FIRSTSUN CAPITAL BANCORP

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 nine months ended September 30, 2025, 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.

The following table presents GAAP to non-GAAP reconciliations:

Segments

Banking

Income before income taxes decreased $2.9 million to $25.7 million for the third quarter of 2025, from $28.6 million for the same period in 2024. The period over period decrease was primarily due to an increase in provision for credit losses and an increase in salary and employee benefits, partially offset by an increase in net interest income. Provision for credit losses increased $4.2 million to $10.5 million for the third quarter of 2025, compared to $6.4 million for the same period in 2024, primarily due to deterioration in a specific commercial and industrial customer relationship, impacts from net changes in loan portfolio balances, and impacts from net portfolio downgrades. Salary and employee benefits increased $4.0 million to $34.5 million for the third quarter of 2025, from $30.5 million for the same period in 2024, primarily due to an increase in headcount of C&I bankers and support personnel and higher medical insurance costs. Net interest income increased $3.6 million to $76.0 million for the third quarter of 2025, compared to $72.4 million for the same period in 2024, primarily due to a decrease in the cost of interest-bearing liabilities. Identifiable assets for our Banking segment increased $0.2 billion to $7.2 billion at September 30, 2025 from $7.0 billion at September 30, 2024. The growth in identifiable assets was primarily driven by organic growth in our loan portfolio.

Income before income taxes increased $9.3 million to $86.1 million for the nine months ended September 30, 2025, from $76.7 million for the same period in 2024. The period over period increase was primarily due to a decrease in provision for credit losses and an increase in net interest income, partially offset by an increase in salary and employee benefits. Provision for credit losses decreased $5.3 million to $19.1 million for the nine months ended September 30, 2025, compared to $24.4 million for the same period in 2024, primarily due to a $14.1 million provision for credit loss on a specific customer in our commercial and industrial loan portfolio during the nine months ended September 30, 2024. Net interest income increased $9.2 million to $219.8 million for the nine months ended September 30, 2025 compared to $210.6 million for the same period in 2024, primarily due to a decrease in the cost of interest-bearing liabilities, relative to a decrease in the yield on interest earning assets, as a result of a declining interest rate environment and mix shift away from higher rate certificates of deposits. Salary and employee benefits increased $7.3 million to $98.5 million for the nine months ended September 30, 2025, compared to $91.3 million for the same period in 2024, primarily due to increased headcount, including the hiring of commercial and industrial bankers in Southern California.

Mortgage Operations

Income before income taxes increased $2.6 million to $5.2 million for the third quarter of 2025, compared to $2.7 million for the same period in 2024. The period over period increase was primarily due to an increase in revenue from mortgage banking services and increase in net interest income, partially offset by an increase in salary and employee benefits. Revenue from mortgage banking services increased $3.8 million to $13.3 million for the third quarter of 2025, compared to $9.4 million for the same period in 2024, primarily due to an increase in loan originations sold and higher margins, and higher net MSR capitalization. Net interest income increased $1.6 million to $6.5 million for the third quarter of 2025, compared to $5.0 million for the same period in 2024, primarily due to higher average balance and higher average yield on residential real estate loans. Salary and employee benefits increased $1.4 million to $9.7 million for the third quarter of 2025, compared to $8.3 million for the same period in 2024, primarily due to higher levels of variable compensation associated with an increase in mortgage loan originations. Identifiable assets for our Mortgage Operations segment increased $0.1 billion to $1.2 billion at September 30, 2025 from $1.0 billion at September 30, 2024. The growth in identifiable assets was primarily driven by organic growth in our residential mortgage portfolio.

Income before income taxes increased $4.7 million to $12.1 million for the nine months ended September 30, 2025, compared to $7.5 million for the same period in 2024. The period over period increase was primarily due to an increase in net interest income and increase in revenue from mortgage banking services, partially offset by an increase in salary and employee benefits. Net interest income increased $5.1 million to $18.1 million for the nine months ended September 30, 2025, compared to $13.0 million for the same period in 2024, primarily due to higher average balance and higher average yield on residential real estate loans. Revenue from mortgage banking services increased $5.7 million to $36.9 million for the nine months ended September 30, 2025, compared to $31.2 million for the same period in 2024, primarily due to an increase in loan originations sold, partially offset by slightly lower margins, and an increase in mortgage servicing income. Salary and employee benefits increased $4.0 million to $27.9 million for the nine months ended September 30, 2025, compared to $23.9 million for the same period in 2024, primarily due to higher levels of variable compensation associated with an increase in mortgage loan originations.

Critical Accounting Estimates

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.

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 the estimates underlying these policies to be critical accounting estimates and we discuss them directly with the Audit Committee of our Board of Directors at least annually.

