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Item 8. Financial Statements and Supplementary Data

2025-03-07 compared with 2024-03-07 · 311 added, 328 removed, 1676 unchanged (28% of the section changed)

8 unchanged sentences

Note 1 - Basis of Presentation, Description of Business and Summary of Significant Accounting Policies

Note 2 - Merger with Pioneer Bancshares, Inc.

Note 2 - Securities

10 unchanged sentences

Note 1 3 - Earnings Per Share

Note 15 - Accumulated Other Comprehensive Income

Note 1 4 - Stockholders' Equity

9 unchanged sentences

Note 2 4 - Revenue from Contracts with Customers

Note 27 - Subsequent Events

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Stockholders and the Board of Directors of FirstSun Capital Bancorp and Subsidiaries

Stockholders and the Board of Directors of

FirstSun Capital Bancorp and Subsidiaries

Denver, Colorado

4 unchanged sentences

As discussed in Note 1 to the financial statements, the Company has changed its method of accounting for credit losses effective January 1, 2023 due to the adoption of ASU 2016-13 Financial Instruments – Credit Losses (ASC Topic 326).

The Company adopted the new credit loss standard using the modified retrospective method such that prior period amounts are not adjusted and continue to be reported in accordance with previously applicable generally accepted accounting principles.

The Company adopted the new credit loss standard using the modified retrospective method such that amounts in periods prior to January 1, 2023 are not adjusted and continue to be reported in accordance with previously applicable generally accepted accounting principles.

Basis for Opinion

42 unchanged sentences

Federal Home Loan Bank advances 135,000 389,468

Convertible notes payable, net — 5,355

Subordinated debt, net 75,841 75,313

39 unchanged sentences

Service charges on deposit accounts 9,495 9,940 9,857

Treasury management service fees 14,829 11,724 8,827

Credit and debit card fees 11,153 11,681 11,038

7 unchanged sentences

Occupancy and equipment 36,282 33,426 31,344

Amortization of intangible assets 4,822 4,215 1,417

Amortization and impairment of intangible assets 3,549 4,822 4,215

Terminated merger related expenses 13,178 — —

Merger related expenses — — 18,751

4 unchanged sentences

Net income $ 75,628 $ 103,533 $ 59,182

Other comprehensive income, net of tax:

Gain (loss) on securities available-for-sale 758 ( 47,821 ) ( 7,455 )

Gain on fair value hedges of securities available-for-sale 218 2,174 —

Other comprehensive income (loss), net of tax 976 ( 45,647 ) ( 7,455 )

Other comprehensive income (loss):

Net unrealized gain (loss) on securities available-for-sale 3,895 976 ( 45,647 )

Other comprehensive income (loss) 3,895 976 ( 45,647 )

Comprehensive income $ 79,523 $ 104,509 $ 13,535

13 unchanged sentences

January 1, 2022 19,903,342 $ 2 $ 261,905 $ ( 38,148 ) $ 298,615 $ 1,664 $ 524,038

Issuance of common stock on restricted stock grants 24,629 — 812 — — — 812

Share-based compensation, net of forfeitures — — 1,730 — — — 1,730

Net income — — — — 43,164 — 43,164

Other comprehensive income — — — — — ( 7,455 ) ( 7,455 )

Balance as of

December 31, 2021 19,903,342 $ 2 $ 261,905 $ ( 38,148 ) $ 298,615 $ 1,664 $ 524,038

Merger with Pioneer Bancshares, Inc.

1 unchanged sentence

4,910,412 — 197,946 38,148 — — 236,094

Issuance of common stock on restricted stock grants 11,344 — 270 — — — 270

Issuance of common stock on restricted stock grants (See Note 1 4 - Stockholders ’ Equity )

11,344 — 270 — — — 270

Stock option exercises 95,886 — ( 579 ) — — — ( 579 )

6 unchanged sentences

Adjusted beginning balance 24,920,984 2 460,720 — 353,989 ( 43,983 ) 770,728

Issuance of common stock on restricted stock grants 15,007 — 371 — — — 371

Issuance of common stock on restricted stock grants (See Note 1 4 - Stockholders’ Equity )

15,007 — 371 — — — 371

Stock option exercises 24,648 — ( 167 ) — — — ( 167 )

4 unchanged sentences

December 31, 2023 24,960,639 $ 2 $ 462,680 $ — $ 457,522 $ ( 43,007 ) $ 877,197

Issuance of common stock, net of issuance costs 2,461,538 1 79,433 — — — 79,434

Issuance of common stock on restricted stock grants, net of forfeiture (See Note 1 4 - Stockholders’ Equity )

10,998 — 464 — — — 464

Stock option exercises 276,504 — 2,837 — — — 2,837

Share-based compensation, net of forfeitures — — 1,911 — — — 1,911

Net income — — — — 75,628 — 75,628

Other comprehensive income — — — — — 3,895 3,895

Balance as of

December 31, 2024 27,709,679 $ 3 $ 547,325 $ — $ 533,150 $ ( 39,112 ) $ 1,041,366

The accompanying notes are an integral part of these consolidated financial statements.

22 unchanged sentences

Impairment of other real estate owned and foreclosed assets 133 286 94

Impairment of other intangible assets 780 — —

Federal Home Loan Bank stock dividends ( 789 ) ( 1,560 ) ( 712 )

1 unchanged sentence

Decrease (increase) in fair value of mortgage servicing rights 4,714 6,649 ( 12,418 )

Net loss on sales of loans held-for-investment — — 701

Net loss on disposal of premises and equipment 397 120 86

24 unchanged sentences

Purchases of available-for-sale securities ( 9,425 ) ( 21,555 ) ( 66,606 )

Proceeds from sale or maturities of available-for-sale securities 41,669 170,410 131,899

Proceeds from sales or maturities of available-for-sale securities 60,309 41,669 170,410

Loan originations, net of repayments ( 129,465 ) ( 362,778 ) ( 1,064,293 )

Proceeds from the sale of loans held-for-sale previously classified as held-for-investment — — 18,544

Purchases of premises and equipment ( 5,412 ) ( 4,268 ) ( 2,196 )

Proceeds from the sale of premises and equipment — 2 5

Proceeds from sales of premises and equipment — — 2

Proceeds from sales of other real estate owned and foreclosed assets 1,077 5,952 867

Proceeds from bank-owned life insurance 725 — —

Purchases of restricted equity securities ( 44,721 ) ( 51,076 ) ( 39,785 )

25 unchanged sentences

Right-of-use lease assets obtained in exchange for lessee operating lease liabilities $ 4,960 $ 2,696 $ 35,212

Net change in unrealized loss on available-for-sale securities and unrealized gain on fair value hedges of securities available-for-sale $ 1,291 $ ( 45,647 ) $ ( 9,870 )

Net change in unrealized gain (loss) on available-for-sale securities $ 5,156 $ 1,291 $ ( 45,647 )

Loan charge-offs $ 21,694 $ 9,672 $ 2,587

13 unchanged sentences

These entities are collectively referred to as “our”, “us”, “we”, or “the Company”.

Nature of Operations - The Bank’s headquarters were relocated to Dallas, Texas from Denver, Colorado in 2023.

The Bank primarily operates throughout Texas, Kansas, Colorado, New Mexico and Arizona providing a full range of commercial and consumer banking and financial services to small and medium-sized companies.

Nature of Operations - The Bank’s headquarters are located in Dallas, Texas.

The Bank primarily operates throughout Texas, Kansas, Colorado, New Mexico, Arizona and California providing a full range of commercial and consumer banking and financial services to small and medium-sized companies.

Its primary deposit products are checking, savings and term certificate accounts.

Its primary wealth management and trust products are personal trust and agency accounts, employee benefit and retirement related trust and agency accounts, investment management and advisory agency accounts, and foundation and endowment trust and agency accounts.

Its primary wealth management and trust products are private banking, personal trust and agency accounts, employee benefit and retirement related trust and agency accounts, investment management and advisory agency accounts, and foundation and endowment trust and agency accounts.

Its primary lending products are residential mortgage, commercial and consumer loans.

1 unchanged sentence

Commercial and industrial loans are generally expected to be repaid from the borrower’s cash flow from operations.

Business Combinations - On April 1, 2022, FirstSun completed its merger with Pioneer Bancshares, Inc.

Pursuant to the terms of the merger agreement, at the Effective Time, each Pioneer shareholder had the right to receive 1.0443 shares of FirstSun common stock, for each share of Pioneer common stock owned by the shareholder, with cash paid in lieu of fractional shares.

Each outstanding share of FirstSun common stock remained outstanding and was unaffected by the merger.

Further information is presented in Note 2 - Merger with Pioneer Bancshares, Inc .

On January 16, 2024, we announced a proposed merger with HomeStreet, Inc.

For additional information regarding our proposed merger with HomeStreet, Inc.

see Note 2 7 - Subsequent Events .

Terminated Merger with HomeStreet - On November 18, 2024, FirstSun, Dynamis Subsidiary, Inc.

and HomeStreet, Inc.

agreed to terminate their previously announced merger agreement, originally announced on January 16, 2024, and amended on April 30, 2024, pursuant to a mutual termination agreement.

Subsequent Events - We evaluate events occurring subsequent to the balance sheet date to determine whether the events required recognition or disclosure in the financial statements.

1 unchanged sentence

If conditions of a subsequent event arose after the balance sheet date, the effects are not required to be recognized in the financial statements, but depending on materiality, may need to be disclosed in the financial statements.

The Company has evaluated subsequent events for potential recognition and disclosure through the filing date of this Form 10-K.

Use of Estimates - The preparation of consolidated financial statements in conformity with U.S.

5 unchanged sentences

In the event that estimates or assumptions prove to differ from actual results, adjustments are made in subsequent periods to reflect more current information.

Concentration of Credit Risk - We have a significant concentration in residential real estate and commercial and industrial loans within Texas, Kansas, Colorado, New Mexico and Arizona.

Concentration of Credit Risk - We have a significant concentration in commercial and industrial loans and residential real estate within Texas, Kansas, Colorado, New Mexico and Arizona.

When necessary, we perform credit evaluations on our customers' financial condition and often request additional guarantees and forms of collateral from our customers.

