FSUN Investor Relations Materials
Page 2 Cautionary Statement Regarding Forward-Looking Statements This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Examples of forward-looking statements include, but are not limited to, statements regarding our outlook, expectations, and strategies. Words such as “focus,” “believe,” “anticipate,” “target,” or “continue,” and variations of such words or other similar expressions are intended to identify such forward-looking statements and in this presentation includes our statements regarding continuing high service fee income and our continuing to add executive talent. Forward-looking statements are subject to numerous risks, uncertainties and assumptions, that are difficult to predict with regard to timing, extent, likelihood and degree of occurrence, which could cause our actual results to differ materially from anticipated results. Such risks, uncertainties and assumptions include, among others, the following: • our ability to execute our growth strategy; • our ability to retain or develop a strong core deposit base or other low-cost funding sources; • negative economic conditions, including inflation, that may adversely affect the economy, real estate values, the job market and other factors nationally and in our market areas, in each case that may affect our liquidity and the performance of our loan portfolio; • changes in U.S. monetary policy, the level and volatility of interest rates, the capital markets and other market conditions that may affect, among other things, our liquidity and the value of our assets and liabilities; • risks with respect to recent, pending or potential future mergers or acquisitions, including our ability to successfully identify potential acquisition targets and, thereafter, complete acquisitions and to integrate or expand businesses and operations that we acquire; • our ability to attract and retain key personnel; • the potential increase in reserves and allowance for loan losses as a result of the transition in 2023 to the current expected credit loss standard, or “CECL”; • competition from financial institutions and other financial service providers, including non-bank financial technology providers, and our ability to attract customers from other financial institutions; • risks associated with actual or potential litigation or investigations by customers, regulatory agencies or others; • The effects of pandemics and governmental responses to these events on the economic and business environments in which we operate; • legislative or regulatory changes, particularly changes in regulation of financial services companies; • changes in accounting principles, policies, practices or guidelines; • any interruption or breach of security resulting in failures or disruptions in customer account management, general ledger, deposit, loan or other systems; and • the adverse effects of events beyond our control that may have a destabilizing effect on financial markets and the economy, such as epidemics and pandemics, war or terrorist activities, essential utility outages, climate change, deterioration in the global economy, instability in the credit markets, disruptions in our customers’ supply chains or disruption in transportation. The foregoing list of factors is not exclusive, is not necessarily in order of importance and you should not place undue reliance on any forward-looking statements. You should also consider the risks, assumptions and uncertainties set forth under “Item 1.A. Risk Factors,” of our Annual Report on Form 10-K filed with the SEC on March 16, 2023. Further, any forward-looking statement speaks only as of the date on which it is made and we do not intend to and disclaim any obligation to update or revise any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events, unless required to do so under the federal securities laws. Use of Non-GAAP Measures This presentation contains certain non-GAAP financial disclosures that are not in accordance with U.S. generally accepted accounting principles, or GAAP. These non-GAAP disclosures include tangible common equity, average tangible common equity, tangible common equity to tangible assets (“TCE/TA”), return on average tangible common equity (“ROATCE”), pre-tax pre-provision net income (“PTPP”), core net income, core return on average assets (“ROAA”), PTPP ROAA, core PTPP ROAA, core efficiency ratio, loans excluding paycheck protection program (“PPP”) loans, loans excluding PPP and non-owner occupied commercial real estate (“NOO CRE”) loans, allowance for credit losses (“ACL”) to loans excluding PPP loans, and core deposits. Our management uses these non-GAAP financial measures in analyzing our performance and the efficiency of our operations. Management believes these non-GAAP measures provide a greater understanding of our ongoing operations, enhance the comparability of our results with prior periods and demonstrate the effects of significant items in the current period. Accordingly, our management believes investors may find these non-GAAP financial measures useful. However, these disclosures should not be viewed as a substitute for financial measures determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. See the Appendix included with this presentation for a reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial measure.
