8-K
FIVE STAR BANCORP (FSBC)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported): April 28, 2025
FIVE STAR BANCORP
(Exact Name of Registrant as Specified in Charter)
| California | 001-40379 | 75-3100966 |
|---|---|---|
| (State or Other Jurisdiction<br><br>of Incorporation) | (Commission<br><br>File Number) | (I.R.S. Employer<br><br>Identification No.) |
3100 Zinfandel Drive, Suite 100, Rancho Cordova, California, 95670
(Address of Principal Executive Offices, and Zip Code)
(916) 626-5000
Registrant’s Telephone Number, Including Area Code
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ☐ | Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| --- | --- |
| ☐ | Pre-commencement communication pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| --- | --- |
| ☐ | Pre-commencement communication pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| --- | --- |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock, no par value per share | FSBC | The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). Emerging growth company ☑
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition
On April 28, 2025, Five Star Bancorp (the “Company”) issued a press release announcing its results of operations and financial condition for the quarter ended March 31, 2025. A copy of the press release is attached to this Current Report on Form 8-K as Exhibit 99.1 and is incorporated herein by reference.
This information (including Exhibit 99.1) is being furnished under Item 2.02 hereof and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, and such information shall not be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 7.01 Regulation FD Disclosure
The Company is conducting an earnings call on April 29, 2025 at 10:00 AM PT/1:00 PM ET to discuss its first quarter 2025 financial results. A copy of the investor presentation to be used during the earnings call is attached to this Current Report on Form 8-K as Exhibit 99.2 and is incorporated herein by reference.
This information (including Exhibit 99.2) is being furnished under Item 7.01 hereof and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section, and such information shall not be deemed incorporated by reference into any filing under the Securities Act, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
| Number | Description |
|---|---|
| 99.1 | Press Release datedApril28, 2024 |
| 99.2 | Firstq12025investorpresentati.htmQuarter 2025Investor Presentation, datedApril29, 2024 |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL) |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| FIVE STAR BANCORP | ||
|---|---|---|
| By: | /s/ Heather C. Luck | |
| Name: Heather C. Luck | ||
| Title: Executive Vice President and Chief Financial Officer | ||
| Date: April 28, 2025 |
Document
| PRESS RELEASE | FOR IMMEDIATE RELEASE |
|---|
Five Star Bancorp Announces First Quarter 2025 Results
RANCHO CORDOVA, CA April 28, 2025 (GLOBE NEWSWIRE) – Five Star Bancorp (Nasdaq: FSBC) (“Five Star” or the “Company”), a holding company that operates through its wholly owned banking subsidiary, Five Star Bank (the “Bank”), today reported net income of $13.1 million for the three months ended March 31, 2025, as compared to $13.3 million for the three months ended December 31, 2024 and $10.6 million for the three months ended March 31, 2024.
First Quarter Highlights
Performance and operating highlights for the Company for the periods noted below included the following:
| Three months ended | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| (in thousands, except per share and share data) | March 31,<br>2025 | December 31,<br>2024 | March 31,<br>2024 | ||||||
| Return on average assets (“ROAA”) | 1.30 | % | 1.31 | % | 1.22 | % | |||
| Return on average equity (“ROAE”) | 13.28 | % | 13.48 | % | 14.84 | % | |||
| Pre-tax income | $ | 18,391 | $ | 19,367 | $ | 14,961 | |||
| Pre-tax, pre-provision income(1) | $ | 20,291 | $ | 20,667 | $ | 15,861 | |||
| Net income | $ | 13,111 | $ | 13,317 | $ | 10,631 | |||
| Basic earnings per common share | $ | 0.62 | $ | 0.63 | $ | 0.62 | |||
| Diluted earnings per common share | $ | 0.62 | $ | 0.63 | $ | 0.62 | |||
| Weighted average basic common shares outstanding | 21,209,881 | 21,182,143 | 17,190,867 | ||||||
| Weighted average diluted common shares outstanding | 21,253,588 | 21,235,318 | 17,272,994 | ||||||
| Shares outstanding at end of period | 21,329,235 | 21,319,083 | 17,353,251 |
(1) See the section entitled “Non-GAAP Reconciliation (Unaudited)” for a reconciliation of this non-GAAP financial measure.
James E. Beckwith, President and Chief Executive Officer, commented:
“The strength of Five Star Bank’s first quarter 2025 financial results is emblematic of a reputation built on an unwavering commitment to customers and community partners who rely on our speed to serve and certainty of execution for their own successes. This differentiated customer experience has created great demand for our services and seized market opportunities in San Francisco. As we continue to grow our presence, we now have 31 San Francisco Bay Area employees. As of March 31, 2025 our San Francisco Bay Area operations had $379.8 million in total deposits.
At the Company level, total loans held for investment increased by $89.1 million, or 2.52% (10.09% when annualized). Total deposits increased by $178.4 million, or 5.01% (20.05% when annualized), with wholesale deposits increasing by $130.0 million, or 23.21%, and non-wholesale deposits increasing by $48.4 million, or 1.61%. Short-term borrowings remained at zero as of March 31, 2025 and December 31, 2024. Net interest margin increased by nine basis points to 3.45% and our efficiency ratio increased to 42.58%, as compared to 41.21% for the fourth quarter of 2024, while cost of funds decreased nine basis points to 2.56%.
In the first quarter of 2025, we were pleased to declare another cash dividend of $0.20 per share. We were also pleased to have been ranked third among best-performing banks in the nation by S&P Global Market Intelligence (among banks with assets between $3 billion and $10 billion).
As we execute on the expansion of industry verticals and our presence in new geographies to meet customer demand, we expect the ongoing acceleration of our growth to benefit our customers, employees, and shareholders. We also expect our demonstrated ability to adapt to changing economic conditions to serve us well into the future as we remain vigilant and focused on disciplined business practices. We thank our employees for their outstanding commitment to ensuring Five Star Bank remains a safe, trusted, and steadfast banking partner.”
Financial highlights during the quarter included the following:
•The San Francisco Bay Area team increased from 27 to 31 employees who generated deposit balances totaling $379.8 million at March 31, 2025, an increase of $87.4 million from December 31, 2024.
•Cash and cash equivalents were $452.6 million, representing 12.11% of total deposits at March 31, 2025, as compared to 9.90% at December 31, 2024.
•Total deposits increased by $178.4 million, or 5.01%, during the three months ended March 31, 2025, due to increases in both non-wholesale and wholesale deposits, which the Company defines as brokered deposits and California Time Deposit Program deposits. During the three months ended March 31, 2025, non-wholesale deposits increased by $48.4 million, or 1.61%, and wholesale deposits increased by $130.0 million, or 23.21%.
