FirstSun to Acquire First Foundation in $785M All-Stock Deal
The merger will create a $17 billion regional bank, signaling a new wave of consolidation in the U.S. banking sector.
FirstSun Capital Bancorp has agreed to acquire First Foundation Inc. in an all-stock transaction valued at approximately $785 million, a move that will create a combined regional bank with $17 billion in assets.
The deal, announced Monday, marks one of the most significant regional banking mergers of the year and underscores a trend of accelerating consolidation within the sector. The transaction will combine FirstSun’s footprint in the Southwest with First Foundation’s presence in key growth markets like Southern California and Florida.
Following the announcement, shares of First Foundation (FFWM) jumped 8% in after-hours trading, while FirstSun’s (FSUN) stock declined by about 4%, a typical reaction for an acquirer in an all-stock deal that involves share dilution.
Under the terms of the agreement, which has been unanimously approved by both boards, FirstSun stockholders will own approximately 59.5% of the combined company, with First Foundation stockholders owning the remaining 40.5%. The deal structure is designed to be a merger of equals, leveraging strengths from both institutions.
The strategic rationale for the merger centers on achieving scale and enhancing profitability. FirstSun leadership projects the combination will be more than 30% accretive to its estimated 2027 earnings per share. In a statement released on Business Wire, the banks highlighted plans to reposition $3.4 billion in non-core assets and diversify revenue, with fee-based services expected to constitute around 20% of the combined company's income.
This merger comes as the U.S. regional banking sector sees a rebound in M&A activity. After a slowdown, analysts at Deloitte noted that 2025 is shaping up to be a pivotal year for consolidation, driven by the need for scale to compete with megabanks, invest in technology, and navigate a complex regulatory environment. First Foundation, with a market capitalization of roughly $457 million and a price-to-book ratio of just 0.48, represented an attractive valuation for an acquirer seeking growth at a reasonable price.
The leadership for the new entity will be drawn from both banks. Mollie Hale Carter, the current Executive Chairman of FirstSun, will retain her role, while FirstSun’s Neal Arnold will continue as CEO. Tom Shafer, CEO of First Foundation, is set to become the Vice Chairman, and five directors from First Foundation’s board will join the combined board, ensuring continuity and integrated governance.
The transaction is expected to close in the second quarter of 2026, subject to customary closing conditions, including approvals from regulators and stockholders of both companies. The final value of the deal for First Foundation shareholders will fluctuate based on the performance of FirstSun's stock through the closing date.