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

Allowance for Credit Losses -Management maintains an ACL for loans based upon management’s estimate of the lifetime expected credit losses in the loan portfolio as of the balance sheet date, excluding loans held for sale. Additionally, management maintains an ACL for held-to-maturity or available-for-sale debt securities, and other off-balance sheet credit exposures (e.g., unfunded loan commitments). For loans and unfunded loan commitments, the estimate of lifetime credit losses includes the use of quantitative models that incorporate forward-looking macroeconomic scenarios that are applied over the contractual lives of the portfolios, adjusted, as appropriate, for prepayments and permitted extension options using historical experience. For purposes of the ACL for lending commitments, such allowance is determined using the same methodology as the ACL for loans, while also taking into consideration the probability of drawdowns or funding, and whether such commitments are cancellable by us. The ACL for held-to-maturity and available-for-sale debt securities is measured using a risk-adjusted discounted cash flow approach that also considers relevant current and forward-looking economic variables and the ACL is limited to the difference between the fair value of the security and its amortized cost. Judgment is specifically applied in the determination of economic assumptions, length of the initial loss forecast period, the reversion of losses beyond the initial forecast period, usage of macroeconomic scenarios, probabilities of default, losses given default, amortization and prepayment rates, and qualitative factors, which may not be adequately captured in the loss model, as further discussed below.

The macroeconomic scenarios utilized by management include variables that have historically been key drivers of increases and decreases in credit losses. These variables include, but are not limited to, unemployment rates, housing and commercial real estate prices, gross domestic product levels, corporate bond spreads and changes in equity market prices. Management derives the economic forecasts it uses in its ACL model from Moody’s Analytics. The latter has a large team of economics, database managers and operational engineers with a history of producing monthly economic forecasts for over 25 years.

Management has currently set an initial forecast period (“reasonable and supportable period”) of four years and a reversion period of one year, utilizing a straight-line approach and reverting back to the historical macroeconomic mean. After the reversion period, a historical loss forecast period covering the remaining contractual life, adjusted for prepayments, is used based on changes in key historical economic variables during representative historical expansionary and recessionary periods. Changes in economic forecasts impact the probability of default (“PD”), loss-given default (“LGD”), and exposure at default (“EAD”) for each instrument, and therefore influence the amount of future cash flows for each instrument that management does not expect to collect.

Further, management periodically considers the need for qualitative adjustments to the ACL. Qualitative adjustments may be related to and include, but not limited to, factors such as the following: (i) management’s assessment of economic forecasts used in the model and how those forecasts align with management’s overall evaluation of current and expected economic conditions; (ii) organization specific risks such as credit concentrations, collateral specific risks, nature, and size of the portfolio and external factors that may ultimately impact credit quality, and (iii) other limitations associated with factors such as changes in underwriting and loan resolution strategies, among others. The qualitative factors applied on September 30, 2025, and the importance and levels of the qualitative factors applied, may change in future periods depending on the level of changes to items such as the uncertainty of economic conditions and management’s assessment of the level of credit risk within the loan portfolio as a result of such changes, compared to the amount of ACL calculated by the model. The evaluation of qualitative factors is inherently imprecise and requires significant management judgment.

The ACL can also be impacted by factors outside of management’s control, which include unanticipated changes in asset quality of the portfolio, such as deterioration in borrower delinquencies, or credit scores in our residential real estate and consumer portfolio. Further, the current fair value of collateral is utilized to assess the expected credit losses when a financial asset is considered to be collateral dependent.

Our process for determining the ACL is further discussed in “Note 1 - Basis of Presentation, Description of Business and Summary of Significant Accounting Policies” in our 2024 Annual Report.

Fair Value Measurement of MSRs -Our residential mortgage servicing rights are measured at fair value on a recurring basis. We estimate the fair value of our MSRs using a process that utilizes a discounted cash flow model and analysis of current market data to arrive at the estimate. The cash flow assumptions used in the model are based on numerous factors, with the key assumptions being mortgage prepayment speeds, discount rates and cost to service that management believes are consistent with the assumptions that other similar market participants use in valuing MSRs. The change of any of these key assumptions due to market conditions or other factors could materially affect the fair value of our MSRs. We also utilize a third-party consulting firm to assist us with the valuation. Because of the nature of the valuation inputs, we classify the valuation of our MSRs as Level 3 in the fair value hierarchy. See Note 4 - Mortgage Servicing Rights for our assumptions used in valuing the MSRs. For information concerning the hypothetical sensitivity of the key assumptions under adverse changes on our MSRs, see the table under “Noninterest Income” elsewhere in the Management’s Discussion and Analysis of Financial Condition and Results of Operations in this report.