Page 3 Unique High Growth Franchise Source: S&P Global Market Intelligence; Financial data as of most recent quarter available (1) Loan Growth represents CAGR calculated from 12/31/2017 (2) MSA’s ranked by population size within the Midwest and Southwest regions as defined by S&P Global Market Intelligence Attractive Core Deposit Funded Franchise with Proven Ability to Deliver Strong Organic Growth Durable & Growing Earnings Strong Growth Momentum With scale in markets with leading projected population growth and household income ATTRACTIVE FOOTPRINT(2) 1 Bank Urban Centers with Favorable Demographics Critical Mass in Key US Markets • Banks in Midwest and Southwest Markets • Banks with Total Assets $5bn - $15bn UNIVERSE SIZE 60 Banks MRQ Fee Income / Rev. >20% STRONG FEE INCOME Specialized C&I Lending LENDING FOCUS Loan Growth(1) >15% GROWTH Differentiated Platform Scarcity Value
Page 4 $7.8 $1.7 $1.9 $3.7 $3.9 $4.2 $5.0 $5.7 $7.4 2015 2016 2017 2018 2019 2020 2021 2022 2023Q2 Balance Between Organic Growth and Strategic M&A Asset Growth Over Time ($bn) Total Asset CAGR: 22.7% Source: S&P Global Market Intelligence; Data as of 6/30/2023 Note: CAGR calculated over 7.5 year period Organic growth alongside PLATFORM TRANSFORMATIONS • Transformed SGB (Strategic Growth Bank) from CRE to C&I with core deposits and strong fee income • Built Dallas and Kansas City through organic recruitment of C&I teams • Built Phoenix with all organic C&I teams on top of 4 de-novo branches • Pioneer Bank acquisition added scale in Austin & Houston markets • Scarcity created across 5 States and along Interstate system connecting key Metro-Markets Maintained CORE DISCIPLINES to-date • Low cost funding / durable NIM • Superior credit quality performance • Strong capital ratios • Expense control while still investing in various teams across the bank Total Active FSUN Branches: 69 Legacy FSUN: 39 From SGB: 13 From Pioneer: 17 Track Record of Successful Integration
Page 5 For the Qtr For the Year Ended '19 - '22 Ended FY 2019A FY 2020A FY 2021A FY 2022A CAGR Q2 2023A Balance Sheet ($mm) Total Assets $4,185 $4,995 $5,667 $7,430 21.1% $7,797 Total Net Loans 3,060 3,799 3,990 5,846 24.1% 6,078 Deposits 3,490 4,154 4,855 5,765 18.2% 6,150 Tang. Common Equity 387 443 483 665 19.8% 717 Balance Sheet Ratios Loans/ Deposits (%) 88.5 92.6 83.2 102.5 100.1 TCE / TA (%) 9.35 8.95 8.58 9.09 9.33 NPAs / Assets (%) 0.50 0.79 0.60 0.48 1.00 NCOs / Avg. Loans (%) 0.13 0.11 0.09 (0.01) 0.05 Allowance for Credit Losses / Loans (%) 0.92 1.24 1.18 1.12 1.26 Profitability ($mm) Total Revenue $198.2 $284.3 $279.5 $331.2 18.7% $98.1 Operating Expenses 170.2 204.1 224.6 239.1 12.0% 58.0 Pre-Tax Pre-Provision Net Income 28.0 80.3 54.8 92.1 48.7% 40.1 Prov ision for Credit Losses 6.1 23.1 3.0 18.1 44.0% 4.4 Net income 20.5 47.6 43.2 59.2 42.4% 28.0 Core Net Incom e 20.5 47.6 45.7 76.2 54.9% 28.0 Profitability Ratios ROAA (%) 0.52 1.02 0.79 0.88 1.49 Core ROAA (%) 0.52 1.02 0.84 1.13 1.49 Pre-Tax Pre-Provision ROAA (%) 0.70 1.72 1.00 1.37 2.13 Core PTPP ROAA (%) 0.70 1.72 1.05 1.62 2.13 Net Interest Margin (%) 3.45 3.10 3.00 3.87 4.24 Efficiency Ratio (%) 85.9 71.8 80.4 72.2 59.2 Core Efficiency Ratio (%) 85.9 71.8 79.3 66.5 59.2 Fee Inc. / Rev. (%) 35.8 52.2 44.5 27.0 24.8 Snapshot of Financial Performance Performance SummaryFSUN Q2 2023 Highlights 25% Fee Income / Revenue $7.8B Total Assets +10% YoY $6.1B Total Net Loans +14% YoY $295M Net Interest Income (Annualized) $393M Revenue (Annualized) 4.24% Net Interest Margin (2) (2) (2) Source: S&P Global Market Intelligence & Company Documents (1) Excludes accrual TDRs (2) Refer to Non-GAAP Financial Measures on pages 24 & 25 (3) Figure shown reflects 2023 Q2 annualized; NCOs / Avg. Loans of 0.03% for 2023 YTD annualized (1) (2) (2) (2) (2) (2) (3)
Page 6 Key Themes St ra te g y O p e ra tin g Solid core earnings progression & growth momentum, have moved from heavy investment phase to realization phase ‒ Past 5 years of repositioning to C&I and reduction in CRE exposure delivering NIM expansion & fee income ‒ Retooled infrastructure has created tremendous operating leverage to continue scaling High service fee income to revenue mix, multiple profitable service fee income businesses ‒ Significant revenue diversification and best-in-class revenue mix ‒ Mortgage banking, wealth/private banking, treasury management, and retail Focused in key Southwest region growth markets ‒ Dallas, Phoenix-Scottsdale, Houston, Kansas City, San Antonio, Austin and Denver ‒ Pioneer acquisition added scale in Austin & Houston markets Specialized Commercial Bank; attractive loan mix with low CRE levels ‒ Focus on attractive business verticals including Healthcare, ABL, Technology, Telecom, Family Offices, Public Finance, Construction Trades and Specialty Finance ‒ Treasury Management Services and Small Business Banking Region Effective organic growth strategy delivered by talent acquisition strategy ‒ Historically generated 20+% YoY Loan growth pre-Pioneer acquisition ‒ Opportunities continue due to recent bank sector consolidations Successful integration of Pioneer; key retention of customers and talent accomplished ‒ Executive management has completed over 30 M&A transactions and integrations ‒ Effectively using FirstSun platform to attract loan teams in targeted markets High quality, low-beta, low-cost core deposit franchise ‒ Balanced distribution across stable, rationalized deposit rich markets in Kansas, New Mexico, Colorado ‒ Provides an advantage in funding for our lending opportunities Discipline C&I Focus Talent Fee Income Integration Granular Deposits
