NEW YORK — FirstSun Capital Bancorp (FSUN) reported first-quarter earnings per share of $1.15, exceeding analyst consensus of $1.08 by 6.5 percent. Net interest income rose 15 percent year-over-year to $78 million, signaling strong loan demand and stable funding costs. The bank's net interest margin expanded by 12 basis points sequentially to 3.84 percent, reversing a multi-quarter trend of compression and surprising many Street analysts.
Total loans grew eight percent annualized, reaching $3.5 billion. This growth was broad-based, with commercial real estate and commercial and industrial segments showing particular strength in key regional markets. Asset quality remains strong; non-performing loans decreased to 0.4 percent of total loans from 0.45 percent in the prior quarter. Provision for credit losses also dropped to $5 million, down from $7 million in the fourth quarter of 2024.
Deposit costs held firm at 1.8 percent, insulating FSUN from the funding pressures impacting many regional banking peers. Total deposits increased five percent year-over-year to $6.2 billion, with non-interest bearing deposits comprising a healthy 28 percent of the total. The bank also showed operational discipline, reporting an efficiency ratio of 58 percent, an improvement from 61 percent in the previous quarter.
I maintain a Buy rating on FSUN, setting a $65 price target. This target represents 22 percent upside from its current trading price of $53.10. The stock trades at 8.5 times forward earnings, a notable discount to its peer group average of 10.2 times. Consistent execution on loan growth and continued net interest margin expansion will drive multiple re-rating.
FSUN's strong performance reflects its differentiated strategy in competitive regional markets. The bank benefits from a disciplined underwriting approach and a focus on high-quality commercial relationships, particularly within its growing Texas footprint. Management's conservative capital allocation, reflected in a strong Common Equity Tier 1 ratio of 10.5 percent, supports a durable earnings profile that reduces downside risk. This positions FSUN for sustained profitability even if interest rates remain elevated longer than anticipated, providing a clear path to our $65 price target.
