ 118,932 $ 114,529 $ 110,040 $ 109,974 $ 106,775
Total interest expense 42,774 41,630 39,234 37,905 33,365
Net interest income 76,158 72,899 70,806 72,069 73,410
Provision for credit losses 5,000 1,200 16,500 6,575 3,890
Net interest income after provision for credit losses 71,158 71,699 54,306 65,494 69,520
Noninterest income:
Service charges on deposits 6,240 5,946 5,768 5,497 5,475
Credit and debit card fees 2,806 3,007 2,803 2,966 2,996
Trust and investment advisory fees 1,395 1,493 1,463 1,356 1,398
Mortgage banking income, net 8,838 11,043 9,502 4,883 7,413
Other noninterest income 2,796 1,785 3,272 2,519 1,368
Total noninterest income 22,075 23,274 22,808 17,221 18,650
Noninterest expense:
Salaries and benefits 39,306 39,828 37,353 30,158 33,968
Occupancy and equipment 9,121 8,701 8,595 8,449 8,487
Amortization of intangible assets 651 652 815 829 899
Merger related expenses 1,633 1,046 2,489 - -
Other noninterest expenses 13,953 13,648 12,576 12,872 12,822
Total noninterest expense 64,664 63,875 61,828 52,308 56,176
Income before income taxes 28,569 31,098 15,286 30,407 31,994
Provision for income taxes 6,147 6,538 2,990 6,393 6,762
Net income $ 22,422 $ 24,560 $ 12,296 $ 24,014 $ 25,232
Earnings per share - basic $ 0.81 $ 0.90 $ 0.46 $ 0.96 $ 1.01
Earnings per share - diluted $ 0.79 $ 0.88 $ 0.45 $ 0.94 $ 1.00

8

Condensed Consolidated Balance Sheets as of (Unaudited):
($ in thousands) September 30,
2024
June 30,
2024
March 31,
2024
December 31,
2023
September 30,
2023
Assets
Cash and cash equivalents $ 573,674 $ 535,766 $ 383,605 $ 479,362 $ 443,887
Securities available-for-sale, at fair value 496,811 491,649 499,078 516,757 495,992
Securities held-to-maturity 35,885 36,310 36,640 36,983 37,410
Loans held-for-sale, at fair value 72,247 66,571 56,813 54,212 51,465
Loans 6,443,756 6,337,162 6,284,868 6,267,096 6,179,522
Allowance for credit losses (83,159) (78,960) (79,829) (80,398) (78,666)
Loans, net 6,360,597 6,258,202 6,205,039 6,186,698 6,100,856
Mortgage servicing rights, at fair value 78,799 80,744 78,416 76,701 81,036
Premises and equipment, net 82,532 83,320 84,063 84,842 83,733
Other real estate owned and foreclosed assets, net 4,478 4,497 4,414 4,100 8,395
Goodwill 93,483 93,483 93,483 93,483 93,483
Intangible assets, net 8,866 9,517 10,168 10,984 11,813
All other assets 331,115 339,236 329,882 335,602 348,805
Total assets $ 8,138,487 $ 7,999,295 $ 7,781,601 $ 7,879,724 $ 7,756,875
Liabilities and Stockholders' Equity
Liabilities:
Deposits:
Noninterest-bearing demand deposit accounts $ 1,554,762 $ 1,562,308 $ 1,517,315 $ 1,530,506 $ 1,610,650
Interest-bearing deposit accounts:
Interest-bearing demand accounts 645,647 538,232 542,184 534,540 440,845
Savings and money market accounts 2,608,808 2,505,439 2,473,255 2,446,632 2,476,097
NOW accounts 41,234 42,687 39,181 56,819 35,686
Certificate of deposit accounts 1,799,429 1,970,859 1,873,453 1,805,606 1,776,569
Total deposits 6,649,880 6,619,525 6,445,388 6,374,103 6,339,847
