FirstSun Capital Bancorp (FSUN)

Regional banking company FirstSun Capital Bancorp (NASDAQ:FSUN) reported Q2 CY2025 results exceeding the market’s revenue expectations, with sales up 11.2% year on year to $105.6 million. Its GAAP profit of $0.93 per share was 5.1% above analysts’ consensus estimates.

Company Overview

Tracing its roots back to 1892 when it first opened its doors in Kansas, FirstSun Capital Bancorp (NASDAQ:FSUN) operates Sunflower Bank, providing commercial and consumer banking services to businesses and individuals across the Southwest region.

Regional banks, financial institutions operating within specific geographic areas, serve as intermediaries between local depositors and borrowers. They benefit from rising interest rates that improve net interest margins (the difference between loan yields and deposit costs), digital transformation reducing operational expenses, and local economic growth driving loan demand. However, these banks face headwinds from fintech competition, deposit outflows to higher-yielding alternatives, credit deterioration (increasing loan defaults) during economic slowdowns, and regulatory compliance costs. Recent concerns about regional bank stability following high-profile failures and significant commercial real estate exposure present additional challenges.

FirstSun Capital Bancorp competes with other regional banks operating in the Southwest, including Prosperity Bancshares (NYSE:PB), Cullen/Frost Bankers (NYSE:CFR), BOK Financial (NASDAQ:BOKF), and Western Alliance Bancorporation (NYSE:WAL).

Net interest income and and fee-based revenue are the two pillars supporting bank earnings. The former captures profit from the gap between lending rates and deposit costs, while the latter encompasses charges for banking services, credit products, wealth management, and trading activities.

Luckily, FirstSun Capital Bancorp’s revenue grew at an impressive 10.4% compounded annual growth rate over the last five years. Its growth surpassed the average bank company and shows its offerings resonate with customers, a great starting point for our analysis.

We at StockStory place the most emphasis on long-term growth, but within financials, a half-decade historical view may miss recent interest rate changes, market returns, and industry trends. FirstSun Capital Bancorp’s recent performance shows its demand has slowed significantly as its annualized revenue growth of 3.5% over the last two years was well below its five-year trend. Note: Quarters not shown were determined to be outliers, impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.

This quarter, FirstSun Capital Bancorp reported year-on-year revenue growth of 11.2%, and its $105.6 million of revenue exceeded Wall Street’s estimates by 2.2%.

Net interest income made up 72.6% of the company’s total revenue during the last five years, meaning lending operations are FirstSun Capital Bancorp’s largest source of revenue.

While banks generate revenue from multiple sources, investors view net interest income as the cornerstone - its predictable, recurring characteristics stand in sharp contrast to the volatility of non-interest income.

Topline growth alone doesn't tell the complete story - the profitability of that growth shapes actual earnings impact. Banks track this dynamic through efficiency ratios, which compare non-interest expenses such as personnel, rent, IT, and marketing costs to total revenue streams.

Investors place greater emphasis on efficiency ratio movements than absolute values, understanding that expense structures reflect revenue mix variations. Lower ratios represent better operational performance since they show banks generating more revenue per dollar of expense.

Over the last four years, FirstSun Capital Bancorp’s efficiency ratio has decreased by 11.8 percentage points, clocking in at 64.6% for the past 12 months. Said differently, the company’s expenses have grown at a slower rate than revenue, which is always a positive sign.

In Q2, FirstSun Capital Bancorp’s efficiency ratio was 64.5%, falling short of analysts’ expectations by 0.7%. This print was 0.8 percentage points better than the same quarter last year.

For the next 12 months, Wall Street expects FirstSun Capital Bancorp to maintain its trailing one-year ratio with a projection of 64.7%.

Banks profit by intermediating between depositors and borrowers, making them fundamentally balance sheet-driven enterprises. Market participants emphasize balance sheet quality and sustained book value growth when evaluating these institutions.

This is why we consider tangible book value per share (TBVPS) the most important metric to track for banks. TBVPS represents the real, liquid net worth per share of a bank, excluding intangible assets that have debatable value upon liquidation. EPS can become murky due to acquisition impacts or accounting flexibility around loan provisions, and TBVPS resists financial engineering manipulation.

FirstSun Capital Bancorp’s TBVPS grew at an excellent 8.7% annual clip over the last four years. TBVPS growth has also accelerated recently, growing by 11.5% annually over the last two years from $28.76 to $35.77 per share.

Over the next 12 months, Consensus estimates call for FirstSun Capital Bancorp’s TBVPS to grow by 10.5% to $39.52, solid growth rate.

Leverage is core to the bank’s business model (loans funded by deposits) and to ensure their stability, regulators require certain levels of capital and liquidity, focusing on a bank’s Tier 1 capital ratio.

Tier 1 capital is the highest-quality capital that a bank holds, consisting primarily of common stock and retained earnings, but also physical gold. It serves as the primary cushion against losses and is the first line of defense in times of financial distress.

This capital is divided by risk-weighted assets to derive the Tier 1 capital ratio. Risk-weighted means that cash and US treasury securities are assigned little risk while unsecured consumer loans and equity investments get much higher risk weights, for example.

New regulation after the 2008 financial crisis requires that all banks must maintain a Tier 1 capital ratio greater than 4.5% On top of this, there are additional buffers based on scale, risk profile, and other regulatory classifications, so that at the end of the day, banks generally must maintain a 7-10% ratio at minimum.

Over the last two years, FirstSun Capital Bancorp has averaged a Tier 1 capital ratio of 12.6%, which is considered safe and well capitalized in the event that macro or market conditions suddenly deteriorate.

Return on equity, or ROE, quantifies bank profitability relative to shareholder equity — an essential capital source for these institutions. Over extended periods, superior ROE performance drives faster shareholder wealth compounding through reinvestment, share repurchases, and dividend growth.

Over the last five years, FirstSun Capital Bancorp has averaged an ROE of 9.3%, healthy for a company operating in a sector where the average shakes out around 7.5% and those putting up 15%+ are greatly admired. This shows FirstSun Capital Bancorp has a decent competitive moat.

It was encouraging to see FirstSun Capital Bancorp beat analysts’ revenue expectations this quarter. Overall, this print had some key positives. The stock remained flat at $39.27 immediately after reporting.

Updated: December 4, 2025 at 11:23 PM EST

The latest quarterly earnings matters, sure, but we actually think longer-term fundamentals and valuation matter more. Investors should consider all these pieces before deciding whether or not to invest in FirstSun Capital Bancorp.

FirstSun Capital Bancorp’s business quality ultimately falls short of our standards. To begin with, its revenue growth was mediocre over the last five years. And while its estimated net interest income growth for the next 12 months is great, the downside is its estimated sales for the next 12 months are weak. On top of that, its projected EPS for the next year is lacking.

FirstSun Capital Bancorp’s P/B ratio based on the next 12 months is 0.8x. This valuation is reasonable, but the company’s shakier fundamentals present too much downside risk. We're fairly confident there are better stocks to buy right now.

Wall Street analysts have a consensus one-year price target of $43.25 on the company (compared to the current share price of $35.09).

Although the price target is bullish, readers should exercise caution because analysts tend to be overly optimistic. The firms they work for, often big banks, have relationships with companies that extend into fundraising, M&A advisory, and other rewarding business lines. As a result, they typically hesitate to say bad things for fear they will lose out. We at StockStory do not suffer from such conflicts of interest, so we’ll always tell it like it is.