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FirstSun Capital Bancorp Reports Fourth Quarter and Full Year 2021 Results

 Fourth Quarter Highlights:

  • Net income of $8.8 million, $0.47 per diluted share
  • Return on average assets of 0.62%
  • Return on average equity of 6.69%
  • Loan growth of 24.5% annualized (excluding PPP loan balances, 30.3% annualized)
  • Average deposit balance growth of 9.0% annualized

FirstSun Capital Bancorp (“FirstSun”) reported net income of $8.8 million for the fourth quarter of 2021, compared to net income of $8.7 million in the prior quarter and $11.3 million in the fourth quarter of 2020. Earnings per diluted share was $0.47 for the fourth quarter 2021, compared to $0.46 in the prior quarter and $0.60 in the fourth quarter of 2020. Net income for the full year of 2021 was $43.2 million, or $2.30 per diluted share, compared to $47.6 million, or $2.58 per diluted share, for the full year of 2020.

Mollie Carter, FirstSun’s Chairman and Chief Executive Officer, commented, “We are very pleased with the strong results we delivered in our fourth quarter and the quality of our continued growth year over year. While we await regulatory approval of our merger with Pioneer Bancshares, Austin, Texas, our teams continued to deliver on our primary organic growth strategy. The targeted investments we have made in our relationship banking model, especially in our Southwest markets, have enabled us to continue our trajectory of growth in the loan, deposit and non-interest income categories that we believe are key to delivering what we refer to as sustainable growth, and we have achieved this while maintaining our historically strong asset quality. We are grateful to our teams who maintained their commitment to building lasting customer relationships again in 2021 after working so hard to deliver an exceptional year in 2020.”

Fourth Quarter 2021 Results

Net income totaled $8.8 million, or $0.47 per diluted share, during the fourth quarter of 2021, compared to $8.7 million, or $0.46 per diluted share, during the prior quarter. The return on average assets was 0.62% in the fourth quarter of 2021, compared to 0.62% in the prior quarter, and the return on average equity was 6.69% in the fourth quarter of 2021, compared to 6.68% in the prior quarter.

Net Interest Income and Net Interest Margin

Net interest income totaled $40.5 million during the fourth quarter of 2021, an increase of $0.5 million compared to the prior quarter. Our net interest margin declined two basis points to 2.99% compared to the prior quarter. Results in the fourth quarter of 2021, compared to the prior quarter, were driven by an increase in average earning assets of $94.9 million, and a decrease of one basis point in the cost of interest bearing liabilities, partially offset by a decrease of three basis points in yield on earning assets. Average loans grew by $59.4 million and investment securities grew by $68.4 million, while interest bearing cash balances declined by $8.8 million in the fourth quarter of 2021, compared to the prior quarter. Loan yield decreased by five basis points in the fourth quarter of 2021, compared to the prior quarter, primarily due to a reduction in fees from loan prepayments and a reduction in fees resulting from PPP loan forgiveness. Our total cost of deposits decreased by two basis points to 0.22% in the fourth quarter of 2021, compared to the prior quarter.

Asset Quality and Provision for Loan Losses

The provision for loan losses totaled $1.3 million during the fourth quarter of 2021, a decrease of $2.3 million compared to the prior quarter. Net charge-offs during the fourth quarter of 2021 were $1.6 million, or a ratio of net charge-offs to average loans of 0.16% annualized, compared to net recoveries of $1.4 million, or a ratio of net charge-offs (recoveries) to average loans of (0.15)% annualized, in the prior quarter. The full year net charge-off ratio for 2021 was 0.09%, down two basis points, from 0.11% for the full year 2020. The allowance for loan losses as a percentage of total loans totaled 1.18% at December 31, 2021, compared to 1.26% at September 30, 2021. The allowance for loan losses as a percentage of total loans, excluding PPP loans, a non-GAAP financial measure, totaled 1.20% at December 31, 2021, compared to 1.30% at September 30, 2021. The ratio of nonperforming assets to total assets was 0.60% at December 31, 2021, compared to 0.63% at September 30, 2021, and 0.79% at December 31, 2020.

Noninterest Income

Noninterest income totaled $29.4 million during the fourth quarter of 2021, an increase of $0.7 million from the prior quarter. Service charges on deposits increased $0.4 million during the fourth quarter of 2021 from the prior quarter, due to increases in both commercial and consumer deposit fees. Mortgage banking income decreased $1.9 million during the fourth quarter of 2021 from the prior quarter, due primarily to margin compression and its impact on loan sale gains and the pipeline valuation. Total mortgage loan originations declined by $0.9 million, or 0.2%, in the fourth quarter of 2021 from the prior quarter, with mortgage loan refinance volumes declining by $15.8 million. In the fourth quarter of 2021, other noninterest income increased $2.3 million from the prior quarter, to $2.9 million, primarily due to increases in customer accommodation interest rate swap fees and loan syndication fee income. Noninterest income as a percentage of total revenue totaled 42.1% in the fourth quarter of 2021, compared to 41.8% in the prior quarter.

Noninterest Expense

Noninterest expense totaled $58.3 million during the fourth quarter of 2021, an increase of $3.7 million from the prior quarter, primarily driven by higher salaries and benefits expense in our banking segment. Noninterest expenses for the fourth quarter of 2021 also included $1.1 million in merger expenses related to the pending transaction with Pioneer Bancshares, Inc., compared to $0.7 million in the prior quarter. Merger expenses reduced diluted earnings per share by $0.05 for the fourth quarter compared to an impact of $0.04 in the prior quarter.

