FIRSTSUN CAPITAL BANCORP

Previous wording

FirstSun Capital Bancorp, headquartered in Denver, Colorado, is the financial holding company for Sunflower Bank, National Association, which is headquartered in Dallas, Texas and operates as Sunflower Bank, First National 1870 and Guardian Mortgage. We conduct a full-service community banking and trust business through our wholly-owned subsidiaries—Sunflower Bank, Logia Portfolio Management, LLC, and FEIF Capital Partners, LLC. Sunflower Bank is currently regulated by the Office of the Comptroller of the Currency. We have announced our intention to convert Sunflower Bank to a state chartered bank regulated by the Texas Department of Banking and to seek membership with the Federal Reserve later this year.

Current wording

FirstSun Capital Bancorp, headquartered in Denver, Colorado, is the financial holding company for Sunflower Bank, National Association, which is headquartered in Dallas, Texas and operates as Sunflower Bank, First National 1870 and Guardian Mortgage. We conduct a full-service community banking and trust business through our wholly-owned subsidiaries—Sunflower Bank, Logia Portfolio Management, LLC, and FEIF Capital Partners, LLC. Sunflower Bank is currently regulated by the Office of the Comptroller of the Currency. We have filed applications to convert Sunflower Bank to a state chartered bank regulated by the Texas Department of Banking and to seek membership with the Federal Reserve later this year.

Previous wording

On January 16, 2024, FirstSun and HomeStreet entered into a definitive merger agreement. Under the merger agreement, FirstSun will continue as the surviving entity and Sunflower Bank will continue as the surviving bank. On April 30, 2024, FirstSun and HomeStreet entered into an amendment to the merger agreement to, among other things, increase total equity capital raised in connection with the merger, revise the exchange ratio pursuant to which the HomeStreet shareholders will receive FirstSun common stock, and reduce the termination fee payable by HomeStreet in certain circumstances. The amendment was unanimously approved by the Boards of Directors of each of FirstSun and HomeStreet. For more complete information related to the Merger Agreement and Amendment see Proposed Merger with HomeStreet in Note 1 -

Current wording

On January 16, 2024, FirstSun and HomeStreet entered into a definitive merger agreement. Under the merger agreement, FirstSun will continue as the surviving entity and Sunflower Bank will continue as the surviving bank. On April 30, 2024, FirstSun and HomeStreet entered into an amendment to the merger agreement that, among other things, increased total capital raised in connection with the merger, revised the share exchange ratio pursuant to which the HomeStreet shareholders will receive FirstSun common stock, and reduced the termination fee payable by HomeStreet in certain circumstances. The amendment was unanimously approved by the Boards of Directors of each of FirstSun and HomeStreet. On June 18, 2024, HomeStreet’s shareholders approved the merger agreement. For more complete information related to the Merger Agreement and Amendment see Proposed Merger with HomeStreet in Note 1 - Organization and Basis of Presentation in our unaudited consolidated financial statements included elsewhere in this report.

Previous wording

Concurrently with entry into the HomeStreet merger agreement, FirstSun entered into investment agreements with investors to raise capital to support the merger. These agreements included an initial $80 million investment in FirstSun common stock. Concurrently with the amendment to the merger agreement, FirstSun entered into an amendment to the investment agreements with the investors to increase the amount of investment to support the merger. For additional information related to the agreements to raise additional equity capital for the merger, see Investment Agreements in Note 1 - Organization and Basis of Presentation and Note 18 - Subsequent Events in our unaudited consolidated financial statements included elsewhere in this report.

Current wording

Concurrently with entry into the HomeStreet merger agreement, FirstSun entered into investment agreements with investors to raise capital to support the merger. These agreements included an initial $80 million investment in FirstSun common stock. Concurrently with the amendment to the merger agreement, FirstSun entered into an amendment to the investment agreements with the investors to increase the amount of investment to support the merger. In June 2024, FirstSun and the investors entered into a Joinder to the Acquisition Finance Securities Purchase Agreement. For additional information related to the agreements to raise additional capital for the merger, including the Joinder, see Investment Agreements in Note 1 - Organization and Basis of Presentation in our unaudited consolidated financial statements included elsewhere in this report.