1 unchanged sentence

Declines in the local or statewide economies could have an adverse impact on our borrowers’ financial condition.

Specifically, inflation and higher interest rates, along with monetary events, can cause some of our business customers who have greater operating cash needs to draw on their deposits with us to meet expenses.

Specifically, inflation and higher interest rates, along with monetary events, can cause some of

our business customers who have greater operating cash needs to draw on their deposits with us to meet expenses.

Adverse developments affecting real estate values in one or more of our markets could increase our credit risk associated with our loan portfolio.

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In March of 2022, the FASB issued ASU 2022-02, Financial Instruments - Credit Losses:

Troubled Debt Restructurings and Vintage Disclosures , which eliminates the accounting for troubled debt restructurings by creditors while enhancing the disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty.

The amendment also requires disclosure of gross charge-offs by year of origination for finance receivables.

We adopted the amendments in this ASU as of January 1, 2023 prospectively.

As a result of the adoption of ASU 2016-13 and ASU 2022-02, several of our significant accounting policies have changed as of January 1, 2023 to reflect the requirements of the new standard.

Troubled Debt Restructurings and Vintage Disclosures , which we adopted the amendments in this ASU as of January 1, 2023 prospectively.

In November of 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures , which improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

We adopted the amendments in this ASU on January 1, 2024.

A description of each business and the methodologies used to measure financial performance is described in Note 21 - Segment Information .

Fair Value Measurement - Fair value is determined in accordance with Accounting Standards Codification (ASC) Topic 820, Fair Value Measurement .

28 unchanged sentences

For available-for-sale debt securities in an unrealized loss position, management first assesses whether it intends to sell, or it is more likely than not that it will be required to sell, the security before recovery of its amortized cost basis.

If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is

written down to fair value.

If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value.

Any previously recognized allowance for credit losses (“ACL”) should be written off and the write-down in excess of such ACL would be recorded through a charge to the provision for credit losses.

For available-for-sale debt securities that do not meet the aforementioned criteria, management evaluates whether the decline in fair value has resulted from credit losses or other factors.

For available-for-sale debt securities that do not meet the aforementioned criteria, management evaluates whether

the decline in fair value has resulted from credit losses or other factors.

In making this assessment, management considers the cash position of the issuer and its cash and capital generation capacity, which could increase or diminish the issuer’s ability to repay its bond obligations, the extent to which the fair value is less than the amortized cost basis, any adverse change to the credit conditions and liquidity of the issuer, taking into consideration the latest information about the financial condition of the issuer, credit ratings, the failure of the issuer to make scheduled principal or interest payments, recent legislation and government actions affecting the issuer’s industry, and actions taken by the issuer to deal with the economic climate.

18 unchanged sentences

Loan origination fees are recorded in the period of origination.

Loans Receivable - Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff, are reported at the principal balance outstanding, net of purchase premiums and discounts, deferred loan fees and costs, and an allowance for credit losses.

Interest on loans receivable is accrued and credited to income based upon the principal amount outstanding using primarily a simple interest calculation.

1 unchanged sentence

The accrual of interest income on loans is discontinued when, in management’s judgment, the interest is uncollectible in the normal course of business, and a loan is moved to nonaccrual status in accordance with the Bank’s policy, typically after 90 or 120 days of non-payment, as follows:

interest income on consumer, commercial real estate and commercial and industrial loans is typically discontinued at the time the loan is 90 days delinquent unless the loan is well-secured and in the process

of collection;

interest income on residential real estate loans is typically discontinued at the time the loan is 120 days delinquent unless the loan is well-secured and in the process of collection.

Consumer and credit card loans are typically charged off no later than 120 days past due.

Past due status is based on the contractual terms of the loan.

Past due status is based on the contractual terms of the

In all cases, loans are placed on nonaccrual or charged-off at an earlier date if collection of principal or interest in full is considered doubtful.

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Factors such as the credit risk inherent in a portfolio and how management monitors the related quality, as well as the estimation approach to estimate credit losses, are considered in the determination of such portfolio segments and classes.

The Bank believes it has a diversified portfolio across a variety of industries,

and the portfolio is generally centered in the states in which the Bank has offices.

The Bank believes it has a diversified portfolio across a variety of industries, and the portfolio is generally centered in the states in which the Bank has offices.

Management has identified the following portfolio segments:

25 unchanged sentences

When management determines that foreclosure is probable, expected credit losses are based on the fair value of the collateral, less selling costs.

For loans for which foreclosure is not probable, but for which repayment is expected to be provided substantially

through the operation or sale of the collateral, management has elected the practical expedient under ASC 326 to estimate expected credit losses based on the fair value of the collateral, with selling costs considered in the event sale of the collateral is expected.

For loans for which foreclosure is not probable, but for which repayment is expected to be provided substantially through the operation or sale of the collateral, management has elected the practical expedient under ASC 326 to estimate expected credit losses based on the fair value of the collateral, with selling costs considered in the event sale of the collateral is expected.

Management has elected not to measure an ACL on accrued interest related to held for investment loans, as uncollectible accrued interest receivables are written off in a timely manner.

31 unchanged sentences

Subsequent to foreclosure/repossession, management periodically performs valuations, and an allowance for losses is established by a charge against earnings if the carrying value of a property exceeds the fair value less estimated costs to sell.

Revenue and expenses from

operation and changes in the valuation allowance are included in other noninterest expense on the consolidated statements of income and comprehensive income.

Revenue and expenses from operation and changes in the valuation allowance are included in other noninterest expense on the consolidated statements of income and comprehensive income.

Bank-owned Life Insurance (BOLI) - We have purchased life insurance policies on certain key current and former executives as a method to offset the cost of employee benefit plans.

1 unchanged sentence

Changes in the net cash surrender value of the policies, as well as insurance proceeds received, are recorded in noninterest income and are not subject to income taxes.

Restricted Equity Securities - Restricted equity securities consist of capital stock of the Federal Home Loan Bank of Topeka (FHLB) and the Federal Reserve Bank of Kansas City (FRB).

Restricted Equity Securities - Restricted equity securities consist of capital stock of the Federal Home Loan Bank of Dallas (FHLB) and the Federal Reserve Bank of Dallas (FRB).

Such stock is not readily marketable, and accordingly, is carried at cost.

7 unchanged sentences

Total restricted equity securities $ 28,917 $ 38,072

As a result of the relocation of our Bank headquarters to Dallas, Texas in 2023, we will be required to liquidate our capital stock in the FHLB of Topeka and the FRB of Kansas City and acquire capital stock in the FHLB of Dallas and the FRB of Dallas.

We expect to complete this activity in early 2024 with no gain or loss on the liquidation of the capital stock.

Goodwill - The excess purchase price of acquired businesses over the fair value of identifiable assets acquired and liabilities assumed is recognized as goodwill.

9 unchanged sentences

These trade names provide a source of market recognition to attract potential clients/relationships and retain existing customers.

Management has indicated that portions of the business will utilize these trade names into perpetuity;

therefore, these trade names have been classified as indefinite-lived assets.

Management has indicated that portions of the business will utilize the First National 1870 trade name into perpetuity;

therefore, this trade name has been classified as an indefinite-lived asset.

In December 2024, a decision was made to discontinue the use of the Guardian Mortgage tradename (see Note 6 - Core Deposits and Other Intangible Assets ).

Further, we have acquired certain customer relationships relating to wealth management.

These customer relationships have been assigned amortization periods of 10 to 16 years.

We had a non-competition agreement for a former employee.

This agreement was fully amortized in 2023.

Impairment of Long-lived Assets - Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

1 unchanged sentence

If impairment is indicated, an adjustment is made to reduce the carrying amount based on the difference between the future cash flows expected and the carrying amount of the asset.

During the years ended December 31, 2023 and 2021, we recorded no impairment of long-lived assets, respectively.

During the years ended December 31, 2024 and 2023 there was no impairment of long-lived assets, respectively.

During the year ended December 31, 2022 we recorded impairment of $ 720 of long-lived assets.

25 unchanged sentences

Our derivative financial instruments are used to manage differences in the amount, timing, and duration of our known or expected cash receipts and our known or expected cash payments principally related to our loan portfolio.

The initial and subsequent changes in value, as well as the offsetting gain or loss of banking derivative financial instruments that qualify as fair value hedges, and

any fees income generated are recorded as a component of interest and fee income on loans in our consolidated statements of income and comprehensive income.

The initial and subsequent changes in value, as well as the offsetting gain or loss of banking derivative financial instruments that qualify as fair value hedges, and any fees income generated are recorded as a component of interest and fee income on loans in our consolidated statements of income and comprehensive income.

Mortgage Banking Activities - Our mortgage bankers enter into interest rate lock commitments (IRLC) with prospective borrowers.

An IRLC represents an agreement to purchase loans from a third-party originator or an agreement to extend credit to a mortgage applicant, whereby the interest rate is set prior to funding.

The loan commitment binds us (subject to the loan approval process) to fund the loan at the specified rate, regardless of whether interest rates have changed between the commitment date and the loan funding date.

The loan commitment binds us (subject to the loan approval process) to fund the loan at the specified rate, regardless of

whether interest rates have changed between the commitment date and the loan funding date.

Outstanding interest rate lock commitments are subject to interest rate risk and related price risk during the period from the date of the commitment through the loan funding date or expiration date.

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Comprehensive income - Comprehensive income consists of net income and other comprehensive income.

Other comprehensive income includes unrealized gains and losses on securities available-for-sale and designated fair value hedges, net of tax, which are recognized as a separate component of equity.

Loss Contingencies - Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be

reasonably estimated.

Other comprehensive income includes unrealized gains and losses on securities available-for-sale, which are recognized as a separate component of equity.

Management does not believe there are such matters that will have a material effect on these consolidated financial statements.

3 unchanged sentences

To the extent that we do not comply with such representations, or there are early payment defaults, we may be required to repurchase the loans or indemnify these investors for any losses from borrower defaults.

In addition, if loans pay off within a specified time frame, we may be required to refund a portion of the sales proceeds to the investors.

In addition, if loans pay

off within a specified time frame, we may be required to refund a portion of the sales proceeds to the investors.

We have established reserves for potential losses related to these representations and warranties which is recorded within accrued expenses and other liabilities.