•The Company had no short-term borrowings at March 31, 2025 or December 31, 2024.
•Consistent, disciplined management of expenses contributed to our efficiency ratio of 42.58% for the three months ended March 31, 2025, as compared to 41.21% for the three months ended December 31, 2024.
•For the three months ended March 31, 2025, net interest margin was 3.45%, as compared to 3.36% for the three months ended December 31, 2024 and 3.14% for the three months ended March 31, 2024. The effective Federal Funds rate was 4.33% as of March 31, 2025, remaining constant from December 31, 2024 and decreasing from 5.33% at March 31, 2024.
•Other comprehensive income was $0.7 million during the three months ended March 31, 2025. Unrealized losses, net of tax effect, on available-for-sale securities were $11.6 million as of March 31, 2025. Total carrying value of held-to-maturity and available-for-sale securities represented 0.06% and 2.35% of total interest-earning assets, respectively, as of March 31, 2025.
•The Company’s common equity Tier 1 capital ratio was 11.00% and 11.02% as of March 31, 2025 and December 31, 2024, respectively. The Bank continues to meet all requirements to be considered “well-capitalized” under applicable regulatory guidelines.
•Loan and deposit growth in the three and twelve months ended March 31, 2025 was as follows:
| (in thousands) | March 31,<br>2025 | December 31,<br>2024 | Change | % Change | |||
|---|---|---|---|---|---|---|---|
| Loans held for investment | $ | 3,621,819 | $ | 3,532,686 | 2.52 | % | |
| Non-interest-bearing deposits | 933,652 | 922,629 | 11,023 | 1.19 | % | ||
| Interest-bearing deposits | 2,802,702 | 2,635,365 | 167,337 | 6.35 | % | ||
| (in thousands) | March 31,<br>2025 | March 31,<br>2024 | Change | % Change | |||
| Loans held for investment | $ | 3,621,819 | $ | 3,104,130 | 16.68 | % | |
| Non-interest-bearing deposits | 933,652 | 817,388 | 116,264 | 14.22 | % | ||
| Interest-bearing deposits | 2,802,702 | 2,138,384 | 664,318 | 31.07 | % |
All values are in US Dollars.
•The ratio of nonperforming loans to loans held for investment at period end remained at 0.05% from December 31, 2024 to March 31, 2025.
•The Company’s Board of Directors declared on January 16, 2025, and the Company subsequently paid, a cash dividend of $0.20 per share during the three months ended March 31, 2025. The Company’s Board of Directors subsequently declared another cash dividend of $0.20 per share on April 17, 2025, which the Company expects to pay on May 12, 2025 to shareholders of record as of May 5, 2025.
Summary Results
Three months ended March 31, 2025, as compared to three months ended December 31, 2024
The Company’s net income was $13.1 million for the three months ended March 31, 2025, as compared to $13.3 million for the three months ended December 31, 2024. Net interest income increased by $0.5 million, primarily due to a decrease in interest expense due to lower average rates on deposits, partially offset by a decrease in interest income driven by lower balances and yields on interest-earning deposits in banks, as compared to the three months ended December 31, 2024. The provision for credit losses increased by $0.6 million, reflecting adjustments to expectations for credit losses based on economic trends and forecasts in the three months ended March 31, 2025 compared to the three months ended December 31, 2024. Non-interest income decreased by $0.3 million, primarily due to a reduction in income received on equity investments in venture-backed funds during the three months ended March 31, 2025, as compared to the three months ended December 31, 2024. Non-interest expense increased by $0.6 million, primarily related to an increase in salaries and employee benefits, partially offset by decreases in advertising, promotional, and other operating expenses during the three months ended March 31, 2025, as compared to the three months ended December 31, 2024.
Three months ended March 31, 2025, as compared to three months ended March 31, 2024
The Company’s net income was $13.1 million for the three months ended March 31, 2025, as compared to $10.6 million for the three months ended March 31, 2024. Net interest income increased by $7.2 million, primarily due to an increase in interest income driven by a higher balance of loans with higher yields, partially offset by an increase in interest expense due to larger average deposit balances, as compared to the three months ended March 31, 2024. The provision for credit losses increased by $1.0 million, relating to loan growth and adjustments to expectations for credit losses based on economic trends and forecasts during the three months ended March 31, 2025, as compared to the three months ended March 31, 2024. Non-interest income decreased by $0.5 million, primarily due to a reduction in income received on equity investments in venture-backed funds during the three months ended March 31, 2025, as compared to the three months ended March 31, 2024. Non-interest expense increased by $2.3 million during the three months ended March 31, 2025, as compared to the three months ended March 31, 2024, with an increase in salaries and employee benefits related to increased headcount as the leading driver.
The following is a summary of the components of the Company’s operating results and performance ratios for the periods indicated:
| Three months ended | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| (in thousands, except per share data) | March 31,<br>2025 | December 31,<br>2024 | Change | % Change | |||||
| Selected operating data: | |||||||||
| Net interest income | $ | 33,977 | $ | 33,489 | 1.46 | % | |||
| Provision for credit losses | 1,900 | 1,300 | 600 | 46.15 | % | ||||
| Non-interest income | 1,359 | 1,666 | (307) | (18.43) | % | ||||
| Non-interest expense | 15,045 | 14,488 | 557 | 3.84 | % | ||||
| Pre-tax income | 18,391 | 19,367 | (976) | (5.04) | % | ||||
| Provision for income taxes | 5,280 | 6,050 | (770) | (12.73) | % | ||||
| Net income | $ | 13,111 | $ | 13,317 | (1.55) | % | |||
| Earnings per common share: | |||||||||
| Basic | $ | 0.62 | $ | 0.63 | (1.59) | % | |||
| Diluted | $ | 0.62 | $ | 0.63 | (1.59) | % | |||
| Performance and other financial ratios: | |||||||||
| ROAA | 1.30 | % | 1.31 | % | |||||
| ROAE | 13.28 | % | 13.48 | % | |||||
| Net interest margin | 3.45 | % | 3.36 | % | |||||
| Cost of funds | 2.56 | % | 2.65 | % | |||||
| Efficiency ratio | 42.58 | % | 41.21 | % |
All values are in US Dollars.