Previous wording

•Net income of $12.3 million, $0.45 per diluted share (excluding merger costs, $14.6 million, $0.53 per diluted share, see the “Non-GAAP Financial Measures and Reconciliations” below)

Current wording

•Net income of $24.6 million, $0.88 per diluted share (excluding merger costs, $25.2 million, $0.90 per diluted share, see the “Non-GAAP Financial Measures and Reconciliations” below)

Previous wording

•24.4% noninterest income to total revenue 1

Current wording

•24.2% noninterest income to total revenue 1

Previous wording

The non-GAAP financial measures presented below are used by our management and our Board of Directors on a regular basis in addition to our GAAP results to facilitate the assessment of our financial performance. Management believes these non-GAAP financial measures enhance an investor’s understanding of our financial results by providing a meaningful basis for period-to-period comparisons, assisting in operating results analysis, and predicting future performance. This information supplements our GAAP reported results, and should not be viewed in isolation from, or as a substitute for, our GAAP results. Accordingly, this financial information should be read in conjunction with our consolidated financial statements and notes thereto for the three months ended March 31, 2024, included elsewhere in this report. Non-GAAP financial measures exclude certain items that are included in the financial results presented in accordance with GAAP. Non-GAAP financial measures have inherent limitations, are not required to be uniformly applied, and are not audited. Although these non-GAAP financial measures are frequently used by investors to evaluate a company, they have limitations as analytical tools, and should not be considered in isolation, or as a substitute for analyses of results as reported under GAAP. These non-GAAP measures are not necessarily comparable to similar measures that may be represented by other companies.

Current wording

The non-GAAP financial measures presented below are used by our management and our Board of Directors on a regular basis in addition to our GAAP results to facilitate the assessment of our financial performance. Management believes these non-GAAP financial measures enhance an investor’s understanding of our financial results by providing a meaningful basis for period-to-period comparisons, assisting in operating results analysis, and predicting future performance. This information supplements our GAAP reported results, and should not be viewed in isolation from, or as a substitute for, our GAAP results. Accordingly, this financial information should be read in conjunction with our consolidated financial statements and notes thereto for the three and six months ended June 30, 2024, included elsewhere in this report. Non-GAAP financial measures exclude certain items that are included in the financial results presented in accordance with GAAP. Non-GAAP financial measures have inherent limitations, are not required to be uniformly applied, and are not audited. Although these non-GAAP financial measures are frequently used by investors to evaluate a company, they have limitations as analytical tools, and should not be considered in isolation, or as a substitute for analyses of results as reported under GAAP. These non-GAAP measures are not necessarily comparable to similar measures that may be represented by other companies.

Previous wording

Income before income taxes decreased $22.7 million to $16.1 million for the first quarter of 2024, from $38.8 million for the same period in 2023. The period over period decrease was primarily driven by an increase in provision for credit losses and a decrease in net interest income. Provision for credit losses increased $15.5 million to $17.9 million for the first quarter of 2024, from $2.4 million for the same period in 2023, primarily due to a $17.4 million charge-off on a specific customer in our C&I loan portfolio. Net interest income decreased $5.0 million to $68.5 million for the first quarter of 2024, compared to $73.5 million for the same period in 2023. The decrease in net interest income was primarily due to an increase in the cost of interest-bearing deposits due to the rising interest rate environment and shift in deposit mix towards certificate of deposits. Identifiable assets for our Banking segment remained largely unchanged at $6.7 billion at March 31, 2024 and March 31, 2023.

Current wording

Income before income taxes decreased $4.9 million to $32.0 million for the second quarter of 2024, from $36.9 million for the same period in 2023. The period over period decrease was primarily due to a decrease in net interest income and an increase in salary and employee benefits partially offset by a decrease in provision for credit losses. Net interest income decreased $4.0 million to $69.7 million for the second quarter of 2024, compared to $73.6 million for the same period in 2023, primarily due to an increase in the cost of interest-bearing deposits amidst the elevated interest rate environment and a shift in mix to certificate of deposits. Salary and employee benefits increased $4.8 million to $31.0 million for the second quarter of 2024, from $26.2 million for the same period in 2023, primarily due to increased headcount, including the hiring of C&I bankers. Provision for credit losses decreased $3.5 million to $0.2 million for the second quarter of 2024, from $3.6 million for the same period in 2023. Identifiable assets for our Banking segment remained largely unchanged at $6.9 billion at June 30, 2024 and 2023.