Tax Rate

The effective tax rate was 14.7% in the fourth quarter of 2021, compared to 17.5% in the prior quarter.

Loans

Total loans were $4.0 billion at December 31, 2021, compared to $3.8 billion at September 30, 2021. Excluding PPP loan balances, loans grew $279.8 million in the fourth quarter of 2021, or 30.3% on an annualized basis from the prior quarter, resulting primarily from growth in commercial and industrial balances.

Deposits

Average deposits increased $107.8 million in the fourth quarter of 2021, or 9.0% on an annualized basis, to $4.9 billion, compared to the prior quarter, with growth in both business and consumer deposits. Noninterest bearing deposit accounts represented 32.3% of total deposits at December 31, 2021 and the loan to deposit ratio was 85.3% at December 31, 2021.

Capital

Capital ratios remain strong and above “well capitalized” thresholds. As of December 31, 2021, the common equity tier 1 risk based capital ratio was 9.70%, the total risk based capital ratio was 11.76% and tier 1 leverage ratio was 8.24%. Book value per common share was $28.56 at December 31, 2021, an increase of $0.18 from September 30, 2021. Tangible book value per common share, a non-GAAP financial measure, was $26.31 at December 31, 2021, an increase of $0.21 from September 30, 2021.

Full Year 2021 Results

Full Year Highlights:

  • Net income of $43.2 million, $2.30 per diluted share
  • Return on average assets of 0.79%
  • Return on average equity of 8.37%
  • Loan growth of 5.0% (excluding PPP loan balances, 10.4%)
  • Average deposit balance growth of 20.0%

Net income totaled $43.2 million, or $2.30 per diluted share, during 2021, compared to $47.6 million, or $2.58 per diluted share, in 2020. The return on average assets was 0.79% during 2021, compared to 1.02% in 2020, and the return on average equity was 8.37% during 2021, compared to 10.20% in 2020.

Net Interest Income and Net Interest Margin

Net interest income totaled $155.2 million during 2021, an increase of $19.3 million compared to 2020. Our net interest margin declined ten basis points to 3.00% in 2021, compared to 2020. Results in 2021, compared to 2020, were driven by an increase in average earning assets of $798.5 million, a decrease of 31 basis points in yield on earning assets and a decrease of 27 basis points in the cost of interest bearing liabilities. Average loans grew by $254.8 million, investment securities declined by $23.2 million and interest bearing cash balances grew by $563.1 million in 2021, compared to 2020. Loan yield increased by ten basis points in 2021, compared to 2020, due to a combination of an improving loan mix, fees from loan prepayments and a decline of $69.3 million in average PPP loan balances, net of deferred fees. The decline in yield on earning assets in 2021, compared to 2020, was primarily due to the increase in average interest bearing cash balances and a decline of 55 basis points in the yield on these cash balances. Our total cost of deposits decreased by 28 basis points to 0.26% in 2021, compared to 2020.

Noninterest Income

Noninterest income totaled $124.2 million during 2021, a decrease of $24.1 million from 2020, primarily driven by lower mortgage banking income. Service charges on deposits increased $2.9 million during 2021, compared to 2020, due to increases in both commercial and consumer deposit fees. Trust and investment advisory fees increased $2.6 million during 2021, compared to 2020, primarily due to the revenues associated with our September 2020 acquisition of certain trust and wealth advisory client relationships. Mortgage banking income decreased $35.8 million during 2021, compared to 2020, due primarily to margin compression and its impact on loan sale gains and the pipeline valuation, along with a decline in mortgage servicing asset and hedging valuation impacts. Total mortgage loan originations declined by $192.3 million, or 7.6%, in 2021, compared to 2020, with mortgage loan refinance volumes declining by $387.1 million. Noninterest income as a percentage of total revenue totaled 44.5% in 2021, compared to 52.2% in 2020.

Noninterest Expense

Noninterest expense totaled $224.6 million during 2021, an increase of $20.6 million from 2020, primarily driven by higher salaries and benefits expense in our banking and mortgage banking segments, merger expenses and other administrative costs related to our continued growth. Merger expenses for 2021 were $3.1 million related to our pending transaction with Pioneer Bancshares, Inc. There were no merger expenses incurred in 2020. Merger expenses reduced diluted earnings per share by $0.14 for 2021.

Tax Rate

The effective tax rate was 16.7% in 2021, compared to 16.8% in 2020.

Loans

Total loans were $4.0 billion at December 31, 2021 compared to $3.8 billion at December 31, 2020. Excluding PPP loan balances, loans grew $375.1 million in 2021, or 10.4% from 2020, resulting primarily from growth in commercial and industrial balances.

Deposits

Average deposits increased $814.4 million during 2021, or 20.0%, to $4.9 billion, compared to 2020, with growth in both business and consumer deposits. Noninterest bearing deposit accounts represented 32.3% of total deposits at December 31, 2021 an increase from 25.4% at December 31, 2020. The loan to deposit ratio was 85.3% at December 31, 2021 compared to 97.3% at December 31, 2020.

Non-GAAP Financial Measures

This press release contains financial information and performance 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 disclosures 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 types of non-GAAP measures used in this press release:

  • Tangible stockholders’ equity
  • Tangible assets
  • Tangible stockholders’ equity to tangible assets
  • Tangible book value per common share
  • Total loans, excluding PPP loans
  • Allowance for loan losses to total loans outstanding, excluding PPP loans
  • Fully tax equivalent (FTE) net interest income
  • Net interest margin on an FTE basis

See the tables within the “Non-GAAP Financial Measures and Reconciliations” section for a reconciliation of each non-GAAP measure 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 $5.7 billion as of December 31, 2021.