| Three months ended | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| (in thousands, except per share data) | March 31,<br>2025 | March 31,<br>2024 | Change | % Change | |||||
| Selected operating data: | |||||||||
| Net interest income | $ | 33,977 | $ | 26,744 | 27.05 | % | |||
| Provision for credit losses | 1,900 | 900 | 1,000 | 111.11 | % | ||||
| Non-interest income | 1,359 | 1,833 | (474) | (25.86) | % | ||||
| Non-interest expense | 15,045 | 12,716 | 2,329 | 18.32 | % | ||||
| Pre-tax income | 18,391 | 14,961 | 3,430 | 22.93 | % | ||||
| Provision for income taxes | 5,280 | 4,330 | 950 | 21.94 | % | ||||
| Net income | $ | 13,111 | $ | 10,631 | 23.33 | % | |||
| Earnings per common share: | |||||||||
| Basic | $ | 0.62 | $ | 0.62 | — | % | |||
| Diluted | $ | 0.62 | $ | 0.62 | — | % | |||
| Performance and other financial ratios: | |||||||||
| ROAA | 1.30 | % | 1.22 | % | |||||
| ROAE | 13.28 | % | 14.84 | % | |||||
| Net interest margin | 3.45 | % | 3.14 | % | |||||
| Cost of funds | 2.56 | % | 2.62 | % | |||||
| Efficiency ratio | 42.58 | % | 44.50 | % |
All values are in US Dollars.
Balance Sheet Summary
| (in thousands) | March 31,<br>2025 | December 31,<br>2024 | Change | % Change | |||
|---|---|---|---|---|---|---|---|
| Selected financial condition data: | |||||||
| Total assets | $ | 4,245,057 | $ | 4,053,278 | 4.73 | % | |
| Cash and cash equivalents | 452,571 | 352,343 | 100,228 | 28.45 | % | ||
| Total loans held for investment | 3,621,819 | 3,532,686 | 89,133 | 2.52 | % | ||
| Total investments | 99,696 | 100,914 | (1,218) | (1.21) | % | ||
| Total liabilities | 3,838,606 | 3,656,654 | 181,952 | 4.98 | % | ||
| Total deposits | 3,736,354 | 3,557,994 | 178,360 | 5.01 | % | ||
| Subordinated notes, net | 73,932 | 73,895 | 37 | 0.05 | % | ||
| Total shareholders’ equity | 406,451 | 396,624 | 9,827 | 2.48 | % |
All values are in US Dollars.
•Insured and collateralized deposits were approximately $2.5 billion, representing 67.55% of total deposits as of March 31, 2025, as compared to 66.92% as of December 31, 2024. Net uninsured and uncollateralized deposits were approximately $1.2 billion as of March 31, 2025, remaining constant from December 31, 2024.
•Non-wholesale deposit accounts constituted 81.53% of total deposits as of March 31, 2025, as compared to 84.26% at December 31, 2024. Deposit relationships of greater than $5 million represented 60.87% of total deposits, as compared to 61.13% as of December 31, 2024, and had an average age of approximately 8.80 years as of March 31, 2025, as compared to 9.28 years as of December 31, 2024.
•Cash and cash equivalents as of March 31, 2025 were $452.6 million, representing 12.11% of total deposits at March 31, 2025, as compared to 9.90% as of December 31, 2024.
•Total liquidity (consisting of cash and cash equivalents and unused and immediately available borrowing capacity as set forth below) was approximately $2.0 billion as of March 31, 2025, as compared to $1.9 billion at December 31, 2024.
| March 31, 2025 | ||||||||
|---|---|---|---|---|---|---|---|---|
| (in thousands) | Line of Credit | Letters of Credit Issued | Borrowings | Available | ||||
| Federal Home Loan Bank of San Francisco (“FHLB”) advances | $ | 1,276,072 | $ | 731,500 | $ | — | $ | 544,572 |
| Federal Reserve Discount Window | 856,366 | — | — | 856,366 | ||||
| Correspondent bank lines of credit | 175,000 | — | — | 175,000 | ||||
| Cash and cash equivalents | — | — | — | 452,571 | ||||
| Total | $ | 2,307,438 | $ | 731,500 | $ | — | $ | 2,028,509 |
The increase in total assets from December 31, 2024 to March 31, 2025 was primarily due to a $100.2 million increase in cash and cash equivalents and an $89.1 million increase in total loans held for investment. The $100.2 million increase in cash and cash equivalents primarily resulted from net cash inflows related to financing and operating activities of $174.1 million and $15.5 million, respectively, partially offset by net cash outflows related to investing activities of $89.3 million. The $89.1 million increase in total loans held for investment between December 31, 2024 and March 31, 2025 was a result of $259.3 million in loan originations and advances, partially offset by $65.6 million and $104.6 million in loan payoffs and paydowns, respectively. The $89.1 million increase in total loans held for investment included $19.8 million in purchases of loans within the consumer concentration of the loan portfolio.
The increase in total liabilities from December 31, 2024 to March 31, 2025 was primarily due to an increase in interest-bearing deposits of $167.3 million. The increase in interest-bearing deposits was largely due to increases in time and money market deposits of $131.2 million and $52.2 million, respectively.
The increase in total shareholders’ equity from December 31, 2024 to March 31, 2025 was primarily a result of net income recognized of $13.1 million and a $0.7 million increase in accumulated other comprehensive income, partially offset by $4.3 million in cash dividends paid during the period.
Net Interest Income and Net Interest Margin
The following is a summary of the components of net interest income for the periods indicated:
| Three months ended | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| (in thousands) | March 31,<br>2025 | December 31,<br>2024 | Change | % Change | |||||
| Interest and fee income | $ | 57,087 | $ | 57,745 | (1.14) | % | |||
| Interest expense | 23,110 | 24,256 | (1,146) | (4.72) | % | ||||
| Net interest income | $ | 33,977 | $ | 33,489 | 1.46 | % | |||
| Net interest margin | 3.45 | % | 3.36 | % | |||||
| Three months ended | |||||||||
| (in thousands) | March 31,<br>2025 | March 31,<br>2024 | Change | % Change | |||||
| Interest and fee income | $ | 57,087 | $ | 47,541 | 20.08 | % | |||
| Interest expense | 23,110 | 20,797 | 2,313 | 11.12 | % | ||||
| Net interest income | $ | 33,977 | $ | 26,744 | 27.05 | % | |||
| Net interest margin | 3.45 | % | 3.14 | % |
All values are in US Dollars.
