FirstSun Capital Bancorp Reports Second Quarter 2024 Results

By: FirstSun Capital Bancorp via Business Wire

July 29, 2024 at 16:00 PM EDT

Second Quarter 2024 Highlights:

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)
Net interest margin of 4.02%
Return on average total assets of 1.26% (excluding merger costs, 1.29%, see the “Non-GAAP Financial Measures and Reconciliations” below)
Return on average stockholders’ equity of 10.03% (excluding merger costs, 10.28%, see the “Non-GAAP Financial Measures and Reconciliations” below)
Loan growth of 3.3% annualized
Deposit growth of 10.8% annualized
24.2% noninterest income to total revenue¹

FirstSun Capital Bancorp (“FirstSun”) (NASDAQ: FSUN) reported net income of $24.6 million for the second quarter of 2024 compared to net income of $28.0 million for the second quarter of 2023. Earnings per diluted share were $0.88 for the second quarter of 2024 compared to $1.11 for the second quarter of 2023. Earnings for the second quarter of 2024 were negatively impacted by $0.6 million of merger costs, net of tax, or $0.02 per diluted share.

Neal Arnold, FirstSun’s President and Chief Executive Officer, commented, “We are pleased to deliver strong earnings this quarter driven by our well diversified business mix. Our net interest margin remains very strong at 4.02%, we grew our deposits and loans and we maintained our balanced mix of business with noninterest income to total revenue at 24.2%.”

Arnold continued, “We continue to work actively on all aspects of planning for the consummation of the previously announced strategic merger with HomeStreet, Inc. and we remain focused on continuing to deliver responsible growth amidst the challenging operating environment. We also remain focused on enhancing shareholder value and are very excited to announce a significant milestone in uplisting to Nasdaq on July 12, 2024 which we expect will provide us better access to the capital markets.”

Second Quarter 2024 Results

Net income totaled $24.6 million, or $0.88 per diluted share, for the second quarter of 2024, compared to $12.3 million, or $0.45 per diluted share, for the prior quarter. Net income in the second quarter of 2024 was negatively impacted by $0.6 million in merger costs, net of tax, or $0.02 per diluted share. Net income in the first quarter of 2024 was negatively impacted by a $13.1 million loan charge-off, net of tax, or $0.47 per diluted share, and $2.3 million in merger costs, net of tax, or $0.08 per diluted share. The return on average total assets was 1.26% for the second quarter of 2024, compared to 0.64% for the prior quarter, and the return on average stockholders’ equity was 10.03% for the second quarter of 2024, compared to 5.15% for the prior quarter. Second quarter of 2024 merger costs, net of tax negatively affected return on average total assets by 0.03% and return on average stockholders’ equity by 0.25%. First quarter of 2024 merger costs, net of tax negatively affected return on average total assets by 0.12% and return on average stockholders’ equity by 0.96%.

Net Interest Income and Net Interest Margin

Net interest income totaled $72.9 million for the second quarter of 2024, an increase of $2.1 million compared to the prior quarter. Our net interest margin increased three basis points to 4.02% compared to the prior quarter. Results for the second quarter of 2024, compared to the prior quarter, were primarily driven by an increase of 11 basis points in the yield on earning assets, partially offset by an increase of 12 basis points in the cost of interest-bearing liabilities.

Average loans, including loans held-for-sale, increased by $70.9 million in the second quarter of 2024, compared to the prior quarter. Loan yield increased by 11 basis points to 6.59% in the second quarter of 2024, compared to the prior quarter, primarily due to higher yields on new originations as compared to amortizing and maturing balances. Average interest-bearing deposits increased $101.7 million in the second quarter of 2024, compared to the prior quarter. Total cost of interest-bearing deposits increased by 11 basis points to 3.11% in the second quarter of 2024, compared to the prior quarter, primarily due to overall rising deposit costs as a result of the elevated interest rate environment. Average FHLB borrowings increased $20.1 million in the second quarter of 2024, compared to the prior quarter. The cost of FHLB borrowings increased by 11 basis points to 5.67% in the second quarter of 2024, compared to the prior quarter.

Asset Quality and Provision for Credit Losses

The provision for credit losses totaled $1.2 million for the second quarter of 2024, a decrease of $15.3 million from $16.5 million for the prior quarter, primarily due to a $17.4 million charge-off on a specific customer in our C&I loan portfolio for the prior quarter.

Net charge-offs for the second quarter of 2024 were $2.0 million resulting in an annualized ratio of net charge-offs to average loans of 0.13%, compared to net charge-offs of $17.4 million, or an annualized ratio of net-charge offs to average loans of 1.11% for the prior quarter. The allowance for credit losses as a percentage of total loans was 1.25% at June 30, 2024, a decrease of two basis points from the prior quarter.

The ratio of nonperforming assets to total assets was 0.84% at June 30, 2024, compared to 0.80% at March 31, 2024.

Noninterest Income

Noninterest income totaled $23.3 million for the second quarter of 2024, an increase of $0.5 million from the prior quarter. Mortgage banking income increased $1.5 million for the second quarter of 2024, primarily due to an increase in mortgage loan originations, including the corresponding impact to our capitalized MSR asset from the prior quarter.