Previous wording

Income before income taxes increased $5.5 million to $3.1 million for the first quarter of 2024, compared to a loss of $2.4 million for the same period in 2023, primarily due to an increase in net interest income, decrease in provision for credit losses, and increase in revenue from mortgage banking services. Net interest income increased $1.6 million to $3.5 million for the first quarter of 2024, compared to $1.9 million for the same period in 2023, primarily due to higher interest rates on residential real estate loans. Revenue from mortgage banking services increased $2.5 million to $10.1 million for the first quarter of 2024, compared to $7.6 million for the same period in 2023, primarily due to an increase 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 activity. Identifiable assets for our Mortgage Operations segment grew by $0.1 billion to $0.9 billion at March 31, 2024 from $0.8 billion for the same period in 2023. The growth in identifiable assets was primarily driven by organic growth in our residential mortgage portfolio.

Current wording

Income before income taxes increased $0.7 million to $1.7 million for the second quarter of 2024, compared to $1.0 million for the same period in 2023. The period over period increase was primarily due to an increase in net interest income partially offset by an increase in salary and employee benefits. Net interest income increased $3.0 million to $4.5 million for the second quarter of 2024, compared to $1.5 million for the same period in 2023, primarily due to higher average balance and higher average yield on residential real estate loans. Salary and employee benefits increased $1.2 million to $8.4 million for the second quarter of 2024, compared to $7.3 millionfor the same period in 2023, primarily due to higher levels of variable compensation associated with an increase in mortgage loan originations. Identifiable assets for our Mortgage Operations segment grew by $0.2 billion to $1.0 billion at June 30, 2024 from $0.8 billion at June 30, 2023. The growth in identifiable assets was primarily driven by organic growth in our residential mortgage portfolio.

Previous wording

In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet and revenues and expenses for the period. Our accounting and reporting estimates are in accordance with generally accepted accounting principles, or “U.S. GAAP,” and conform to general practices within the banking industry. Estimates that are susceptible to significant changes include accounting for the allowance for credit losses and fair value measurements, both of which require significant judgments by management. Actual results could result in material changes to our consolidated financial condition or consolidated results of operations.

Current wording

In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet and revenues and expenses for the period. Our accounting and reporting estimates are in accordance with generally accepted accounting principles, or “U.S. GAAP,” and conform to general practices within the banking industry. Estimates that are susceptible to significant changes include accounting for the allowance for credit losses and fair value measurements of MSRs, both of which require significant judgments by management. Actual results could result in material changes to our consolidated financial condition or consolidated results of operations.

Previous wording

Certain policies inherently have a greater reliance on the use of estimates, assumptions and judgments and, as such, have a greater possibility of producing results that could be materially different than originally reported. We have identified the determination of the allowance for credit losses and fair value measurements to be the accounting areas that require the most subjective or complex judgments and, as such, could be most subject to revision as new or additional information becomes available or circumstances change, including overall changes in the economic climate and/or market interest rates. Therefore, we consider these policies to be critical accounting estimates and discuss them directly with the Audit Committee of our board of directors.

Current wording

Certain policies inherently have a greater reliance on the use of estimates, assumptions and judgments and, as such, have a greater possibility of producing results that could be materially different than originally reported. We have identified the determination of the allowance for credit losses and fair value measurements of MSRs to be the accounting areas that require the most subjective or complex judgments and, as such, could be most subject to revision as new or additional information becomes available or circumstances change, including overall changes in the economic climate and/or market interest rates. Therefore, we consider these policies to be critical accounting estimates and we discuss them directly with the audit committee of our board of directors at least annually.

Previous wording

These critical accounting estimates and their application are reviewed at least annually by our audit committee. The following is a description of our critical accounting estimates and an explanation of the methods and assumptions underlying their application.

Current wording

The following is a description of our critical accounting estimates and an explanation of the methods and assumptions underlying their application.