Page 7 0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 1990 2000 2010 2023 Q2 Leverage Ratio NPAs / Loans + OREO NIM 0% 5% 10% 15% 20% 25% 30% 35% 40% 1990 2000 2010 2023 Q2 C&I Loans / Loans CRE Loans / Loans 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 1990 2000 2010 2023 Q2 Total Assets ($mm) Total Deposits ($mm) History of Sunflower Bank Founded in late 1800s, Sunflower is now a ~$8 billion multi-state Regional Bank that has grown from a small, rural Kansas Community Bank Expanded into major higher growth metro-markets such as Dallas, Denver, Phoenix Shifted focus from community CRE lending to Major Customer C&I Relationship Banking: • Industry Specific Lending Expertise • Treasury Management • Wealth Management & Trust Maintained Core Disciplines 1) Superior credit quality performance 2) Low cost funding – drives durable NIM - full year 2022 was 3.87%; 4.24% in 2Q’23 3) Strong Loan Growth and Capital Ratios 4) Expense control while still investing in Teams Metrics of Interest: • Low NCOs – cumulatively over life of bank • High Reserve Coverage • Granular Deposits • Impressive Current Loan Yields • Success in De-emphasizing CRE exposure 10% -12% CAGRs Source: S&P Global Market Intelligence Note: 1990, 2000, and 2010 data per holding company regulatory filings; 2023 Q2 data per GAAP filings Note: Bank level data shown where consolidated unavailable
Page 8 0.13% 0.11% 0.09% (0.01%) 0.03% 2019 2020 2021 2022 2023 YTD Ann. 0.22% 0.21% 0.65% 1.94% 0.26% 0.29% 1.05% 2.23% 2021Q4 2022Q2 2022Q4 2023Q2 FSUN Peer Median 36% 41% FSUN Deposit Beta Peer Deposit Beta 204% 133% 167% 227% 114% 2019 2020 2021 2022 2023 Q2 Long-Term Credit Performance Low-Cost, Low Beta Core Deposits1 Key Metrics: • Cumulative NCOs since 2007: Only $31mm - $22mm of the $31mm from ’07-’11 Great Financial Crisis • Avg. ACL/Loans since 2007: ~1.17% - Avg. NCOs/Loans since 2007: 13bps • Recent Asset Quality Trends Below: Key Metrics: • Cost of Total Deposits: 139 bps (2Q’23) - Current Cumulative Deposit Beta of 36%(2) • Core Deposits(3): $5.7b or 92% of Total Deposits (2Q’23) - 27% Non-Interest Bearing / Total Deposits - 34% Transaction Deposits / Total Deposits NPAs(1) / Assets Historical Cost of Interest-Bearing Deposits (Sunflower Bank only) FSUN is well-positioned in current rate environment Deposit Beta vs Industry FSUN vs. Peer Cumulative Deposit Betas(2) Net Charge-offs / Average Loans Allowance for Credit Losses / NPLs(1) 11 rate hikes since Q1 2022 Source: S&P Global Market Intelligence; Financial data as of most recent quarter available Note: Peers include major exchange-traded banks and thrifts headquartered in the Midwest and Southwest with total assets between $5 billion and $10 billion and MRQ C&I loans as a % of total loans >20%; Excludes merger targets and mutual holding companies (1) Excludes accrual TDRs (2) Deposit beta on a cumulative basis and calculated as the change in cost of IB deposits divided by the change in avg. fed funds rate over the same period (2022Q1 – 2023Q2) (3) Refer to Non-GAAP Financial Measures on pages 24 & 25 0.50% 0.79% 0.60% 0.48% 1.00% 2019 2020 2021 2022 2023 Q2 2
Page 9 $170 $232 2019 2023Q2 Annualized $198 $393 2019 2023Q2 Annualized $127 $136 $155 $242 $295 2019 2020 2021 2022 2023Q2 Annualized $3,490 $4,154 $4,855 $5,765 $6,150 2019 2020 2021 2022 2023Q2 ’19 – ’23Q2 CAGR: 18% Strong Organic Growth Underpinning Recent Operating Trends Total Loans excl. PPP ($mm) Net Interest Income Growth ($mm) Revenue and Expense Growth ($mm) Total Deposits ($mm) ’19 – ’23Q2 CAGR: 22% 98% Increase 36% Increase ’19 – ’23Q2 CAGR: 27% Peer Median(1): 12% Peer Median(1): 13% Peer Median(1): 11% Operating Leverage Growth of $132mm Source: S&P Global Market Intelligence & Company Documents (1) Peers include major exchange-traded banks and thrifts headquartered in the Midwest and Southwest with total assets between $5 billion and $10 billion and MRQ C&I loans as a % of total loans >20%; Excludes merger targets and mutual holding companies (2) Refer to Non-GAAP Financial Measures on pages 24 & 25 3 4 Revenue Expenses (2)(2) $3,089 $3,595 $3,970 $5,908 $6,152 $2,496 $3,014 $3,466 $5,128 $5,429 2019 2020 2021 2022 2023Q2 Total Loans (excl. PPP) Loans excl. PPP & NOO CRE