Securities sold under agreements to repurchase 10,913 20,408 20,423 24,693 25,868
Federal Home Loan Bank advances 215,000 145,000 144,810 389,468 330,000
Other borrowings 75,709 75,577 75,445 75,313 75,180
Other liabilities 152,900 142,186 130,873 138,950 142,261
Total liabilities 7,104,402 7,002,696 6,816,939 7,002,527 6,913,156
Stockholders' equity:
Preferred stock - - - - -
Common stock 3 3 3 2 2
Additional paid-in capital 547,271 543,339 542,582 462,680 462,507
Retained earnings 516,800 494,378 469,818 457,522 433,508
Accumulated other comprehensive loss, net (29,989) (41,121) (47,741) (43,007) (52,298)
Total stockholders' equity 1,034,085 996,599 964,662 877,197 843,719
Total liabilities and stockholders' equity $ 8,138,487 $ 7,999,295 $ 7,781,601 $ 7,879,724 $ 7,756,875

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Consolidated Capital Ratios as of:
September 30,
2024
June 30,
2024
March 31,
2024
December 31,
2023
September 30,
2023
Stockholders' equity to total assets 12.71 % 12.46 % 12.40 % 11.13 % 10.88 %
Tangible stockholders' equity to tangible assets (1) 11.59 % 11.32 % 11.21 % 9.94 % 9.65 %
Tangible stockholders' equity to tangible assets reflecting net unrealized losses on HTM securities, net of tax (1) (2) 11.56 % 11.27 % 11.17 % 9.90 % 9.59 %
Tier 1 leverage ratio 11.96 % 11.83 % 11.73 % 10.52 % 10.37 %
Common equity tier 1 risk-based capital ratio 13.06 % 12.80 % 12.54 % 11.10 % 10.79 %
Tier 1 risk-based capital ratio 13.06 % 12.80 % 12.54 % 11.10 % 10.79 %
Total risk-based capital ratio 15.25 % 14.95 % 14.73 % 13.25 % 12.93 %
(1) Represents a non-GAAP financial measure. See the tables beginning on page 15 for a reconciliation of each non-GAAP measure to the most comparable GAAP equivalent.
(2) Tangible stockholders' equity and tangible assets have been adjusted to reflect net unrealized losses on held-to-maturity securities, net of tax.
10

Summary of Net Interest Margin:
For the quarter ended
For the nine months ended
September 30, 2024 September 30, 2023 September 30, 2024 September 30, 2023
(In thousands) Average Balance Average Yield/Rate Average Balance Average Yield/Rate Average Balance Average Yield/Rate Average Balance Average Yield/Rate
Interest Earning Assets
Loans (1) 6,460,484 6.71 % 6,180,684 6.44 % 6,386,620 6.59 % 6,144,057 6.15 %
Investment securities 527,241 3.62 % 545,257 3.10 % 532,562 3.51 % 559,855 3.00 %
Interest-bearing cash and other assets 442,632 5.17 % 221,559 5.39 % 343,911 5.26 % 187,468 5.41 %
Total earning assets 7,430,357 6.40 % 6,947,500 6.15 % 7,263,093 6.31 % 6,891,380 5.88 %
Other assets 534,740 557,988 543,916 553,628
Total assets $ 7,965,097 $ 7,505,488 $ 7,807,009 $ 7,445,008
Interest-bearing liabilities
Demand and NOW deposits $ 657,537 3.75 % $ 466,837 3.27 % $ 609,632 3.70 % $ 343,112 2.79 %
Savings deposits 411,526 0.72 % 439,172 0.62 % 415,687 0.70 % 452,298 0.48 %
Money market deposits 2,140,552 2.25 % 2,026,028 1.58 % 2,098,927 2.06 % 2,142,301 1.18 %
Certificates of deposits 1,800,502 4.58 % 1,748,515 4.21 % 1,812,839 4.62 % 1,407,264 3.61 %
