FirstSun Capital Q2 adjusted EPS misses estimates as charge-offs weigh

Overview

• US regional bank's Q2 adjusted EPS missed analyst expectations after First Foundation merger

• Company posted net loss on merger expenses and two large loan charge-offs

• Board authorized $150 mln share repurchase program

Outlook

• FirstSun Capital Bancorp authorized a $150 mln share repurchase program through June 30, 2027

• Company says it is well positioned for future success after acquisition and balance sheet repositioning

Result Drivers

• MERGER IMPACT - Q2 results included significant increases in assets, loans, deposits, and expenses following the First Foundation acquisition

• MERGER AND INTEGRATION EXPENSES - Company incurred $57.6 mln in merger-related costs, contributing to the net loss

• LOAN CHARGE-OFFS - Two large commercial loan charge-offs, including one linked to alleged borrower fraud, drove higher credit loss provisions

Company press release: ID:nBw6jz1Kma

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "strong buy" and the breakdown of recommendations is 4 "strong buy" or "buy", no "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the banks peer group is "buy."

• Wall Street's median 12-month price target for Firstsun Capital Bancorp is $44.50, about 29% above its July 24 closing price of $34.49

• The stock recently traded at 9 times the next 12-month earnings vs. a P/E of 9 three months ago

Reuters Recommended Reads

• July 27 - NBT Bancorp Q2 net income more than doubles on Evans acquisition

• July 27 - HBT Financial Q2 adjusted EPS beats on CNB acquisition; raises dividend

• July 27 - Citizens Community Bancorp Q2 profit drops on higher credit losses

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)