The following table shows the components of net interest income and net interest margin for the quarterly periods indicated:
| Three months ended | ||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| March 31, 2025 | December 31, 2024 | March 31, 2024 | ||||||||||||||||
| (in thousands) | Average<br>Balance | Interest <br>Income/<br>Expense | Yield/ Rate | Average<br>Balance | Interest <br>Income/<br>Expense | Yield/ Rate | Average<br>Balance | Interest <br>Income/<br>Expense | Yield/ Rate | |||||||||
| Assets | ||||||||||||||||||
| Interest-earning deposits in banks | $ | 328,571 | $ | 3,575 | 4.41 | % | $ | 363,828 | $ | 4,335 | 4.74 | % | $ | 233,002 | $ | 3,102 | 5.35 | % |
| Investment securities | 100,474 | 581 | 2.34 | % | 103,930 | 607 | 2.33 | % | 109,177 | 653 | 2.41 | % | ||||||
| Loans held for investment and sale | 3,567,992 | 52,931 | 6.02 | % | 3,498,109 | 52,803 | 6.01 | % | 3,082,290 | 43,786 | 5.71 | % | ||||||
| Total interest-earning assets | 3,997,037 | 57,087 | 5.79 | % | 3,965,867 | 57,745 | 5.79 | % | 3,424,469 | 47,541 | 5.58 | % | ||||||
| Interest receivable and other assets, net | 93,543 | 91,736 | 93,983 | |||||||||||||||
| Total assets | $ | 4,090,580 | $ | 4,057,603 | $ | 3,518,452 | ||||||||||||
| Liabilities and shareholders’ equity | ||||||||||||||||||
| Interest-bearing transaction accounts | $ | 303,822 | $ | 1,112 | 1.48 | % | $ | 298,518 | $ | 1,249 | 1.66 | % | $ | 300,325 | $ | 1,126 | 1.51 | % |
| Savings accounts | 123,599 | 772 | 2.53 | % | 127,298 | 887 | 2.77 | % | 124,561 | 861 | 2.78 | % | ||||||
| Money market accounts | 1,540,879 | 12,435 | 3.27 | % | 1,596,116 | 13,520 | 3.37 | % | 1,410,264 | 12,155 | 3.47 | % | ||||||
| Time accounts | 706,528 | 7,629 | 4.38 | % | 617,596 | 7,438 | 4.79 | % | 429,586 | 5,369 | 5.03 | % | ||||||
| Subordinated notes and other borrowings | 73,908 | 1,162 | 6.37 | % | 73,872 | 1,162 | 6.25 | % | 82,775 | 1,286 | 6.25 | % | ||||||
| Total interest-bearing liabilities | 2,748,736 | 23,110 | 3.41 | % | 2,713,400 | 24,256 | 3.56 | % | 2,347,511 | 20,797 | 3.56 | % | ||||||
| Demand accounts | 910,954 | 921,881 | 842,105 | |||||||||||||||
| Interest payable and other liabilities | 30,389 | 29,234 | 40,730 | |||||||||||||||
| Shareholders’ equity | 400,501 | 393,088 | 288,106 | |||||||||||||||
| Total liabilities & shareholders’ equity | $ | 4,090,580 | $ | 4,057,603 | $ | 3,518,452 | ||||||||||||
| Net interest spread | 2.38 | % | 2.23 | % | 2.02 | % | ||||||||||||
| Net interest income/margin | $ | 33,977 | 3.45 | % | $ | 33,489 | 3.36 | % | $ | 26,744 | 3.14 | % |
Net interest income during the three months ended March 31, 2025 increased $0.5 million, or 1.46%, to $34.0 million compared to $33.5 million during the three months ended December 31, 2024. Net interest margin totaled 3.45% for the three months ended March 31, 2025, an increase of nine basis points compared to the prior quarter. The increase in net interest income is primarily attributable to a $1.1 million decrease in interest expense, driven by a 15 basis point decrease in the average rate on interest-bearing deposits compared to the prior quarter. The decrease in interest expense was partially offset by a $0.7 million decrease in interest income, primarily due to a $35.3 million, or 9.69%, decrease in the average balance of interest-earning deposits in banks, combined with a 33 basis point decrease in the average yield on interest-earning deposits in banks.
As compared to the three months ended March 31, 2024, net interest income increased $7.2 million, or 27.05%, to $34.0 million from $26.7 million. Net interest margin totaled 3.45% for the three months ended March 31, 2025, an increase of 31 basis points compared to the same quarter of the prior year. The increase in net interest income is primarily attributable to an additional $9.1 million in loan interest income due to a $485.7 million, or 15.76%, increase in the average balance of loans and a 31 basis point improvement in the average yield on loans during the three months ended March 31, 2025 compared to the same quarter of the prior year. The increase in interest income was partially offset by a $2.4 million increase in deposit interest expense compared to the same quarter of the prior year. The increase in deposit interest expense is primarily attributable to a $478.9 million, or 15.42%, increase in the average balance of deposits and a five basis point increase in the average cost of deposits during the three months ended March 31, 2025 compared to the same quarter of the prior year.
Loans by Type
The following table provides loan balances, excluding deferred loan fees, by type as of March 31, 2025:
| (in thousands) | ||
|---|---|---|
| Real estate: | ||
| Commercial | $ | 2,941,201 |
| Commercial land and development | 3,556 | |
| Commercial construction | 113,002 | |
| Residential construction | 5,747 | |
| Residential | 34,053 | |
| Farmland | 43,643 | |
| Commercial: | ||
| Secured | 170,525 | |
| Unsecured | 34,970 | |
| Consumer and other | 277,093 | |
| Net deferred loan fees | (1,971) | |
| Total loans held for investment | $ | 3,621,819 |
Interest-bearing Deposits
The following table provides interest-bearing deposit balances by type as of March 31, 2025:
| (in thousands) | ||
|---|---|---|
| Interest-bearing transaction accounts | $ | 295,633 |
| Money market accounts | 1,577,473 | |
| Savings accounts | 128,210 | |
| Time accounts | 801,386 | |
| Total interest-bearing deposits | $ | 2,802,702 |
Asset Quality
Allowance for Credit Losses
At March 31, 2025, the Company’s allowance for credit losses was $39.2 million, as compared to $37.8 million at December 31, 2024. The $1.4 million increase in the allowance is due to a $2.2 million provision for credit losses recorded during the three months ended March 31, 2025, partially offset by net charge-offs mainly attributable to commercial and industrial loans of $0.7 million, during the same period.
The Company’s ratio of nonperforming loans to loans held for investment remained at 0.05% from December 31, 2024 to March 31, 2025. Loans designated as watch decreased from $123.4 million to $112.0 million between December 31, 2024 and March 31, 2025. Loans designated as substandard increased from $2.6 million to $3.7 million between December 31, 2024 and March 31, 2025. There were no loans with doubtful risk grades at March 31, 2025 or December 31, 2024.