Previous wording

Our net interest income was $70.8 million for the first quarter of 2024, a decrease of $3.3 million, or 4.5%, compared to the same period in 2023. Interest income on loans increased by $13.7 million for the first quarter of 2024, compared to the same period in 2023. Interest income on investment securities increased by $0.3 million for the first quarter of 2024, compared to the same period in 2023. Interest expense from total interest-bearing liabilities increased by $18.4 million for the first quarter of 2024, compared to the same period in 2023.

Current wording

Our net interest income was $72.9 million for the second quarter of 2024, a decrease of $0.9 million, or 1.3%, compared to the same period in 2023. Interest income on loans increased by $9.9 million for the second quarter of 2024, compared to the same period in 2023. Interest income on investment securities increased by $0.5 million for the second quarter of 2024, compared to the same period in 2023. Interest expense from total interest-bearing liabilities increased by $13.4 million for the second quarter of 2024, compared to the same period in 2023.

Previous wording

Total average loans grew to $6.3 billion at March 31, 2024, an increase of $0.3 billion or 4.7%, compared to March 31, 2023, due to organic growth in our loan portfolios. Yield on loans increased 60 basis points in the first quarter of 2024, compared to the same period in 2023, primarily due to the rising interest rate environment and its impact on variable rate loans in the loan portfolio and higher yields on new originations.

Current wording

Total average loans grew to $6.4 billion at June 30, 2024, an increase of $0.2 billion or 2.6%, compared to June 30, 2023, due to organic growth in our loan portfolio. Yield on loans increased 46 basis points for the second quarter of 2024, compared to the same period in 2023, primarily due to the elevated interest rate environment for the second quarter of 2024 as compared to the lower, yet rising interest rate environment for the second quarter of 2023, its impact on variable rate loans, and higher yields on new originations.

Previous wording

Average interest-bearing liabilities increased $0.4 billion, or 9.2%, for the first quarter of 2024, compared to the same period in 2023, primarily to support the growth in our loan portfolio. Average interest-bearing deposits increased $0.8 billion, or 19.2%, in the first quarter of 2024, compared to the same period in 2023. Average FHLB borrowings decreased $0.3 billion, or 75.6%, in the first quarter of 2024, compared to the same period in 2023.

Current wording

Average interest-bearing liabilities increased $0.3 billion, or 6.3%, for the second quarter of 2024, compared to the same period in 2023, primarily to support the growth in our loan portfolio. Average interest-bearing deposits increased $0.7 billion, or 15.7%, for the second quarter of 2024, compared to the same period in 2023. Average FHLB borrowings decreased $0.3 billion, or 72.3%, for the second quarter of 2024, compared to the same period in 2023.

Previous wording

Our net interest margin was 3.99% for the first quarter of 2024, compared to 4.39% for the same period in 2023, a decrease of 40 basis points. We experienced a 58 basis points increase in yield from earning assets while our total cost of funds increased by 130 basis points, for the first quarter of 2024 as compared to the same period in 2023. In the first quarter of 2024, we saw the level of increase in our total cost of funds exceed the level of increase in yield from earning assets primarily as a result of the mix shift within our deposit base to certificates of deposits and the overall rising deposit costs across all deposit products.

Current wording

Our net interest margin was 4.02% for the second quarter of 2024, compared to 4.24% for the same period in 2023, a decrease of 22 basis points. We experienced a 45 basis point increase in yield from earning assets while our total cost of funds increased by 90 basis points, for the second quarter of 2024 as compared to the same period in 2023. In the second quarter of 2024, compared to the same period in 2023, we saw the level of increase in our total cost of funds exceed the level of increase in yield from earning assets primarily as a result of the mix shift within our deposit base to certificates of deposits and the overall rising deposit cost across all deposit products.

Previous wording

We had a provision for credit losses of $16.5 million for the first quarter of 2024, compared to $3.4 million for the same period in 2023, primarily due to a $17.4 million charge-off on a specific customer in our C&I loan portfolio.

Current wording

We had a provision for credit losses of $17.7 million for the six months ended June 30, 2024, compared to $7.8 million for the same period in 2023. The increase in the provision for credit losses for the six months ended June 30, 2024 was primarily due toa $17.4 million charge-off on a specific customer in our C&I loan portfolio in the first quarter of 2024.