Other noninterest income decreased $1.5 million for the second quarter of 2024, primarily due to a decrease in income from BOLI and a decrease in the fair value of investments related to our deferred compensation plan. Noninterest income as a percentage of total revenue² was 24.2%, an increase of 0.2% from the prior quarter.

Noninterest Expense

Noninterest expense totaled $63.9 million for the second quarter of 2024, an increase of $2.0 million from the prior quarter, primarily due to an increase in salary and employee benefits of $2.5 million as a result of increased head count of C&I bankers and higher levels of variable compensation associated with an increase in mortgage loan originations. Noninterest expense for the second quarter of 2024 included $1.0 million in merger related expenses, a decrease of $1.4 million from the prior quarter.

The efficiency ratio for the second quarter of 2024 was 66.42% compared to 66.05% for the prior quarter. Merger costs negatively affected the efficiency ratio for the second quarter of 2024 by 1.09%, down from a negative impact of 2.66% for the prior quarter.

Tax Rate

The effective tax rate was 21.0% for the second quarter of 2024, compared to 19.6% for the prior quarter.

Loans

Loans were $6.3 billion at June 30, 2024 and March 31, 2024, increasing $52.3 million in the second quarter of 2024, or 3.3% on an annualized basis.

Deposits

Deposits were $6.6 billion at June 30, 2024 compared to $6.4 billion at March 31, 2024, an increase of $0.2 billion in the second quarter of 2024, or 10.8% on an annualized basis. Average deposits were $6.5 billion for the second quarter of 2024, compared to $6.4 billion for the prior quarter, an increase of $0.1 billion in the second quarter of 2024, or 7.3% on an annualized basis. Noninterest-bearing deposit accounts represented 23.6% of total deposits at June 30, 2024 and the loan-to-deposit ratio was 95.7% at June 30, 2024.

The ratio of total uninsured deposits to total deposits was estimated to be 32.1% at June 30, 2024, compared to 32.0% at March 31, 2024. The ratio of total uninsured and uncollateralized deposits to total deposits was estimated to be 25.5% at June 30, 2024, compared to 25.2% at March 31, 2024.³

Capital

Capital ratios remain strong and above “well-capitalized” thresholds. As of June 30, 2024, our common equity tier 1 risk-based capital ratio was 12.80%, total risk-based capital ratio was 14.95% and tier 1 leverage ratio was 11.83%. Book value per share was $36.31 at June 30, 2024, an increase of $1.16 from March 31, 2024. Tangible book value per share, a non-GAAP financial measure, was $32.56 at June 30, 2024, an increase of $1.19 from March 31, 2024.

Non-GAAP Financial Measures

This press release (including the tables within the “Non-GAAP Financial Measures and Reconciliations” section) contains financial 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 non-GAAP financial measures, however, 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 non-GAAP measures used in this press release:

Tangible stockholders’ equity;
Tangible assets;
Tangible stockholders’ equity to tangible assets;
Tangible stockholders’ equity to tangible assets, reflecting net unrealized losses on HTM securities, net of tax;
Tangible book value per share;
Net income excluding merger costs;
Return on average total assets excluding merger costs;
Return on average stockholders’ equity excluding merger costs;
Efficiency ratio excluding merger related expenses;
Diluted earnings per share excluding merger related costs; and
Fully tax equivalent (“FTE”) net interest income and net interest margin on FTE basis.

The tables within the “Non-GAAP Financial Measures and Reconciliations” section provide a reconciliation of each non-GAAP financial measure contained in this press release 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 $8.0 billion as of June 30, 2024.

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.

____________________

¹ Total revenue is net interest income plus noninterest income.

² Total revenue is net interest income plus noninterest income.

³ Uninsured deposits and uninsured and uncollateralized deposits are reported for our wholly-owned subsidiary Sunflower Bank, N.A.

Summary Data:

	As of and for the quarter ended
($ in thousands, except per share amounts)	June 30, 2024			March 31, 2024			December 31, 2023			September 30, 2023			June 30, 2023
Net interest income	$	72,899		$	70,806		$	72,069		$	73,410		$	73,835
Provision for credit losses		1,200			16,500			6,575			3,890			4,422
Noninterest income		23,274			22,808			17,221			18,650			24,290
Noninterest expense		63,875			61,828			52,308			56,176			58,043
Income before income taxes		31,098			15,286			30,407			31,994			35,660
Provision for income taxes		6,538			2,990			6,393			6,762			7,654
Net income		24,560			12,296			24,014			25,232			28,006
Net income, excluding merger costs (1)		25,181			14,592			24,014			25,232			28,006
Weighted average common shares outstanding, basic		27,430,761			27,019,625			24,953,764			24,942,389			24,933,664
Weighted average common shares outstanding, diluted		28,031,956			27,628,941			25,472,017			25,357,807			25,206,359
Diluted earnings per share	$	0.88		$	0.45		$	0.94		$	1.00		$	1.11
Diluted earnings per share, excluding merger costs (1)	$	0.90		$	0.53		$	0.94		$	1.00		$	1.11
Return on average total assets		1.26	%		0.64	%		1.26	%		1.34	%		1.49	%
Return on average total assets, excluding merger costs (1)		1.29	%		0.76	%		1.26	%		1.34	%		1.49	%
Return on average stockholders' equity		10.03	%		5.15	%		11.19	%		12.03	%		13.54	%
Return on average stockholders’ equity, excluding merger costs (1)		10.28	%		6.11	%		11.19	%		12.03	%		13.54	%
Net interest margin		4.02	%		3.99	%		4.08	%		4.23	%		4.24	%
Net interest margin (FTE basis) (1)		4.08	%		4.06	%		4.15	%		4.30	%		4.32	%
Efficiency ratio		66.42	%		66.05	%		58.58	%		61.02	%		59.15	%
Efficiency ratio, excluding merger related expenses (1)		65.33	%		63.39	%		58.58	%		61.02	%		59.15	%
Noninterest income to total revenue (2)		24.2	%		24.4	%		19.3	%		20.3	%		24.8	%
Total assets	$	7,999,295		$	7,781,601		$	7,879,724		$	7,756,875		$	7,797,344
Total loans held-for-sale		66,571			56,813			54,212			51,465			56,350
Total loans held-for-investment		6,337,162			6,284,868			6,267,096			6,179,522			6,155,090
Total deposits		6,619,525			6,445,388			6,374,103			6,339,847			6,150,418
Total stockholders' equity		996,599			964,662			877,197			843,719			823,635
Loan to deposit ratio		95.7	%		97.5	%		98.3	%		97.5	%		100.1	%
Period end common shares outstanding		27,443,246			27,442,943			24,960,639			24,942,645			24,941,468
Book value per share	$	36.31		$	35.15		$	35.14		$	33.83		$	33.02
Tangible book value per share (1)	$	32.56		$	31.37		$	30.96		$	29.60		$	28.76