First National 1870 and Guardian Mortgage are divisions of Sunflower Bank, N.A. To learn more, visit SunflowerBank.com, FirstNational1870.com or GuardianMortgageOnline.com.

Cautionary Note Regarding Forward-Looking Statements

This press release contains ”forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 regarding the financial condition, results of operations, business plans and the future performance of FirstSun. Words such as “anticipates,” “believes,” “estimates,” “expects,” “forecasts,” “intends,” “plans,” “projects,” “may,” “will,” “should,” “would,” “could” and other similar expressions are intended to identify these forward-looking statements. Forward-looking statements are not based on historical facts but instead represent management's expectations and assumptions regarding FirstSun’s business, the economy and other future conditions. Such statements involve inherent uncertainties, risks and changes in circumstances that are difficult to predict. As such, FirstSun’s actual results may differ materially from those contemplated by forward-looking statements. While there can be no assurance that any list of risks and uncertainties or risk factors is complete, important factors that could cause actual results to differ materially from those contemplated by forward-looking statements include the following, without limitation, as well as the risks and uncertainties more fully discussed under the “Risk Factors” section in our proxy statement/prospectus dated August 10, 2021 that we filed with the SEC pursuant to Securities Act Rule 424(b)(3) in connection with our proposed merger with Pioneer Bancshares, Inc. on August 12, 2021 and in FirstSun’s subsequent filings with the Securities and Exchange Commission:

  • the failure to obtain necessary regulatory approvals for the merger (the “merger”) of Pioneer Bancshares, Inc. (“Pioneer”) with and into FirstSun when expected or at all (and the risk that such approvals may result in the imposition of conditions that could adversely affect the combined company or the expected benefits of the transaction);
  • the occurrence of any event, change or other circumstances that could give rise to the right of one or both of the parties to terminate the merger agreement with respect to the merger;
  • the possibility that the anticipated benefits of the merger, including anticipated cost savings and strategic gains, are not realized when expected or at all, including as a result of the impact of, or problems arising from, the integration of the two companies or as a result of the strength of the economy, competitive factors in the areas where FirstSun and Pioneer do business or as a result of other unexpected factors or events;
  • the continuing impact of COVID-19 and its variants on FirstSun’s business or Pioneer’s business, including the impact of the actions taken by governmental authorities to try and contain the virus or address the impact of the virus on the economy, and the resulting effect of these items on each party’s operations, liquidity and capital position, and on the financial condition of each party’s borrowers and other customers;
  • the inability to sustain revenue and earnings growth;
  • the inability to efficiently manage operating expenses;
  • the impact of competition with other financial institutions, including pricing pressures and the resulting impact on FirstSun’s results, including as a result of compression to net interest margin;
  • deterioration in the financial condition of borrowers resulting in significant increases in loan losses and provisions for those losses;
  • changes in loan underwriting, credit review or loss reserve policies associated with economic conditions, examination conclusions, or regulatory developments; and
  • adverse changes in asset quality and credit risk.

Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date they are made. Except to the extent required by applicable law or regulation, FirstSun undertakes no obligation to revise or update any forward-looking statements.

Summary Data:

 

 

As of and For The Quarter Ended

 

As of and For The Year Ended

($ in thousands, except per share amounts)

 

December 31,

2021

 

September 30,

2021

 

December 31,

2020

 

December 31,

2021

 

December 31,

2020

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

$

40,451

 

 

$

39,965

 

 

$

36,797

 

 

$

155,233

 

 

$

135,953

 

Provision for loan losses

 

 

1,250

 

 

 

3,500

 

 

 

8,000

 

 

 

3,000

 

 

 

23,100

 

Noninterest income

 

 

29,396

 

 

 

28,684

 

 

 

39,271

 

 

 

124,244

 

 

 

148,385

 

Noninterest expense

 

 

58,261

 

 

 

54,570

 

 

 

54,935

 

 

 

224,635

 

 

 

204,073

 

Income before income taxes

 

 

10,336

 

 

 

10,579

 

 

 

13,133

 

 

 

51,842

 

 

 

57,165

 

Provision for income taxes

 

 

1,519

 

 

 

1,851

 

 

 

1,873

 

 

 

8,678

 

 

 

9,580

 

Net income

 

 

8,817

 

 

 

8,728

 

 

 

11,260

 

 

 

43,164

 

 

 

47,585

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share

 

$

0.47

 

 

$

0.46

 

 

$

0.60

 

 

$

2.30

 

 

$

2.58

 

Return on average assets

 

 

0.62

%

 

 

0.62

%

 

 

0.91

%

 

 

0.79

%

 

 

1.02

%

Return on average equity

 

 

6.69

%

 

 

6.68

%

 

 

9.19

%

 

 

8.37

%

 

 

10.20

%

Net interest margin

 

 

2.99

%

 

 

3.01

%

 

 

3.15

%

 

 

3.00

%

 

 

3.10

%

Net interest margin (FTE basis)1

 

 

3.08

%

 

 

3.10

%

 

 

3.27

%

 

 

3.08

%

 

 

3.20

%

Efficiency ratio

 

 

83.41

%

 

 

79.49

%

 

 

72.22

%

 

 

80.38

%

 

 

71.77

%

Noninterest income to total revenue

 

 

42.09

%

 

 

41.78

%

 

 

51.63

%

 

 

44.46

%

 

 

52.19

%

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

$

5,666,814

 

 

$

5,683,085

 

 

$

4,995,457

 

 

$

5,666,814

 

 

$

4,995,457

 