Previous wording

Service charges on deposit accounts includes overdraft and non-sufficient funds charges, treasury management services provided to our business customers, and other maintenance fees on deposit accounts. For the first quarter of 2024, service charges on deposit accounts increased $0.8 million, compared to the same period in 2023, primarily due to increased treasury management service fee income.

Current wording

Service charges on deposit accounts includes overdraft and non-sufficient funds charges, treasury management services provided to our business customers, and other maintenance fees on deposit accounts. For the second quarter of 2024, service charges on deposit accounts increased $0.6 million, compared to the same period in 2023, primarily due to increased treasury management service fee income.

Previous wording

Credit and debit card fees represent interchange income from credit and debit card activity and referral fees earned from processing fees on card transactions by our business customers. Credit and debit card fees decreased $0.2 million for the first quarter of 2024 compared to the same period in 2023, as card transaction volumes decreased slightly.

Current wording

Credit and debit card fees represent interchange income from credit and debit card activity and referral fees earned from processing fees on card transactions by our business customers. Credit and debit card fees decreased $0.1 million for the second quarter of 2024 compared to the same period in 2023, as card transaction volumes decreased slightly.

Previous wording

Trust and investment advisory fees represent fees we receive in connection with our investment advisory and custodial management services of investment accounts. Trust and investment advisory fees were largely unchanged for the first quarter of 2024 as compared to the same period in 2023.

Current wording

Trust and investment advisory fees represent fees we receive in connection with our investment advisory and custodial management services of investment accounts. Trust and investment advisory fees were largely unchanged for the second quarter of 2024 as compared to the same period in 2023.

Previous wording

Total loan originations sold were $200.2 million for the first quarter of 2024, an increase of $16.4 million from $183.8 million for the same period in 2023. The increase in loan originations sold and higher margins, resulted in the increase in revenue related to net sale gains and fees from loan originations, including fair value changes in the held-for-sale portfolio and hedging activity. MSR capitalization and changes in fair value, net of derivative activity, increased $0.3 million in the first quarter of 2024, compared to the same period in 2023. The increase in revenue related to our MSRs was primarily the result of changes in market interest rates and our corresponding hedging positions. We recognize fair value adjustments to our MSR asset, which includes changes in assumptions to the valuation model and pay-offs and pay-downs of the MSR portfolio. We also maintain a hedging strategy to manage a portion of the risk associated with changes in the fair value of our MSR portfolio. Changes in fair value of the derivative instruments used to economically hedge the MSRs are also included as a component of income from mortgage banking services. Due to a number of factors and until we see a change in these factors, including rising interest rates, low inventory in the housing market, lower refinance volumes and a decrease in margin on loans sales, for the immediate future, we do not expect revenue from mortgage banking activities to return to levels seen in prior years which will reduce the amount of income from mortgage banking services, net, recorded in future periods in comparison to prior year periods.

Current wording

For the second quarter of 2024, income from mortgage banking services decreased $0.6 million, compared to the same period in 2023. Total loan originations sold were $282.5 million for the second quarter of 2024, an increase of $34.8 million from $247.8 million for the same period in 2023. The increase in loan originations sold and higher margins, resulted in the increase in revenue related to net sale gains and fees from loan originations, including fair value changes in the held-for-sale portfolio and hedging activity. MSR capitalization and changes in fair value, net of derivative activity, decreased $1.9 million in the second quarter of 2024, compared to the same period in 2023. The decrease in revenue related to our MSRs was primarily the result of changes in market interest rates and our corresponding hedging positions. We recognize fair value adjustments to our MSR asset, which includes changes in assumptions to the valuation model and pay-offs and pay-downs of the MSR portfolio. We also maintain a hedging strategy to manage a portion of the risk associated with changes in the fair value of our MSR portfolio. Changes in fair value of the derivative instruments used to economically hedge the MSRs are also included as a component of income from mortgage banking services. Due to a number of factors and until we see a change in these factors, including elevated interest rates, low inventory in the housing market and lower refinance volumes, for the immediate future, we do not expect revenue from mortgage banking activities to return to levels seen in prior years which will reduce the amount of income from mortgage banking services, net, recorded in future periods in comparison to prior year periods.