Page 10 Strategic Focus St ra te g y GEOGRAPHIC CONNECTIVITY: Focus in key Southwest region growth markets ‒ Dallas, Phoenix-Scottsdale, Houston, Kansas City, San Antonio, Austin and Denver ‒ Pioneer Bank acquisition added scale in Austin and Houston markets ‒ Scarcity created across 5 states and along Interstate system connecting key Metro-Markets 1 SPECIALIZED C&I EXPERTISE: Focus on closely held business owners; create & build relationships ‒ Focus on attractive business verticals including: Healthcare, ABL, Technology, Telecom, Public Finance, Construction Trades, Family Offices and Specialty Finance ‒ Provide strong Treasury Management Services and Small Business Banking ‒ Establish efficient syndication to handle varying credit sizes and structures ‒ Proactively change Loan Mix to Specialty C&I from CRE (previously acquired SGB & Pioneer platforms heavy on CRE) Improved CRE to Risk-Based Capital ratios 2 EFFECTIVE ORGANIC GROWTH: Delivered by platform transformations and talent acquisition strategy ‒ Re-position how local platforms approach their markets Transformed SGB (Strategic Growth Bank) from CRE to C&I with core deposits and strong service fee income Built Dallas and Kansas City through organic recruitment of C&I teams Built Phoenix with all organic C&I teams on top of 4 de-novo branches ‒ 20+% YoY Loan growth pre-Pioneer acquisition ‒ Opportunities for lateral hires continue due to recent bank sector consolidations - still hiring teams 3
Page 11 $97.0 $90.9 $74.3 $78.2 $81.6 $69.1 $73.5 Denver, CO Austin, TX Houston, TX Phoenix, AZ Dallas, TX San Antonio, TX U.S.National Average 19.0% 41.8% 24.5% 20.1% 24.6% 24.1% 8.3% Denver, CO Austin, TX Houston, TX Phoenix, AZ Dallas, TX San Antonio, TX U.S.National Average Source: S&P Global Market Intelligence Situated in Top-Tier Growth Markets (5 of the Top 10 in the U.S.) 2010 – 2023 Population Growth % Enhancing Our Presence in High Growth Markets Denver, CO Phoenix, AZ Austin, TX Houston, TX San Antonio, TX Dallas, TX 2023 Median Household Income ($000s) Focus Markets Critical Mass Attracting Clients And Talent
Page 12 Regional Operations & Scale Source: Company documents; Financial data as of June 30, 2023 Eastern KS Loans: $705 Deposits: $246 Branches: 3 FTE: 36 Metro TX Loans: $2,324 Deposits: $1,303 Branches: 19 FTE: 148 El Paso Loans: $210 Deposits: $548 Branches: 5 FTE: 35 New Mexico Loans: $140 Deposits: $1,054 Branches: 7 FTE: 48 Desert Mountain Loans: $1,648 Deposits: $1,111 Branches: 15 FTE: 129 Regional Presidents / Leaders are local Focused on small to mid-sized businesses and business owners Leadership team incentivized Local credit oversight with both local and centralized underwriting authorities Market Strategies *$’s in millions Denver Austin Dallas Phoenix Kansas City El Paso Sante Fe Central / Western KS Loans: $178 Deposits: $1,324 Branches: 20 FTE: 118 Houston San Antonio Wichita Albuquerque
Page 13 C&I Relationship Banking: Vertical Focus in Growing Markets C&I relationships come with higher margins, fees and deposits Diversified verticals in specialized markets, competing w/ bigger competitors Robust client relationships – proven track record of beating bigger competitors due to efficiency and proven execution Structure products to offer best-in-class price on level of risk plus “capital markets” style fees and treasury management HR Leverage – talented industry specific bankers focused on creating consistent and sustainable growth ~$2.0 billion of organic loan growth in the past 4 years $433M Total Deposits $2.5B Total Loans Specialty C&I Lending Summary • Team based in high-growth Texas markets and Nashville • Includes business banking specialty in practice finance healthcare • Regional specialization in high-growth Southwest markets • Emphasis on charter school, bridge-lending and turnaround public finance • Highly specialized team in high-growth Southwest markets • Focused on cash flow subscription lending; not venture or start-ups • Includes PE sponsor-based transactions • Team specializes in working capital, growth and buyout financing • Focused on lower middle-market • Team based in Colorado • Focused on businesses supporting large scale construction related industries (1) Denotes Technology, Media, and Telecom (2) Denotes Asset-Backed Lending (1) (2) Family Office • Focused on building private asset connections with local expertise • Expanding our relationships with key families in high growth markets • Leveraging our locally focused platform and investment options for business owners Construction Trades
Page 14 40.2% 28.3% FirstSun Peer Median Construction 4% Residential R.E. 21% Multifamily 1% Owner Occupied C.R.E 12% Non-Owner Occupied C.R.E. 26% Commercial & Industrial 22% Consumer & Other 4% Oblig. of St & Poli. Subdivisions 10% Construction 5% Residential R.E. 18% Multifamily 2% Owner Occupied C.R.E 10% Non-Owner Occupied C.R.E. 12% Commercial & Industrial 40% Consumer & Other 3% Oblig. of St & Poli. Subdivisions 10% Loan Composition: Strong C&I Growth while Significantly Lowering CRE Q2 2023 C&I Loans / Total Loans (%) (1) Yield on Loans: 4.69% Well-diversified portfolio with strong C&I lending Well-managed CRE portfolio Variable rate structural emphasis leading to healthy NIM performance Source: S&P Global Market Intelligence Note: FSUN data represents GAAP data as of June 30, 2023; Bank level regulatory data shown where GAAP unavailable (1) Peers include major exchange-traded banks and thrifts headquartered in the Midwest and Southwest with total assets between $5 billion and $10 billion and MRQ C&I loans as a % of total loans >20%; Excludes merger targets and mutual holding companies THEN….Q4 2018 Loan Composition NOW…Q2 2023 Loan Composition Yield on Loans: 6.13% FSUN CRE / Total Risk-Based Capital vs. Peers (%) Building C&I Verticals De-emphasizing CRE Major decrease Major increase 146% 113% 90% 94% 81% FSUN NOO CRE/TRBC: 179% 146% 136% 171% 152% 187% 176% 172% 196% 228% 2019Y 2020Y 2021Y 2022Y 2023Q2 FirstSun Peer Median
