FirstSun Capital and First Foundation Announce $785 Million Merger

FirstSun Capital Bancorp and First Foundation Inc. have announced a definitive agreement to merge in an all-stock transaction valued at approximately $785 million. Under the terms of the agreement, First Foundation shareholders will receive 0.16083 shares of FirstSun common stock for each share of First Foundation common stock they own. Additionally, First Foundation's warrant holders will exercise their warrants early, receiving FirstSun common stock and a total of $17.5 million in cash. Upon completion of the merger, FirstSun shareholders will own 59.5% of the combined entity, while First Foundation shareholders will hold 40.5%. The transaction is expected to close in the second quarter of 2026, pending regulatory and shareholder approvals.

The combined organization is projected to have approximately $17 billion in total assets and $6.8 billion in assets under management. The merger is anticipated to be accretive to FirstSun's estimated earnings per share by over 30% in 2027. Leadership of the combined company will include Mollie Hale Carter continuing as Executive Chairman, Neal Arnold as CEO and President, and Rob Cafera as CFO. Tom Shafer, currently CEO of First Foundation, will serve as Vice Chairman. Additionally, five current First Foundation directors will join the combined company's board.

This merger significantly accelerates FirstSun's expansion into the Southern California market, aligning with its growth strategy in high-potential regions. The combined entity plans a substantial balance sheet repositioning strategy, including downsizing approximately $3.4 billion in non-core assets, aiming to reduce risk in liquidity, interest rate, and credit areas. The merger is expected to improve the combined company's financial performance, targeting a return on average assets (ROAA) of approximately 1.45% and a return on average tangible common equity (ROATCE) of about 13.3%.

Following the announcement, FirstSun's stock experienced a decline of nearly 17%, while First Foundation's shares rose by approximately 8%. Analysts suggest that the market's reaction may be due to FirstSun's third-quarter earnings report, which showed higher credit costs and a slight miss on earnings estimates.

This merger is part of a broader trend of consolidation among regional banks, driven by credit concerns and economic uncertainties. For instance, Nicolet Bankshares recently announced an $864 million stock acquisition of MidWestOne Financial Group.

The merger between FirstSun Capital Bancorp and First Foundation Inc. represents a strategic consolidation aimed at enhancing market presence and financial performance. As the regional banking sector continues to evolve through such mergers, stakeholders will closely monitor the integration process and its impact on the combined entity's growth trajectory.