A summary of the allowance for credit losses by loan class is as follows:
| March 31, 2025 | December 31, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| (in thousands) | Amount | % of Total | Amount | % of Total | ||||
| Real estate: | ||||||||
| Commercial | $ | 27,027 | 68.91 | % | $ | 25,864 | 68.44 | % |
| Commercial land and development | 70 | 0.18 | % | 78 | 0.21 | % | ||
| Commercial construction | 2,227 | 5.68 | % | 2,268 | 6.00 | % | ||
| Residential construction | 78 | 0.20 | % | 64 | 0.17 | % | ||
| Residential | 279 | 0.71 | % | 270 | 0.71 | % | ||
| Farmland | 598 | 1.52 | % | 607 | 1.61 | % | ||
| 30,279 | 77.20 | % | 29,151 | 77.14 | % | |||
| Commercial: | ||||||||
| Secured | 5,905 | 15.05 | % | 5,866 | 15.52 | % | ||
| Unsecured | 403 | 1.03 | % | 278 | 0.74 | % | ||
| 6,308 | 16.08 | % | 6,144 | 16.26 | % | |||
| Consumer and other | 2,637 | 6.72 | % | 2,496 | 6.60 | % | ||
| Total allowance for credit losses | $ | 39,224 | 100.00 | % | $ | 37,791 | 100.00 | % |
The ratio of allowance for credit losses to loans held for investment was 1.08% at March 31, 2025, as compared to 1.07% at December 31, 2024.
Non-interest Income
The following table presents the key components of non-interest income for the periods indicated:
| Three months ended | |||||||
|---|---|---|---|---|---|---|---|
| (in thousands) | March 31,<br>2025 | December 31,<br>2024 | Change | % Change | |||
| Service charges on deposit accounts | $ | 215 | $ | 179 | 20.11 | % | |
| Gain on sale of loans | 125 | 150 | (25) | (16.67) | % | ||
| Loan-related fees | 448 | 400 | 48 | 12.00 | % | ||
| FHLB stock dividends | 331 | 332 | (1) | (0.30) | % | ||
| Earnings on bank-owned life insurance | 161 | 182 | (21) | (11.54) | % | ||
| Other income | 79 | 423 | (344) | (81.32) | % | ||
| Total non-interest income | $ | 1,359 | $ | 1,666 | (18.43) | % |
All values are in US Dollars.
Service charges on deposit accounts. The increase resulted primarily from individually immaterial increases in fees earned for services and products to support deposit accounts including, but not limited to, service charges, check order fees, and debit card income.
Gain on sale of loans. The decrease resulted from a decline in the volume and effective yield of loans sold. During the three months ended March 31, 2025, approximately $1.7 million of loans were sold with an effective yield of 7.24%, as compared to approximately $2.0 million of loans sold with an effective yield of 7.60% during the three months ended December 31, 2024.
Other income. The decrease resulted primarily from $0.3 million of income received on equity investments in venture-backed funds during the three months ended December 31, 2024 which did not reoccur during the three months ended March 31, 2025.
The following table presents the key components of non-interest income for the periods indicated:
| Three months ended | |||||||
|---|---|---|---|---|---|---|---|
| (in thousands) | March 31,<br>2025 | March 31,<br>2024 | Change | % Change | |||
| Service charges on deposit accounts | $ | 215 | $ | 188 | 14.36 | % | |
| Gain on sale of loans | 125 | 369 | (244) | (66.12) | % | ||
| Loan-related fees | 448 | 429 | 19 | 4.43 | % | ||
| FHLB stock dividends | 331 | 332 | (1) | (0.30) | % | ||
| Earnings on bank-owned life insurance | 161 | 142 | 19 | 13.38 | % | ||
| Other income | 79 | 373 | (294) | (78.82) | % | ||
| Total non-interest income | $ | 1,359 | $ | 1,833 | (25.86) | % |
All values are in US Dollars.
Gain on sale of loans. The decrease related primarily to an overall decline in the volume of loans sold, partially offset by an improvement in the effective yield of loans sold. During the three months ended March 31, 2025, approximately $1.7 million of loans were sold with an effective yield of 7.24%, as compared to approximately $5.2 million of loans sold with an effective yield of 7.08% during the three months ended March 31, 2024.
Other income. The decrease related primarily to $0.3 million of income received on equity investments in venture-backed funds during the three months ended March 31, 2024, which did not reoccur during the three months ended March 31, 2025.
Non-interest Expense
The following table presents the key components of non-interest expense for the periods indicated:
| Three months ended | |||||||
|---|---|---|---|---|---|---|---|
| (in thousands) | March 31,<br>2025 | December 31,<br>2024 | Change | % Change | |||
| Salaries and employee benefits | $ | 9,134 | $ | 8,360 | 9.26 | % | |
| Occupancy and equipment | 637 | 649 | (12) | (1.85) | % | ||
| Data processing and software | 1,457 | 1,369 | 88 | 6.43 | % | ||
| Federal Deposit Insurance Corporation (“FDIC”) insurance | 455 | 440 | 15 | 3.41 | % | ||
| Professional services | 913 | 774 | 139 | 17.96 | % | ||
| Advertising and promotional | 522 | 752 | (230) | (30.59) | % | ||
| Loan-related expenses | 319 | 321 | (2) | (0.62) | % | ||
| Other operating expenses | 1,608 | 1,823 | (215) | (11.79) | % | ||
| Total non-interest expense | $ | 15,045 | $ | 14,488 | 3.84 | % |
All values are in US Dollars.
Salaries and employee benefits. The increase related primarily to: (i) a $0.9 million increase in salaries, benefits, and bonus expense; and (ii) a $0.3 million decrease in loan origination costs due to fewer loan originations, net of purchased consumer loans. The increase was partially offset by a $0.5 million decrease in commissions expense due to fewer loan originations, net of purchased consumer loans, period-over-period.
Professional services. The increase was primarily due to $0.1 million in fees paid for compensation consulting services, which did not occur in the three months ended December 31, 2024.
Advertising and promotional. The decrease related primarily to a $0.1 million decrease in expenses related to sponsored events and partnerships and $0.1 million decrease related to business development expenses.
Other operating expenses. The decrease was primarily due to a $0.1 million decrease in director expenses, such as conferences and meetings, combined with individually immaterial decreases in expenses related to operations, including administrative and operational expenses.
The following table presents the key components of non-interest expense for the periods indicated:
| Three months ended | |||||||
|---|---|---|---|---|---|---|---|
| (in thousands) | March 31,<br>2025 | March 31,<br>2024 | Change | % Change | |||
| Salaries and employee benefits | $ | 9,134 | $ | 7,577 | 20.55 | % | |
| Occupancy and equipment | 637 | 626 | 11 | 1.76 | % | ||
| Data processing and software | 1,457 | 1,157 | 300 | 25.93 | % | ||
| FDIC insurance | 455 | 400 | 55 | 13.75 | % | ||
| Professional services | 913 | 707 | 206 | 29.14 | % | ||
| Advertising and promotional | 522 | 460 | 62 | 13.48 | % | ||
| Loan-related expenses | 319 | 297 | 22 | 7.41 | % | ||
| Other operating expenses | 1,608 | 1,492 | 116 | 7.77 | % | ||
| Total non-interest expense | $ | 15,045 | $ | 12,716 | 18.32 | % |
All values are in US Dollars.