Page 15 Operating Focus O p e ra tin g SOLID CORE EARNINGS PROGRESSION & GROWTH, HAVE MOVED FROM INVESTMENT PHASE TO REALIZATION PHASE ‒ Past 5 years of repositioning to C&I and reduction in CRE exposure delivering NIM expansion & fee income ‒ Retooled infrastructure has created tremendous operating leverage to continue scaling - 1.49% ROAA and 4.24% NIM (MRQ) 4 SUCCESSFUL INTEGRATION OF PIONEER; KEY RETENTION OF CUSTOMERS AND TALENT - accomplished ‒ Executive management has completed over 30 M&A transactions and integrations ‒ Effectively using FirstSun platform to attract loan teams in targeted markets 2 CONTINUE TO GENERATE HIGH SERVICE FEE INCOME TO REVENUE MIX, MULTIPLE PROFITABLE SERVICE FEE INCOME BUSINESSES ‒ Best-in-class mix: Mortgage banking, wealth/private banking, treasury management, and retail – add payments efficiencies ‒ Right-sized mortgage origination to be a low-cost provider in our footprint ‒ Pricing retail & commercial service fees at sustainable levels that are market-based (do not give away services) ‒ Continue to add to Treasury Management product suite ‒ Continue cross-sell momentum (Private Banking, Wealth and Treasury) ‒ Non-homogenous pricing (Western KS is different than Dallas) 1 COMMITMENT TO HIGH QUALITY, LOW-BETA, LOW-COST CORE DEPOSIT FRANCHISE ‒ Continue with team incentives and client programs to maintain deposit growth at attractive rates to FSUN ‒ Provides an advantage in funding for our lending opportunities - deposit beta is proving to be sure-footed 3
Page 16 Loans / Cash + Securities / On-Hand Reliance on One Year GAP / AOCI & HTM Sec. FMV / Deposits Deposits Liquidity Ratio Wholesale Funding Assets Total Equity FirstSun 100.1% 17.0% 9.6% 16.5% 18.1% (6.1%) Peer Median 91.5% 25.2% 12.8% 13.9% 17.9% (14.0%) Demand Deposits 22%NOW & Other Trans. Accts 2% MMDA & Other Savings 61% Retail Time Deposits 7% Jumbo Time Deposits 8% Demand Deposits 27% NOW & Other Trans. Accts 7% MMDA & Other Savings 40% Retail Time Deposits 13% Jumbo Time Deposits 13% Funding Composition: Low-Cost, Low Beta Deposits Cost of Total Deposits: 0.52% Source: S&P Global Market Intelligence Note: FSUN data represents holding company GAAP data as of June 30, 2023; Bank level regulatory data shown where GAAP unavailable Note: Jumbo time deposits defined as time deposits > 100k (1) Peers include major exchange-traded banks and thrifts headquartered in the Midwest and Southwest with total assets between $5 billion and $10 billion and MRQ C&I loans as a % of total loans >20%; Excludes merger targets and mutual holding companies (2) On-Hand Liquidity ratio defined as (total cash & equivalents + securities – pledged securities) / total liabilities (3) Wholesale funding ratio defined as (brokered deposits + borrowings) / total liabilities (4) Defined as the difference in rate sensitive assets and liabilities maturing in one year THEN…..Q4 2018 Deposit Composition NOW….Q2 2023 Deposit Composition Cost of Total Deposits: 1.39% Liquidity Metrics +5% Improvement
Page 17 979 1,121 2019Q4 2023Q2 $76 $525 $0 $200 $400 $600 Dec 2019 Jun 2023 $517 $705 $0 $300 $600 $900 Dec 2019 Jun 2023 $92 $1,868 $0 $500 $1,000 $1,500 $2,000 Dec 2019 Jun 2023 178.5% 146.0% 136.4% 170.6% 152.3% $0.8 $1.3 $1.7 $2.3 $2.5 Organic Growth Strategy in New Markets $113.8 $136.2 2019Q4 2023Q2 Metro Texas(2) Eastern Kansas Arizona Leading to Strong Organic Loan Growth in Select Metro Markets Intentional Strategy to De-Emphasize CRE Full Time Employees Annualized Salary and Benefits Expense ($mm) CRE / TRBC (%) C&I Loans ($bn) $685mm loans in Select Metro Markets $3.1bn loans in Select Metro Markets Dec 2019 June 2023 Investments Made into the Franchise Post-2019 Source: S&P Global Market Intelligence & Company Documents (1) Consists of business development in Dallas, Houston, Austin and San Antonio 54% CAGR
Page 18 75% 2% 3% 3% 3% 12% 3% Net Interest Income Wealth Management Service Fees Treasury Management Service Fees Deposit Service Fees Interchange Service Fees Mortgage Service Fee Income Other Service Fee Income Sources % of Revenue ($000) Balance Total Net Interest Income $295,340 75% Wealth Management Service Fees 5,912 2% Treasury Management Service Fees 11,848 3% Deposit Service Fees 9,984 3% Interchange Service Fees 11,824 3% Mortgage Service Fee Income 46,636 12% Other Service Fee Income Sources 10,956 3% Total $392,500 100% % of Revenue ($000) Balance Total Net Interest Income $155,233 56% Wealth Management Service Fees 7,795 3% Treasury Management Service Fees 6,109 2% Deposit Service Fees 6,783 2% Interchange Service Fees 9,208 3% Mortgage Service Fee Income 86,410 31% Other Service Fee Income Sources 7,939 3% Total $279,477 100% 56% 3% 2% 2% 3% 31% 3% Net Interest Income Wealth Management Service Fees Treasury Management Service Fees Deposit Service Fees Interchange Service Fees Mortgage Service Fee Income Other Service Fee Income Sources Revenue Diversification Source: S&P Global Market Intelligence & Company documents (1) Peers include major exchange-traded banks and thrifts headquartered in the Midwest and Southwest with total assets between $5 billion and $10 billion and MRQ C&I loans as a % of total loans >20%; Excludes merger targets and mutual holding companies Service Fee Inc / Rev: 44.5% Mortgage Revenue / Rev: 30.9% 2021Y (Pre-Pioneer Acquisition) 2023Q2 (Annualized) Service Fee Inc / Rev: 24.8% Mortgage Revenue / Rev: 11.9% Peer Median(1) Service Fee Inc / Rev: 19.2%
