FirstSun Capital Bancorp (FSUN)
We aren’t fans of FirstSun Capital Bancorp. Its weak sales growth and low returns on capital show it struggled to generate demand and profits.― StockStory Analyst Team
1. News
2. Summary
Why We Think FirstSun Capital Bancorp Will Underperform
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.
- Estimated tangible book value per share decline of 4% for the next 12 months implies a challenging profitability environment
- Annual revenue growth of 8.5% over the last five years was below our standards for the banking sector
- On the plus side, its projected net interest income growth of 50.3% for the next 12 months is above its five-year trend, pointing to accelerating demand
FirstSun Capital Bancorp falls short of our quality standards. Better stocks can be found in the market.
Why There Are Better Opportunities Than FirstSun Capital Bancorp
At $39.76 per share, FirstSun Capital Bancorp trades at 0.9x forward P/B. FirstSun Capital Bancorp’s multiple may seem like a great deal among banking peers, but we think there are valid reasons why it’s this cheap.
Cheap stocks can look like a great deal at first glance, but they can be value traps. They often have less earnings power, meaning there is more reliance on a re-rating to generate good returns - an unlikely scenario for low-quality companies.
3. FirstSun Capital Bancorp (FSUN) Research Report: Q3 CY2025 Update
Regional banking company FirstSun Capital Bancorp (NASDAQ:FSUN) fell short of the markets revenue expectations in Q3 CY2025 as sales rose 4.2% year on year to $97.19 million. Its GAAP profit of $0.82 per share was 7.6% below analysts’ consensus estimates.
FirstSun Capital Bancorp (FSUN) Q3 CY2025 Highlights:
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.
FirstSun delivers its services through two primary subsidiaries: Sunflower Bank (which operates under the brands Sunflower Bank and First National 1870) and Guardian Mortgage. The company maintains a branch network spanning Texas, Kansas, Colorado, New Mexico, and Arizona, with mortgage banking capabilities extending to 43 states.
The bank's commercial lending portfolio includes specialized offerings like commercial and industrial loans, structured finance products, asset-based lending, and healthcare financing. These loans typically fund working capital needs, equipment purchases, and business expansions. FirstSun also provides commercial real estate financing for properties ranging from office buildings and warehouses to healthcare facilities and hotels.
For individual consumers, FirstSun offers residential mortgages, home equity loans, and personal loans for purchases like vehicles or boats. A business owner in Dallas might use FirstSun's commercial line of credit to manage seasonal inventory fluctuations, while a family in Denver might secure a mortgage through Guardian to purchase their first home.
The company generates revenue primarily through interest income on loans and investments, as well as through fees from deposit accounts, wealth management services, and mortgage origination. FirstSun's wealth management division provides personalized services including private banking, investment management, trust administration, and retirement planning.
Beyond traditional banking, FirstSun offers treasury management solutions that help businesses optimize cash flow, manage payments, and mitigate fraud risk. The company also participates in the SBA Preferred Lender's Program, allowing it to streamline the approval process for small business loans backed by the Small Business Administration.
4. Regional Banks
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).
5. Sales Growth
In general, banks make money from two primary sources. The first is net interest income, which is interest earned on loans, mortgages, and investments in securities minus interest paid out on deposits. The second source is non-interest income, which can come from bank account, credit card, wealth management, investing banking, and trading fees. Over the last five years, FirstSun Capital Bancorp grew its revenue at a mediocre 8.5% compounded annual growth rate. This fell short of our benchmark for the banking sector and is a rough starting point for our analysis.
Long-term growth is the most important, but within financials, a half-decade historical view may miss recent interest rate changes and market returns. FirstSun Capital Bancorp’s recent performance shows its demand has slowed as its annualized revenue growth of 3.7% over the last two years was 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’s revenue grew by 4.2% year on year to $97.19 million, falling short of Wall Street’s estimates.
Net interest income made up 74.5% of the company’s total revenue during the last five years, meaning lending operations are FirstSun Capital Bancorp’s largest source of revenue.
Our experience and research show the market cares primarily about a bank’s net interest income growth as non-interest income is considered a lower-quality and non-recurring revenue source.
6. Efficiency Ratio
The underlying profitability of top-line growth determines the actual bottom-line impact. Banking institutions measure this dynamic using the efficiency ratio, which is calculated by dividing non-interest expenses like personnel, facilities, technology, and marketing by total revenue.
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 five years, FirstSun Capital Bancorp’s efficiency ratio has swelled by 7.7 percentage points, going from 79.4% to 64.6%. Said differently, the company’s expenses have grown at a slower rate than revenue, which typically signals prudent management.
In Q3, FirstSun Capital Bancorp’s efficiency ratio was 64.2%, falling short of analysts’ expectations by 102 basis points (100 basis points = 1 percentage point). This result was in line with 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 64.9%.
7. Tangible Book Value Per Share (TBVPS)
Banks operate as balance sheet businesses, with profits generated through borrowing and lending activities. Valuations reflect this reality, emphasizing balance sheet strength and long-term book value compounding ability.
Because of this, tangible book value per share (TBVPS) emerges as the critical performance benchmark. By excluding intangible assets with uncertain liquidation values, this metric captures real, liquid net worth per share. Other (and more commonly known) per-share metrics like EPS can sometimes be murky due to M&A or accounting rules allowing for loan losses to be spread out.
FirstSun Capital Bancorp’s TBVPS grew at an exceptional 9.1% annual clip over the last four years. TBVPS growth has also accelerated recently, growing by 11.7% annually over the last two years from $29.60 to $36.92 per share.
Over the next 12 months, Consensus estimates call for FirstSun Capital Bancorp’s TBVPS to shrink by 4% to $35.43, a sour projection.
8. Balance Sheet Assessment
Leverage is core to a financial firm’s business model (loans funded by deposits). To ensure economic stability and avoid a repeat of the 2008 GFC, regulators require certain levels of capital and liquidity, focusing on the Tier 1 capital ratio.
Tier 1 capital is the highest-quality capital that a firm 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 firms 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, firms 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 12.9%, which is considered safe and well capitalized in the event that macro or market conditions suddenly deteriorate.
9. Return on Equity
Return on equity (ROE) measures how effectively banks generate profit from each dollar of shareholder equity - a critical funding source. High-ROE institutions typically compound shareholder wealth faster over time through retained earnings, share repurchases, and dividend payments.
Over the last five years, FirstSun Capital Bancorp has averaged an ROE of 9.2%, uninspiring for a company operating in a sector where the average shakes out around 7.5%.
10. Key Takeaways from FirstSun Capital Bancorp’s Q3 Results
It was good to see FirstSun Capital Bancorp narrowly top analysts’ tangible book value per share expectations this quarter. On the other hand, its revenue missed and its EPS fell short of Wall Street’s estimates. Overall, this quarter could have been better. The stock remained flat at $38.82 immediately after reporting.
11. Is Now The Time To Buy FirstSun Capital Bancorp?
Updated: December 19, 2025 at 12:16 AM 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 isn’t a terrible business, but it doesn’t pass our bar. First off, 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 0.9x. This valuation multiple is fair, but we don’t have much faith in the company. We're pretty confident there are superior stocks to buy right now.
Wall Street analysts have a consensus one-year price target of $45 on the company (compared to the current share price of $39.76).