Salaries and employee benefits. The increase related primarily to: (i) a $1.6 million increase in salaries, benefits, and bonus expense, mainly related to a 13.19% increase in headcount between March 31, 2024 and March 31, 2025; and (ii) a $0.1 million increase in commissions paid. This increase was partially offset by a $0.2 million increase in loan origination costs due to a greater number of loan originations, net of purchased consumer loans, period-over-period.
Data processing and software. The increase was primarily due to: (i) increased usage of our digital banking platform; (ii) higher transaction volumes related to the increased number of loan and deposit accounts; and (iii) an increased number of licenses required for new users on our loan origination and documentation system.
Professional services. The increase was primarily due to $0.1 million in fees paid for compensation consulting services and $0.1 million in consulting services relating to operations in San Francisco, neither of which occurred in the three months ended March 31, 2024.
Other operating expenses. The increase was primarily due to individually immaterial increases in expenses related to operations, including administrative and operational expenses such as travel, subscriptions, and professional association memberships.
Provision for Income Taxes
Three months ended March 31, 2025, as compared to three months ended December 31, 2024
Provision for income taxes decreased to $5.3 million for the three months ended March 31, 2025 from $6.1 million for the three months ended December 31, 2024, which was primarily due to: (i) a slight decline in taxable income recognized during the three months ended March 31, 2025; and (ii) a $0.6 million provision to return true-up recorded during the three months ended December 31, 2024 related primarily to the timing of recognition of low income housing tax credits, which did not reoccur during the three months ended March 31, 2025. The effective tax rates were 28.71% and 31.24% for the three months ended March 31, 2025 and December 31, 2024, respectively.
Three months ended March 31, 2025, as compared to three months ended March 31, 2024
Provision for income taxes increased by $1.0 million, or 21.94%, for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. This increase was primarily driven by an increase in taxable income. The effective tax rates were 28.71% and 28.94% for the three months ended March 31, 2025 and March 31, 2024, respectively.
Webcast Details
Five Star Bancorp will host a live webcast for analysts and investors on Tuesday, April 29, 2025 at 1:00 PM ET (10:00 AM PT) to discuss its first quarter financial results. To view the live webcast, visit the “News & Events”
section of the Company’s website under “Events” at https://investors.fivestarbank.com/news-events/events. The webcast will be archived on the Company’s website for a period of 90 days.
About Five Star Bancorp
Five Star is a bank holding company headquartered in Rancho Cordova, California. Five Star operates through its wholly owned banking subsidiary, Five Star Bank. The Bank has eight branches in Northern California.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent plans, estimates, objectives, goals, guidelines, expectations, intentions, projections, and statements of the Company’s beliefs concerning future events, business plans, objectives, expected operating results, and the assumptions upon which those statements are based. Forward-looking statements include without limitation, any statement that may predict, forecast, indicate, or imply future results, performance, or achievements, and are typically identified with words such as “may,” “could,” “should,” “will,” “would,” “believe,” “anticipate,” “estimate,” “expect,” “aim,” “intend,” “plan,” or words or phases of similar meaning. The Company cautions that the forward-looking statements are based largely on the Company’s expectations and are subject to a number of known and unknown risks and uncertainties that are subject to change based on factors which are, in many instances, beyond the Company’s control. Such forward-looking statements are based on various assumptions (some of which may be beyond the Company’s control) and are subject to risks and uncertainties, which change over time, and other factors, which could cause actual results to differ materially from those currently anticipated. New risks and uncertainties may emerge from time to time, and it is not possible for the Company to predict their occurrence or how they will affect the Company. If one or more of the factors affecting the Company’s forward-looking information and statements proves incorrect, then the Company’s actual results, performance, or achievements could differ materially from those expressed in, or implied by, forward-looking information and statements contained in this press release. Therefore, the Company cautions you not to place undue reliance on the Company’s forward-looking information and statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements are set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 under the section entitled “Risk Factors,” and other documents filed by the Company with the Securities and Exchange Commission from time to time.
The Company disclaims any duty to revise or update the forward-looking statements, whether written or oral, to reflect actual results or changes in the factors affecting the forward-looking statements, except as specifically required by law.
Condensed Financial Data (Unaudited)
| Three months ended | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| (in thousands, except per share and share data) | March 31,<br>2025 | December 31,<br>2024 | March 31,<br>2024 | ||||||
| Revenue and Expense Data | |||||||||
| Interest and fee income | $ | 57,087 | $ | 57,745 | $ | 47,541 | |||
| Interest expense | 23,110 | 24,256 | 20,797 | ||||||
| Net interest income | 33,977 | 33,489 | 26,744 | ||||||
| Provision for credit losses | 1,900 | 1,300 | 900 | ||||||
| Net interest income after provision | 32,077 | 32,189 | 25,844 | ||||||
| Non-interest income: | |||||||||
| Service charges on deposit accounts | 215 | 179 | 188 | ||||||
| Gain on sale of loans | 125 | 150 | 369 | ||||||
| Loan-related fees | 448 | 400 | 429 | ||||||
| FHLB stock dividends | 331 | 332 | 332 | ||||||
| Earnings on bank-owned life insurance | 161 | 182 | 142 | ||||||