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ASU 2023-06 is not expected to have a significant impact on our financial statements.

2023-07, “Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures.” ASU 2023-07 expands segment disclosure requirements for public entities to require disclosure of significant segment expenses and other segment items on an annual and interim basis and to provide in interim periods all disclosures about a reportable segment’s profit or loss and assets that are currently required annually.

ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

Early adoption is permitted.

ASU 2023-07 is not expected to have a significant impact on our financial statements.

2023-09, “Income Taxes (Topic 740):

3 unchanged sentences

ASU 2023-09 is not expected to have a significant impact on our financial statements.

NOTE 2 - Merger with Pioneer Bancshares, Inc.

As described under the title “Business Combination” in Note 1 - Basis of Presentation, Description of Business and Summary of Significant Accounting Policies , we completed our merger with Pioneer on April 1, 2022.

We accounted for the Pioneer merger under the acquisition method in accordance with ASC Topic 805, Business Combinations .

Accordingly, the purchase price was allocated to the fair value of the assets acquired, including identifiable intangible assets, and the liabilities assumed as of the closing date of the merger.

Goodwill resulting from the difference between the fair value of the assets acquired and the fair value of the liabilities assumed is not amortizable for book or tax purposes.

This goodwill resulted from the combination of expected operational synergies, the increase in our market share in Texas and other factors.

Although the merger was nontaxable, the merger gave rise to certain temporary differences for which deferred taxes have been recognized.

The results of operations for the Pioneer merger have been included in our consolidated financial results beginning on the April 1, 2022 closing date.

Consideration

Under the terms of the merger agreement, each outstanding share of Pioneer common stock was converted into 1.0443 shares of FirstSun common stock (except for shareholders who properly exercised their dissenters’ rights) with cash paid in lieu of fractional shares.

Accordingly, we issued 6,467,466 shares of our common stock to Pioneer shareholders in the merger valued at $ 230,760 based on a third-party valuation of our common stock in accordance with ASC Topic 820, Fair Value Measurements as of the closing date.

We also converted Pioneer stock options into 431,645 options to purchase shares of FirstSun common stock.

This conversion was valued at $ 5,334 .

We also paid cash to certain Pioneer shareholders of $ 4,736 .

Total aggregate consideration paid in the Pioneer merger was $ 240,830 .

We recorded the fair value of assets acquired and liabilities assumed based on valuations at April 1, 2022.

The determination of fair value required management to make assumptions related to discount rates, expected future cash flows, market conditions and other future events that are subjective in nature.

Fair values of the assets acquired and liabilities assumed in this transaction are as follows:

Cash and cash equivalents $ 449,278

Investment securities 157,859

Loans held-for-sale 2,923

Loans 811,300

Premises and equipment 39,935

Bank-owned life insurance 21,382

Restricted equity securities 9,320

Core deposits and other intangible assets 11,771

Accrued interest receivable 3,947

Deferred tax assets 19,752

Prepaid expenses and other assets 7,317

Total assets acquired 1,534,784

Deposits 1,192,081

Federal Home Loan Bank advances 159,924

Accrued interest payable 407

Accrued expenses and other liabilities 1,975

Total liabilities assumed 1,354,387

Fair value of net assets acquired 180,397

Purchase price 240,830

Goodwill $ 60,433

Acquired loans and purchased credit impaired loans

Acquired loans were recorded at fair value based on a discounted cash flow valuation methodology that considered, among other things, projected default rates, loss given default rates and recovery rates.

No allowance for credit losses was carried over from Pioneer.

We identified certain acquired loans as purchased credit impaired (PCI).

PCI loan identification considered payment history and past due status, debt service coverage, loan grading, collateral values and other factors that may be an indication of a deterioration of credit quality since origination.

Although we identified certain acquired loans as PCI, the amount was determined to be insignificant.

The following table discloses the fair value and contractual value of loans acquired from Pioneer on April 1, 2022.

Acquired Loans Contractual Principal Balance

Commercial $ 98,351 $ 98,752

Commercial real estate 509,173 516,341

Residential real estate 173,094 174,763

Consumer 30,682 31,982

Total fair value $ 811,300 $ 821,838

Supplemental pro forma information

The following unaudited pro forma summary presents consolidated information of FirstSun as if the business combination had occurred on January 1, 2021.

Pro forma for the

Net interest income $ 251,783 $ 201,501

Provision for credit losses 17,200 350

Net interest income after provision for credit losses 234,583 201,151

Noninterest income 90,993 129,373

Noninterest expenses 229,307 258,544

Income before income taxes 96,269 71,980

Provision for income taxes 19,508 13,413

Net income $ 76,761 $ 58,567

Earnings per share:

Net income available to common stockholders $ 76,761 $ 58,567

Basic $ 3.09 $ 2.36

Diluted $ 3.01 $ 2.30

The unaudited pro forma amounts for these periods includes adjustments for interest income on loans and investment securities acquired, amortization of intangibles arising from the transaction, adjustments for interest expense on deposits and Federal Home Loan bank advances acquired, adjustments for merger related expenses incurred, and the related income tax effects of all these items and the income tax costs or benefits derived from the income or loss before taxes of Pioneer.

The unaudited pro forma amounts are not necessarily indicative of the results of operations that would have occurred had the transaction been effected on the assumed date.

NOTE 2 - Securities

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Total held-to-maturity $ 36,983 $ 5 $ ( 4,807 ) $ 32,181

There was no allowance for credit losses related to our investment securities as of December 31, 2023.

There was no allowance for credit losses related to our investment securities as of December 31, 2024 and 2023.

As of December 31, 2024 and 2023, there were no holdings of securities of any one issuer, other than the U.S.

15 unchanged sentences

Mortgage backed - commercial 1,705 ( 51 ) 112,801 ( 12,853 ) 114,506 ( 12,904 ) 23

Other debt — — 15,556 ( 1,236 ) 15,556 ( 1,236 ) 9

Total available-for-sale $ 16,278 $ ( 112 ) $ 400,806 $ ( 52,597 ) $ 417,084 $ ( 52,709 ) 194

28 unchanged sentences

We continue to monitor unrealized loss positions for potential credit impairments.

During the year ended December 31, 2023, there were no credit impairments related to our investment securities.

During the years ended December 31, 2024, 2023 and 2022, there were no credit impairments related to our investment securities.

The amortized cost and fair value of our debt securities by contractual maturity as of December 31, 2024 are summarized in the following table.

13 unchanged sentences

Securities with a carrying value of $ 460,387 and $ 468,679 were pledged to secure public deposits, securities sold under agreements to repurchase and borrowed funds at December 31, 2024 and 2023, respectively.

There were no proceeds from sales and calls of securities for the year ended December 31, 2023.

There were proceeds from sales and calls of securities of $ 81,016 for the year ended December 31, 2022.

There were no proceeds from sales and calls of securities for the years ended December 31, 2024 and 2023.

For the years ended December 31, 2024, 2023 and 2022 there were no gross investment gains or losses resulting from the sale of securities.

24 unchanged sentences

Balance, beginning of period $ 29,523 $ 27,546 $ 16,345 $ 5,337 $ 717 $ 930 $ 80,398

Impact of adopting ASC 326

( 13,583 ) 3,867 10,256 3,890 249 577 5,256

Provision for (benefit from) credit losses 27,951 1,243 ( 865 ) ( 587 ) 352 106 28,200

4 unchanged sentences

Balance, beginning of period $ 40,785 $ 19,754 $ 2,963 $ 1,664 $ 352 $ 399 $ 65,917

Impact of adopting ASC 326

( 13,583 ) 3,867 10,256 3,890 249 577 5,256

Provision for (benefit from) credit losses 10,445 3,996 2,457 ( 217 ) 400 ( 46 ) 17,035

10 unchanged sentences

As of December 31, 2024 and 2023, we had an allowance for credit losses on unfunded commitments of $ 1,659 and $ 2,309 , respectively.

For the years ended December 31, 2023, 2022 and 2021, we recorded a provision for credit losses on unfunded commitments of $ 1,212 , $ 525 and $ 300 , respectively.

For the years ended December 31, 2024, 2023 and 2022, we recorded a provision (benefit) for credit losses on unfunded commitments of $( 650 ), $ 1,212 and $ 525 , respectively.

The following table presents our loan portfolio aging analysis as of December 31,:

27 unchanged sentences

Total loans $ 6,138,489 $ 47,501 $ 17,963 $ 25,816 $ 37,327 $ 6,267,096

(1) Loans greater than 90 days past due, still accruing relates primarily to one borrower relationship where interest was paid current in February 2024.

Contractual principal payments related to this borrower relationship were deferred until March 15, 2024.

This deferral was not significant.

Interest income recorded on nonperforming loans was not material for the years ended December 31, 2024, 2023 and 2022.

17 unchanged sentences

Losses for Substandard - Accruing loans are moderated by the lower likelihood of ultimate default and the existence of relatively favorable secondary repayment protection.

These loans are considered “nonperforming”.

Substandard - Nonaccrual – Substandard - Nonaccrual loans are inadequately protected by the current sound net worth and paying capacity of the obligor or the collateral pledged, if any.

16 unchanged sentences

These loans are considered “nonperforming”.