Total deposits 5,010,117 3.16 % 4,680,552 2.64 % 4,937,085 3.09 % 4,344,975 2.02 %
Repurchase agreements 13,528 1.29 % 26,549 0.98 % 17,099 1.15 % 29,953 0.73 %
Total deposits and repurchase agreements 5,023,645 3.16 % 4,707,101 2.63 % 4,954,184 3.08 % 4,374,928 2.01 %
FHLB borrowings 135,641 5.61 % 84,332 5.40 % 125,799 5.61 % 335,485 5.00 %
Other long-term borrowings 75,654 6.58 % 78,680 6.44 % 75,522 6.59 % 79,801 6.36 %
Total interest-bearing liabilities 5,234,940 3.27 % 4,870,113 2.74 % 5,155,505 3.20 % 4,790,214 2.29 %
Noninterest-bearing deposits 1,568,685 1,654,090 1,529,793 1,705,392
Other liabilities 141,206 142,027 136,491 131,628
Stockholders' equity 1,020,266 839,258 985,220 817,774
Total liabilities and stockholders' equity $ 7,965,097 $ 7,505,488 $ 7,807,009 $ 7,445,008
Net interest spread 3.13 % 3.41 % 3.11 % 3.59 %
Net interest margin 4.10 % 4.23 % 4.04 % 4.28 %
Net interest margin (on FTE basis) (2) 4.16 % 4.30 % 4.10 % 4.36 %
(1) Includes loans held-for-investment, including nonaccrual loans, and loans held-for-sale.
(2) Represents a non-GAAP financial measure. See the tables beginning on page 15 for a reconciliation of each non-GAAP measure to the most comparable GAAP equivalent.
11

For the quarter ended
September 30, 2024 June 30, 2024 March 31, 2024 December 31, 2023 September 30, 2023
(In thousands) Average Balance Average Yield/Rate Average Balance Average Yield/Rate Average Balance Average Yield/Rate Average Balance Average Yield/Rate Average Balance Average Yield/Rate
Interest Earning Assets
Loans (1) 6,460,484 6.71 % 6,384,709 6.59 % 6,313,855 6.48 % 6,280,362 6.51 % 6,180,684 6.44 %
Investment securities 527,241 3.62 % 523,545 3.65 % 546,960 3.28 % 538,348 3.28 % 545,257 3.10 %
Interest-bearing cash and other assets 442,632 5.17 % 348,509 5.25 % 239,508 5.49 % 247,978 5.50 % 221,559 5.39 %
Total earning assets 7,430,357 6.40 % 7,256,763 6.31 % 7,100,323 6.20 % 7,066,688 6.22 % 6,947,500 6.15 %
Other assets 534,740 548,465 548,642 563,368 557,988
Total assets $ 7,965,097 $ 7,805,228 $ 7,648,965 $ 7,630,056 $ 7,505,488
Interest-bearing liabilities
Demand and NOW deposits $ 657,537 3.75 % $ 621,343 3.80 % $ 549,491 3.54 % $ 510,982 3.45 % $ 466,837 3.27 %
Savings deposits 411,526 0.72 % 413,699 0.69 % 421,882 0.69 % 457,679 0.93 % 439,172 0.62 %
Money market deposits 2,140,552 2.25 % 2,092,449 2.01 % 2,063,321 1.93 % 2,063,383 1.82 % 2,026,028 1.58 %
Certificates of deposits 1,800,502 4.58 % 1,823,522 4.69 % 1,814,629 4.60 % 1,825,325 4.54 % 1,748,515 4.21 %
Total deposits 5,010,117 3.16 % 4,951,013 3.11 % 4,849,323 3.00 % 4,857,369 2.93 % 4,680,552 2.64 %
Repurchase agreements 13,528 1.29 % 16,553 1.15 % 21,254 1.06 % 23,457 1.06 % 26,549 0.98 %
Total deposits and repurchase agreements 5,023,645 3.16 % 4,967,566 3.10 % 4,870,577 2.99 % 4,880,826 2.92 % 4,707,101 2.63 %
FHLB borrowings 135,641 5.61 % 130,871 5.67 % 110,777 5.56 % 74,146 5.64 % 84,332 5.40 %
Other long-term borrowings 75,654 6.58 % 75,522 6.59 % 75,389 6.62 % 75,249 6.62 % 78,680 6.44 %