| Other income | 79 | 423 | 373 | ||||||
| Total non-interest income | 1,359 | 1,666 | 1,833 | ||||||
| Non-interest expense: | |||||||||
| Salaries and employee benefits | 9,134 | 8,360 | 7,577 | ||||||
| Occupancy and equipment | 637 | 649 | 626 | ||||||
| Data processing and software | 1,457 | 1,369 | 1,157 | ||||||
| FDIC insurance | 455 | 440 | 400 | ||||||
| Professional services | 913 | 774 | 707 | ||||||
| Advertising and promotional | 522 | 752 | 460 | ||||||
| Loan-related expenses | 319 | 321 | 297 | ||||||
| Other operating expenses | 1,608 | 1,823 | 1,492 | ||||||
| Total non-interest expense | 15,045 | 14,488 | 12,716 | ||||||
| Income before provision for income taxes | 18,391 | 19,367 | 14,961 | ||||||
| Provision for income taxes | 5,280 | 6,050 | 4,330 | ||||||
| Net income | $ | 13,111 | $ | 13,317 | $ | 10,631 | |||
| Comprehensive Income | |||||||||
| Net income | $ | 13,111 | $ | 13,317 | $ | 10,631 | |||
| Net unrealized holding gain (loss) on securities available-for-sale during the period | 1,030 | (3,747) | (955) | ||||||
| Less: Income tax expense (benefit) related to other comprehensive income (loss) | 305 | (1,108) | (282) | ||||||
| Other comprehensive income (loss) | 725 | (2,639) | (673) | ||||||
| Total comprehensive income | $ | 13,836 | $ | 10,678 | $ | 9,958 | |||
| Three months ended | |||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| (in thousands, except per share and share data) | March 31,<br>2025 | December 31,<br>2024 | March 31,<br>2024 | ||||||
| Share and Per Share Data | |||||||||
| Earnings per common share: | |||||||||
| Basic | $ | 0.62 | $ | 0.63 | $ | 0.62 | |||
| Diluted | 0.62 | 0.63 | 0.62 | ||||||
| Book value per share | 19.06 | 18.60 | 16.86 | ||||||
| Tangible book value per share(1) | 19.06 | 18.60 | 16.86 | ||||||
| Weighted average basic common shares outstanding | 21,209,881 | 21,182,143 | 17,190,867 | ||||||
| Weighted average diluted common shares outstanding | 21,253,588 | 21,235,318 | 17,272,994 | ||||||
| Shares outstanding at end of period | 21,329,235 | 21,319,083 | 17,353,251 | ||||||
| Selected Financial Ratios | |||||||||
| ROAA | 1.30 | % | 1.31 | % | 1.22 | % | |||
| ROAE | 13.28 | % | 13.48 | % | 14.84 | % | |||
| Net interest margin | 3.45 | % | 3.36 | % | 3.14 | % | |||
| Loan to deposit(2) | 97.01 | % | 99.38 | % | 105.37 | % |
(1) See the section entitled “Non-GAAP Reconciliation (Unaudited)” for a reconciliation of this non-GAAP financial measure.
(2) Loan balance in loan to deposit ratio is total loans held for investment and sale at period end. Deposit balance in loan to deposit ratio is total deposits at period end.
| (in thousands) | March 31,<br>2025 | December 31,<br>2024 | March 31,<br>2024 | ||||||
|---|---|---|---|---|---|---|---|---|---|
| Balance Sheet Data | |||||||||
| Cash and due from financial institutions | $ | 42,473 | $ | 33,882 | $ | 29,750 | |||
| Interest-bearing deposits in banks | 410,098 | 318,461 | 155,575 | ||||||
| Time deposits in banks | 4,024 | 4,121 | 5,878 | ||||||
| Securities - available-for-sale, at fair value | 97,111 | 98,194 | 105,006 | ||||||
| Securities - held-to-maturity, at amortized cost | 2,585 | 2,720 | 3,000 | ||||||
| Loans held for sale | 2,669 | 3,247 | 10,243 | ||||||
| Loans held for investment | 3,621,819 | 3,532,686 | 3,104,130 | ||||||
| Allowance for credit losses | (39,224) | (37,791) | (34,653) | ||||||
| Loans held for investment, net of allowance for credit losses | 3,582,595 | 3,494,895 | 3,069,477 | ||||||
| FHLB stock | 15,000 | 15,000 | 15,000 | ||||||
| Operating leases, right-of-use asset | 5,944 | 6,245 | 6,932 | ||||||
| Premises and equipment, net | 1,524 | 1,584 | 1,569 | ||||||
| Bank-owned life insurance | 23,246 | 19,375 | 18,872 | ||||||
| Interest receivable and other assets | 57,788 | 55,554 | 55,058 | ||||||
| Total assets | $ | 4,245,057 | $ | 4,053,278 | $ | 3,476,360 | |||
| Non-interest-bearing deposits | $ | 933,652 | $ | 922,629 | $ | 817,388 | |||
| Interest-bearing deposits | 2,802,702 | 2,635,365 | 2,138,384 | ||||||
| Total deposits | 3,736,354 | 3,557,994 | 2,955,772 | ||||||
| Subordinated notes, net | 73,932 | 73,895 | 73,786 | ||||||
| Other borrowings | — | — | 120,000 | ||||||
| Operating lease liability | 6,591 | 6,857 | 7,320 | ||||||
| Interest payable and other liabilities | 21,729 | 17,908 | 26,902 | ||||||
| Total liabilities | 3,838,606 | 3,656,654 | 3,183,780 | ||||||
| Common stock | 302,788 | 302,531 | 220,804 | ||||||
| Retained earnings | 115,309 | 106,464 | 84,216 | ||||||
| Accumulated other comprehensive loss, net of taxes | (11,646) | (12,371) | (12,440) | ||||||
| Total shareholders’ equity | 406,451 | 396,624 | 292,580 | ||||||
| Total liabilities and shareholders’ equity | $ | 4,245,057 | $ | 4,053,278 | $ | 3,476,360 | |||
| Quarterly Average Balance Data | |||||||||
| Average loans held for investment and sale | $ | 3,567,992 | $ | 3,498,109 | $ | 3,082,290 | |||
| Average interest-earning assets | 3,997,037 | 3,965,867 | 3,424,469 | ||||||
| Average total assets | 4,090,580 | 4,057,603 | 3,518,452 | ||||||
| Average deposits | 3,585,782 | 3,561,409 | 3,106,841 | ||||||
| Average total equity | 400,501 | 393,088 | 288,106 | ||||||
| Credit Quality | |||||||||
| Allowance for credit losses to nonperforming loans | 2,222.32 | % | 2,101.78 | % | 1,806.73 | % | |||
| Nonperforming loans to loans held for investment | 0.05 | % | 0.05 | % | 0.06 | % | |||
| Nonperforming assets to total assets | 0.04 | % | 0.05 | % | 0.06 | % | |||
| Nonperforming loans plus performing loan modifications to loans held for investment | 0.05 | % | 0.05 | % | 0.06 | % | |||
| (in thousands) | March 31,<br>2025 | December 31,<br>2024 | March 31,<br>2024 | ||||||
| --- | --- | --- | --- | --- | --- | --- | |||
| Capital Ratios | |||||||||
| Total shareholders’ equity to total assets | 9.57 | % | 9.79 | % | 8.42 | % | |||
| Tangible shareholders’ equity to tangible assets(1) | 9.57 | % | 9.79 | % | 8.42 | % | |||
| Total capital (to risk-weighted assets) | 13.97 | % | 13.99 | % | 12.34 | % | |||
| Tier 1 capital (to risk-weighted assets) | 11.00 | % | 11.02 | % | 9.13 | % | |||
| Common equity Tier 1 capital (to risk-weighted assets) | 11.00 | % | 11.02 | % | 9.13 | % | |||
| Tier 1 leverage ratio | 10.17 | % | 10.05 | % | 8.63 | % |
(1) See the section entitled “Non-GAAP Reconciliation (Unaudited)” for a reconciliation of this non-GAAP financial measure.
