FIRSTSUN CAPITAL BANCORP (FSUN): what the price requires
At today's price, FIRSTSUN CAPITAL BANCORP (FSUN) is priced for 8.3% return on equity. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.
Generated: 2026-07-14 · Exported: 2026-07-16 · Source: https://boothcheck.com/report/FSUN
Headline
| Field | Value |
|---|---|
| Ticker | FSUN |
| Company | FIRSTSUN CAPITAL BANCORP |
| Current price | $35.57/sh |
| Composition | Banking 82% / Mortgage Operations 18% |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | financials |
| Return on equity needed | 8.3% |
| Return on equity now | 8.5% |
| ROE gap | -0.2pp |
| Price-to-book | 0.86x |
Solve inputs: computed at a 9% cost of equity with 4% terminal growth over a 5-year stage, on common book equity (FY2026); each 1pp of cost of equity moves the implied ROE ~0.9pp.
How unusual the bet is: within-range
| Reference | Value |
|---|---|
| vs own history | -0.02σ |
| cohort percentile (of 119 peers) | 2 |
| sustained it ~10 years at this level | 81% |
| implied end-window share | 0% |
Valuation X-Ray
The price is supported by asset-based and earnings-power and relative-multiple and growth-DCF value. A value/asset-supported name, not a pure growth bet.
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 0.97x | 3 | justifies |
| Earnings | 0.65x | 2 | justifies |
| Relative | 0.73x | 3 | justifies |
| Growth | 1.19x | 1 | expensive |
Families that justify the price: Asset, Earnings, Relative, Growth
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 5.0%); the inversion above states its own rate.
Per-Model Detail (n=9)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | — | — | no | — |
| Bank Fair Value (P/TBV) | — | $26.53 | 1.34x | yes | TBVPS $38.05 × 0.70x (ROE (TTM) 8.2% / CoE 9.3%, g=5.0% (sustainable: 65% retention × ROE, 5% cap; not the terminal-growth assumption), credit 1.21% allowance/loans → ×0.94) |
| Relative Valuation | Relative | $36.70 | 0.97x | yes | P/E 10x (static sector reference · 2026-04), scenarios: 8.3x / 10.0x / 11.7x (bear / base = reference held flat / bull), EV/EBITDA N/Ax |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $36.63 | 0.97x | yes | BV/sh $41.51, ROE (TTM) 8.2%, ke 9.3% |
| Two-Stage Excess Return | Asset | $34.38 | 1.03x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $29.95 | 1.19x | yes | Rev $0.3B, growth 8% (input: historical growth; tapered), Terminal P/S: 2.6x / 3.1x / 3.6x (bear / base = today's held flat / bull, cap 8x) |
| Peter Lynch Fair Value | Relative | $48.61 | 0.73x | yes | EPS $3.40, growth 14% (input: historical EPS growth), PEG=0.73 (Undervalued) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | — | — | no | — |
| Residual Income | Asset | — | — | no | — |
| Graham Number | Asset | $56.35 | 0.63x | yes | √(22.5 × EPS $3.40 × BVPS $41.51) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | — | — | no | — |
| FCF Yield | Earnings | — | — | no | — |
| SBC-Adj FCF Yield | Earnings | — | — | no | — |
| Ben Graham Formula | Earnings | $105.70 | 0.34x | yes | EPS $3.40 × (8.5 + 2×14.3%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | — | — | no | — |
| P/Sales Sector | Relative | — | — | no | — |
| PEG Fair Value | Relative | $72.91 | 0.49x | yes | EPS $3.40 × (PEG 1.5 × growth 14.3% (input: historical EPS growth)) → PE 21.4x |
| Earnings Yield | Earnings | $36.76 | 0.97x | yes | EPS $3.40 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Share count CAGR (dilution) | 10.6% |
Deposit/float-funded balance sheet: debt is funding, not corporate leverage, and GAAP operating cash flow follows loan flows. Net-debt, interest-coverage, and cash-burn lenses do not apply. The solvency frame for a financial is regulatory capital and payout capacity (CET1, stress buffer, dividends plus buybacks against earnings).