Total interest-bearing liabilities 5,234,940 3.27 % 5,173,959 3.22 % 5,056,743 3.10 % 5,030,221 3.01 % 4,870,113 2.74 %
Noninterest-bearing deposits 1,568,685 1,517,560 1,502,707 1,597,672 1,654,090
Other liabilities 141,206 133,845 134,370 143,416 142,027
Stockholders' equity 1,020,266 979,864 955,145 858,747 839,258
Total liabilities and stockholders' equity $ 7,965,097 $ 7,805,228 $ 7,648,965 $ 7,630,056 $ 7,505,488
Net interest spread 3.13 % 3.09 % 3.10 % 3.21 % 3.41 %
Net interest margin 4.10 % 4.02 % 3.99 % 4.08 % 4.23 %
Net interest margin (on FTE basis) (2) 4.16 % 4.08 % 4.06 % 4.15 % 4.30 %
(1) Includes loans held-for-investment, including nonaccrual loans, and loans held-for-sale.
(2) Represents a non-GAAP financial measure. See the tables beginning on page 15 for a reconciliation of each non-GAAP measure to the most comparable GAAP equivalent.
12

Deposits as of:
($ in thousands) September 30,
2024
June 30,
2024
March 31,
2024
December 31,
2023
September 30,
2023
Consumer
Noninterest bearing deposit accounts $ 397,880 $ 414,795 $ 356,732 $ 360,168 $ 366,366
Interest-bearing deposit accounts:
Demand and NOW deposits 61,929 42,903 38,625 36,162 33,340
Savings deposits 331,811 334,741 340,086 343,291 356,890
Money market deposits 1,333,486 1,243,355 1,229,239 1,196,645 1,149,365
Certificates of deposits 1,247,348 1,438,792 1,437,590 1,437,537 1,366,255
Total interest-bearing deposit accounts 2,974,574 3,059,791 3,045,540 3,013,635 2,905,850
Total consumer deposits $ 3,372,454 $ 3,474,586 $ 3,402,272 $ 3,373,803 $ 3,272,216
Business
Noninterest bearing deposit accounts $ 1,156,882 $ 1,147,513 $ 1,160,583 $ 1,170,338 $ 1,244,284
Interest-bearing deposit accounts:
Demand and NOW deposits 624,952 538,016 502,726 555,197 443,191
Savings deposits 77,744 77,931 80,226 80,802 85,234
Money market deposits 865,767 849,412 823,704 825,811 859,516
Certificates of deposits 62,187 90,189 97,854 87,407 77,228
Total interest-bearing deposit accounts 1,630,650 1,555,548 1,504,510 1,549,217 1,465,169
Total business deposits $ 2,787,532 $ 2,703,061 $ 2,665,093 $ 2,719,555 $ 2,709,453
Wholesale deposits (1) $ 489,894 $ 441,878 $ 378,023 $ 280,745 $ 358,178
Total deposits $ 6,649,880 $ 6,619,525 $ 6,445,388 $ 6,374,103 $ 6,339,847
(1) Wholesale deposits primarily consist of brokered deposits included in our condensed consolidated balance sheets within certificates of deposits.
Balance Sheet Ratios as of:
September 30,
2024
June 30,
2024
March 31,
2024
December 31,
2023
September 30,
2023
Cash to total assets (1) 6.90 % 6.60 % 4.80 % 6.00 % 5.60 %
Loan to deposit ratio 96.9 % 95.7 % 97.5 % 98.3 % 97.5 %
Uninsured deposits to total deposits (2) 32.7 % 32.1 % 32.0 % 31.2 % 32.0 %
Uninsured and uncollateralized deposits to total deposits (2) 26.8 % 25.5 % 25.2 % 25.1 % 25.4 %
Wholesale deposits and borrowings to total liabilities (3) 9.9 % 8.4 % 7.7 % 9.6 % 10.0 %
(1) Cash consists of cash and amounts due from banks and interest-bearing deposits with other financial institutions.