The following table present the amortized costs by segment of loans by risk category and origination date as of December 31, 2023:

The following table presents the amortized costs by segment of loans by risk category and origination date as of December 31, 2024 and gross charge-offs by origination date for the year ended December 31, 2024:

2024 2023 2022 2021 2020 Prior Revolving Loans

Converted to Term Revolving Total

Commercial and industrial:

Pass $ 490,655 $ 257,005 $ 255,402 $ 221,739 $ 67,636 $ 48,713 $ 76,821 $ 822,815 $ 2,240,786

Pass/Watch 1,469 17,131 29,927 19,200 4,373 2,343 322 19,994 94,759

Special Mention 277 13,796 22,630 3,740 345 664 1,901 3,772 47,125

Substandard - Accruing 928 6,359 27,244 22,543 2,862 3,236 6,339 17,277 86,788

Substandard - Nonaccrual — 2,235 12,689 4,100 2,895 2,459 1,584 1,707 27,669

Doubtful — — — — 415 — 230 — 645

Total commercial and industrial $ 493,329 $ 296,526 $ 347,892 $ 271,322 $ 78,526 $ 57,415 $ 87,197 $ 865,565 $ 2,497,772

Gross charge-offs $ — $ — $ — $ 19,720 $ 269 $ 2 $ 630 $ 122 $ 20,743

Commercial real estate:

Non-owner occupied:

Pass $ 40,289 $ 62,077 $ 101,213 $ 126,215 $ 137,151 $ 190,618 $ 7,919 $ 20,030 $ 685,512

Pass/Watch — — 1,305 23,343 851 6,016 — 17,386 48,901

Special Mention — — — 5,953 — — — — 5,953

Substandard - Accruing — 2,711 — — 542 3,399 1,493 — 8,145

Substandard - Nonaccrual — — — — — 4,350 — — 4,350

Total non-owner occupied $ 40,289 $ 64,788 $ 102,518 $ 155,511 $ 138,544 $ 204,383 $ 9,412 $ 37,416 $ 752,861

Gross charge-offs $ — $ — $ — $ — $ 270 $ 11 $ — $ — $ 281

Owner occupied:

Pass $ 102,994 $ 78,583 $ 64,881 $ 88,399 $ 90,033 $ 177,733 $ 21,049 $ 5,273 $ 628,945

Pass/Watch — 13,933 875 5,515 19,266 3,773 — — 43,362

Special Mention — — 2,268 406 1,870 6,836 — — 11,380

Substandard - Accruing — 577 446 — 2,516 12,269 — — 15,808

Substandard - Nonaccrual — — — 1,167 — 2,111 — — 3,278

Total owner occupied $ 102,994 $ 93,093 $ 68,470 $ 95,487 $ 113,685 $ 202,722 $ 21,049 $ 5,273 $ 702,773

Gross charge-offs $ — $ — $ — $ — $ — $ 194 $ — $ — $ 194

Construction & land:

Pass $ 15,602 $ 54,903 $ 199,050 $ 6,749 $ 3,745 $ 4,414 $ 3,436 $ 29,998 $ 317,897

Pass/Watch — — 3,351 — — 15 — — 3,366

Special Mention — — 41,414 — — — — — 41,414

Total construction & land $ 15,602 $ 54,903 $ 243,815 $ 6,749 $ 3,745 $ 4,429 $ 3,436 $ 29,998 $ 362,677

Gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ —

Pass $ 4,408 $ 1,338 $ 36,156 $ 32,878 $ 4,866 $ 7,502 $ 5,533 $ — $ 92,681

Substandard - Nonaccrual — — 1,674 — — — — — 1,674

Total multifamily $ 4,408 $ 1,338 $ 37,830 $ 32,878 $ 4,866 $ 7,502 $ 5,533 $ — $ 94,355

Gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ —

Total commercial real estate:

Pass $ 163,293 $ 196,901 $ 401,300 $ 254,241 $ 235,795 $ 380,267 $ 37,937 $ 55,301 $ 1,725,035

Pass/Watch — 13,933 5,531 28,858 20,117 9,804 — 17,386 95,629

Special Mention — — 43,682 6,359 1,870 6,836 — — 58,747

Substandard - Accruing — 3,288 446 — 3,058 15,668 1,493 — 23,953

Substandard - Nonaccrual — — 1,674 1,167 — 6,461 — — 9,302

Total commercial real estate:

$ 163,293 $ 214,122 $ 452,633 $ 290,625 $ 260,840 $ 419,036 $ 39,430 $ 72,687 $ 1,912,666

Gross charge-offs $ — $ — $ — $ — $ 270 $ 205 $ — $ — $ 475

2024 2023 2022 2021 2020 Prior Revolving Loans

Converted to Term Revolving Total

Residential real estate:

Pass $ 141,409 $ 138,915 $ 549,022 $ 108,084 $ 35,720 $ 151,015 $ 2,405 $ 15,201 $ 1,141,771

Pass/Watch — 1,405 4,731 4,148 90 6,151 62 994 17,581

Special Mention — — 351 — — 601 — — 952

Substandard - Accruing — — — — — 86 — — 86

Substandard - Nonaccrual 210 — 10,667 727 2,244 6,284 59 29 20,220

Total residential real estate $ 141,619 $ 140,320 $ 564,771 $ 112,959 $ 38,054 $ 164,137 $ 2,526 $ 16,224 $ 1,180,610

Gross charge-offs $ — $ — $ — $ — $ — $ 38 $ — $ — $ 38

Public Finance:

Pass $ 29,860 $ 19,986 $ — $ 42,558 $ 130,447 $ 322,066 $ — $ 2,641 $ 547,558

Substandard - Nonaccrual — — — — — 7,226 — — 7,226

Total public finance $ 29,860 $ 19,986 $ — $ 42,558 $ 130,447 $ 329,292 $ — $ 2,641 $ 554,784

Gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ —

Pass $ 3,949 $ 1,610 $ 1,333 $ 3,793 $ 7,464 $ 4,695 $ 60 $ 17,665 $ 40,569

Pass/Watch — 6 37 104 182 331 1 46 707

Special Mention — — — 1 — — — — 1

Substandard - Accruing — — — — — — 4 — 4

Substandard - Nonaccrual — — — 58 4 2 — — 64

Total consumer $ 3,949 $ 1,616 $ 1,370 $ 3,956 $ 7,650 $ 5,028 $ 65 $ 17,711 $ 41,345

Gross charge-offs $ 3 $ 10 $ 6 $ 3 $ 147 $ 46 $ 15 $ 208 $ 438

Pass $ 26,745 $ 18,892 $ 7,664 $ 10,621 $ 148 $ 8,339 $ 129 $ 110,891 $ 183,429

Pass/Watch — — — 3,360 — — — — 3,360

Substandard - Nonaccrual — — — — — 2,391 — — 2,391

Total other $ 26,745 $ 18,892 $ 7,664 $ 13,981 $ 148 $ 10,730 $ 129 $ 110,891 $ 189,180

Gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ —

Pass $ 855,911 $ 633,309 $ 1,214,721 $ 641,036 $ 477,210 $ 915,095 $ 117,352 $ 1,024,514 $ 5,879,148

Pass/Watch 1,469 32,475 40,226 55,670 24,762 18,629 385 38,420 212,036

Special Mention 277 13,796 66,663 10,100 2,215 8,101 1,901 3,772 106,825

Substandard - Accruing 928 9,647 27,690 22,543 5,920 18,990 7,836 17,277 110,831

Substandard - Nonaccrual 210 2,235 25,030 6,052 5,143 24,823 1,643 1,736 66,872

Doubtful — — — — 415 — 230 — 645

Total loans $ 858,795 $ 691,462 $ 1,374,330 $ 735,401 $ 515,665 $ 985,638 $ 129,347 $ 1,085,719 $ 6,376,357

Gross charge-offs $ 3 $ 10 $ 6 $ 19,723 $ 686 $ 291 $ 645 $ 330 $ 21,694

The following table presents the amortized cost by segment of loans by risk category and origination date as of December 31, 2023 and gross charge-offs by origination date for the year ended December 31, 2023:

2023 2022 2021 2020 2019 Prior Revolving Loans Converted to Term Revolving Total

79 unchanged sentences

Gross charge-offs $ — $ — $ 2,797 $ 3,117 $ 111 $ 483 $ 2,995 $ 169 $ 9,672

The following table presents the credit risk profile of our loan portfolio, gross of deferred costs, fees, premiums and discounts, based on our rating categories as of December 31, 2022, which is prior to the adoption of ASU 2016-13 on January 1, 2023 and continue to be reported under ASC 310, Receivables .

We categorized loans into risk categories based on relevant information about the ability of borrowers to service their debt including current financial information, historical payment experience, credit documentation, public information and current economic trends among other factors.

This risk rating system was used as a tool to analyze and monitor loan portfolio quality.

Risk ratings meeting an internally specified exposure threshold were updated annually, or more frequently upon the occurrence of a circumstance that affected the credit risk of the loan.

We use the following definitions for risk ratings:

Substandard - loans are considered “classified” and have a well-defined weakness, or weaknesses, such as loans that are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any.

Substandard loans are also characterized by the distinct possibility of loss in the future if the deficiencies are not corrected.

Doubtful - loans are considered “classified” and have all the weaknesses inherent in those classified as Substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable.

There were loans totaling $ 45 categorized as doubtful as of December 31, 2022.

Non-Classified Classified Total

Commercial and industrial $ 2,969,786 $ 55,288 $ 3,025,074

Commercial real estate 1,715,415 37,945 1,753,360

Residential real estate 1,096,108 10,685 1,106,793

Consumer 43,592 114 43,706

Total loans $ 5,824,901 $ 104,032 $ 5,928,933

The following table presents information about collateral dependent loans that were individually evaluated for purposes of determining the ACL as of December 31,:

1 unchanged sentence

With Allowance Collateral Dependent Loans

With No Related Allowance Total Collateral Dependent Loans

With No Related Allowance Total Collateral

Dependent Loans

Amortized Cost Related Allowance Amortized Cost Amortized Cost Related Allowance

3 unchanged sentences

Owner occupied — — 3,278 3,278 —

Construction and land — — 185 185 —

Multifamily — — 1,674 1,674 —

Total commercial real estate — — 9,302 9,302 —

Residential real estate 1,409 154 18,811 20,220 154

Public Finance 7,226 1,460 — 7,226 1,460

Consumer 64 64 — 64 64

22 unchanged sentences

Additionally, the Company may allow a loan to go interest only for a specified period of time.

The following table presents loan modifications that were experiencing financial difficulty during 2023, segregated by modification type, regardless of whether such modifications resulted in a new loan.

Delay Interest Rate Reduction % of

The following tables present loan modifications for borrowers experiencing financial difficulty for the years ended December 31, 2024 and 2023, segregated by modification type, regardless of whether such modifications resulted in a new loan.