(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)	Total revenue is net interest income plus noninterest income.

	As of and for the six months ended
($ in thousands, except per share amounts)	June 30, 2024			June 30, 2023
Net interest income	$	143,705		$	147,952
Provision for credit losses		17,700			7,782
Noninterest income		46,082			43,221
Noninterest expense		125,703			114,309
Income before income taxes		46,384			69,082
Provision for income taxes		9,528			14,795
Net income		36,856			54,287
Net income, excluding merger costs (1)		39,773			54,287
Weighted average common shares outstanding, basic		27,224,968			24,928,485
Weighted average common shares outstanding, diluted		27,825,189			25,368,702
Diluted earnings per share	$	1.32		$	2.14
Diluted earnings per share, excluding merger costs (1)	$	1.43		$	2.14
Return on average total assets		0.95	%		1.46	%
Return on average total assets, excluding merger costs (1)		1.03	%		1.46	%
Return on average stockholders' equity		7.62	%		13.46	%
Return on average stockholders’ equity, excluding merger costs (1)		8.22	%		13.46	%
Net interest margin		4.00	%		4.31	%
Net interest margin (FTE basis) (1)		4.07	%		4.39	%
Efficiency ratio		66.23	%		59.79	%
Efficiency ratio, excluding merger related expenses (1)		64.37	%		59.79	%
Noninterest income to total revenue (2)		24.3	%		22.6	%
Total assets	$	7,999,295		$	7,797,344
Total loans held-for-sale		66,571			56,350
Total loans held-for-investment		6,337,162			6,155,090
Total deposits		6,619,525			6,150,418
Total stockholders' equity		996,599			823,635
Loan to deposit ratio		95.7	%		100.1	%
Period end common shares outstanding		27,443,246			24,941,468
Book value per share	$	36.31		$	33.02
Tangible book value per share (1)	$	32.56		$	28.76

(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)	Total revenue is net interest income plus noninterest income.

Condensed Consolidated Statements of Income (Unaudited):

	For the quarter ended				For the six months ended
($ in thousands, except per share amounts)	June 30, 2024		June 30, 2023		June 30, 2024		June 30, 2023
Total interest income	$	114,529	$	102,032	$	224,569	$	196,935
Total interest expense		41,630		28,197		80,864		48,983
Net interest income		72,899		73,835		143,705		147,952
Provision for credit losses		1,200		4,422		17,700		7,782
Net interest income after provision for credit losses		71,699		69,413		126,005		140,170
Noninterest income:
Service charges on deposits		5,946		5,358		11,714		10,373
Credit and debit card fees		3,007		3,057		5,810		6,038
Trust and investment advisory fees		1,493		1,478		2,956		2,939
Mortgage banking income, net		11,043		11,659		20,545		19,088
Other noninterest income		1,785		2,738		5,057		4,783
Total noninterest income		23,274		24,290		46,082		43,221
Noninterest expense:
Salaries and benefits		39,828		34,056		77,181		69,105
Occupancy and equipment		8,701		8,135		17,296		16,490
Amortization of intangible assets		652		2,050		1,467		3,094
Merger related expenses		1,046		—		3,535		—
Other noninterest expenses		13,648		13,802		26,224		25,620
Total noninterest expense		63,875		58,043		125,703		114,309
Income before income taxes		31,098		35,660		46,384		69,082
Provision for income taxes		6,538		7,654		9,528		14,795
Net income	$	24,560	$	28,006	$	36,856	$	54,287
Earnings per share - basic	$	0.90	$	1.12	$	1.35	$	2.18
Earnings per share - diluted	$	0.88	$	1.11	$	1.32	$	2.14