(2) Uninsured deposits and uninsured and uncollateralized deposits are reported for our wholly-owned subsidiary Sunflower Bank, N.A. and are estimated.
(3) Wholesale deposits primarily consist of brokered deposits included in our condensed consolidated balance sheets within certificates of deposits. Wholesale borrowings consist of FHLB overnight and term advances.
13

Loan Portfolio as of:
($ in thousands) September 30,
2024
June 30,
2024
March 31,
2024
December 31,
2023
September 30,
2023
Commercial and industrial $ 2,527,636 $ 2,431,110 $ 2,480,078 $ 2,467,688 $ 2,459,358
Commercial real estate:
Non-owner occupied 821,670 866,999 836,515 812,235 767,135
Owner occupied 700,325 660,511 642,930 635,365 631,352
Construction and land 333,457 350,878 326,447 345,430 329,433
Multifamily 95,125 94,220 94,898 103,066 114,535
Total commercial real estate 1,950,577 1,972,608 1,900,790 1,896,096 1,842,455
Residential real estate 1,172,459 1,146,989 1,109,676 1,110,610 1,059,074
Public Finance 536,776 537,872 579,991 602,913 602,844
Consumer 45,267 42,129 40,317 36,371 37,681
Other 211,041 206,454 174,016 153,418 178,110
Total loans, net of deferred costs, fees, premiums, and discounts $ 6,443,756 $ 6,337,162 $ 6,284,868 $ 6,267,096 $ 6,179,522
Asset Quality:
As of and for the quarter ended
($ in thousands) September 30,
2024
June 30,
2024
March 31,
2024
December 31,
2023
September 30,
2023
Net charge-offs $ 1,401 $ 2,009 $ 17,429 $ 4,743 $ 2,296
Allowance for credit losses $ 83,159 $ 78,960 $ 79,829 $ 80,398 $ 78,666
Nonperforming loans, including nonaccrual loans, and accrual loans greater than 90 days past due $ 65,824 $ 62,558 $ 57,599 $ 63,143 $ 40,743
Nonperforming assets $ 70,302 $ 67,055 $ 62,013 $ 67,243 $ 49,138
Ratio of net charge-offs to average loans outstanding 0.09 % 0.13 % 1.11 % 0.30 % 0.15 %
Allowance for credit losses to total loans outstanding 1.29 % 1.25 % 1.27 % 1.28 % 1.27 %
Allowance for credit losses to total nonperforming loans 126.34 % 126.22 % 138.59 % 127.33 % 193.08 %
Nonperforming loans to total loans 1.02 % 0.99 % 0.92 % 1.01 % 0.66 %
Nonperforming assets to total assets 0.86 % 0.84 % 0.80 % 0.85 % 0.63 %

14

Non-GAAP Financial Measures and Reconciliations:

As of and for the quarter ended
As of and for the nine months ended
($ in thousands, except share and per share amounts) September 30,
2024
June 30,
2024
March 31,
2024
December 31,
2023
September 30,
2023
September 30,
2024
September 30,
2023
Tangible stockholders' equity:
Total stockholders' equity (GAAP) $ 1,034,085 $ 996,599 $ 964,662 $ 877,197 $ 843,719 $ 1,034,085 $ 843,719
Less: Goodwill and other intangible assets:
Goodwill (93,483) (93,483) (93,483) (93,483) (93,483) (93,483) (93,483)
Other intangible assets (8,866) (9,517) (10,168) (10,984) (11,813) (8,866) (11,813)
