FSUN Merger Boosts ROATCE to 13.3%

By Philip Seaworth • Tuesday, October 28 06:12 • Permanent Link

The press release discusses the proposed merger between FirstSun Capital Bancorp (FSUN) and Sunflower Bank with First Foundation Inc. (FFWM) and First Foundation Bank. The press release provides key financial and operational details, as well as projections for the combined entity.

According to the press release, the pro forma 2027 estimated Return on Average Tangible Common Equity (ROATCE) is 13.3%, which represents a significant improvement. The pro forma total assets for the combined entity are estimated to be $17 billion, showcasing an increase in scale. Additionally, the pro forma Assets Under Management (AUM) are projected to be $7 billion.

The press release highlights that the loan-to-deposit ratio for the combined entity is estimated to be 85%, indicating a strong position in terms of lending and deposits. The pro forma 2027 estimated Earnings Per Share (EPS) accretion is expected to be around 7-8 times the trading price, suggesting a positive impact on shareholder value.

Furthermore, the press release reveals that the pro forma 2027 estimated Return on Average Assets (ROAA) is 1.45%, indicating a favorable return on assets. The Tangible Common Equity to Total Assets (TCE/TA) ratio is projected to be 9.6%, reflecting a healthy capital position for the combined entity.

The press release also discusses the balance sheet re-positioning plan to reduce the risk profile of First Foundation, which is a significant aspect of the proposed merger. The plan aims to migrate the core franchise of First Foundation to FSUN's higher profitability business model and mix, potentially unlocking value and driving growth.

As a result of these announcements, the company's shares have moved 2.04% on the market, and are now trading at a price of $40.44. For more information, read the company's full 8-K submission here.

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