Total loans held-for-sale

 

 

103,939

 

 

 

122,217

 

 

 

193,963

 

 

 

103,939

 

 

 

193,963

 

Total loans held-for-investment

 

 

4,037,123

 

 

 

3,803,981

 

 

 

3,846,357

 

 

 

4,037,123

 

 

 

3,846,357

 

Total deposits

 

 

4,854,948

 

 

 

4,857,985

 

 

 

4,153,549

 

 

 

4,854,948

 

 

 

4,153,549

 

Total stockholders' equity

 

 

524,038

 

 

 

519,921

 

 

 

485,787

 

 

 

524,038

 

 

 

485,787

 

Period end loan to deposit ratio2

 

 

85.30

%

 

 

80.82

%

 

 

97.27

%

 

 

85.30

%

 

 

97.27

%

Book value per common share

 

 

28.56

 

 

 

28.38

 

 

 

26.51

 

 

 

28.56

 

 

 

26.51

 

Tangible book value per common share¹

 

 

26.31

 

 

 

26.10

 

 

 

24.18

 

 

 

26.31

 

 

 

24.18

 

_______________________________

1 Represents a non-GAAP financial measure. See the tables within the “Non-GAAP Financial Measures and Reconciliations” section for a reconciliation of each non-GAAP measure to the most comparable GAAP equivalent.

2 Loans are inclusive of loans held-for-sale and loans held-for-investment.

Consolidated Condensed Statements of Income (Unaudited):

 

 

As of and For The Quarter Ended

 

As of and For The Year Ended

($ in thousands, except per share amounts)

 

December 31,

2021

 

September 30,

2021

 

December 31,

2020

 

December 31,

2021

 

December 31,

2020

 

 

 

 

 

 

 

 

 

 

 

Total interest income

 

$

43,578

 

$

43,261

 

$

41,027

 

$

169,354

 

$

156,837

Total interest expense

 

 

3,127

 

 

3,296

 

 

4,230

 

 

14,121

 

 

20,884

Net interest income

 

 

40,451

 

 

39,965

 

 

36,797

 

 

155,233

 

 

135,953

Provision for loan losses

 

 

1,250

 

 

3,500

 

 

8,000

 

 

3,000

 

 

23,100

Net interest income after provision for loan losses

 

 

39,201

 

 

36,465

 

 

28,797

 

 

152,233

 

 

112,853

Noninterest income:

 

 

 

 

 

 

 

 

 

 

Service charges on deposits

 

 

3,845

 

 

3,471

 

 

2,588

 

 

12,504

 

 

9,630

Credit and debit card fees

 

 

2,456

 

 

2,472

 

 

2,129

 

 

9,596

 

 

7,994

Trust and investment advisory fees

 

 

1,924

 

 

1,974

 

 

1,979

 

 

7,795

 

 

5,201

Mortgage banking income, net

 

 

18,266

 

 

20,151

 

 

32,188

 

 

86,410

 

 

122,174

Other noninterest income

 

 

2,905

 

 

616

 

 

387

 

 

7,939

 

 

3,386

Total noninterest income

 

 

29,396

 

 

28,684

 

 

39,271

 

 

124,244

 

 

148,385

Noninterest expense:

 

 

 

 

 

 

 

 

 

 

Salaries and benefits

 

 

38,797

 

 

36,061

 

 

37,982

 

 

151,926

 

 

139,980

Occupancy and equipment

 

 

6,698

 

 

6,643

 

 

7,465

 

 

26,565

 

 

26,716

Amortization of intangible assets

 

 

355

 

 

354

 

 

392

 

 

1,417

 

 

1,485

Merger related expenses

 

 

1,101

 

 

705

 

 

 

 

3,085

 

 

Other noninterest expenses

 

 

11,310

 

 

10,807

 

 

9,096

 

 

41,642

 

 

35,892

Total noninterest expense

 

 

58,261

 

 

54,570

 

 

54,935

 

 

224,635

 

 

204,073

Income before income taxes

 

 

10,336

 

 

10,579

 

 

13,133

 

 

51,842

 

 

57,165

Provision for income taxes

 

 

1,519

 

 

1,851

 

 

1,873

 

 

8,678

 

 

9,580

Net income

 

$

8,817

 

$

8,728

 

$

11,260

 

$

43,164

 

$

47,585

 

 

 

 

 

 

 

 

 

 

 

Earnings per share - basic

 

$

0.48

 

$

0.48

 

$

0.61

 

$

2.36

 

$

2.60

Earnings per share - diluted

 

$

0.47

 

$

0.46

 

$

0.60

 

$

2.30

 

$

2.58

Consolidated Condensed Balance Sheets as of (Unaudited):

($ in thousands)

 

December 31,

2021

 

September 30,

2021

 

December 31,

2020

Assets

 

 

 

 

 

 

Cash and cash equivalents

 

$

668,462

 

 

$

949,541

 

 

$

201,978

 

Securities available-for-sale, at fair value

 

 

572,501

 

 

 

531,395

 

 

 

468,586

 

Securities held-to-maturity

 

 

18,007

 

 

 

19,811

 

 

 

32,188

 

Loans held-for-sale, at fair value

 

 

103,939

 

 

 

122,217

 

 

 

193,963

 

Loans

 

 

4,037,123

 

 

 

3,803,981

 

 

 

3,846,357

 

Allowance for loan losses

 

 

(47,547

)

 

 

(47,868

)

 

 

(47,766

)

Loans, net

 

 

3,989,576

 

 

 

3,756,113

 

 

 

3,798,591

 

 

 

 

 

 

 

 