Page 19 Creating a High-Growth, High-Performing Franchise Select High Performing Regional Peers(1) Broader Midwest & Southwest Median(2) Outpacing peers If We Deliver on Focused Strategies and Keep to Our Operating Disciplines, then FirstSun can Outpace its Peers Size & Balance Sheet Composition Revenue Mix & Growth Profile Source: S&P Global Market Intelligence; Financial data as of June 30, 2023 (1) Includes SBSI, VBTX, NBHC, SYBT, PEBO and EFSC (2) Peers include major exchange-traded banks and thrifts headquartered in the Midwest and Southwest with total assets between $5 billion and $10 billion and MRQ C&I loans as a % of total loans >20%; Excludes merger targets and mutual holding companies (3) Refer to Non-GAAP Financial Measures on pages 24 & 25 # of Branches 67 69 59 Total Assets ($B) $9.3 $7.8 $7.1 Tangible Common Equity / Tangible Assets(3) 8.22% 9.33% 8.28% Loans / Deposits 98.5% 100.1% 91.5% Most Recent Quarter Cost of Deposits 1.36% 1.39% 1.65% Noninterest Bearing Deposits / Deposits 26% 27% 28% Regulatory CRE / TRBC 237% 152% 228% Most Recent Quarter Fee Income / Rev . 15.4% 24.8% 19.2% Loan ex. PPP CAGR (YE' 19 - Q2 '23) 18% 21% 12% Revenue CAGR (YE '19 - Q2 '23 ann.) 16% 22% 11% Most Recent Quarter ROAA 1.31% 1.49% 1.26% Most Recent Quarter ROATCE(3) 16.9% 16.5% 16.8% Most Recent Quarter NIM 3.76% 4.24% 3.38%
APPENDIX
Page 21 Introduction to FirstSun & Sunflower Management NEAL E. ARNOLD, CEO & President Neal E. Arnold serves as President and Chief Executive Officer of FirstSun since April 1, 2022 and for Sunflower since 2018. Mr. Arnold also serves as a board member for FirstSun and Sunflower Bank. He served as Executive Vice President of Fifth Third Bancorp and Fifth Third Bank from 1998 to 2005, and as Chief Financial Officer of Fifth Third Bancorp and Fifth Third Bank from 1997 to 2005. Mr. Arnold has over 20 years of experience completing numerous regulatory compliance consulting engagements for bank boards. ROBERT A. CAFERA, CFO & EVP Robert A. Cafera has held his current positions since 2012 and serves as a board member for Sunflower Bank. Before that, he served in different roles at Fifth Third Bank, including as Senior Vice President and Chief Financial Officer of the Commercial Bank, and before that as its Assistant Controller. Before joining Fifth Third Bank, he was a Senior Manager with Arthur Andersen for about ten years. LAURA J. FRAZIER, Chief Admin. Officer & EVP Laura J. Frazier has held her positions since 2013. Before that, from 2010 to 2013, Ms. Frazier served as the Deputy Director of Human Resources for the Department of Developmental Disabilities for the State of Ohio. Before that, she spent eight years as the Director of Labor Relations for the same governmental agency. MOLLIE H. CARTER, Executive Chairman Mollie H. Carter served as President and Chief Executive Officer of FirstSun from 2005 until April 1, 2022, and she served as President and Chief Executive Officer of Sunflower Bank from 2005 to 2018. Ms. Carter also serves as Executive Chair of the board for FirstSun and Sunflower Bank. She served as a director of Evergy, Inc. and its predecessor, Westar Energy, from 2003 until 2022. She also serves on the NPR Foundation Board of Trustees on the Executive Committee, and she is a Co-Chair of the NPR News Task Force. JENNIFER L. NORRIS, Chief Credit Officer & EVP Jennifer L. Norris has held her current positions since 2020. Before that, from 1997 to 2019, Ms. Norris held various roles at Wells Fargo Bank, most recently serving as Loan Team Manager for the Credit Resolution Group, a position she held for ten years. Before joining Wells Fargo, Ms. Norris was Vice President, Credit Products Manager at Specialized Industries Risk Management from 2001 to 2004. CHRIS RUDE, Chief Banking Officer – Western Banking Chris Rude joined Sunflower Bank in July 2019 and currently serves as Executive Vice President and Chief Banking Officer leading multiple markets throughout the organization. He has diverse experience in commercial and business banking, credit portfolio management and retail banking. Throughout his over 20 year career in banking he has held increasingly responsible leadership roles at national and regional banks. BRIAN WALSH, Chief Lending Officer Brian Walsh joined Sunflower Bank in 2020 and currently serves as Executive Vice President and Chief Lending Officer. Brian has over 20 years in the banking industry, including Texas Capital Bank, Legacy Texas (now Prosperity Bank), Bank of Texas and Comerica Bank. Brian has a 30-year career in various leadership roles in financial services, public accounting, and operating companies. CECIL G. EDWARDS, JR., Chief Banking Officer – Eastern Banking Cecil G. Edwards, Jr. joined Sunflower Bank in April 2023 as a Chief Banking Officer leading multiple markets throughout the organization. His over 40 years of experience in the banking industry includes management and building of lines of businesses, client relationships, and corporate finance teams spanning across geographies.