Previous wording

Our noninterest income increased $3.9 million to $22.8 million for the first quarter of 2024 from $18.9 million for the same period in 2023, primarily due to an increase in income from mortgage banking services, net.

Current wording

Our noninterest income increased $2.9 million to $46.1 million for the six months ended June 30, 2024 from $43.2 million for the same period in 2023.

Previous wording

Other noninterest income increased $1.2 million for the first quarter of 2024 compared to the same period in 2023, primarily due to an increase in income from BOLI.

Current wording

Other noninterest income increased $0.3 million for the six months ended June 30, 2024 compared to the same period in 2023, primarily due to an increase in income from BOLI.

Previous wording

Our noninterest expenses increased $5.6 million to $61.8 million for the first quarter of 2024, from $56.3 million for the same period in 2023.

Current wording

Our noninterest expenses increased $5.8 million to $63.9 million for the second quarter of 2024, from $58.0 million for the same period in 2023.

Previous wording

Noninterest expense for the first quarter of 2024 included $2.5 million in merger related expenses. There were no merger related expenses for the same period in 2023.

Current wording

Noninterest expense for the second quarter of 2024 included $1.0 million in merger related expenses. There were no merger related expenses for the same period in 2023.

Previous wording

We had income tax expense for the first quarter of 2024 of $3.0 million, compared to income tax expense of $7.1 million for the same period in 2023. The decrease in income tax expense was due to our decreased income during the first quarter of 2024. Our effective tax rate was 19.6% for the first quarter of 2024, compared to 21.4% for the same period in 2023.

Current wording

We had income tax expense for the second quarter of 2024 of $6.5 million, compared to income tax expense of $7.7 million for the same period in 2023. The decrease in income tax expense was due to our decreased income during the second quarter of 2024. Our effective tax rate was 21.0% for the second quarter of 2024, compared to 21.5% for the same period in 2023.

Previous wording

Our total assets were $7.8 billion and $7.9 billion, total liabilities were $6.8 billion and $7.0 billion, and total stockholders’ equity was $1.0 billion and $0.9 billion at March 31, 2024 and December 31, 2023, respectively.

Current wording

Our total assets were $8.0 billion and $7.9 billion, total liabilities were $7.0 billion and $7.0 billion, and total stockholders’ equity was $1.0 billion and $0.9 billion at June 30, 2024 and December 31, 2023, respectively.

Previous wording

Our securities available-for-sale decreased by $17.7 million to $499.1 million at March 31, 2024, compared to December 31, 2023. The decrease was primarily due to amortization of the portfolio and a decrease in fair value due to the rising interest rate environment. During the period ended March 31, 2024, the securities held-to-maturity decreased $0.3 million to $36.6 million.

Current wording

Our securities available-for-sale decreased by $25.1 million to $491.6 million at June 30, 2024, compared to December 31, 2023. The decrease was primarily due to amortization of the portfolio. During the period ended June 30, 2024, the securities held-to-maturity decreased $0.7 million to $36.3 million.

Previous wording

Commercial real estate (“CRE”) loans include owner occupied and non-owner occupied commercial real estate mortgage loans to operating commercial and agricultural businesses, and include both loans for long-term financing of land and buildings and loans made for the initial development or construction of a commercial real estate project. Non-owner occupied CRE loans were 80.0% of the Company’s risk-based capital, or 13.3% of total loans as of March 31, 2024. Non-owner occupied CRE loans associated with office space were $110.4 million, or 1.8% of total loans as of March 31, 2024. Owner occupied CRE loans associated with office space were $141.3 million, or 2.2% of total loans as of March 31, 2024.

Current wording

Commercial real estate (“CRE”) loans include owner occupied and non-owner occupied commercial real estate mortgage loans to operating commercial and agricultural businesses, and include both loans for long-term financing of land and buildings and loans made for the initial development or construction of a commercial real estate project. Non-owner occupied CRE loans were 80.9% of the Company’s risk-based capital, or 13.7% of total loans as of June 30, 2024. Non-owner occupied CRE loans associated with office space were $103.7 million, or 1.6% of total loans as of June 30, 2024. Owner occupied CRE loans associated with office space were $184.0 million, or 2.9% of total loans as of June 30, 2024.