Mortgage servicing rights, at fair value

 

 

47,392

 

 

 

43,971

 

 

 

29,144

 

Premises and equipment, net

 

 

53,147

 

 

 

54,094

 

 

 

56,758

 

Other real estate owned and foreclosed assets, net

 

 

5,487

 

 

 

5,747

 

 

 

3,354

 

Goodwill

 

 

33,050

 

 

 

33,050

 

 

 

33,050

 

Intangible assets, net

 

 

8,250

 

 

 

8,605

 

 

 

9,667

 

All other assets

 

 

167,003

 

 

 

158,541

 

 

 

168,178

 

Total assets

 

$

5,666,814

 

 

$

5,683,085

 

 

$

4,995,457

 

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

Noninterest-bearing demand deposit accounts

 

$

1,566,113

 

 

$

1,578,306

 

 

$

1,054,458

 

Interest-bearing deposit accounts:

 

 

 

 

 

 

Interest-bearing demand accounts

 

 

187,712

 

 

 

201,510

 

 

 

164,870

 

Savings accounts and money market accounts

 

 

2,757,882

 

 

 

2,711,417

 

 

 

2,472,965

 

NOW accounts

 

 

19,496

 

 

 

37,888

 

 

 

95,297

 

Certificate of deposit accounts

 

 

323,745

 

 

 

328,864

 

 

 

365,959

 

Total deposits

 

 

4,854,948

 

 

 

4,857,985

 

 

 

4,153,549

 

 

 

 

 

 

 

 

Securities sold under agreements to repurchase

 

 

92,093

 

 

 

117,001

 

 

 

115,372

 

Federal Home Loan Bank advances

 

 

40,000

 

 

 

40,000

 

 

 

70,411

 

Other borrowings

 

 

69,458

 

 

 

69,184

 

 

 

68,362

 

Other liabilities

 

 

86,277

 

 

 

78,994

 

 

 

101,976

 

Total liabilities

 

 

5,142,776

 

 

 

5,163,164

 

 

 

4,509,670

 

 

 

 

 

 

 

 

Stockholders' equity:

 

 

 

 

 

 

Preferred stock

 

 

 

 

 

 

 

 

 

Common stock

 

 

2

 

 

 

2

 

 

 

2

 

Additional paid-in capital

 

 

261,905

 

 

 

260,864

 

 

 

259,363

 

Treasury stock

 

 

(38,148

)

 

 

(38,148

)

 

 

(38,148

)

Retained earnings

 

 

298,615

 

 

 

289,798

 

 

 

255,451

 

Accumulated other comprehensive income, net

 

 

1,664

 

 

 

7,405

 

 

 

9,119

 

Total stockholders' equity

 

 

524,038

 

 

 

519,921

 

 

 

485,787

 

Total liabilities and stockholders' equity

 

$

5,666,814

 

 

$

5,683,085

 

 

$

4,995,457

 

Share Data as of and for the periods ended:

 

 

As of and for the quarter ended

 

As of and for the Year Ended

 

 

December 31,

2021

 

September 30,

2021

 

December 31,

2020

 

December 31,

2021

 

December 31,

2020

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding, basic

 

 

18,322,194

 

 

18,321,659

 

 

18,315,176

 

 

18,321,794

 

 

18,325,630

Weighted average common shares outstanding, diluted

 

 

18,836,918

 

 

18,770,681

 

 

18,619,670

 

 

18,770,785

 

 

18,475,538

Period end common shares outstanding

 

 

18,346,288

 

 

18,321,659

 

 

18,321,659

 

 

18,346,288

 

 

18,321,659

Book value per common share

 

$

28.56

 

$

28.38

 

$

26.51

 

$

28.56

 

$

26.51

Tangible book value per common share3

 

$

26.31

 

$

26.10

 

$

24.18

 

$

26.31

 

$

24.18

_______________________________

3 Represents a non-GAAP financial measure. See the tables within the “Non-GAAP Financial Measures and Reconciliations” section for a reconciliation of each non-GAAP measure to the most comparable GAAP equivalent.

Consolidated Capital Ratios as of:

 

 

December 31,

2021

 

September 30,

2021

 

December 31,

2020

 

 

 

 

 

 

 

Stockholders' equity to total assets

 

9.25

%

 

9.15

%

 

9.72

%

Tangible equity to tangible assets

 

8.58

%

 

8.48

%

 

8.95

%

Tier 1 leverage ratio

 

8.24

%

 

8.19

%

 

8.53

%

Common equity tier 1 risk based capital ratio

 

9.70

%

 

10.32

%

 

9.87

%

Tier 1 risk based capital ratio

 

9.70

%

 

10.32

%

 

9.87

%

Total risk based capital ratio

 

11.76

%

 

12.55

%

 

12.19

%

Summary of Net Interest Margin:

 

 

For the three months ended

December 31, 2021

 

For the three months ended

September 30, 2021

 

For the three months ended

December 31, 2020

(In thousands)

 

Average

Balance

 

Interest

 

Average

Yield/Rate

 

Average

Balance

 

Interest

 

Average

Yield/Rate

 

Average

Balance

 

Interest

 

Average

Yield/Rate

Interest Earning Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans held-for-sale

 

$

97,934

 

$

793

 

 

3.24

%

 

$

122,007

 

$

986

 

 

3.23

%

 

$

142,854

 

$

1,064

 

 

3.00

%

Loans held-for-investment4

 

 

3,838,871

 

 

39,830

 

 

4.15

%

 

 

3,779,517

 

 

39,710

 

 

4.20

%

 

 

3,800,741

 

