First Quarter 2022 Highlights:

• Net income of $7.7 million, $0.41 per diluted share
• Return on average assets of 0.54%
• Return on average equity of 5.85%
• Loan growth of 27.5% annualized (excluding PPP loan balances, 30.9% annualized)
• 36.5% fee revenue to total revenue mix

FirstSun Capital Bancorp (“FirstSun”) reported net income of $7.7 million for the first quarter of 2022, compared to net income of $8.8 million in the prior quarter and $14.3 million in the first quarter of 2021. Earnings per diluted share was $0.41 for the first quarter 2022, compared to $0.47 in the prior quarter and $0.76 in the first quarter of 2021.

Neal Arnold, FirstSun’s President and Chief Executive Officer, commented, “We remain focused on continuing to expand our presence in our growth markets and are pleased with our progress this quarter, particularly in our loan growth and diversified revenue mix. The macroeconomic environment as a whole is impacting the banking industry and certainly mortgage banking trends, however, we believe the overall economic diversity of the geographic regions we are operating in positions us well moving forward. Our team has been actively preparing for our merger transaction with Pioneer Bancshares, Inc. and following its closing on April 1, 2022, we are now working on integrating the business, including a planned system conversion in the second quarter. We believe our merger with Pioneer will allow us to continue to expand our business, particularly in our growth markets in Texas. We welcome our new team members from Pioneer and look forward to our future growth.”

First Quarter 2022 Results

Net income totaled $7.7 million, or $0.41 per diluted share, during the first quarter of 2022, compared to $8.8 million, or $0.47 per diluted share, during the prior quarter. The return on average assets was 0.54% in the first quarter of 2022, compared to 0.62% in the prior quarter and 1.13% in the first quarter of 2021, and the return on average equity was 5.85% in the first quarter of 2022, compared to 6.69% in the prior quarter and 11.46% in the first quarter of 2021.

Net Interest Income and Net Interest Margin

Net interest income totaled $41.3 million during the first quarter of 2022, an increase of $0.8 million compared to the prior quarter. Our net interest margin increased nine basis points to 3.08% compared to the prior quarter. Results in the first quarter of 2022, compared to the prior quarter, were driven by an increase of 11 basis points in yield on earning assets, partially offset by a decrease in average earning assets of $54.9 million, and an increase of two basis points in the cost of interest bearing liabilities. Average loans grew by $285.0 million, offset by a decline in investment securities of $9.0 million and interest-bearing cash balances of $294.0 million in the first quarter of 2022, compared to the prior quarter. Loan yield decreased by 16 basis points in the first quarter of 2022, 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 three basis points to 0.19% in the first quarter of 2022, compared to the prior quarter.

Asset Quality and Provision for Loan Losses

The provision for loan losses totaled $3.7 million during the first quarter of 2022, an increase of $2.5 million compared to the prior quarter. The increase in the provision for loan losses was due to loan growth, primarily in commercial and industrial loans and residential real estate loans. Net charge-offs during the first quarter of 2022 were $0.7 million, or a ratio of net charge-offs to average loans of 0.07% annualized, compared to net charge-offs of $1.6 million, or a ratio of net charge-offs to average loans of 0.16% annualized, in the prior quarter. The allowance for loan losses as a percentage of total loans totaled 1.17% at March 31, 2022, compared to 1.18% at December 31, 2021. The allowance for loan losses as a percentage of total loans, excluding PPP loans, a non-GAAP financial measure, totaled 1.18% at March 31, 2022, compared to 1.20% at December 31, 2021. The ratio of nonperforming assets to total assets was 0.64% at March 31, 2022, compared to 0.71% at December 31, 2021, and 0.88% at March 31, 2021.

Noninterest Income

Noninterest income totaled $23.7 million during the first quarter of 2022, a decrease of $5.7 million from the prior quarter. Mortgage banking income decreased $3.7 million during the first quarter of 2022 from the prior quarter, due primarily to a decline in loan sales and continuing margin compression and its impact on loan sale gains and the pipeline valuation. Total mortgage loan originations declined by $32.9 million, or 6.2%, in the first quarter of 2022 from the prior quarter, with mortgage loan refinance volumes declining by $18.9 million. In the first quarter of 2022, other noninterest income decreased $2.1 million from the prior quarter, to $0.8 million, primarily due to decreases in customer accommodation interest rate swap fees and loan syndication fee income. Noninterest income as a percentage of total revenue totaled 36.5% in the first quarter of 2022, compared to 42.1% in the prior quarter.

Noninterest Expense

Noninterest expense totaled $52.5 million during the first quarter of 2022, a decrease of $5.8 million from the prior quarter, primarily driven by a decrease in salaries and benefits expense in both our banking and mortgage segments. Noninterest expenses for the first quarter of 2022 also included $0.3 million in merger expenses related to the transaction with Pioneer Bancshares, Inc., compared to $1.1 million in the prior quarter. Merger expenses reduced diluted earnings per share by $0.01 for the first quarter of 2022 compared to $0.05 in the prior quarter.

Tax Rate

The effective tax rate was 13.0% in the first quarter of 2022, compared to 14.7% in the prior quarter.

Loans

Total loans were $4.3 billion at March 31, 2022, compared to $4.0 billion at December 31, 2021. Excluding PPP loan balances, loans grew $306.7 million in the first quarter of 2022, or 30.9% on an annualized basis from the prior quarter, resulting primarily from growth in commercial and industrial and residential real estate balances.

Deposits

Average deposits decreased $6.1 million in the first quarter of 2022, or (0.5)% on an annualized basis, to $4.9 billion, compared to the prior quarter. Noninterest-bearing deposit accounts represented 33.6% of total deposits at March 31, 2022 and the loan-to-deposit ratio was 87.2% at March 31, 2022.

Capital

Capital ratios remain strong and above “well-capitalized” thresholds. As of March 31, 2022, our common equity tier 1 risk-based capital ratio was 9.27%, total risk-based capital ratio was 11.74% and tier 1 leverage ratio was 8.42%. Book value per common share was $28.10 at March 31, 2022, a decrease of $0.46 from December 31, 2021. Tangible book value per common share, a non-GAAP financial measure, was $25.87 at March 31, 2022, a decrease of $0.44 from December 31, 2021. The decline in the book value per common share and tangible book value per common share at March 31, 2022 relates to a decline in accumulated other comprehensive income (loss), net, for unrealized losses in our available-for-sale securities portfolio resulting from the rising interest rate environment.

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 March 31, 2022. On April 1, 2022, we completed our merger with Pioneer Bancshares, Inc.

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.

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,” “look forward” 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 Annual Report on Form 10-K that we filed with the SEC on March 25, 2022 and in FirstSun’s subsequent filings with the Securities and Exchange Commission:

• the possibility that the anticipated benefits of the merger with Pioneer Bancshares, Inc. that closed on April 1, 2022, 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, 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;
• adverse changes in asset quality and credit risk; and
• the potential effects of events beyond our control that may have a destabilizing effect on financial markets and the economy, such as epidemics and pandemics, war or terrorist activities, disruptions in our customers’ supply chains, disruptions in transportation, essential utility outages or trade disputes and related tariffs.

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.

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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.

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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.

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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.

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