In a significant corporate development, FirstSun Capital Bancorp (NASDAQ: FSUN) has agreed to merge with First Foundation Inc. (NYSE: FFWM), a transaction that is poised to create a premier banking institution in the Southwest with approximately $17 billion in assets. The merger agreement, finalized on October 27, 2025, outlines a strategic plan for both companies, with FirstSun continuing as the surviving corporation post-merger.
Under the terms of the merger, shareholders of First Foundation will receive 0.16083 shares of FirstSun common stock for each share they own, along with cash for any fractional shares. Additionally, First Foundation's preferred stock will convert into the same proportion of FirstSun shares. This merger is valued at approximately $6.46 per share, based on FirstSun's closing stock price of $40.15 on the day prior to the announcement.
The strategic rationale behind this merger centers on a comprehensive balance sheet repositioning plan. FirstSun aims to strengthen its capital position, improve liquidity, and transition to a more diversified, relationship-focused business model. This will include the potential sale, securitization, or run-off of select First Foundation loans and a reduction in higher-cost funding sources, leading to a robust credit profile for the newly formed entity.
Following the merger's completion, a special meeting of FirstSun stockholders is scheduled for [insert date], 2026, to vote on the merger agreement and related proposals, including amendments to increase authorized shares and create a class of non-voting common stock. Similarly, First Foundation will hold its stockholder meeting on [insert date], 2026, to consider the merger proposal and other related matters. The merger can only proceed if a majority of stockholders from both companies approve the necessary proposals.
From a market perspective, this merger is expected to have significant implications. Shareholders from FirstSun will maintain their ownership in the combined company, while First Foundation's shareholders will hold approximately 40.5% of the merged entity. The anticipated effects on employees and the broader market will depend on the successful integration of operations and the realization of projected synergies.
Regulatory considerations include necessary approvals to ensure compliance with antitrust laws, although no significant hurdles are expected at this time. The transaction is designed to qualify as a reorganization under federal tax laws, which should allow First Foundation shareholders to defer tax liabilities on their exchange of shares, further making the deal appealing.
As both companies move forward, stakeholders are encouraged to stay informed about the developments leading to the merger’s completion and the potential enhancements to their investment positions.