	For the quarter ended
($ in thousands, except per share amounts)	June 30, 2024		March 31, 2024		December 31, 2023		September 30, 2023		June 30, 2023
Total interest income	$	114,529	$	110,040	$	109,974	$	106,775	$	102,032
Total interest expense		41,630		39,234		37,905		33,365		28,197
Net interest income		72,899		70,806		72,069		73,410		73,835
Provision for credit losses		1,200		16,500		6,575		3,890		4,422
Net interest income after provision for credit losses		71,699		54,306		65,494		69,520		69,413
Noninterest income:
Service charges on deposits		5,946		5,768		5,497		5,475		5,358
Credit and debit card fees		3,007		2,803		2,966		2,996		3,057
Trust and investment advisory fees		1,493		1,463		1,356		1,398		1,478
Mortgage banking income, net		11,043		9,502		4,883		7,413		11,659
Other noninterest income		1,785		3,272		2,519		1,368		2,738
Total noninterest income		23,274		22,808		17,221		18,650		24,290
Noninterest expense:
Salaries and benefits		39,828		37,353		30,158		33,968		34,056
Occupancy and equipment		8,701		8,595		8,449		8,487		8,135
Amortization of intangible assets		652		815		829		899		2,050
Merger related expenses		1,046		2,489		—		—		—
Other noninterest expenses		13,648		12,576		12,872		12,822		13,802
Total noninterest expense		63,875		61,828		52,308		56,176		58,043
Income before income taxes		31,098		15,286		30,407		31,994		35,660
Provision for income taxes		6,538		2,990		6,393		6,762		7,654
Net income	$	24,560	$	12,296	$	24,014	$	25,232	$	28,006
Earnings per share - basic	$	0.90	$	0.46	$	0.96	$	1.01	$	1.12
Earnings per share - diluted	$	0.88	$	0.45	$	0.94	$	1.00	$	1.11

Condensed Consolidated Balance Sheets as of (Unaudited):

($ in thousands)	June 30, 2024			March 31, 2024			December 31, 2023			September 30, 2023			June 30, 2023
Assets
Cash and cash equivalents	$	535,766		$	383,605		$	479,362		$	443,887		$	492,735
Securities available-for-sale, at fair value		491,649			499,078			516,757			495,992			515,956
Securities held-to-maturity		36,310			36,640			36,983			37,410			37,883
Loans held-for-sale, at fair value		66,571			56,813			54,212			51,465			56,350
Loans		6,337,162			6,284,868			6,267,096			6,179,522			6,155,090
Allowance for credit losses		(78,960	)		(79,829	)		(80,398	)		(78,666	)		(77,362	)
Loans, net		6,258,202			6,205,039			6,186,698			6,100,856			6,077,728
Mortgage servicing rights, at fair value		80,744			78,416			76,701			81,036			78,390
Premises and equipment, net		83,320			84,063			84,842			83,733			84,483
Other real estate owned and foreclosed assets, net		4,497			4,414			4,100			8,395			10,139
Goodwill		93,483			93,483			93,483			93,483			93,483
Intangible assets, net		9,517			10,168			10,984			11,813			12,712
All other assets		339,236			329,882			335,602			348,805			337,485
Total assets	$	7,999,295		$	7,781,601		$	7,879,724		$	7,756,875		$	7,797,344
Liabilities and Stockholders' Equity
Liabilities:
Deposits:
Noninterest-bearing demand deposit accounts	$	1,562,308		$	1,517,315		$	1,530,506		$	1,610,650		$	1,667,247
Interest-bearing deposit accounts:
Interest-bearing demand accounts		538,232			542,184			534,540			440,845			379,779
Savings and money market accounts		2,505,439			2,473,255			2,446,632			2,476,097			2,441,349
NOW accounts		42,687			39,181			56,819			35,686			48,270
Certificate of deposit accounts		1,970,859			1,873,453			1,805,606			1,776,569			1,613,773
Total deposits		6,619,525			6,445,388			6,374,103			6,339,847			6,150,418
Securities sold under agreements to repurchase		20,408			20,423			24,693			25,868			32,861
Federal Home Loan Bank advances		145,000			144,810			389,468			330,000			570,585
Other borrowings		75,577			75,445			75,313			75,180			80,511
Other liabilities		142,186			130,873			138,950			142,261			139,334
Total liabilities		7,002,696			6,816,939			7,002,527			6,913,156			6,973,709
Stockholders' equity:
Preferred stock		—			—			—			—			—
Common stock		3			3			2			2			2
Additional paid-in capital		543,339			542,582			462,680			462,507			461,856
Retained earnings		494,378			469,818			457,522			433,508			408,276
Accumulated other comprehensive loss, net		(41,121	)		(47,741	)		(43,007	)		(52,298	)		(46,499	)
Total stockholders' equity		996,599			964,662			877,197			843,719			823,635
Total liabilities and stockholders' equity	$	7,999,295		$	7,781,601		$	7,879,724		$	7,756,875		$	7,797,344

Consolidated Capital Ratios as of:

	June 30, 2024		March 31, 2024		December 31, 2023		September 30, 2023		June 30, 2023
Stockholders' equity to total assets	12.46	%	12.40	%	11.13	%	10.88	%	10.56	%
Tangible stockholders' equity to tangible assets (1)	11.32	%	11.21	%	9.94	%	9.65	%	9.33	%
Tangible stockholders' equity to tangible assets reflecting net unrealized losses on HTM securities, net of tax (1) (2)	11.27	%	11.17	%	9.90	%	9.59	%	9.28	%
Tier 1 leverage ratio	11.83	%	11.73	%	10.52	%	10.37	%	10.00	%
Common equity tier 1 risk-based capital ratio	12.80	%	12.54	%	11.10	%	10.79	%	10.40	%
Tier 1 risk-based capital ratio	12.80	%	12.54	%	11.10	%	10.79	%	10.40	%
Total risk-based capital ratio	14.95	%	14.73	%	13.25	%	12.93	%	12.52	%

(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)	Tangible stockholders’ equity and tangible assets have been adjusted to reflect net unrealized losses on held-to-maturity securities, net of tax.