 

37,714

 

 

3.99

%

Investment securities

 

 

591,289

 

 

2,333

 

 

1.58

%

 

 

522,870

 

 

1,954

 

 

1.49

%

 

 

505,666

 

 

1,862

 

 

1.48

%

Interest-bearing cash and other assets

 

 

886,472

 

 

622

 

 

0.28

%

 

 

895,288

 

 

611

 

 

0.27

%

 

 

217,059

 

 

387

 

 

0.72

%

Total earning assets

 

 

5,414,566

 

 

43,578

 

 

3.22

%

 

 

5,319,682

 

 

43,261

 

 

3.25

%

 

 

4,666,320

 

 

41,027

 

 

3.54

%

Other assets

 

 

291,934

 

 

 

 

 

 

287,323

 

 

 

 

 

 

284,238

 

 

 

 

Total assets

 

$

5,706,500

 

 

 

 

 

$

5,607,005

 

 

 

 

 

$

4,950,558

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Demand and NOW deposits

 

$

203,416

 

$

120

 

 

0.24

%

 

$

241,488

 

$

139

 

 

0.23

%

 

$

210,437

 

$

217

 

 

0.41

%

Savings deposits

 

 

458,657

 

 

97

 

 

0.08

%

 

 

453,687

 

 

101

 

 

0.09

%

 

 

453,210

 

 

140

 

 

0.15

%

Money market deposits

 

 

2,282,755

 

 

987

 

 

0.17

%

 

 

2,264,682

 

 

1,054

 

 

0.19

%

 

 

1,917,209

 

 

1,297

 

 

0.27

%

Certificates of deposits

 

 

326,440

 

 

609

 

 

0.75

%

 

 

337,906

 

 

684

 

 

0.81

%

 

 

373,307

 

 

1,107

 

 

1.19

%

Total deposits

 

 

3,271,268

 

 

1,813

 

 

0.22

%

 

 

3,297,763

 

 

1,978

 

 

0.24

%

 

 

2,954,163

 

 

2,761

 

 

0.38

%

Repurchase agreements

 

 

109,319

 

 

10

 

 

0.04

%

 

 

120,009

 

 

13

 

 

0.04

%

 

 

132,937

 

 

18

 

 

0.05

%

Total deposits and repurchase agreements

 

 

3,380,587

 

 

1,823

 

 

0.22

%

 

 

3,417,772

 

 

1,991

 

 

0.23

%

 

 

3,087,100

 

 

2,779

 

 

0.36

%

FHLB borrowings

 

 

40,000

 

 

151

 

 

1.51

%

 

 

40,000

 

 

151

 

 

1.51

%

 

 

91,181

 

 

304

 

 

1.34

%

Other long-term borrowings

 

 

69,306

 

 

1,153

 

 

6.65

%

 

 

69,028

 

 

1,154

 

 

6.69

%

 

 

68,391

 

 

1,147

 

 

6.74

%

Total interest-bearing liabilities

 

 

3,489,893

 

 

3,127

 

 

0.36

%

 

 

3,526,800

 

 

3,296

 

 

0.37

%

 

 

3,246,672

 

 

4,230

 

 

0.52

%

Noninterest-bearing deposits

 

 

1,617,278

 

 

 

 

 

 

1,483,010

 

 

 

 

 

 

1,120,016

 

 

 

 

Other liabilities

 

 

71,862

 

 

 

 

 

 

74,286

 

 

 

 

 

 

93,759

 

 

 

 

Stockholders' equity

 

 

527,467

 

 

 

 

 

 

522,909

 

 

 

 

 

 

490,111

 

 

 

 

Total liabilities and stockholders' equity

 

$

5,706,500

 

 

 

 

 

$

5,607,005

 

 

 

 

 

$

4,950,558

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

 

 

$

40,451

 

 

 

 

 

 

$

39,965

 

 

 

 

 

 

$

36,797

 

 

 

Net interest spread

 

 

 

 

2.86

%

 

 

 

 

 

 

2.88

%

 

 

 

 

 

 

3.02

%

 

 

Net interest margin

 

 

 

 

2.99

%

 

 

 

 

 

 

3.01

%

 

 

 

 

 

 

3.15

%

 

 

Net interest margin (on an FTE basis)5

 

 

 

 

3.08

%

 

 

 

 

 

 

3.10

%

 

 

 

 

 

 

3.27

%

 

 

_______________________________

4 Includes nonaccrual loans.

5 Represents a non-GAAP financial measure. See the tables within the “Non-GAAP Financial Measures and Reconciliations” section for a reconciliation of each non-GAAP measure to the most comparable GAAP equivalent.

Summary of Net Interest Margin (continued):

 

 

For the year ended December 31, 2021

 

For the year ended December 31, 2020

(In thousands)

 

Average

Balance

 

Interest

 

Average

Yield/Rate

 

Average

Balance

 

Interest

 

Average

Yield/Rate

Interest Earning Assets

 

 

 

 

 

 

 

 

 

 

 

 

Loans held-for-sale

 

$

125,808

 

$

4,051

 

 

3.22

%

 

$

121,941

 

$

3,842

 

 

3.15

%

Loans held-for-investment6

 

 

3,780,650

 

 

155,252

 

 

4.11

%

 

 

3,525,837

 

 

141,413

 

 

4.01

%

Investment securities

 

 

531,803

 

 

7,979

 

 

1.50

%

 

 

555,030

 

 

10,100

 

 

1.82

%

Interest-bearing cash and other assets

 

 

742,389

 

 

2,072

 

 

0.28

%

 

 

179,331

 