Tangible stockholders' equity (non-GAAP) $ 931,736 $ 893,599 $ 861,011 $ 772,730 $ 738,423 $ 931,736 $ 738,423
Tangible assets:
Total assets (GAAP) $ 8,138,487 $ 7,999,295 $ 7,781,601 $ 7,879,724 $ 7,756,875 $ 8,138,487 $ 7,756,875
Less: Goodwill and other intangible assets:
Goodwill (93,483) (93,483) (93,483) (93,483) (93,483) (93,483) (93,483)
Other intangible assets (8,866) (9,517) (10,168) (10,984) (11,813) (8,866) (11,813)
Tangible assets (non-GAAP) $ 8,036,138 $ 7,896,295 $ 7,677,950 $ 7,775,257 $ 7,651,579 $ 8,036,138 $ 7,651,579
Tangible stockholders' equity to tangible assets:
Total stockholders' equity to total assets (GAAP) 12.71 % 12.46 % 12.40 % 11.13 % 10.88 % 12.71 % 10.88 %
Less: Impact of goodwill and other intangible assets (1.12) % (1.14) % (1.19) % (1.19) % (1.23) % (1.12) % (1.23) %
Tangible stockholders' equity to tangible assets (non-GAAP) 11.59 % 11.32 % 11.21 % 9.94 % 9.65 % 11.59 % 9.65 %
Tangible stockholders' equity to tangible assets, reflecting net unrealized losses on HTM securities, net of tax:
Tangible stockholders' equity (non-GAAP) $ 931,736 $ 893,599 $ 861,011 $ 772,730 $ 738,423 $ 931,736 $ 738,423
Less: Net unrealized losses on HTM securities, net of tax (2,852) (3,949) (4,236) (3,629) (5,001) (2,852) (5,001)
Tangible stockholders' equity less net unrealized losses on HTM securities, net of tax (non-GAAP) $ 928,884 $ 889,650 $ 856,775 $ 769,101 $ 733,422 $ 928,884 $ 733,422
Tangible assets (non-GAAP) $ 8,036,138 $ 7,896,295 $ 7,677,950 $ 7,775,257 $ 7,651,579 $ 8,036,138 $ 7,651,579
Less: Net unrealized losses on HTM securities, net of tax (2,852) (3,949) (4,236) (3,629) (5,001) (2,852) (5,001)
Tangible assets less net unrealized losses on HTM securities, net of tax (non-GAAP) $ 8,033,286 $ 7,892,346 $ 7,673,714 $ 7,771,628 $ 7,646,578 $ 8,033,286 $ 7,646,578
15

As of and for the quarter ended
As of and for the nine months ended
($ in thousands, except share and per share amounts) September 30,
2024
June 30,
2024
March 31,
2024
December 31,
2023
September 30,
2023
September 30,
2024
September 30,
2023
Tangible stockholders' equity to tangible assets (non-GAAP) 11.59 % 11.32 % 11.21 % 9.94 % 9.65 % 11.59 % 9.65 %
Less: Net unrealized losses on HTM securities, net of tax (0.03) % (0.05) % (0.04) % (0.04) % (0.06) % (0.03) % (0.06) %
Tangible stockholders' equity to tangible assets reflecting net unrealized losses on HTM securities, net of tax (non-GAAP) 11.56 % 11.27 % 11.17 % 9.90 % 9.59 % 11.56 % 9.59 %
Tangible book value per share:
Total stockholders' equity (GAAP) $ 1,034,085 $ 996,599 $ 964,662 $ 877,197 $ 843,719 $ 1,034,085 $ 843,719
Tangible stockholders' equity (non-GAAP) $ 931,736 $ 893,599 $ 861,011 $ 772,730 $ 738,423 $ 931,736 $ 738,423
Total shares outstanding 27,665,918 27,443,246 27,442,943 24,960,639 24,942,645 27,665,918 24,942,645