Summary of Net Interest Margin:

	For the quarter ended								For the six months ended
	June 30, 2024				June 30, 2023				June 30, 2024				June 30, 2023
(In thousands)	Average Balance		Average Yield/Rate		Average Balance		Average Yield/Rate		Average Balance		Average Yield/Rate		Average Balance		Average Yield/Rate
Interest Earning Assets
Loans (1)		6,384,709	6.59	%		6,220,833	6.13	%		6,349,282	6.53	%		6,125,441	6.01	%
Investment securities		523,545	3.65	%		563,902	3.00	%		535,252	3.46	%		567,273	2.96	%
Interest-bearing cash and other assets		348,509	5.25	%		176,672	5.63	%		294,009	5.35	%		166,523	5.55	%
Total earning assets		7,256,763	6.31	%		6,961,407	5.86	%		7,178,543	6.26	%		6,859,237	5.74	%
Other assets		548,465				556,105				548,553				555,040
Total assets	$	7,805,228			$	7,517,512			$	7,727,096			$	7,414,277

Interest-bearing liabilities
Demand and NOW deposits	$	621,343	3.80	%	$	332,695	2.55	%	$	585,417	3.67	%	$	280,224	2.40	%
Savings deposits		413,699	0.69	%		448,059	0.44	%		417,791	0.69	%		458,969	0.41	%
Money market deposits		2,092,449	2.01	%		2,107,379	1.11	%		2,077,885	1.97	%		2,201,401	0.99	%
Certificates of deposits		1,823,522	4.69	%		1,392,847	3.52	%		1,819,075	4.64	%		1,233,810	3.19	%
Total deposits		4,951,013	3.11	%		4,280,980	1.94	%		4,900,168	3.06	%		4,174,404	1.67	%
Repurchase agreements		16,553	1.15	%		33,673	0.80	%		18,904	1.10	%		31,683	0.62	%
Total deposits and repurchase agreements		4,967,566	3.10	%		4,314,653	1.93	%		4,919,072	3.05	%		4,206,087	1.66	%
FHLB borrowings		130,871	5.67	%		472,105	5.19	%		120,824	5.62	%		463,142	4.94	%
Other long-term borrowings		75,522	6.59	%		80,440	6.36	%		75,456	6.60	%		80,370	6.32	%
Total interest-bearing liabilities		5,173,959	3.22	%		4,867,198	2.32	%		5,115,352	3.16	%		4,749,599	2.06	%
Noninterest-bearing deposits		1,517,560				1,694,961				1,510,134				1,731,468
Other liabilities		133,845				128,118				134,106				126,343
Stockholders' equity		979,864				827,235				967,504				806,867
Total liabilities and stockholders' equity	$	7,805,228			$	7,517,512			$	7,727,096			$	7,414,277

Net interest spread			3.09	%			3.54	%			3.10	%			3.68	%
Net interest margin			4.02	%			4.24	%			4.00	%			4.31	%
Net interest margin (on FTE basis) (2)			4.08	%			4.32	%			4.07	%			4.39	%

(1)	Includes loans held-for-investment, including nonaccrual loans, and loans held-for-sale.
(2)	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.

	For the quarter ended
	June 30, 2024				March 31, 2024				December 31, 2023				September 30, 2023				June 30, 2023
(In thousands)	Average Balance		Average Yield/Rate		Average Balance		Average Yield/Rate		Average Balance		Average Yield/Rate		Average Balance		Average Yield/Rate		Average Balance		Average Yield/Rate
Interest Earning Assets
Loans (1)		6,384,709	6.59	%		6,313,855	6.48	%		6,280,362	6.51	%		6,180,684	6.44	%		6,220,833	6.13	%
Investment securities		523,545	3.65	%		546,960	3.28	%		538,348	3.28	%		545,257	3.10	%		563,902	3.00	%
Interest-bearing cash and other assets		348,509	5.25	%		239,508	5.49	%		247,978	5.50	%		221,559	5.39	%		176,672	5.63	%
Total earning assets		7,256,763	6.31	%		7,100,323	6.20	%		7,066,688	6.22	%		6,947,500	6.15	%		6,961,407	5.86	%
Other assets		548,465				548,642				563,368				557,988				556,105
Total assets	$	7,805,228			$	7,648,965			$	7,630,056			$	7,505,488			$	7,517,512

