FirstSun Capital Bancorp (FSUN)
We’re cautious 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.
- Tangible book value per share is projected to decrease by 3.6% over the next 12 months as capital generation weakens
- ROE of 9.2% reflects management’s challenges in identifying attractive investment opportunities
- A positive is that its exciting net interest income outlook for the upcoming 12 months calls for 69.9% growth, an acceleration from its five-year trend
FirstSun Capital Bancorp is skating on thin ice. More profitable opportunities exist elsewhere.
Why There Are Better Opportunities Than FirstSun Capital Bancorp
FirstSun Capital Bancorp is trading at $37.88 per share, or 0.9x forward P/B. FirstSun Capital Bancorp’s valuation may seem like a bargain, especially when stacked up against other banking companies. We remind you that you often get what you pay for, though.
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: Q4 CY2025 Update
Regional banking company FirstSun Capital Bancorp (NASDAQ:FSUN) reported Q4 CY2025 results beating Wall Street’s revenue expectations, with sales up 17.4% year on year to $110.2 million. Its GAAP profit of $0.88 per share was 7.3% above analysts’ consensus estimates.
FirstSun Capital Bancorp (FSUN) Q4 CY2025 Highlights:
- Net Interest Income: $83.46 million vs analyst estimates of $82.65 million (8.3% year-on-year growth, 1% beat)
- Net Interest Margin: 4.2% vs analyst estimates of 4.1% (4.7 basis point beat)
- Revenue: $110.2 million vs analyst estimates of $107.6 million (17.4% year-on-year growth, 2.4% beat)
- Efficiency Ratio: 65.4% vs analyst estimates of 64.5% (89.5 basis point miss)
- EPS (GAAP): $0.88 vs analyst estimates of $0.82 (7.3% beat)
- Tangible Book Value per Share: $37.83 vs analyst estimates of $37.78 (11.5% year-on-year growth, in line)
- Market Capitalization: $1.05 billion
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 8.9% compounded annual growth rate. This was below our standard for the banking sector and is a tough 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 as its annualized revenue growth of 6.4% 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 reported year-on-year revenue growth of 17.4%, and its $110.2 million of revenue exceeded Wall Street’s estimates by 2.4%.
Net interest income made up 75.6% 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.
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.
Markets emphasize efficiency ratio trends over static measurements, recognizing that revenue compositions drive different expense bases. Lower efficiency ratios signal superior performance by indicating that banks are controlling costs effectively relative to their income.
Over the last five years, FirstSun Capital Bancorp’s efficiency ratio has swelled by 7.6 percentage points, going from 79.4% to 64.8%. Said differently, the company’s expenses have grown at a slower rate than revenue, which typically signals prudent management.
In Q4, FirstSun Capital Bancorp’s efficiency ratio was 65.4%, falling short of analysts’ expectations by 89.5 basis points (100 basis points = 1 percentage point).
For the next 12 months, Wall Street expects FirstSun Capital Bancorp to maintain its trailing one-year ratio with a projection of 63.8%.
7. Tangible Book Value Per Share (TBVPS)
Banks are balance sheet-driven businesses because they generate earnings primarily through borrowing and lending. They’re also valued based on their balance sheet strength and ability to compound book value (another name for shareholders’ equity) over time.
When analyzing banks, tangible book value per share (TBVPS) takes precedence over many other metrics. This measure isolates genuine per-share value by removing intangible assets of debatable liquidation worth. 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 exceptional 9.4% annual clip over the last five years. TBVPS growth has also accelerated recently, growing by 10.5% annually over the last two years from $30.96 to $37.83 per share.
Over the next 12 months, Consensus estimates call for FirstSun Capital Bancorp’s TBVPS to shrink by 3.6% to $36.48, 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 13.3%, which is considered safe and well capitalized in the event that macro or market conditions suddenly deteriorate.
9. Return on Equity
Return on equity, or ROE, tells us how much profit a company generates for each dollar of shareholder equity, a key funding source for banks. Over a long period, banks with high ROE tend to compound shareholder wealth faster through retained earnings, buybacks, and dividends.
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 Q4 Results
It was encouraging to see FirstSun Capital Bancorp beat analysts’ revenue expectations this quarter. We were also happy its net interest income narrowly outperformed Wall Street’s estimates. Overall, this print had some key positives. The stock remained flat at $37.88 immediately following the results.
11. Is Now The Time To Buy FirstSun Capital Bancorp?
Updated: January 26, 2026 at 11:34 PM EST
Are you wondering whether to buy FirstSun Capital Bancorp or pass? We urge investors to not only consider the latest earnings results but also longer-term business quality and valuation as well.
FirstSun Capital Bancorp’s business quality ultimately falls short of our standards. For starters, 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. While this valuation is fair, the upside isn’t great compared to the potential downside. We're pretty confident there are more exciting stocks to buy at the moment.
Wall Street analysts have a consensus one-year price target of $45 on the company (compared to the current share price of $37.88).
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.