 

1,482

 

 

0.83

%

Total earning assets

 

 

5,180,650

 

 

169,354

 

 

3.27

%

 

 

4,382,139

 

 

156,837

 

 

3.58

%

Other assets

 

 

288,617

 

 

 

 

 

 

279,806

 

 

 

 

Total assets

 

$

5,469,267

 

 

 

 

 

$

4,661,945

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Demand and NOW deposits

 

$

254,679

 

$

756

 

 

0.30

%

 

$

205,557

 

$

1,019

 

 

0.50

%

Savings deposits

 

 

455,451

 

 

460

 

 

0.10

%

 

 

380,839

 

 

703

 

 

0.19

%

Money market deposits

 

 

2,208,498

 

 

4,292

 

 

0.19

%

 

 

1,801,809

 

 

6,635

 

 

0.37

%

Certificates of deposits

 

 

344,224

 

 

3,036

 

 

0.88

%

 

 

488,575

 

 

7,285

 

 

1.49

%

Total deposits

 

 

3,262,852

 

 

8,544

 

 

0.26

%

 

 

2,876,780

 

 

15,642

 

 

0.54

%

Repurchase agreements

 

 

125,867

 

 

59

 

 

0.05

%

 

 

116,074

 

 

157

 

 

0.14

%

Total deposits and repurchase agreements

 

 

3,388,719

 

 

8,603

 

 

0.25

%

 

 

2,992,854

 

 

15,799

 

 

0.53

%

FHLB borrowings

 

 

42,527

 

 

909

 

 

2.14

%

 

 

89,861

 

 

1,658

 

 

1.84

%

Other long-term borrowings

 

 

68,918

 

 

4,609

 

 

6.69

%

 

 

51,091

 

 

3,427

 

 

6.71

%

Total interest-bearing liabilities

 

 

3,500,164

 

 

14,121

 

 

0.40

%

 

 

3,133,806

 

 

20,884

 

 

0.67

%

Noninterest-bearing deposits

 

 

1,376,968

 

 

 

 

 

 

978,092

 

 

 

 

Other liabilities

 

 

76,362

 

 

 

 

 

 

83,427

 

 

 

 

Stockholders' equity

 

 

515,773

 

 

 

 

 

 

466,620

 

 

 

 

Total liabilities and stockholders' equity

 

$

5,469,267

 

 

 

 

 

$

4,661,945

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

 

 

$

155,233

 

 

 

 

 

 

$

135,953

 

 

 

Net interest spread

 

 

 

 

2.87

%

 

 

 

 

 

 

2.91

%

 

 

Net interest margin

 

 

 

 

3.00

%

 

 

 

 

 

 

3.10

%

 

 

Net interest margin (on an FTE basis)7

 

 

 

 

3.08

%

 

 

 

 

 

 

3.20

%

 

 

_______________________________

6 Includes nonaccrual loans.

7 Represents a non-GAAP financial measure. See the tables within the “Non-GAAP Financial Measures and Reconciliations” section for a reconciliation of each non-GAAP measure to the most comparable GAAP equivalent.

Loan Portfolio

($ in thousands)

 

December 31,

2021

 

September 30,

2021

 

December 31,

2021

vs

September 30,

2021

% change

 

December 31,

2020

 

December 31,

2021

vs

December 31,

2020

% change

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

$

2,407,888

 

$

2,222,261

 

8.4

%

 

$

2,173,615

 

10.8

%

Commercial real estate

 

 

1,174,242

 

 

1,137,820

 

3.2

%

 

 

1,154,576

 

1.7

%

Residential real estate

 

 

437,017

 

 

425,927

 

2.6

%

 

 

503,697

 

(13.2

)%

Consumer

 

 

17,976

 

 

17,973

 

%

 

 

14,469

 

24.2

%

Total loans held-for-investment

 

$

4,037,123

 

$

3,803,981

 

6.1

%

 

$

3,846,357

 

5.0

%

Asset Quality:

 

 

As of and for the three months ended

 

As of and For The Year Ended

($ in thousands)

 

December 31,

2021

 

September 30,

2021

 

December 31,

2020

 

December 31,

2021

 

December 31,

2020

 

 

 

 

 

 

 

 

 

 

 

Net charge-offs (recoveries)

 

$

1,571

 

 

$

(1,390

)

 

$

2,930

 

 

$

3,219

 

 

$

3,880

 

Allowance for loan losses

 

$

47,547

 

 

$

47,868

 

 

$

47,766

 

 

$

47,547

 

 

$

47,766

 

Nonperforming loans, including loans 90 days past due and still accruing

 

$

28,388

 

 

$

30,303

 

 

$

36,026

 

 

$

28,388

 

 

$

36,026

 

Nonperforming assets

 

$

33,875

 

 

$

36,050

 

 

$

39,380

 

 

$

33,875

 

 

$

39,380

 

Ratio of net charge-offs (recoveries) to average loans outstanding

 

 

0.16

%

 

 

(0.15

)%

 

0.31

%

 

 

0.09

%

 

 

0.11

%

Allowance for loan losses to total loans outstanding

 

 

1.18

%

 

 

1.26

%

 

 

1.24

%

 

 

1.18

%

 

 

1.24

%

Allowance for loan losses to total loans outstanding, excluding PPP loans

 

 

1.20

%

 

 

1.30

%

 

 

1.33

%

 

 

1.20

%

 

 

1.33

%

Allowance for loan losses to total nonperforming loans

 

 

167.49

%

 

 

157.96

%

 

 

132.59

%

 

 

167.49

%

 

 