Interest-bearing liabilities
Demand and NOW deposits	$	621,343	3.80	%	$	549,491	3.54	%	$	510,982	3.45	%	$	466,837	3.27	%	$	332,695	2.55	%
Savings deposits		413,699	0.69	%		421,882	0.69	%		457,679	0.93	%		439,172	0.62	%		448,059	0.44	%
Money market deposits		2,092,449	2.01	%		2,063,321	1.93	%		2,063,383	1.82	%		2,026,028	1.58	%		2,107,379	1.11	%
Certificates of deposits		1,823,522	4.69	%		1,814,629	4.60	%		1,825,325	4.54	%		1,748,515	4.21	%		1,392,847	3.52	%
Total deposits		4,951,013	3.11	%		4,849,323	3.00	%		4,857,369	2.93	%		4,680,552	2.64	%		4,280,980	1.94	%
Repurchase agreements		16,553	1.15	%		21,254	1.06	%		23,457	1.06	%		26,549	0.98	%		33,673	0.80	%
Total deposits and repurchase agreements		4,967,566	3.10	%		4,870,577	2.99	%		4,880,826	2.92	%		4,707,101	2.63	%		4,314,653	1.93	%
FHLB borrowings		130,871	5.67	%		110,777	5.56	%		74,146	5.64	%		84,332	5.40	%		472,105	5.19	%
Other long-term borrowings		75,522	6.59	%		75,389	6.62	%		75,249	6.62	%		78,680	6.44	%		80,440	6.36	%
Total interest-bearing liabilities		5,173,959	3.22	%		5,056,743	3.10	%		5,030,221	3.01	%		4,870,113	2.74	%		4,867,198	2.32	%
Noninterest-bearing deposits		1,517,560				1,502,707				1,597,672				1,654,090				1,694,961
Other liabilities		133,845				134,370				143,416				142,027				128,118
Stockholders' equity		979,864				955,145				858,747				839,258				827,235
Total liabilities and stockholders' equity	$	7,805,228			$	7,648,965			$	7,630,056			$	7,505,488			$	7,517,512

Net interest spread			3.09	%			3.10	%			3.21	%			3.41	%			3.54	%
Net interest margin			4.02	%			3.99	%			4.08	%			4.23	%			4.24	%
Net interest margin (on FTE basis) (2)			4.08	%			4.06	%			4.15	%			4.30	%			4.32	%

(1)	Includes loans held-for-investment, including nonaccrual loans, and loans held-for-sale.
(2)	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.

Deposits as of:

($ in thousands)	June 30, 2024		March 31, 2024		December 31, 2023		September 30, 2023		June 30, 2023
Consumer
Noninterest bearing deposit accounts	$	414,795	$	356,732	$	360,168	$	366,366	$	375,583
Interest-bearing deposit accounts:
Demand and NOW deposits		42,903		38,625		36,162		33,340		34,731
Savings deposits		334,741		340,086		343,291		356,890		378,193
Money market deposits		1,243,355		1,229,239		1,196,645		1,149,365		1,174,883
Certificates of deposits		1,438,792		1,437,590		1,437,537		1,366,255		1,095,754
Total interest-bearing deposit accounts		3,059,791		3,045,540		3,013,635		2,905,850		2,683,561
Total consumer deposits	$	3,474,586	$	3,402,272	$	3,373,803	$	3,272,216	$	3,059,144
Business
Noninterest bearing deposit accounts	$	1,147,513	$	1,160,583	$	1,170,338	$	1,244,284	$	1,291,664
Interest-bearing deposit accounts:
Demand and NOW deposits		538,016		502,726		555,197		443,191		393,318
Savings deposits		77,931		80,226		80,802		85,234		30,904
Money market deposits		849,412		823,704		825,811		859,516		832,279
Certificates of deposits		90,189		97,854		87,407		77,228		77,604
Total interest-bearing deposit accounts		1,555,548		1,504,510		1,549,217		1,465,169		1,334,105
Total business deposits	$	2,703,061	$	2,665,093	$	2,719,555	$	2,709,453	$	2,625,769
Wholesale deposits (1)	$	441,878	$	378,023	$	280,745	$	358,178	$	465,505
Total deposits	$	6,619,525	$	6,445,388	$	6,374,103	$	6,339,847	$	6,150,418

(1)	Wholesale deposits primarily consist of brokered deposits included in our condensed consolidated balance sheets within certificates of deposits.

Balance Sheet Ratios as of:

	June 30, 2024		March 31, 2024		December 31, 2023		September 30, 2023		June 30, 2023
Cash to total assets (1)	6.60	%	4.80	%	6.00	%	5.60	%	6.20	%
Loan to deposit ratio	95.7	%	97.5	%	98.3	%	97.5	%	100.1	%
Uninsured deposits to total deposits (2)	32.1	%	32.0	%	31.2	%	32.0	%	32.5	%
Uninsured and uncollateralized deposits to total deposits (2)	25.5	%	25.2	%	25.1	%	25.4	%	24.1	%
Wholesale deposits and borrowings to total liabilities (3)	8.4	%	7.7	%	9.6	%	10.0	%	14.9	%

(1)		Cash consists of cash and amounts due from banks and interest-bearing deposits with other financial institutions.
(2)		Uninsured deposits and uninsured and uncollateralized deposits are reported for our wholly-owned subsidiary Sunflower Bank, N.A. and are estimated.
(3)		Wholesale deposits primarily consist of brokered deposits included in our condensed consolidated balance sheets within certificates of deposits. Wholesale borrowings consist of FHLB overnight and term advances.

