Sunflower Bank has finally moved a large chunk of multifamily debt it picked up through its merger with First Foundation Bank, closing a deal that had been in the works well before the two companies came together.
FirstSun Capital Bancorp, Sunflower's parent company, said it sold roughly $890 million in performing multifamily commercial real estate loans to entities affiliated with Brookfield Asset Management. The loans were part of the portfolio Sunflower inherited when its acquisition of First Foundation closed on April 1, 2026.
The transaction checks an important box for FirstSun as it advances a broader effort to reshape its balance sheet following the merger. In prepared remarks, CFO Rob Cafera said, "Successfully completing the sale of this performing multifamily commercial real estate loan pool is a significant milestone in our balance sheet repositioning strategy."
The push to offload those loans didn't start with the merger. Back in October 2024, First Foundation reclassified a sizable portion of its then-$1.9 billion multifamily portfolio from loans held to maturity to loans held for sale, signaling a clear intent to reduce its exposure.
At the time, the move was framed as a necessary step to stabilize the company's financial footing.
"Our decision to transfer these multifamily loans to held for sale marks an important next step in the Company's strategic roadmap to fortify the balance sheet and embrace a more offensive-minded posture," First Foundation CEO Scott Kavanaugh said in a prepared statement.
"We believe this move will position the Company for a return to its historical profitability and performance levels."
That strategy ultimately carried into the merger with FirstSun, which created a $17 billion bank and included plans to shed $3.4 billion in non-core assets. The all-stock deal was valued at about $785 million, including cash paid to warrant holders.
The scale of First Foundation's multifamily exposure helps explain the urgency. According to CoStar, FDIC data showed that just before the deal closed, the bank held about $3.46 billion in multifamily loans, making it the 35th largest such portfolio in the U.S. Sunflower, by contrast, had just $228 million.
Even before the merger was finalized, the loan reduction effort was already underway. During an April 28, 2026, earnings call, FirstSun Capital CEO Neal Arnold said the company had cut about $1 billion in loans, or 44% of its $2.3 billion target.
"At the end of the first quarter, before the transaction closed, First Foundation had already made significant progress on the loan downsizing, successfully reducing balances by approximately $1 billion or 44% of the planned $2.3 billion in total loan downsizing," Arnold said.
"We are now actively working on the remaining $1.3 billion in total loan downsizing. And based on our ongoing work with certain counterparties there, we expect to be completed by the end of the second quarter."
Arnold also pointed to broader momentum in the business, including more than 16% annualized loan growth during the quarter and a net interest margin that widened to 4.25%.
With the Brookfield deal now closed, FirstSun has made a noticeable dent in the multifamily exposure it inherited — though more work remains as it continues to wind down the remaining targeted loan portfolio.
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