For the years ended December 31,:

Forgiveness Payment

Delay / Deferral Term

Extension Interest Rate

Reduction Combination Principal Forgiveness

and Interest Rate Reduction Combination Term Extension and Interest Rate Reduction Combination Payment Delay / Deferral, Interest Rate Reduction, and Interest Only Period % of

Commercial and industrial $ 952 $ 15,661 $ 365 $ — $ 525 $ — $ 190 0.7 %

2 unchanged sentences

Owner occupied — 3,748 — 2,737 — — — 0.9 %

Total commercial real estate — 3,748 — 2,737 — 1,936 — 0.4 %

Residential real estate — — 519 — 287 — — 0.1 %

Total loans $ 952 $ 19,409 $ 884 $ 2,737 $ 812 $ 1,936 $ 190 0.4 %

Commercial and industrial $ — $ 270 $ — $ — $ — $ — $ — — %

Commercial real estate:

Owner occupied — — — 1,124 — — — 0.2 %

Residential real estate — — 215 — — — — — %

Total loans $ — $ 270 $ 215 $ 1,124 $ — $ — $ — — %

Modifications made to the loans presented in the tables above to borrowers experiencing financial difficulty for the years ended December 31, 2024 and 2023 were short-term in nature.

There were no commitments to lend additional funds to these borrowers at December 31, 2024.

The financial effects of our loan modifications made to borrowers experiencing financial difficulty during the years ended December 31, 2024 and 2023 were not significant.

We closely monitor the performance of loan modifications made to borrowers experiencing financial difficulty to understand the effectiveness of the modification efforts.

The following table depicts the performance of loan modifications made to borrowers experiencing financial difficulty that have been modified in the last 12 months:

Past Due Loans

Past Due Loans Greater

Still Accruing Nonaccrual Total

December 31, 2024

Commercial and industrial $ 1,630 $ — $ — $ — $ 16,063 $ 17,693

Commercial real estate:

Non-owner occupied 1,936 — — — — 1,936

Owner occupied 5,819 — — — 666 6,485

Construction and land — — — — — —

6 unchanged sentences

Total loans $ 9,504 $ — $ — $ — $ 17,416 $ 26,920

There were no commitments to lend additional funds to these borrowers at December 31, 2023.

The financial effects of our loan modifications made to borrowers experiencing financial difficulty during 2023 were not significant.

We closely monitor the performance of loan modifications made to borrowers experiencing financial difficulty to understand the effectiveness of the modification efforts.

There were no loans past due that have been modified in the last 12 months.

There is one commercial and industrial loan totaling $ 292 on nonaccrual status that has been modified in the last 12 months.

NOTE 4 - Mortgage Servicing Rights

50 unchanged sentences

Balance, beginning of year $ 1,800 $ 8,621 $ 563 $ — $ 10,984

Impairment ( 780 ) — — — ( 780 )

Amortization — ( 2,595 ) ( 175 ) — ( 2,770 )

5 unchanged sentences

Balance, beginning of year $ 1,800 $ 4,999 $ 1,451 $ — $ 8,250

Additions — 11,327 — 444 11,771

Amortization — ( 3,167 ) ( 703 ) ( 345 ) ( 4,215 )

Balance, end of year $ 1,800 $ 13,159 $ 748 $ 99 $ 15,806

During the year ended December 31, 2024 we impaired the tradename for Guardian Mortgage as we are in the process of rebranding our mortgage lending division as Sunflower Bank Mortgage Lending.

During the years ended December 31, 2024, 2023 and 2022, there was no indication of impairment of our core deposits and other intangible assets.

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The carrying amount of hedged loans receivable and available-for-sale securities as of December 31, 2024 and 2023 was $ 170,166 and $ 184,829 , respectively.

The cumulative amount of fair value hedging adjustment included in the carrying amount of the hedged loans receivable as of December 31, 2023 and 2022 was $( 9,567 ) and $( 12,752 ), respectively.

The cumulative amount of fair value hedging adjustment included in the carrying amount of the hedged available-for-sale securities as of December 31, 2023 and 2022 was $ 3,168 and $ 2,879 , respectively.

The cumulative amount of fair value hedge accounting adjustments included in the carrying amount of the hedged loans receivable as of December 31, 2024 and 2023 was $( 9,169 ) and $( 9,567 ), respectively.

The cumulative amount of fair value hedge accounting adjustments included in the carrying amount of the hedged available-for-sale securities as of December 31, 2024 and 2023 was $( 4,285 ) and $( 3,168 ), respectively.

The hedges were determined to be effective during all periods presented and we expect the hedges to remain effective during their remaining terms.

21 unchanged sentences

Interest Rate Products 49 2024 - 2037 $ 396,111 $ 19,869

Other 2 2028 $ 6,168 $ 30

We recorded gains and losses on banking derivatives assets as follows for the years ended December 31,:

2024 2023 2022

Recorded gain (loss) on banking derivative assets $ 4,482 $ 28,783 $ ( 777 )

Recorded (loss) gain on banking derivative liabilities $ ( 4,820 ) $ ( 27,973 ) $ 1,172

Recorded gain on banking derivative assets $ 10,118 $ 4,482 $ 28,783

Recorded loss on banking derivative liabilities $ ( 9,962 ) $ ( 4,820 ) $ ( 27,973 )

For the years ended December 31, 2024, 2023 and 2022 our banking derivative financial instruments not designated as hedging instruments generated fee income of $ 704 , $ 1,451 and $ 2,152 , respectively.

10 unchanged sentences

Derivative financial instruments

Futures 2024 $ 28,700 $ 2,153

Interest rate lock commitments (IRLC) 2024 $ 41,404 $ 252

Forward MBS trades 2025 $ 86,000 $ 464

Interest rate lock commitments (IRLC) 2025 $ 44,701 $ 110

Futures 2025 $ 44,900 $ 1,002

Derivative financial instruments

1 unchanged sentence

Forward MBS trades 2024 $ 41,404 $ 252

Interest rate lock commitments (IRLC) 2023 $ 52,533 $ 60

Forward MBS trades 2024 $ 77,000 $ 606

We recorded gains and losses on mortgage banking derivatives assets as follows for the years ended December 31,:

2024 2023 2022

Recorded (loss) gain on mortgage banking derivative assets

$ ( 857 ) $ 233 $ ( 9,655 )

Recorded (loss) gain on mortgage banking derivative liabilities $ ( 642 ) $ ( 15,863 ) $ 246

Recorded gain (loss) on mortgage banking derivative assets $ 928 $ ( 857 ) $ 233

Recorded loss on mortgage banking derivative liabilities $ ( 4,370 ) $ ( 642 ) $ ( 15,863 )

NOTE 8 - Prepaid Expenses and Other Assets

The components of prepaid expenses and other assets consisted of the following as of December 31,:

Loans subject to unilateral repurchase rights - Ginnie Mae $ 36,600 $ 23,430

Derivative financial instruments 36,088 35,080

Right-of-use asset on leased property 22,476 24,227

Loans subject to unilateral repurchase rights - Ginnie Mae 23,430 12,224

Fiserv ATM compensating balance 11,308 9,865

Prepaid expenses 7,617 7,691

CRA investments 25,219 4,370

Prepaid expenses 10,377 7,617

Fiserv ATM compensating balance 10,107 11,308

Federal and state tax receivables, net 2,061 3,640

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The following is a breakdown of our FHLB advances and other borrowings outstanding as of December 31,:

Amount Rate Weighted

Rate Amount Rate Weighted

Variable rate line-of-credit advance $ 389,468 5.55 % N/A $ 643,885 4.48 % N/A

Amount Weighted

Rate Amount Weighted

Variable rate line-of-credit advance $ — N/A $ 389,468 5.55 %

Fixed rate term advance $ 135,000 4.60 % $ — N/A

$ 135,000 $ 389,468

Our FHLB advances are typically considered short-term borrowings with maturities less than one year and are used to manage liquidity as needed.

Maturing advances are replaced by drawing on available cash, making additional borrowings or through increased customer deposits.

The advances were collateralized by $ 2,733,150 and $ 1,674,096 of loans pledged to the FHLB as of December 31, 2024 and 2023, respectively.

All FHLB advances as of December 31, 2023 consisted of overnight borrowings with a maturity of January 1, 2024.

As of December 31, 2024 and 2023, the Bank had total borrowing capacity with the FHLB that is based on qualified collateral lending values of $ 1,669,888 and $ 1,192,022 , respectively.

10 unchanged sentences

On August 31, 2023, the convertible notes of $ 5,456 matured and were repaid in full.

As of December 31, 2022, we had outstanding convertible notes of $ 5,456 .

The annual interest rate on these convertible notes was 3.29 % with quarterly interest payments.

With respect to conversion, each $1 (in thousands) principal amount of the convertible notes was convertible to 15.6717 shares of Parent Company common stock at any time prior to maturity.

The conversion feature was not exercised at maturity.

21 unchanged sentences

We incurred and capitalized $ 534 of costs related to the issuance of the subordinated note.

As of and for the years ended December 31, 2023 and 2022 the amortization associated with the debt issuance costs totaled $ 54 and $ 51 , respectively.

As of and for the years ended December 31, 2024, 2023 2022, the amortization associated with the debt issuance costs totaled $ 53 , $ 54 and $ 51 , respectively.

Future amortization of the debt issuance costs is expected as follows:

4 unchanged sentences

In addition, we have issued $ 4,640 in trust preferred securities through a special purpose trust, New Mexico Banquest Capital Trust II (“NMBCT II”, and together with NMBCT I, collectively referred to as “NMBCT Trusts”).

Interest is payable quarterly at a rate of three-month LIBOR (which was amended to three-month term SOFR as of June 30, 2023) plus 3.35 % ( 8.94 % and 7.02 % as of December 31, 2023 and 2022, respectively) for the trust preferred securities issued through NMBCT I and at a rate of three-month LIBOR(which was amended to three-month SOFR as of June 30, 2023) plus 2.00 % ( 7.64 % and 6.69 % as of December 31, 2023 and 2022, respectively) for the trust preferred securities issued through NMBCT II.

Interest is payable quarterly at a rate of three-month LIBOR (which was amended to three-month term SOFR as of June 30, 2023) plus 3.35 % ( 7.94 % and 8.51 % as of December 31, 2024 and 2023, respectively) for the trust preferred securities issued through NMBCT I and at a rate of three-month LIBOR (which was amended to three-month term SOFR as of June 30, 2023) plus 2.00 % ( 6.78 % and 7.39 % as of December 31, 2024 and 2023, respectively) for the trust preferred securities issued through NMBCT II.