Loan Portfolio as of:

($ in thousands)	June 30, 2024		March 31, 2024		December 31, 2023		September 30, 2023		June 30, 2023
Commercial and industrial	$	2,431,110	$	2,480,078	$	2,467,688	$	2,459,358	$	2,474,531
Commercial real estate:
Non-owner occupied		866,999		836,515		812,235		767,135		723,365
Owner occupied		660,511		642,930		635,365		631,352		643,191
Construction and land		350,878		326,447		345,430		329,433		316,399
Multifamily		94,220		94,898		103,066		114,535		100,464
Total commercial real estate		1,972,608		1,900,790		1,896,096		1,842,455		1,783,419
Residential real estate		1,146,989		1,109,676		1,110,610		1,059,074		1,082,991
Public Finance		537,872		579,991		602,913		602,844		611,748
Consumer		42,129		40,317		36,371		37,681		39,909
Other		206,454		174,016		153,418		178,110		162,492
Total loans, net of deferred costs, fees, premiums, and discounts	$	6,337,162	$	6,284,868	$	6,267,096	$	6,179,522	$	6,155,090

Asset Quality:

	As of and for the quarter ended
($ in thousands)	June 30, 2024			March 31, 2024			December 31, 2023			September 30, 2023			June 30, 2023
Net charge-offs	$	2,009		$	17,429		$	4,743		$	2,296		$	717
Allowance for credit losses	$	78,960		$	79,829		$	80,398		$	78,666		$	77,362
Nonperforming loans, including nonaccrual loans, and accrual loans greater than 90 days past due	$	62,558		$	57,599		$	63,143		$	40,743		$	67,840
Nonperforming assets	$	67,055		$	62,013		$	67,243		$	49,138		$	77,979
Ratio of net charge-offs to average loans outstanding		0.13	%		1.11	%		0.30	%		0.15	%		0.05	%
Allowance for credit losses to total loans outstanding		1.25	%		1.27	%		1.28	%		1.27	%		1.26	%
Allowance for credit losses to total nonperforming loans		126.22	%		138.59	%		127.33	%		193.08	%		114.04	%
Nonperforming loans to total loans		0.99	%		0.92	%		1.01	%		0.66	%		1.10	%
Nonperforming assets to total assets		0.84	%		0.80	%		0.85	%		0.63	%		1.00	%

Non-GAAP Financial Measures and Reconciliations:

	As of and for the quarter ended															As of and for the six months ended
($ in thousands, except share and per share amounts)	June 30, 2024			March 31, 2024			December 31, 2023			September 30, 2023			June 30, 2023			June 30, 2024			June 30, 2023
Tangible stockholders’ equity:
Total stockholders' equity (GAAP)	$	996,599		$	964,662		$	877,197		$	843,719		$	823,635		$	996,599		$	823,635
Less: Goodwill and other intangible assets:
Goodwill		(93,483	)		(93,483	)		(93,483	)		(93,483	)		(93,483	)		(93,483	)		(93,483	)
Other intangible assets		(9,517	)		(10,168	)		(10,984	)		(11,813	)		(12,712	)		(9,517	)		(12,712	)
Tangible stockholders' equity (non-GAAP)	$	893,599		$	861,011		$	772,730		$	738,423		$	717,440		$	893,599		$	717,440
Tangible assets:
Total assets (GAAP)	$	7,999,295		$	7,781,601		$	7,879,724		$	7,756,875		$	7,797,344		$	7,999,295		$	7,797,344
Less: Goodwill and other intangible assets:
Goodwill		(93,483	)		(93,483	)		(93,483	)		(93,483	)		(93,483	)		(93,483	)		(93,483	)
Other intangible assets		(9,517	)		(10,168	)		(10,984	)		(11,813	)		(12,712	)		(9,517	)		(12,712	)
Tangible assets (non-GAAP)	$	7,896,295		$	7,677,950		$	7,775,257		$	7,651,579		$	7,691,149		$	7,896,295		$	7,691,149
Tangible stockholders’ equity to tangible assets:
Total stockholders' equity to total assets (GAAP)		12.46	%		12.40	%		11.13	%		10.88	%		10.56	%		12.46	%		10.56	%
Less: Impact of goodwill and other intangible assets		(1.14	)%		(1.19	)%		(1.19	)%		(1.23	)%		(1.23	)%		(1.14	)%		(1.23	)%
Tangible stockholders' equity to tangible assets (non-GAAP)		11.32	%		11.21	%		9.94	%		9.65	%		9.33	%		11.32	%		9.33	%
Tangible stockholders’ equity to tangible assets, reflecting net unrealized losses on HTM securities, net of tax:
Tangible stockholders' equity (non-GAAP)	$	893,599		$	861,011		$	772,730		$	738,423		$	717,440		$	893,599		$	717,440
Less: Net unrealized losses on HTM securities, net of tax		(3,949	)		(4,236	)		(3,629	)		(5,001	)		(3,821	)		(3,949	)		(3,821	)
Tangible stockholders’ equity less net unrealized losses on HTM securities, net of tax (non-GAAP)	$	889,650		$	856,775		$	769,101		$	733,422		$	713,619		$	889,650		$	713,619
Tangible assets (non-GAAP)	$	7,896,295		$	7,677,950		$	7,775,257		$	7,651,579		$	7,691,149		$	7,896,295		$	7,691,149
Less: Net unrealized losses on HTM securities, net of tax		(3,949	)		(4,236	)		(3,629	)		(5,001	)		(3,821	)		(3,949	)		(3,821	)
Tangible assets less net unrealized losses on HTM securities, net of tax (non-GAAP)	$	7,892,346		$	7,673,714		$	7,771,628		$	7,646,578		$	7,687,328		$	7,892,346		$	7,687,328