Previous wording

Deposits represent our primary source of funds. Total deposits increased by $0.1 billion to $6.4 billion at March 31, 2024, compared to December 31, 2023.

Current wording

Deposits represent our primary source of funds. Total deposits increased by $0.2 billion to $6.6 billion at June 30, 2024, compared to December 31, 2023.

Previous wording

As of March 31, 2024 and December 31, 2023, approximately $2.1 billion or 32.0% and $2.0 billion or 31.2%, respectively, of our deposit portfolio was uninsured. As of March 31, 2024 and December 31, 2023, approximately $1.6 billion or 25.2% and $1.6 billion or 25.1%, respectively, of our deposit portfolio was uninsured and uncollateralized. The uninsured and uninsured and uncollateralized amounts are estimates based on the methodologies and assumptions used for the Bank's regulatory reporting requirements.

Current wording

As of June 30, 2024 and December 31, 2023, approximately $2.1 billion or 32.1% and $2.0 billion or 31.2%, respectively, of our deposit portfolio was uninsured. As of June 30, 2024 and December 31, 2023, approximately $1.7 billion or 25.5% and $1.6 billion or 25.1%, respectively, of our deposit portfolio was uninsured and uncollateralized. The uninsured and uninsured and uncollateralized amounts are estimates based on the methodologies and assumptions used for the Bank's regulatory reporting requirements.

Previous wording

CDARS program totaled $0.6 billion, or 9.2% of all deposits as of March 31, 2024, and $0.6 billion, or 9.2% of all deposits as of December 31, 2023.

Current wording

CDARS program totaled $0.6 billion, or 8.9% of all deposits as of June 30, 2024, and $0.6 billion, or 9.2% of all deposits as of December 31, 2023.

Previous wording

FirstSun has routine funding requirements consisting primarily of operating expenses, debt service, and funds used for acquisitions. FirstSun can obtain funding to meet its obligations from dividends collected from its subsidiaries, primarily the Bank, and through the issuance of varying forms of debt. At March 31, 2024, FirstSun had available cash and cash equivalents of $109.0 million and debt outstanding of $78.9 million. Management believes FirstSun has the ability to generate and obtain adequate amounts of liquidity to meet its requirements in the short-term and the long-term.

Current wording

FirstSun has routine funding requirements consisting primarily of operating expenses, debt service, and funds used for acquisitions. FirstSun can obtain funding to meet its obligations from dividends collected from its subsidiaries, primarily the Bank, and through the issuance of varying forms of debt. At June 30, 2024, FirstSun had available cash and cash equivalents of $109.9 million and debt outstanding of $78.9 million. Management believes FirstSun has the ability to generate and obtain adequate amounts of liquidity to meet its requirements in the short-term and the long-term.

Previous wording

Federal banking laws regulate the amount of dividends that may be paid by banking subsidiaries without prior approval. The Bank may declare dividends without prior regulatory approval that do not exceed the total of retained net income for the current year combined with its retained net income for the preceding two years, subject to maintenance of minimum capital requirements. Prior regulatory approval to pay dividends was not required in 2023 and is not currently required. At March 31, 2024, the Bank could pay dividends to FirstSun of approximately $157.2 million without prior regulatory approval. During the three months ended March 31, 2024, the Bank did not pay dividends to FirstSun. Upon conversion to a Texas state chartered bank with membership with the Federal Reserve, regulations related to dividends will change, including the amount of dividends available to be paid without prior regulatory approval.

Current wording

Federal banking laws regulate the amount of dividends that may be paid by banking subsidiaries without prior approval. The Bank may declare dividends without prior regulatory approval that do not exceed the total of retained net income for the current year combined with its retained net income for the preceding two years, subject to maintenance of minimum capital requirements. Prior regulatory approval to pay dividends was not required in 2023 and is not currently required. At June 30, 2024, the Bank could pay dividends to FirstSun of approximately $183.4 million without prior regulatory approval. During the six months ended June 30, 2024, the Bank did not pay dividends to FirstSun. Upon conversion to a Texas state chartered bank with membership with the Federal Reserve, regulations related to dividends will change, including the amount of dividends available to be paid without prior regulatory approval.