This subordinated debt of $ 13,919 was originally recorded at a discount of $ 4,293 .

10 unchanged sentences

The components of accrued expenses and other liabilities consisted of the following as of December 31,:

Lease liability $ 26,431 $ 31,267

Loans subject to unilateral repurchase rights - Ginnie Mae $ 36,600 $ 23,430

Salary and employee benefits 35,391 30,549

Lease liability 24,376 26,431

Derivative financial instruments 22,863 20,505

Loans subject to unilateral repurchase rights - Ginnie Mae 23,430 12,224

LIHTC delayed equity contribution 10,366 —

FRB courtesy inclearings 5,541 6,139

24 unchanged sentences

Diluted earnings per common share $ 2.69 $ 4.08 $ 2.48

There were no antidilutive securities for the year ended December 31, 2023.

There were no antidilutive securities for the years ended December 31, 2024 and 2023.

Convertible notes payable for 85,500 shares of common stock and stock-based awards for 1,699 were not considered in computing diluted earnings per share for the year ended December 31, 2022 because they were antidilutive.

Convertible notes payable for 323,984 shares of common stock were not considered in computing diluted earnings per share for the year ended December 31, 2021 because they were antidilutive.

NOTE 15 - Accumulated Other Comprehensive Income

The following table sets forth the components in accumulated other comprehensive income for the years ended December 31,:

2023 2022 2021

Securities available-for-sale:

Balance, beginning of year $ ( 46,157 ) $ 1,664 $ 9,119

Unrealized loss 1,002 ( 63,302 ) ( 9,870 )

Income tax effect ( 244 ) 15,481 2,415

Net unrealized loss 758 ( 47,821 ) ( 7,455 )

Reclassifications out of AOCI (1) — — —

Other comprehensive loss, net of tax 758 ( 47,821 ) ( 7,455 )

Balance, end of year $ ( 45,399 ) $ ( 46,157 ) $ 1,664

Fair value hedges of securities available-for-sale:

Balance, beginning of year $ 2,174 $ — $ —

Unrealized gain 289 2,879 —

Income tax effect ( 71 ) ( 705 ) —

Net unrealized gain 218 2,174 —

Balance, end of year $ 2,392 $ 2,174 $ —

(1) Reclassifications are reported in noninterest income on the Consolidated Statements of Income and Comprehensive Income

NOTE 14 - Stockholders’ Equity

As of December 31, 2024 and 2023, the Company has 10,000,000 shares of preferred stock authorized, $ 0.0001 par value, of which none were issued or outstanding, respectively.

As of December 31, 2023 and 2022, the Company has 50,000,000 shares of common stock authorized, $ 0.0001 par value, of which 24,960,639 and 24,920,984 shares were issued and 24,960,639 and 24,920,984 shares were outstanding, respectively.

Treasury stock:

Activity in treasury stock is as follows for the years ended December 31,:

Shares Amount Shares Amount

Balance, beginning of year — $ — 1,557,054 $ 38,148

Purchases — — — —

Issuances — — ( 1,557,054 ) ( 38,148 )

Balance, end of year — $ — — $ —

All purchases were in conjunction with the stock repurchase program that expired in 2022, and shares were held-in-treasury at $ 24.50 per share.

As of December 31, 2024 and 2023, the Company has 50,000,000 shares of common stock authorized, $ 0.0001 par value, of which 27,709,679 and 24,960,639 shares were issued and outstanding, respectively.

Dividends paid by the Company, if any, are substantially provided from Bank dividends.

The Bank may declare dividends without prior regulatory approval that do not exceed the total of retained net income for the current year combined with its retained net income for the preceding two years , subject to maintenance of minimum capital requirements.

During 2024 the Bank did not pay a dividend.

During 2023 and 2022, the Bank paid dividends totaling $ 26,000 and $ 8,000 , respectively, to the Parent Company.

During 2024, 2023 and 2022, Logia paid dividends totaling $ 720 , $ 595 and $ 700 , respectively, to the Parent Company.

The Bank and Logia did not declare or pay any dividends in 2021.

The Parent Company did not declare or pay any dividend in 2024, 2023 or 2022.

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The following table presents stock options outstanding as of and for the years ended December 31,:

Shares Weighted-Average Exercise Price, per Share Weighted-Average Remaining Contractual Term (years)

Outstanding, beginning of period 1,307,915 $ 20.23

Shares Weighted-Average

Exercise Price,

per Share Weighted-Average

Remaining Contractual

Outstanding, beginning of year 1,245,000 $ 20.25

Exercised ( 362,430 ) 19.92

Outstanding, end of period 1,245,000 $ 20.25 4.29

Forfeited — —

Outstanding, end of year 882,570 $ 20.39 3.37

Options vested or expected to vest 882,570 $ 20.39

Options exercisable, end of period 1,198,624 $ 20.13 4.21

Outstanding, beginning of period 1,412,900 $ 20.19

Options exercisable, end of year 876,095 $ 20.30 3.34

Outstanding, beginning of year 1,307,915 $ 20.23

Exercised ( 62,915 ) 19.72

Outstanding, end of period 1,307,915 $ 20.23 5.26

Outstanding, end of year 1,245,000 $ 20.25 4.29

Options vested or expected to vest 1,245,000 $ 20.25

Options exercisable, end of period 1,191,032 $ 20.03 5.05

Options exercisable, end of year 1,198,624 $ 20.13 4.21

At December 31, 2024, there was $ 27 of total unrecognized compensation cost related to non-vested stock options.

The unrecognized compensation cost at December 31, 2023 is expected to be recognized over the following two years .

The unrecognized compensation cost at December 31, 2024 is expected to be recognized over the following five

At December 31, 2024 and 2023, the intrinsic value of the stock options was $ 17,439 and $ 16,392 , respectively.

3 unchanged sentences

The LTIP is intended to qualify as a “top-hat” plan under ERISA that is unfunded and provides benefits only to a select group of management or highly compensated employees of FirstSun or the Bank.

In March 2024, we issued 11,739 shares of restricted stock that will fully vest in March 2025.

In May 2023, we issued 15,007 shares of restricted stock, 741 shares were forfeited during 2024 prior to vesting, the remaining 14,266 were fully vested in May 2024.

In May 2022, we issued 11,344 shares of restricted stock that were fully vested in May 2023.

In May 2023, we issued 15,007 shares of restricted stock that will fully vest in May 2024.

At December 31, 2024, there was $ 105 of total unrecognized compensation cost related to the non-vested restricted stock.

In April 2024, we issued performance-based restricted stock under the LTIP that, subject to the achievement of performance conditions, will fully vest in March 2027.

At December 31, 2024, we determined it is probable that 92,460 shares will be issued based upon the probability that the performance conditions will be achieved.

At December 31, 2024, there was $ 2,462 of total unrecognized compensation cost related to the non-vested restricted stock granted on these probable shares.

In May 2023, we issued performance-based restricted stock under the LTIP that, subject to the achievement of performance conditions, will fully vest in April 2026.

10 unchanged sentences

The following table presents option activity:

Shares Weighted-Average Exercise Price, per Share Weighted-Average Remaining Contractual Term (years)

beginning of period 170,711 $ 23.19

Shares Weighted-Average

Exercise Price,

per Share Weighted-Average

Remaining Contractual

Outstanding, beginning of year 121,901 $ 23.25

Exercised ( 46,460 ) 22.83

Forfeited ( 522 ) 17.24

Outstanding, vested, and exercisable, end of period 121,901 $ 23.26 3.87

beginning of period — $ —

Options assumed from Pioneer Bancshares, Inc.

431,645 23.32

Outstanding, vested, and exercisable, end of year 74,919 $ 23.57 3.02

Outstanding, beginning of year 170,711 $ 23.19

Exercised ( 40,719 ) 23.88

Forfeited ( 8,091 ) 18.76

Outstanding, vested, and exercisable, end of period 170,711 $ 23.19 5.62

Outstanding, vested, and exercisable, end of year 121,901 $ 23.25 3.87

At December 31, 2024 and 2023, the intrinsic value of the stock options was $ 1,243 and $ 1,239 , respectively.

14 unchanged sentences

Net increase in cash surrender value of BOLI ( 588 ) ( 405 ) ( 353 )

Federal tax credits ( 380 ) — —

Non-deductible professional fees — — 216

15 unchanged sentences

Fair value adjustments on deposits 19 99

Other real estate owned and foreclosed assets — 7

Other 4,131 5,437

7 unchanged sentences

FHLB stock 100 144

Partnership investment 485 —

Other 177 193

31 unchanged sentences

Under the Basel III rules, the Parent Company and the Bank must hold a 2.50% capital conservation buffer above the adequately capitalized risk-based capital ratios.

The fully phased in capital conservation buffer is 2.50% for all periods presented.

The net unrealized gain or loss on available for sale securities is not included in computing regulatory capital.

58 unchanged sentences

Director Fees :

Fees paid to directors of the Company and the Bank for the year ended December 31, 2023, 2022 and 2021 totaled $ 535 , $ 488 and $ 310 , respectively.

Fees paid to non-employee directors of the Company and the Bank for the years ended December 31, 2024, 2023 and 2022 totaled $ 531 , $ 535 and $ 488 , respectively.

We also grant our non-employee directors annual equity awards in the form of restricted stock units.

These awards vest on the first anniversary of the grant date.

Fair value of the equity awards as of grant date for the years ended December 31, 2024, 2023 and 2022 totaled $ 420 , $ 405 and $ 405 , respectively.

Principal Officers :

On November 8, 2023, FirstSun acquired all membership interests of FEIF Capital Partners, LLC, a Delaware limited liability company (“FEIF”) from our chief executive officer for $ 150 and assumed liabilities of $ 11 .

On November 8, 2023, FirstSun acquired all membership interests of FEIF Capital Partners, LLC, a Delaware limited liability company (“FEIF”) from our Chief Executive Officer and President for $ 150 and assumed liabilities of $ 11 .

FEIF currently has no operations.

21 unchanged sentences

Banking Activities - Interest rate swaps are valued based on quoted prices for similar assets in an active market with inputs that are observable.

These instruments are a component of prepaid expenses and other assets and accrued expenses and

other liabilities.

