FIRSTSUN CAPITAL BANCORP

Significant segment totals are reconciled to the financial statements as follows for the nine months ended September 30,:

NOTE 14 -Commitments and Contingencies

Commitments

We are a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of our customers. These financial instruments include loan commitments, standby letters of credit, and documentary letters of credit and involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the financial statements. Our exposure to credit loss in the event of nonperformance by the other party of these loan commitments and standby letters of credit is represented by the contractual amount of those instruments. We use the same credit policies in making commitments and conditional obligations as we do for on-balance sheet financial instruments.

Undistributed portion of committed loans and unused lines of credit

Loan commitments are agreements to lend to a customer as long as there is no customer violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require a payment of a fee. As of September 30, 2025 and December 31, 2024, commitments included the funding of fixed-rate loans totaling $138,174 and $184,780 and variable-rate loans totaling $1,363,989 and $1,615,505, respectively. The fixed-rate loan commitments have interest rates ranging from 1.00% to 18.00% at September 30, 2025 and December 31, 2024, and maturities ranging from 1 month to 17 years at September 30, 2025 and December 31, 2024.

Standby letters of credit

Standby letters of credit are conditional commitments to guarantee the performance of a customer to a third-party. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. Since many loan commitments and letters of credit expire without being drawn upon, the total commitment amount does not necessarily represent future cash requirements. We evaluate each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary upon extension of credit, is based on our credit evaluation of the counterparty. Collateral held varies but may include accounts receivable, inventory, property, plant and equipment, owner occupied real estate, and/or income-producing commercial properties. As of September 30, 2025 and December 31, 2024, our standby letters of credit commitment totaled $41,225 and $39,586, respectively.

MPF Master Commitments

The Bank has executed MPF Master Commitments (Commitments) with the FHLB to deliver mortgage loans and to guarantee the payment of any realized losses that exceed the FHLB’s first loss account for mortgages delivered under the Commitments. The Bank receives credit enhancement fees from the FHLB for providing this guarantee and continuing to manage the credit risk of the MPF Program mortgage loans. As of September 30, 2025 and December 31, 2024, the Bank considered the amount of any of its liability for the present value of the credit enhancement fees less any expected losses in the mortgages delivered under the Commitments to be immaterial, and has not recorded a liability and offsetting receivable. As of September 30, 2025 and December 31, 2024, the maximum potential amount of future payments that the Bank would have been required to make under the Commitments was $4,170 and $3,887, respectively. Under the Commitments, the Bank agrees to service the loans and therefore, is responsible for any necessary foreclosure proceedings. Any future recoveries on any losses would not be paid by the FHLB under the Commitments. The Bank has not experienced any material losses under these guarantees.

Contingencies

We generally sell loans to investors without recourse; therefore, the investors have assumed the risk of loss or default by the borrower. However, we are usually required by these investors to make certain standard representations and warranties relating to credit information, loan documentation, and collateral. To the extent that we do not comply with such representations, we may be required to repurchase the loans or indemnify these investors for any losses from borrower defaults. We establish reserves for potential losses related to these representations and warranties if deemed appropriate and such reserves would be recorded within accrued expenses and other liabilities. In assessing the adequacy of the reserve, we evaluate various factors including actual write-offs during the period, historical loss experience, known delinquent and other problem loans, and economic trends and conditions in the industry.

From time to time, we are a defendant in various claims, legal actions, and complaints arising in the ordinary course of business. We periodically review all outstanding pending or threatened legal proceedings and determine if such matters will have an adverse effect on our business, financial condition, results of operations or cash flows.

Litigation

Check Fraud Litigation

Rodeo Electrical Services, Inc. and its owner (collectively, “RESI”) filed a civil action against the Bank on June 23, 2020 in the Santa Fe County, New Mexico District Court. The complaint alleged that the Bank conspired with or otherwise aided a former RESI employee’s embezzlement of approximately $0.4 million from RESI. The complaint sought compensatory, exemplary, statutory and punitive damages, as well as payment of RESI’s legal fees and expenses. On January 18, 2024, the jury awarded RESI approximately $2.1 million which included punitive damages. Judgment on the jury’s award was entered on July 25, 2024. On June 6, 2025, a supplemental award of RESI’s legal fees of $0.8 million was entered. On June 30, 2025 the Bank filed an appeal, and on August 20, 2025, after mediation, the parties reached a settlement, all of which is covered by the Bank’s insurance. Because the settlement is covered by insurance, the settlement will not have a material effect on the financial condition or results of operations of the Bank.

We establish reserves for contingencies, including legal proceedings, when potential losses become probable and can be reasonably estimated. While the ultimate resolution of any legal proceedings, including the matters described above, cannot be determined at this time, based on information presently available, and after consultation with legal counsel, management believes that the ultimate outcome in these above legal proceedings, either individually or in the aggregate, will not have a material adverse effect on our financial statements. It is possible, however, that future developments could result in an unfavorable outcome for or resolution of any of these proceedings, which may be material to our results of operations for a given fiscal period.

NOTE 15 -Lease Commitments

Our leases relate primarily to office space and bank branches with remaining lease terms of generally 1 to 15 years. Certain lease arrangements contain extension options which typically range from 5 to 10 years at the then fair market rental rates. As these extension options are not generally considered reasonably certain of exercise, they are not included in the lease term.

The following table reconciles future undiscounted lease payments due under non-cancelable operating leases to the aggregate operating lessee lease liability as of September 30, 2025:

Total lease expense for three months ended September 30, 2025 and 2024 was $1,885 and $1,857, respectively. Total lease expense for the nine months ended September 30, 2025 and 2024 was $5,989 and $5,695, respectively. The components of total lease expense were as follows:

We do not currently have any significant finance leases in which we are the lessee, material related-party leases, leases containing residual value guarantees or restrictive covenants.

NOTE 16 -Subsequent Events

The Company has evaluated subsequent events for potential recognition and disclosure through the filing date of this Form 10-Q.

Subordinated Notes Redemption

On October 1, 2025, FirstSun Capital Bancorp redeemed the entire principal amount, or $40 million, of its 6.000% Fixed-to-Floating Rate Subordinated Notes Due July 1, 2030.

Proposed Merger with First Foundation Inc.

On October 27, 2025, FirstSun and First Foundation, Inc. (“First Foundation”) entered into a definitive merger agreement pursuant to which First Foundation will merge with and into FirstSun (the “Merger”). In accordance with the terms and subject to the conditions set forth in the merger agreement, FirstSun will exchange 0.16083 shares of its common stock for each share of First Foundation common stock and preferred stock (on a fully converted basis) outstanding at the effective time of the Merger. Additionally, First Foundation’s warrant holders will exercise their warrants early and receive FirstSun common stock in the merger and also receive additional cash consideration totaling $17.5 million in the aggregate. The aggregate transaction value, inclusive of the cash consideration being paid to warrant holders, is estimated at $785 million based on FirstSun’s closing price as of October 24, 2025.