Page 22 Board of Directors (excluding management) CHRISTOPHER C. CASCIATO Christopher C. Casciato is a Managing Director of Lightyear Capital LLC, a position he has held since 2008. Before that, he spent over 20 years at Goldman, Sachs & Co., where he was elected partner in 2000. His career at Goldman, Sachs & Co. included a number of senior management positions in the firm’s investment banking division, including partner in the Financial Institutions Group, as well as partner and Chief Operating Officer of Goldman Sachs’ worldwide investment banking business. ISABELLA CUNNINGHAM Isabella Cunningham joined FirstSun’s board as a result of the merger with Pioneer Bancshares effective April 1, 2022. Professor Cunningham served as a director of Pioneer Bancshares and Pioneer Bank from July 2013 until April 2022. Professor Cunningham holds the Stan Richards Chair in Advertising and Public Relations at the University of Texas at Austin. KEVIN T. HAMMOND Kevin T. Hammond joined the FirstSun board as a result of the merger with Pioneer Bancshares effective April 1, 2022. Mr. Hammond served as a director of Pioneer from 2016 until April 2022. He is a Managing Director at JLL Partners, which he joined in 2004, where he focuses on making new private equity investments and managing the firm’s portfolio of companies. He also serves on JLL Partners’ management and investment committees. BEVERLY O. ELVING Beverly O. Elving is the former Director of Corporate Accounting, Vice President & Controller, and Sr. Vice President of Finance at Applebee’s International from 1998 to 2021. Before that, she served as the Chief Financial Officer of Integrated Medical Resources from 1996 to 1998, and additionally, Ms. Elving served as Vice President Finance & Accounting for the FDIC/Resolution Trust Corporation from 1990 to 1996. PAUL A. LARKINS Paul A. Larkins is currently a Senior Advisor with Aquiline Capital Partners, a position he has held since 2018. He is also the board member of Amur Equipment Finance. He previously served as board chair of LERETA, LLC, and as an advisor to Tarsadia Investments, both from July 2019 through July 2021. Mr. Larkins served as President and director of SquareTwo Financial Corporation, positions he held from 2009 to 2016. SquareTwo Financial Corporation filed for bankruptcy under Chapter 11 in March 2017. DIANE E. MERDIAN Diane L. Merdian is the former Chief Financial Officer of Redwood Trust, Inc., a position she held from 2010 to 2012, having previously served on Redwood’s board of directors from 2008 to 2009. From 1984 to 2008, Ms. Merdian was an equity analyst covering financial companies, working at Investment Banking firms and Institutional Investment firms. She primarily analyzed banks, focusing on valuation, strategy, and economics vs. accounting. DAVID W. LEVY David W. Levy is a Managing Director at Pickwick Capital Partners, a position he has held since 2012. Before that, he served as Vice Chairman of Investment Banking and Co-Head of the Financial Institutions Group at Cowen & Company from 2009 to 2010 and served as Senior Managing Director at Bear Stearns from 2005 to 2008.