These instruments are a component of prepaid expenses and other assets and accrued expenses and other liabilities.

The initial and subsequent changes in fair value of the interest rate swaps and the economic hedge derivatives are a component of other noninterest income.

22 unchanged sentences

Total $ 54,234 $ 531,333 $ 76,701 $ 662,268

There were not any transfers between Level 2 and Level 3 during the years ended December 31, 2023 and 2022.

There were no transfers between Level 2 and Level 3 during the years ended December 31, 2024 and 2023.

The following table presents a reconciliation for our Level 3 assets measured at fair value on a recurring basis as of and for the years ended December 31,:

5 unchanged sentences

Balance, end of year $ 84,258 $ 76,701 $ 74,097

Certain financial assets and financial liabilities are regularly measured at fair value on a nonrecurring basis;

Certain financial and non-financial assets and liabilities are measured at fair value on a nonrecurring basis;

that is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment).

Assets and liabilities measured at fair value on a nonrecurring basis include the following:

Collateral dependent loans - Loan impairment is reported when full payment under the loan terms is not expected.

Collateral dependent loans - Collateral dependent loans are financial assets.

Loan impairment is reported when full payment under the loan terms is not expected.

Fair value is generally based on recent third-party appraisals which are updated on a periodic basis.

4 unchanged sentences

When loans are partially charged off, the resulting valuation would be considered Level 3, consisting of appraisals of underlying collateral.

Other Real Estate Owned and Foreclosed Assets - Other real estate owned is valued at the time the property is acquired and initially recorded at fair value less costs to sell, establishing a new cost basis.

Other Real Estate Owned and Foreclosed Assets - Other real estate owned are non-financial assets and are valued at the time the property is acquired and initially recorded at fair value less costs to sell, establishing a new cost basis.

Fair value is generally based on recent third-party real estate appraisals which are updated on a periodic basis.

5 unchanged sentences

Commercial and industrial $ 12,430 $ 2,756

Commercial real estate — 607

Residential real estate 1,255 1,448

Public finance 5,766 —

Other 2,232 2,289

5 unchanged sentences

$ 5,138 $ 4,100

The fair value of the financial assets in the table above utilize the market approach valuation technique, with discount adjustments for differences between comparable sales.

The fair value of other real estate owned and foreclosed assets in the table above utilize the market approach valuation technique, with discount adjustments for differences between comparable sales.

Fair value of financial instruments not carried at fair value:

4 unchanged sentences

Securities held-to-maturity 35,242 29,563 — 29,563 —

Loans (excluding collateral dependent loans at fair value) 6,260,603 6,121,749 — — 6,121,749

Loans (excluding collateral dependent loans) 6,344,377 6,191,461 — — 6,191,461

Restricted equity securities 28,917 28,917 — 28,917 —

7 unchanged sentences

Securities held-to-maturity 36,983 32,181 — 32,181 —

Loans (excluding impaired loans) 5,871,274 5,756,197 — — 5,756,197

Loans (excluding collateral dependent loans) 6,258,060 6,121,749 — — 6,121,749

Restricted equity securities 38,072 38,072 — 38,072 —

3 unchanged sentences

FHLB advances 389,468 389,468 — 389,468 —

Convertible notes payable, net 5,355 5,329 — 5,329 —

Subordinated debt, net 75,313 72,073 — 72,073 —

11 unchanged sentences

Total assets $ 1,134,826 $ 967,759

Convertible notes payable, net $ — $ 5,355

Subordinated debt, net $ 75,841 $ 75,313

7 unchanged sentences

Dividends received from subsidiaries $ 720 $ 26,595 $ 8,700

Interest income, $ 0 , $ 2 and $ 44 from subsidiaries, respectively

Interest income 35 36 22

Total income 755 26,631 8,722

2 unchanged sentences

Occupancy and equipment 240 189 83

Terminated merger related expenses 4,537 — —

Merger related expenses — — 1,598

1 unchanged sentence

Total expenses 12,871 9,165 9,888

Income (loss) before income taxes and undistributed earnings from subsidiaries 17,466 ( 1,166 ) ( 8,301 )

(Loss) income before income taxes and undistributed earnings from subsidiaries ( 12,116 ) 17,466 ( 1,166 )

Equity in undistributed earnings from subsidiaries 84,609 83,837 58,047

9 unchanged sentences

Net income $ 75,628 $ 103,533 $ 59,182

Adjustments to reconcile income to net cash provided by (used in) operating activities:

Adjustments to reconcile income to net cash (used in) provided by operating activities:

Amortization and accretion 529 533 1,529

(Equity) deficit in undistributed income of subsidiaries ( 83,837 ) ( 58,047 ) ( 49,729 )

Equity in undistributed income of subsidiaries ( 84,609 ) ( 83,837 ) ( 58,047 )

Changes in operating assets and liabilities:

1 unchanged sentence

Other liabilities 2,923 2,911 293

Net cash provided by (used in) operating activities 22,721 1,515 ( 6,241 )

Net cash (used in) provided by operating activities ( 6,822 ) 22,721 1,515

Cash flows from investing activities:

Payments for investments in and advances to subsidiaries — 125 500

Repayments of advances to subsidiaries — — 125

Cash paid to acquire FEIF Capital Partners, LLC (for further information, see Note 18 - Transactions with Related Parties )

1 unchanged sentence

Contributions to subsidiaries ( 500 ) ( 210 ) —

Net cash (used in) provided by investing activities ( 360 ) ( 4,015 ) 500

Net cash used in investing activities ( 500 ) ( 360 ) ( 4,015 )

Cash flows from financing activities:

2 unchanged sentences

Proceeds from issuance of common stock, net of issuance costs 82,271 ( 167 ) ( 578 )

Net cash (used in) provided by financing activities ( 5,623 ) 8,671 ( 66 )

Net increase (decrease) in cash and cash equivalents 16,738 6,171 ( 5,807 )

Net cash provided by (used in) financing activities 82,271 ( 5,623 ) 8,671

Net increase in cash and cash equivalents 74,949 16,738 6,171

Cash and cash equivalents, beginning of year 34,050 17,312 11,141

1 unchanged sentence

NOTE 21 - Segment Information

Our operations are conducted through two operating segments:

The Company’s Chief Executive Officer has been identified as the chief operating decision maker (“CODM”), who oversees the operations conducted through our two primary operating segments:

Banking and Mortgage Operations.

Corporate represents costs not allocated to the operating segments.

Operating segments are defined as components of an enterprise that engage in business activity from which revenues are earned and expenses are incurred for which discrete financial information is available that is evaluated regularly by executive management in deciding how to allocate resources and in assessing performance.

Operating segments have been determined based on the products and services offered and reflect the manner in which financial information is currently evaluated by management.

Each segment operates under the same banking charter, but is reported on a segmented basis for this report.

Each of the operating segments is complementary to each other and because of the interrelationship of the segments, the information presented is not indicative of how the segments would perform if they operated as independent entities.

Corporate represents costs not allocated to the operating segments, including those of FirstSun and our non-bank subsidiaries.

The Banking segment originates loans and provides deposits and fee based services to consumer, business, and mortgage lending customers.

2 unchanged sentences

The Mortgage Operations segment originates, sells, services, and manages market risk from changes in interest rates on one-to-four family residential mortgage loans to sell or hold on our balance sheet.

Loans originated-to-sell comprise the

majority of the lending activity.

Loans originated-to-sell comprise the majority of the lending activity.

The Mortgage Operations segment recognizes interest income on loans that are held-for-sale and newly originated residential mortgages held-for-investment, the gains from one to four family residential mortgage sales, and revenue for servicing loans and other ancillary fees following a sales transaction.

5 unchanged sentences

related costs have been allocated between the operating segments and Corporate.

Revenues are comprised of net interest income before the provision (benefit) for credit losses and noninterest income.

Noninterest expenses are allocated to each operating segment.

Provision for credit losses is primarily allocated to the Banking segment.

Allocation methodologies may be subject to periodic adjustment as management systems evolve and/or the business or product lines within the segments change.

Significant segment totals are reconciled to the financial statements as follows for the year ended December 31,:

Allocations of expenses to the operating segments are based on estimated uses of those services.

We use a funds transfer pricing process to allocate costs, capital and resources to each operating segment.

This allows us to identify the cost of funds within each segment, measure the profitability of each segment by relating costs to revenue, and to evaluate each operating segment’s impact on consolidated earnings.

Our CODM reviews net income to budgeted net income to assess segment performance on a monthly basis and to make decisions about allocating capital and personnel to the segments.

Significant segment totals, including significant expense categories provided to the CODM are reconciled to the financial statements as follows for the year ended December 31,:

Banking Mortgage Operations Corporate Total Segments

Summary of Operations

Interest income $ 420,386 $ 39,119 $ 35 $ 459,540

Interest expense 137,147 20,532 4,951 162,630

Net interest income (expense) 283,239 18,587 ( 4,916 ) 296,910

Provision for credit losses 15,790 2,457 — 18,247

Provision for (benefit from) credit losses 28,415 ( 865 ) — 27,550

Noninterest income:

Service charges on deposit accounts 9,499 ( 4 ) — 9,495

Treasury management service fees 14,829 — — 14,829

Credit and debit card fees 11,148 5 — 11,153

6 unchanged sentences

Occupancy and equipment 32,864 3,179 239 36,282

Amortization and impairment of intangible assets 3,549 — — 3,549

Terminated merger related expenses 8,641 — 4,537 13,178

Other noninterest expenses 38,363 16,393 1,290 56,046

2 unchanged sentences

Other Information

Depreciation expense $ 6,320 $ 233 $ — $ 6,553

Depreciation expense and amortization on premises and equipment $ 7,189 $ 186 $ — $ 7,375