Bullet Takeaways
- FirstSun is a fast-growing regional bank whose lending margin is notably wide, with a net interest margin of 4.25% in the most recent quarter and annualized loan growth of 16.2%.
- The biggest risk is that the return on equity, near 8%, still sits below the bank's roughly 9.3% cost of equity, so the price is paid for a profitability the bank has not yet reached.
- Watch the pending First Foundation merger and the trajectory of credit costs, since a bank growing loans this fast is taking on risk that only shows up later in the cycle.
Bull Case
The balance sheet tells the clearest version of the bull case, and it starts with the margin. FirstSun earns a net interest margin of 4.25%, which rose 7 basis points in the most recent quarter, well above the level most regional banks manage. Net interest margin is the spread between what a bank earns on its loans and securities and what it pays for deposits, and a 4.25% margin means FirstSun is funding itself cheaply relative to what it lends at. The 10-K reports net interest income of $317.4 million for the year, up $20.5 million, the income engine widening as the loan book grows.
That loan book is growing fast, and the funding behind it is the kind a bank wants. Loans grew at a 16.2% annualized pace in the quarter, evidence the franchise is taking share in its commercial markets, and the bank funds that lending with customer deposits rather than expensive wholesale borrowing. Crucially, FirstSun is not a one-trick lender: noninterest income made up 24.7% of total revenue, meaning roughly a quarter of what it earns comes from fees and its mortgage operations rather than from interest spread alone. Fee income is more stable across the rate cycle than spread income, and a bank with a diversified revenue base is less hostage to where interest rates move.
The valuation reflects a bank priced at roughly its asset value while still growing. The stock trades near tangible book value of about $38 per share and book value near $41.51, and the asset-based and relative-multiple methods cluster right around the current price. For a bank compounding loans in the mid-teens with a wide margin and a quarter of revenue from fees, paying close to book is a reasonable entry, because the book value itself is growing and the return on that equity, currently around 8% and trending toward its adjusted 8.2%, has room to rise as the loan growth seasons into earnings. The discipline shows in the credit process the 10-K describes, where the relationship manager and credit team "engage in active evaluation of the asset to determine the appropriate grading, the underwriting rigor that keeps fast growth from becoming reckless growth.
Bear Case
Interest rates are the external variable with the most leverage on FirstSun, and the bank's own filing spells out the exposure. A bank's earnings hinge on the gap between asset yields and funding costs, and that gap shifts with the rate environment. The 10-K lists the drivers of net interest income as including how assets "reprice, variances in prepayment of loans and securities, exercise of call options on borrowings or securities, a general rise or decline in interest rates, changes in the slope of the yield curve. The current 4.25% margin is a strength today, but it is also a level that can compress if deposit costs rise faster than loan yields or if the yield curve moves against the bank's positioning. The price embeds the margin holding, and margins are not the bank's to control.
The deeper concern is that the return on equity has not yet cleared the cost of equity. FirstSun's return on equity is around 8%, against a cost of equity near 9.3%. A bank earning less than its cost of capital is, in the strict sense, not yet creating value on each incremental dollar of equity, which is why the price-to-tangible-book lens warrants a multiple below one. The fast loan growth is the bet that this reverses, that scale and seasoning lift the return above the hurdle. But fast loan growth is also where credit risk is created. The 10-K is explicit about the danger in the riskier categories, noting that for a construction and land development loan, "risk of loss depends on whether the bank's "initial estimate of the property's value at completion of construction exceeds the cost. Loans booked in a boom look pristine until the cycle turns, and a bank growing its book 16% a year is adding exposure that will be tested in the next downturn.
The pending First Foundation merger layers integration risk on top. Bank mergers are operationally complex, can require dilutive capital, and absorb management attention; share count has already been growing at about 10% a year, which dilutes per-share progress. If the acquired loans or operations underperform, or if the deal is timed into a softening credit environment, the combined entity could see the return on equity stay below its cost of capital for longer than the price assumes. A regional bank growing fast, earning below its hurdle rate, mid-merger, and dependent on rate stability is a value name whose value rests on several things going right at once.