Book value per share (GAAP) $ 37.38 $ 36.31 $ 35.15 $ 35.14 $ 33.83 $ 37.38 $ 33.83
Tangible book value per share (non-GAAP) $ 33.68 $ 32.56 $ 31.37 $ 30.96 $ 29.60 $ 33.68 $ 29.60
Net income excluding merger costs:
Net income (GAAP) $ 22,422 $ 24,560 $ 12,296 $ 24,014 $ 25,232 $ 59,278 $ 79,519
Add: Merger costs
Merger related expenses 1,633 1,046 2,489 - - 5,168 -
Income tax effect on merger related expenses (400) (425) (193) - - (1,018) -
Total merger costs, net of tax 1,233 621 2,296 - - 4,150 -
Net income excluding merger costs (non-GAAP) $ 23,655 $ 25,181 $ 14,592 $ 24,014 $ 25,232 $ 63,428 $ 79,519
Return on average total assets excluding merger costs:
Return on average total assets (ROAA) (GAAP) 1.13 % 1.26 % 0.64 % 1.26 % 1.34 % 1.01 % 1.42 %
Add: Impact of merger costs, net of tax 0.06 % 0.03 % 0.12 % - % - % 0.07 % - %
ROAA excluding merger costs (non-GAAP) 1.19 % 1.29 % 0.76 % 1.26 % 1.34 % 1.08 % 1.42 %
Return on average stockholders' equity excluding merger costs:
Return on average stockholders' equity (ROAE) (GAAP) 8.79 % 10.03 % 5.15 % 11.19 % 12.03 % 8.02 % 12.97 %
Add: Impact of merger costs, net of tax 0.48 % 0.25 % 0.96 % - % - % 0.56 % - %
ROAE excluding merger costs (non-GAAP) 9.27 % 10.28 % 6.11 % 11.19 % 12.03 % 8.58 % 12.97 %
Efficiency ratio excluding merger related expenses:
Efficiency ratio (GAAP) 65.83 % 66.42 % 66.05 % 58.58 % 61.02 % 66.10 % 60.19 %
Less: Impact of merger related expenses (1.67) % (1.09) % (2.66) % - % - % (1.80) % - %
Efficiency ratio excluding merger related expenses (non-GAAP) 64.16 % 65.33 % 63.39 % 58.58 % 61.02 % 64.30 % 60.19 %
16

As of and for the quarter ended
As of and for the nine months ended
($ in thousands, except share and per share amounts) September 30,
2024
June 30,
2024
March 31,
2024
December 31,
2023
September 30,
2023
September 30,
2024
September 30,
2023
Diluted earnings per share excluding merger costs:
Diluted earnings per share (GAAP) $ 0.79 $ 0.88 $ 0.45 $ 0.94 $ 1.00 $ 2.12 $ 3.13
Add: Impact of merger costs, net of tax 0.05 0.02 0.08 - - 0.15 -
Diluted earnings per share excluding merger costs (non-GAAP) $ 0.84 $ 0.90 $ 0.53 $ 0.94 $ 1.00 $ 2.27 $ 3.13
Fully tax equivalent ("FTE") net interest income and net interest margin on FTE basis:
Net interest income (GAAP) $ 76,158 $ 72,899 $ 70,806 $ 72,069 $ 73,410 $ 219,863 $ 221,362
Gross income effect of tax exempt income 1,132 1,156 1,318 1,270 1,286 3,606 3,816
FTE net interest income (non-GAAP) $ 77,290 $ 74,055 $ 72,124 $ 73,339 $ 74,696 $ 223,469 $ 225,178
Average earning assets $ 7,430,357 $ 7,256,763 $ 7,100,323 $ 7,066,688 $ 6,947,500 $ 7,263,093 $ 6,891,380
Net interest margin 4.10 % 4.02 % 3.99 % 4.08 % 4.23 % 4.04 % 4.28 %
Net interest margin on FTE basis (non-GAAP) 4.16 % 4.08 % 4.06 % 4.15 % 4.30 % 4.10 % 4.36 %
17