Page 23 Asset Quality Summary Source: S&P Global Market Intelligence; Financial data as of the most recent quarter available (1) Includes U.S. Banks headquartered in the Midwest and Southwest with total assets between $5 billion and $10 billion with C&I / Loans > 20% for the quarter ending June 30, 2023; Excludes merger targets. Data represents holding company data where available; if unavailable, data represents bank level regulatory data (2) Refer to Non-GAAP Financial Measures on pages 24 & 25 NPAs (Excl. Accrual TDRs) / Assets Net Charge-offs / Average Loans ACL / Gross Loans (ex. PPP)(2) ACL / NPLs (Excl. Accrual TDRs) Peer Median: 0.32%(1) Peer Median: 0.05%(1) Peer Median: 367%(1) Peer Median: 1.24%(1) 0.50% 0.79% 0.60% 0.48% 1.00% 2019 2020 2021 2022 2023 Q2 0.13% 0.11% 0.09% (0.01%) 0.03% 2019 2020 2021 2022 2023 YTD Ann. 0.92% 1.33% 1.20% 1.12% 1.26% 2019 2020 2021 2022 2023 Q2 204% 133% 167% 227% 114% 2019 2020 2021 2022 2023 Q2
Page 24 Tangible common equity: Total stockholders' equity (GAAP) 430$ 486$ 524$ 775$ 824$ Less: Goodwill and other intangible assets Goodwill (33) (33) (33) (93) (93) Other intangible assets (10) (10) (8) (16) (13) Tangible common equity (non-GAAP) 387$ 443$ 483$ 665$ 717$ Tangible assets: Total assets (GAAP) 4,185$ 4,995$ 5,667$ 7,430$ 7,797$ Less: Goodwill and other intangible assets Goodwill (33) (33) (33) (93) (93) Other intangible assets (10) (10) (8) (16) (13) Total tangible assets (non-GAAP) 4,142$ 4,953$ 5,626$ 7,321$ 7,691$ Common equity/assets (GAAP) 10.28% 9.72% 9.25% 10.42% 10.56% TCE/TA (non-GAAP) 9.35% 8.95% 8.58% 9.09% 9.33% Average tangible common equity: Average stockholders' equity (GAAP) 444$ 467$ 516$ 693$ 827$ Less: Average goodwill and other intangible assets Average goodwill (33) (33) (33) (79) (93) Average other intangible assets (11) (10) (9) (16) (14) Average tangible common equity (non-GAAP) 400$ 424$ 474$ 598$ 720$ Tangible Net Income / Core Tangible Net Income: Net income (GAAP) 20.5$ 47.6$ 43.2$ 59.2$ 28.0$ Add: Intangible amortization, net of tax 1.5 1.2 1.1 3.3 1.6 Tangible net income (non-GAAP) 22.0$ 48.8$ 44.3$ 62.5$ 29.6$ Add: Merger costs, net of income taxes Merger related expenses - - 3.1 18.8 - Income tax effect on merger related expenses - - (0.5) (4.1) - Provision for loan loss on Pioneer loans marked at a premium - - - 2.9 - Income tax effect on provision for loan loss on Pioneer loans marked at a premium - - - (0.5) - Total merger costs - - 2.6 17.0 - Core tangible net income (non-GAAP) 22.0$ 48.8$ 46.9$ 79.5$ 29.6$ ROAE (GAAP) 4.6% 10.2% 8.4% 8.5% 13.5% ROATCE (non-GAAP) 5.5% 11.5% 9.3% 10.5% 16.5% Pre-Tax Pre-Provision Net Income: Net income (GAAP) 20.5$ 47.6$ 43.2$ 59.2$ 28.0$ Add: Prov ision for credit losses and income taxes Provision for credit losses 6.1 23.1 3.0 18.1 4.4 Provision for income taxes 1.4 9.6 8.7 14.8 7.7 Pre-tax pre-prov ision net income (non-GAAP) 28.0$ 80.3$ 54.8$ 92.1$ 40.1$ $'s in millions For the Quarter Ended 2019 2020 2021 2022 June 30, 2023 For the Year Ended Non-GAAP Financial Measures and Reconciliations Source: Company Documents
Page 25 Core Net Income / Core Pre-Tax Pre-Provision Net Income: Net income (GAAP) 20.5$ 47.6$ 43.2$ 59.2$ 28.0$ Add: Merger costs, net of income taxes Merger related expenses - - 3.1 18.8 - Income tax effect on merger related expenses - - (0.5) (4.1) - Prov ision for loan loss on Pioneer loans marked at a premium - - - 2.9 - Income tax effect on provision for loan loss on Pioneer loans marked at a premium - - - (0.5) - Total merger costs - - 2.6 17.0 - Core net income (non-GAAP) 20.5$ 47.6$ 45.7$ 76.2$ 28.0$ Add: Prov ision for credit losses and income taxes 7.5 32.7 11.7 32.9 12.1 Core pre-tax pre-prov ision net income (non-GAAP) 28.0$ 80.3$ 57.4$ 109.1$ 40.1$ ROAA (GAAP) 0.52% 1.02% 0.79% 0.88% 1.49% Core ROAA (non-GAAP) 0.52% 1.02% 0.84% 1.13% 1.49% PTPP ROAA (non-GAAP) 0.70% 1.72% 1.00% 1.37% 2.13% Core PTPP ROAA (non-GAAP) 0.70% 1.72% 1.05% 1.62% 2.13% Core Efficiency Ratio: Efficiency ratio (GAAP) 85.9% 71.8% 80.4% 72.2% 59.2% Less: Impact of merger related expenses, net of tax 0.0% 0.0% -1.1% -5.7% 0.0% Core efficiency ratio (non-GAAP) 85.9% 71.8% 79.3% 66.5% 59.2% Loans Excluding PPP and NOO CRE Loans: Loans (GAAP) 3,089$ 3,846$ 4,037$ 5,912$ 6,155$ Less: PPP loans - (251) (67) (4) (3) Loans excluding PPP loans (non-GAAP) 3,089$ 3,595$ 3,970$ 5,908$ 6,152$ Less: NOO CRE loans (593) (581) (504) (780) (723) Loans excluding PPP and NOO CRE loans (non-GAAP) 2,496$ 3,014$ 3,466$ 5,128$ 5,429$ ACL/Loans (GAAP) 0.92% 1.24% 1.18% 1.12% 1.26% ACL/Loans excluding PPP loans (non-GAAP) 0.92% 1.33% 1.20% 1.12% 1.26% Core Deposits: Total deposits (GAAP) 3,490$ 4,154$ 4,855$ 5,765$ 6,150$ Less: Wholesale funding (181) (100) (25) (243) (465) Core deposits (non-GAAP) 3,309$ 4,054$ 4,830$ 5,522$ 5,685$ Non-GAAP Financial Measures and Reconciliations (continued) Source: Company Documents $'s in millions For the Quarter Ended 2019 2020 2021 2022 June 30, 2023 For the Year Ended
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