Previous wording

As more fully discussed in our 2023 Annual Report, we regularly monitor our liquidity position and make adjustments to the balance between sources and uses of funds as we deem appropriate. At March 31, 2024, our liquid assets, which consist of cash and amounts due from banks and interest-bearing deposits in other financial institutions, amounted to $376.1 million, or 4.8% of total assets, compared to $473.0 million, or 6.0% of total assets, at December 31, 2023. The decrease in our liquid assets was primarily due to a decrease in cash held at the Federal Reserve. At March 31, 2024, approximately 82% of the investment securities portfolio was pledged as collateral to secure public deposits and repurchase agreements. Our unencumbered available-for-sale securities at March 31, 2024 were $89.1 million, or 1.1% of total assets, compared to $81.5 million, or 1.0% of total assets, at December 31, 2023.

Current wording

As more fully discussed in our 2023 Annual Report, we regularly monitor our liquidity position and make adjustments to the balance between sources and uses of funds as we deem appropriate. At June 30, 2024, our liquid assets, which consist of cash and amounts due from banks and interest-bearing deposits in other financial institutions, amounted to $527.6 million, or 6.6% of total assets, compared to $473.0 million, or 6.0% of total assets, at December 31, 2023. The increase in our liquid assets was primarily due to an increase in cash held at the Federal Reserve. At June 30, 2024, approximately 85% of the investment securities portfolio was pledged as collateral to secure public deposits and repurchase agreements. Our unencumbered available-for-sale securities at June 30, 2024 were $74.2 million, or 0.9% of total assets, compared to $81.5 million, or 1.0% of total assets, at December 31, 2023.

Previous wording

The liability portion of our balance sheet serves as a primary source of liquidity. We plan to meet our future cash needs primarily through the generation of deposits. Customer deposits have historically provided a sizeable source of relatively stable and low-cost funds. At March 31, 2024, loans as a percentage of customer deposits were 97.5%, compared with 98.3% at December 31, 2023. For additional information related to our deposits, see Deposits section above. We are also a member of the FHLB and FRB, from which we can borrow for leverage or liquidity purposes. The FHLB and FRB requires that securities and qualifying loans be pledged to secure any advances. Liquidity sources available to us for immediate funding at March 31, 2024, are as follows:

Current wording

The liability portion of our balance sheet serves as a primary source of liquidity. We plan to meet our future cash needs primarily through the generation of deposits. Customer deposits have historically provided a sizeable source of relatively stable and low-cost funds. At June 30, 2024, loans as a percentage of customer deposits were 95.7%, compared with 98.3% at December 31, 2023. For additional information related to our deposits, see Deposits section above. We are also a member of the FHLB and FRB, from which we can borrow for leverage or liquidity purposes. The FHLB and FRB requires that securities and qualifying loans be pledged to secure any advances. Liquidity sources available to us for immediate funding at June 30, 2024, are as follows:

Previous wording

Stockholders’ equity at March 31, 2024 was $964.7 million, compared to $877.2 million at December 31, 2023, an increase of $87.5 million, or 10.0%. As previously announced, concurrent with the entry into the merger agreement with HomeStreet on January 16, 2024, we entered into an upfront securities purchase agreement with certain funds managed by Wellington Management Company, LLP, pursuant to which we issued 2.46 million shares of our common stock in a private placement for $80.0 million that closed on January 17, 2024.

Current wording

Stockholders’ equity at June 30, 2024 was $996.6 million, compared to $877.2 million at December 31, 2023, an increase of $119.4 million, or 13.6%. As previously announced, concurrent with the entry into the merger agreement with HomeStreet on January 16, 2024, we entered into an upfront securities purchase agreement with certain funds managed by Wellington Management Company, LLP, pursuant to which we issued 2.46 million shares of our common stock in a private placement for $80.0 million that closed on January 17, 2024.

Previous wording

We did not pay a dividend to our common shareholders for the three months ended March 31, 2024 and 2023.

Current wording

We did not pay a dividend to our common shareholders for the three or six months ended June 30, 2024 and 2023.