Valuation
FirstSun is priced as a bank trading near its asset value, which for a financial is read off tangible book and the return earned on it. The asset-based, relative-multiple, and earnings-power methods all cluster around the current price, and only the forward-growth lens points modestly higher. That convergence says the market is valuing FirstSun close to what its current book and earnings justify, neither cheap nor stretched.
The specifics frame the bet. Tangible book value is about $38 per share and book value about $41.51, so at $36.19 (June 27, 2026) the stock trades near tangible book and slightly below stated book. The return on equity is around 8%, just under the roughly 9.3% cost of equity, and that is exactly why the bank-specific fair-value lens applies a multiple below one to tangible book: a bank earning less than its cost of capital does not warrant a premium to book. The relative-multiple lens, using a sector price-to-earnings near 10 times, lands right at the price. The reconciliation that matters is between the sub-hurdle current return and the fast loan growth: if the 16% annualized loan growth and the wide net interest margin lift the return on equity above the cost of equity, the value methods would support more; if growth slows or credit costs rise, the current near-book valuation is about right.
Solvency for a bank is read through capital adequacy and deposit funding, not net debt, because deposits are funding rather than corporate leverage. FirstSun funds its lending with customer deposits and a wide margin, and the diversified revenue base, a quarter from fees, adds stability. The decisive variable is not leverage but whether the return on equity climbs above its hurdle as the loan book seasons, and how the pending First Foundation merger affects capital and earnings. The bank's full-year net interest income of $317.4 million, up $20.5 million, is the income trajectory the forward methods are pricing.
Catalysts
FirstSun reported first-quarter 2026 results in April, with net income of $21.6 million, or $0.76 per diluted share, and adjusted net income of $23.7 million, or $0.84 per diluted share. The net interest margin was 4.25%, up 7 basis points from the prior quarter, and loans grew at a 16.2% annualized pace. Return on average assets was 1.04%, or 1.14% adjusted, and return on average stockholders' equity was 7.47%, or 8.20% adjusted, with noninterest income contributing 24.7% of total revenue.
The most significant strategic item is the pending merger with First Foundation, which the company addressed in its quarterly update. The completion, integration, and capital impact of that transaction is the development most likely to reshape the bank's earnings profile and is the central near-term event for investors to follow.
The other items to watch are the trajectory of the net interest margin as deposit costs and loan yields reprice, the credit performance of the rapidly growing loan book, particularly in commercial real estate and construction lending, and whether the return on equity climbs toward and past the cost of equity as the growth matures. The next earnings report and any further detail on the merger timeline are the key updates ahead.
Peer Cohorts (Per Segment, With Filing Citations)
Banking (reported)
- UCB (UNITED COMMUNITY BANKS INC)
- (no filing in the citation store)
- TRMK (Trustmark Corporation)
- (no filing in the citation store)
- PRK (PARK NATIONAL CORPORATION)
- (no filing in the citation store)
- FBK (FB FINANCIAL CORPORATION)
- (no filing in the citation store)
- TCBI (TEXAS CAPITAL BANCSHARES INC/TX)
- (no filing in the citation store)
- HWC (HANCOCK WHITNEY CORPORATION)
- (no filing in the citation store)
- SSB (SOUTHSTATE BANK CORP)
- (no filing in the citation store)
Mortgage Operations (reported)
- RKT (Rocket Companies, Inc.)
- (no filing in the citation store)
- UWMC (UWM HOLDINGS CORPORATION)
- (no filing in the citation store)
- PFSI (PennyMac Financial Services, Inc.)
- (no filing in the citation store)
- WD (Walker & Dunlop, Inc.)
- (no filing in the citation store)
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.
Sources
Q1 2026 results, April 2026 · FY2025 10-K · Q1 2026 results release, April 2026