Tangible stockholders’ equity to tangible assets (non-GAAP)		11.32	%		11.21	%		9.94	%		9.65	%		9.33	%		11.32	%		9.33	%
Less: Net unrealized losses on HTM securities, net of tax		(0.05	)%		(0.04	)%		(0.04	)%		(0.06	)%		(0.05	)%		(0.05	)%		(0.05	)%
Tangible stockholders’ equity to tangible assets reflecting net unrealized losses on HTM securities, net of tax (non-GAAP)		11.27	%		11.17	%		9.90	%		9.59	%		9.28	%		11.27	%		9.28	%
Tangible book value per share:
Total stockholders' equity (GAAP)	$	996,599		$	964,662		$	877,197		$	843,719		$	823,635		$	996,599		$	823,635
Tangible stockholders' equity (non-GAAP)	$	893,599		$	861,011		$	772,730		$	738,423		$	717,440		$	893,599		$	717,440
Total shares outstanding		27,443,246			27,442,943			24,960,639			24,942,645			24,941,468			27,443,246			24,941,468
Book value per share (GAAP)	$	36.31		$	35.15		$	35.14		$	33.83		$	33.02		$	36.31		$	33.02
Tangible book value per share (non-GAAP)	$	32.56		$	31.37		$	30.96		$	29.60		$	28.76		$	32.56		$	28.76
Net income excluding merger costs:
Net income (GAAP)	$	24,560		$	12,296		$	24,014		$	25,232		$	28,006		$	36,856		$	54,287
Add: Merger costs
Merger related expenses		1,046			2,489			—			—			—			3,535			—
Income tax effect on merger related expenses		(425	)		(193	)		—			—			—			(618	)		—
Total merger costs, net of tax		621			2,296			—			—			—			2,917			—
Net income excluding merger costs (non-GAAP)	$	25,181		$	14,592		$	24,014		$	25,232		$	28,006		$	39,773		$	54,287
Return on average total assets excluding merger costs:
Return on average total assets (ROAA) (GAAP)		1.26	%		0.64	%		1.26	%		1.34	%		1.49	%		0.95	%		1.46	%
Add: Impact of merger costs, net of tax		0.03	%		0.12	%		—	%		—	%		—	%		0.08	%		—	%
ROAA excluding merger costs (non-GAAP)		1.29	%		0.76	%		1.26	%		1.34	%		1.49	%		1.03	%		1.46	%
Return on average stockholders’ equity excluding merger costs:
Return on average stockholders' equity (ROAE) (GAAP)		10.03	%		5.15	%		11.19	%		12.03	%		13.54	%		7.62	%		13.46	%
Add: Impact of merger costs, net of tax		0.25	%		0.96	%		—	%		—	%		—	%		0.60	%		—	%
ROAE excluding merger costs (non-GAAP)		10.28	%		6.11	%		11.19	%		12.03	%		13.54	%		8.22	%		13.46	%
Efficiency ratio excluding merger related expenses:
Efficiency ratio (GAAP)		66.42	%		66.05	%		58.58	%		61.02	%		59.15	%		66.23	%		59.79	%
Less: Impact of merger related expenses		(1.09	)%		(2.66	)%		—	%		—	%		—	%		(1.86	)%		—	%
Efficiency ratio excluding merger related expenses (non-GAAP)		65.33	%		63.39	%		58.58	%		61.02	%		59.15	%		64.37	%		59.79	%

Diluted earnings per share excluding merger costs:
Diluted earnings per share (GAAP)	$	0.88		$	0.45		$	0.94		$	1.00		$	1.11		$	1.32		$	2.14
Add: Impact of merger costs, net of tax		0.02			0.08			—			—			—			0.11			—
Diluted earnings per share excluding merger costs (non-GAAP)	$	0.90		$	0.53		$	0.94		$	1.00		$	1.11		$	1.43		$	2.14
Fully tax equivalent (“FTE”) net interest income and net interest margin on FTE basis:
Net interest income (GAAP)	$	72,899		$	70,806		$	72,069		$	73,410		$	73,835		$	143,705		$	147,952
Gross income effect of tax exempt income		1,156			1,318			1,270			1,286			1,288			2,475			2,530
FTE net interest income (non-GAAP)	$	74,055		$	72,124		$	73,339		$	74,696		$	75,123		$	146,180		$	150,482
Average earning assets	$	7,256,763		$	7,100,323		$	7,066,688		$	6,947,500		$	6,961,407		$	7,178,543		$	6,859,237
Net interest margin		4.02	%		3.99	%		4.08	%		4.23	%		4.24	%		4.00	%		4.31	%
Net interest margin on FTE basis (non-GAAP)		4.08	%		4.06	%		4.15	%		4.30	%		4.32	%		4.07	%		4.39	%