132.59

%

Nonperforming loans to total loans

 

 

0.70

%

 

 

0.80

%

 

 

0.94

%

 

 

0.70

%

 

 

0.94

%

Nonperforming assets to total assets

 

 

0.60

%

 

 

0.63

%

 

 

0.79

%

 

 

0.60

%

 

 

0.79

%

Non-GAAP Financial Measures and Reconciliations:

Tangible stockholders’ equity, tangible assets, and tangible book value per common share:

Tangible stockholders’ equity as of:

($ in thousands)

 

December 31,

2021

 

September 30,

2021

 

December 31,

2020

 

 

 

 

 

 

 

Total stockholders'' equity (GAAP)

 

$

524,038

 

 

$

519,921

 

 

$

485,787

 

Less: Goodwill and other intangible assets

 

 

 

 

 

 

Goodwill

 

 

(33,050

)

 

 

(33,050

)

 

 

(33,050

)

Other intangible assets

 

 

(8,250

)

 

 

(8,605

)

 

 

(9,667

)

Total tangible stockholders' equity (non-GAAP)

 

$

482,738

 

 

$

478,266

 

 

$

443,070

 

Tangible assets as of:

($ in thousands)

 

December 31,

2021

 

September 30,

2021

 

December 31,

2020

 

 

 

 

 

 

 

Total assets (GAAP)

 

$

5,666,814

 

 

$

5,683,085

 

 

$

4,995,457

 

Less: Goodwill and other intangible assets

 

 

 

 

 

 

Goodwill

 

 

(33,050

)

 

 

(33,050

)

 

 

(33,050

)

Other intangible assets

 

 

(8,250

)

 

 

(8,605

)

 

 

(9,667

)

Total tangible assets (non-GAAP)

 

$

5,625,514

 

 

$

5,641,430

 

 

$

4,952,740

 

Tangible stockholders’ equity to tangible assets as of:

 

 

December 31,

2021

 

September 30,

2021

 

December 31,

2020

 

 

 

 

 

 

 

Stockholders' equity to total assets (GAAP)

 

9.25

%

 

9.15

%

 

9.72

%

Less: Impact of goodwill and other intangible assets

 

(0.67

)%

 

(0.67

)%

 

(0.77

)%

Tangible stockholders' equity to tangible assets (non-GAAP)

 

8.58

%

 

8.48

%

 

8.95

%

Tangible book value per common share as of:

($ in thousands, except share and per share amounts)

 

December 31,

2021

 

September 30,

2021

 

December 31,

2020

 

 

 

 

 

 

 

Stockholders' equity (GAAP)

 

$

524,038

 

$

519,921

 

$

485,787

Tangible stockholders' equity (non-GAAP)

 

$

482,738

 

$

478,266

 

$

443,070

Total common shares outstanding

 

 

18,346,288

 

 

18,321,659

 

 

18,321,659

Book value per common share (GAAP)

 

$

28.56

 

$

28.38

 

$

26.51

Tangible book value per common share (non-GAAP)

 

$

26.31

 

$

26.10

 

$

24.18

Total loans excluding PPP loans and allowance for loan losses to total loans excluding PPP loans as of:

($ in thousands)

 

December 31,

2021

 

September 30,

2021

 

December 31,

2020

 

 

 

 

 

 

 

Total loans (GAAP)

 

$

4,037,123

 

 

$

3,803,981

 

 

$

3,846,357

 

Less: PPP loans

 

 

(66,749

)

 

 

(113,366

)

 

 

(251,101

)

Total loans excluding PPP loans (non-GAAP)

 

$

3,970,374

 

 

$

3,690,615

 

 

$

3,595,256

 

 

 

 

 

 

 

 

Allowance for loan losses to total loans (GAAP)

 

 

1.18

%

 

 

1.26

%

 

 

1.24

%

Allowance for loan losses to total loans, excluding PPP loans (non-GAAP)

 

 

1.20

%

 

 

1.30

%

 

 

1.33

%

Fully tax equivalent (FTE) net interest income and net interest margin on FTE basis:

 

 

As of and For The Quarter Ended

 

As of and For The Year Ended

($ in thousands)

 

December 31,

2021

 

September 30,

2021

 

December 31,

2020

 

December 31,

2021

 

December 31,

2020

 

 

 

 

 

 

 

 

 

 

 

Net interest income (GAAP)

 

$

40,451

 

 

$

39,965

 

 

$

36,797

 

 

$

155,233

 

 

$

135,953

 

Gross income effect of tax exempt income

 

 

1,336

 

 

 

1,704

 

 

 

1,783

 

 

 

5,755

 

 

 

6,490

 

FTE net interest income (non-GAAP)

 

$

41,787

 

 

$

41,669

 

 

$

38,580

 

 

$

160,988

 

 

$

142,443

 

 

 

 

 

 

 

 

 

 

 

 

Average earning assets

 

$

5,414,566

 

 

$

5,319,682

 

 

$

4,666,320

 

 

$

5,180,650

 

 

$

4,382,139

 

Net interest margin

 

 

2.99

%

 

 

3.01

%

 

 

3.15

%

 

 

3.00

%

 

 

3.10

%

Net interest margin on FTE basis (non-GAAP)

 

 

3.08

%

 

 

3.10

%

 

 

3.27

%

 

 

3.08

%

 

 

3.20

%

 

Contacts

Investor Relations:

Kelly C. Rackley

Corporate Secretary & Sr. Paralegal

303.962.0150 | stockholder.relations@sunflowerbank.com

Media Relations:

Jeanne Lipson

Vice President, Marketing

915.881.6785

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