Identifiable assets $ 6,812,204 $ 1,147,686 $ 137,497 $ 8,097,387

1 unchanged sentence

Summary of Operations

Interest income $ 386,535 $ 27,113 $ 36 $ 413,684

Interest expense 93,962 21,242 5,049 120,253

Net interest income (expense) 292,573 5,871 ( 5,013 ) 293,431

2 unchanged sentences

Service charges on deposit accounts 9,940 — — 9,940

Treasury management service fees 11,724 — — 11,724

Credit and debit card fees 11,681 — — 11,681

5 unchanged sentences

Salary and employee benefits 106,030 25,313 1,888 133,231

Occupancy 27,407 3,854 83 31,344

Occupancy and equipment 30,461 2,775 190 33,426

Amortization of intangible assets 4,822 — — 4,822

Other noninterest expenses 34,343 14,933 2,038 51,314

2 unchanged sentences

Other Information

Depreciation expense $ 6,754 $ 364 $ — $ 7,118

Depreciation expense and amortization on premises and equipment $ 7,187 $ 233 $ — $ 7,420

Identifiable assets $ 6,907,741 $ 910,728 $ 61,255 $ 7,879,724

1 unchanged sentence

Summary of Operations

Interest income $ 250,405 $ 16,390 $ 22 $ 266,817

Interest expense 8,565 10,935 5,685 25,185

Net interest income (expense) 241,840 5,455 ( 5,663 ) 241,632

Provision (benefit) for credit losses 3,235 ( 235 ) — 3,000

Provision for credit losses 14,781 3,269 — 18,050

Noninterest income:

Service charges on deposit accounts 9,857 — — 9,857

Treasury management service fees 8,827 — — 8,827

Credit and debit card fees 11,038 — — 11,038

5 unchanged sentences

Salary and employee benefits 94,310 38,456 1,593 134,359

Occupancy 24,558 3,067 3 27,628

Occupancy and equipment 27,407 3,854 83 31,344

Amortization of intangible assets 4,215 — — 4,215

Merger related expenses 18,751 — — 18,751

Other noninterest expenses 34,116 13,814 2,527 50,457

2 unchanged sentences

Other Information

Depreciation expense $ 5,728 $ 390 $ — $ 6,118

Depreciation expense and amortization on premises and equipment $ 7,589 $ 364 $ — $ 7,953

Identifiable assets $ 6,633,383 $ 752,841 $ 44,098 $ 7,430,322

38 unchanged sentences

The amended complaint alleges that the Bank improperly charged multiple insufficient funds or overdraft fees.

The Plaintiff seeks unspecified restitution, actual and statutory damages, costs,

attorneys’ fees, pre-judgment interest, and other relief as the Court deems proper.

On September 27, 2021, the Bank filed a motion to dismiss the amended complaint.

The motion to dismiss has been fully pled and is before the Court for decision.

The Plaintiff seeks unspecified restitution, actual and statutory damages, costs, attorneys’ fees, pre-judgment interest, and other relief as the Court deems proper.

On September 27, 2021, the Bank filed a motion to dismiss the amended complaint, which was denied on March 11, 2024.

The parties have engaged in settlement discussions.

At this time, the Bank is unable to reasonably estimate the outcome of this litigation.

5 unchanged sentences

On January 18, 2024, the jury awarded RESI approximately $ 2.1 million which included punitive damages.

Final judgment, which could potentially include a supplemental award of RESI’s legal fees and expenses, has not been rendered by the Court.

Judgment on the aforementioned jury award was formally entered on July 25, 2024.

A supplemental award of RESI’s legal fees will likely be entered by March 31, 2025.

A supplemental judgment award of RESI’s legal fees is before the Court for consideration.

We believe the judgment will be covered by insurance;

7 unchanged sentences

As these extension options are not generally considered reasonably certain of exercise, they are not included in the lease term.

For leases existing during transition from ASC 840 to ASC 842 at January 1, 2022, extension options were not considered in the remaining lease term.

ROU asset on leased property, gross $ 38,779 $ 36,520

9 unchanged sentences

Total operating lease liability included in the accompanying balance sheet $ 24,376

Weighted Average Remaining Life - Operating Leases 5.56

Weighted Average Remaining Life - Operating Leases (years) 5.09

Weighted Average Rate - Operating Leases 2.61 %

13 unchanged sentences

Service charges on deposit accounts $ 9,495 $ 9,940 $ 9,857

Treasury management service fees 14,829 11,724 8,827

Credit and debit card fees 11,153 11,681 11,038

4 unchanged sentences

Service charges on deposit accounts:

We charge depositors various deposit account service fees including those for outgoing wires, overdrafts, stop payment orders, and ATM fees.

We charge depositors various deposit account service fees including those for online banking, outgoing wires, overdrafts, stop payment orders, and ATM fees.

These fees are generated from a depositor’s option to purchase services offered under the contract and are only considered a contract when the depositor exercises their option to purchase these account services.

1 unchanged sentence

Deposit account and other banking fees are recorded at the point in time we perform the requested service.

Treasury management service fees:

We charge business customers various service fees for products and account management services provided including financial information, accounts receivable, accounts payable, fraud mitigation, and cash flow management.

These service fees are generated from a depositor’s election to purchase services offered under the contract and are only considered a contract when the depositor elects to purchase these products and account services.

Therefore, we deem the term of our contracts with depositors to be month to month and do not extend beyond the services already provided.

Credit and debit card fees :

11 unchanged sentences

Therefore, we deem the term of our contracts with these customers to be day-to-day and do not extend beyond the services already provided .

NOTE 27 - Subsequent Events

The Company has evaluated subsequent events for potential recognition and disclosure through the filing date of this Form 10-K.

Proposed Merger with HomeStreet

On January 16, 2024, FirstSun entered into an Agreement and Plan of Merger, that provides for the combination of FirstSun and HomeStreet.

Under the merger agreement, a newly formed wholly-owned subsidiary of FirstSun, will merge with and into HomeStreet, with HomeStreet remaining as the surviving entity and becoming a wholly-owned subsidiary of FirstSun, with FirstSun as the surviving entity, in a transaction we refer to as the “first step merger.” This surviving entity, immediately following the first step merger and as part of a single integrated transaction, will merge with and into FirstSun, in a transaction we refer to as the “second step merger.” Immediately following the completion of the second step merger, HomeStreet Bank will merge with and into Sunflower Bank.

Upon the terms and subject to the conditions set forth in the merger agreement, at the effective time of the merger, each share of common stock of HomeStreet issued and outstanding immediately prior to the merger effective time, subject to certain exceptions, will be converted into the right to receive 0.4345 of a share of FirstSun common stock.

Holders of such HomeStreet common stock, subject to certain exceptions, will also be entitled to receive cash in lieu of fractional shares of FirstSun common stock.

Consummation of the proposed HomeStreet merger is subject to the satisfaction of customary closing conditions including receipt of necessary HomeStreet shareholder and regulatory approvals.

The merger agreement provides certain termination rights for both FirstSun and HomeStreet and further provides that a termination fee will be payable by either FirstSun or HomeStreet, as applicable, upon termination of the merger agreement under certain circumstances.

The parties to the merger expect to close the merger in the middle of 2024, subject to satisfaction of closing conditions, including receipt of customary required regulatory approvals and the requisite approval by the shareholders of HomeStreet.

The combined entity is expected to have total assets of approximately $ 17 billion and 129 branch locations.

The combined entity’s expanded footprint includes, FirstSun’s current presence in the Southwest and Midwest together with HomeStreet’s presence in Southern California, Hawaii and the Pacific Northwest.

Investment Agreements

Upfront Securities Purchase Agreement

Concurrently with entry into the merger agreement, FirstSun entered into an upfront securities purchase agreement (the “Upfront Securities Purchase Agreement”) with certain funds managed by Wellington Management Company, LLP (collectively, the “Wellington Funds”), pursuant to which we issued 2,461,538 shares of our common stock in a private placement for $ 80.0 million that closed on January 17, 2024.

Under the terms of the Upfront Securities Purchase Agreement, FirstSun is also obligated, concurrently with the closing of the proposed HomeStreet merger, to issue to the Wellington Funds, warrants (the “Warrants”) to purchase approximately 1.15 million shares of FirstSun common stock with such Warrants having an initial exercise price of $ 32.50 per share.

The Warrants will carry a term of three years .

In the event the proposed HomeStreet merger is not consummated, no Warrants will be issued.

Acquisition Finance Securities Purchase Agreement

Concurrently with its entry into the HomeStreet merger agreement, FirstSun entered into an acquisition finance securities purchase agreement (the “Acquisition Finance Securities Purchase Agreement,” and together with the Upfront Securities Purchase Agreement, as the “Investment Agreements”), dated January 16, 2024, with the Wellington Funds and certain other institutional investors (who we refer to as “additional institutional investors” and, collectively with the Wellington Funds, as the “institutional investors”).

Pursuant to the Acquisition Finance Securities Purchase Agreement, on the terms and subject to the conditions set forth therein, substantially concurrently with the closing of the merger, the institutional investors will invest an aggregate of $ 95 million in exchange for the sale and issuance, at a purchase price of $ 32.50 per share, of approximately 2.92 million shares of FirstSun common stock.

Registration Rights Agreements

In connection with the Upfront Securities Purchase Agreement, FirstSun and the Wellington Funds also entered into a registration rights agreement (the “Upfront Registration Rights Agreement”), dated January 16, 2024, pursuant to which FirstSun agreed to, among other things, provide customary resale registration rights with respect to the shares of our common stock obtained by the Wellington Funds pursuant to the Investment Agreements, including those issued upon exercise of the Warrants.

the Acquisition Finance Securities Purchase Agreement contemplates that, in connection with the closing of the investments under the Acquisition Finance Securities Purchase Agreement, FirstSun will enter into a resale registration rights agreement with each additional institutional investor (the “Acquisition Finance Registration Rights Agreement”), the material terms and conditions of which are consistent with the terms and conditions of the Upfront Registration Rights Agreement.

Charter Amendment

In connection with the proposed merger, the holders of a majority of the voting power of FirstSun common stock e xecuted a written consent approving and adopting an amendment to our certificate of incorporation (the “Charter Amendment”) which will increase the number of FirstSun’s authorized shares of capital stock from 60,000,000 to 110,000,000 , consisting of 100,000,000 shares of FirstSun common stock, and 10,000,000 shares of preferred stock and will become effective upon FirstSun’s filing the Charter Amendment with the Secretary of State of the State of Delaware.

We plan to file the Charter Amendment prior to the closing of the proposed merger.

Changes in and Disagreements With Accountants on Accounting and Financial Disclosures

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data