Non-GAAP Reconciliation (Unaudited)
The Company uses financial information in its analysis of the Company’s performance that is not in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The Company believes that these non-GAAP financial measures provide useful information to management and investors that is supplementary to the Company’s financial condition, results of operations, and cash flows computed in accordance with GAAP. However, the Company acknowledges that its non-GAAP financial measures have a number of limitations. As such, investors should not view these disclosures as a substitute for results determined in accordance with GAAP. Additionally, these non-GAAP measures are not necessarily comparable to non-GAAP financial measures that other banking companies use. Other banking companies may use names similar to those the Company uses for the non-GAAP financial measures the Company discloses, but may calculate them differently. Investors should understand how the Company and other companies each calculate their non-GAAP financial measures when making comparisons.
Tangible shareholders’ equity to tangible assets is defined as total equity less goodwill and other intangible assets, divided by total assets less goodwill and other intangible assets. The most directly comparable GAAP financial measure is total shareholders’ equity to total assets. Management believes that tangible shareholders’ equity to tangible assets is a useful financial measure because it enables management, investors, and others to assess the Company’s financial health based on tangible capital. We had no goodwill or other intangible assets at the end of any period indicated. As a result, tangible shareholders’ equity to tangible assets is the same as total shareholders’ equity to total assets at the end of each of the periods indicated.
Tangible book value per share is defined as total shareholders’ equity less goodwill and other intangible assets, divided by the outstanding number of common shares at the end of the period. The most directly comparable GAAP financial measure is book value per share. Management believes that tangible book value per share is a useful financial measure because it enables management, investors, and others to assess the Company’s value and use of equity. We had no goodwill or other intangible assets at the end of any period indicated. As a result, tangible book value per share is the same as book value per share at the end of each of the periods indicated.
Pre-tax, pre-provision income is defined as pre-tax income plus provision for credit losses. The most directly comparable GAAP financial measure is pre-tax income. Management believes that pre-tax, pre-provision income is a useful financial measure because it enables management, investors, and others to assess the Company’s ability to generate operating profit and capital.
The following reconciliation table provides a more detailed analysis of this non-GAAP financial measure:
| Three months ended | ||||||
|---|---|---|---|---|---|---|
| (in thousands) | March 31,<br>2025 | December 31,<br>2024 | March 31,<br>2024 | |||
| Pre-tax, pre-provision income | ||||||
| Pre-tax income | $ | 18,391 | $ | 19,367 | $ | 14,961 |
| Add: provision for credit losses | 1,900 | 1,300 | 900 | |||
| Pre-tax, pre-provision income | $ | 20,291 | $ | 20,667 | $ | 15,861 |
Investor Contact: Heather C. Luck, Chief Financial Officer Five Star Bancorp (916) 626-5008 hluck@fivestarbank.com
Media Contact:
Shelley R. Wetton, Chief Marketing Officer Five Star Bancorp (916) 284-7827 swetton@fivestarbank.com
16
q12025investorpresentati
Safe Harbor Statement and Disclaimer Forward-Looking Statements In this presentation, “we,” “our,” “us,” “Five Star,” or “the Company” refers to Five Star Bancorp, a California corporation, and our consolidated subsidiaries, including Five Star Bank, a California state- chartered bank, unless the context indicates that we refer only to the parent company, Five Star Bancorp. This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent plans, estimates, objectives, goals, guidelines, expectations, intentions, projections, and statements of the Company’s beliefs concerning future events, business plans, objectives, expected operating results, and the assumptions upon which those statements are based. Forward-looking statements include without limitation, any statement that may predict, forecast, indicate, or imply future results, performance, or achievements, and are typically identified with words such as “may,” “could,” “should,” “will,” “would,” “believe,” “anticipate,” “estimate,” “expect,” “aim,” “intend,” “plan,” or words or phases of similar meaning. The Company cautions that the forward-looking statements are based largely on the Company’s expectations and are subject to a number of known and unknown risks and uncertainties that are subject to change based on factors which are, in many instances, beyond the Company’s control. Such forward-looking statements are based on various assumptions (some of which may be beyond the Company’s control) and are subject to risks and uncertainties, which change over time, and other factors which could cause actual results to differ materially from those currently anticipated. New risks and uncertainties may emerge from time to time, and it is not possible for the Company to predict their occurrence or how they will affect the Company. If one or more of the factors affecting the Company’s forward-looking information and statements proves incorrect, then the Company’s actual results, performance, or achievements could differ materially from those expressed in, or implied by, forward-looking information and statements contained in this presentation. Therefore, the Company cautions you not to place undue reliance on the Company’s forward-looking information and statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements are set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 under the section entitled “Risk Factors,” and other documents filed by the Company with the Securities and Exchange Commission from time to time. The Company disclaims any duty to revise or update the forward-looking statements, whether written or oral, to reflect actual results or changes in the factors affecting the forward-looking statements, except as specifically required by law. Industry Information This presentation includes statistical and other industry and market data that we obtained from government reports and other third-party sources. Our internal data, estimates, and forecasts are based on information obtained from government reports, trade, and business organizations and other contacts in the markets in which we operate and our management’s understanding of industry conditions. Although we believe that this information (including the industry publications and third-party research, surveys, and studies) is accurate and reliable, we have not independently verified such information. In addition, estimates, forecasts, and assumptions are necessarily subject to a high degree of uncertainty and risk due to a variety of factors. Finally, forward-looking information obtained from these sources is subject to the same qualifications and the additional uncertainties regarding the other forward-looking statements in this presentation. Unaudited Financial Data Numbers contained in this presentation for the quarter ended March 31, 2025 and for other quarterly periods are unaudited. Additionally, all figures presented as year-to-date, except for periods that represent a full fiscal year ended December 31, represent unaudited results. As a result, subsequent information may cause a change in certain accounting estimates and other financial information, including the Company’s allowance for credit losses, fair values, and income taxes. Non-GAAP Financial Measures The Company uses financial information in its analysis of the Company’s performance that is not in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The Company believes that these non-GAAP financial measures provide useful information to management and investors that is supplementary to the Company’s financial condition, results of operations, and cash flows computed in accordance with GAAP. However, the Company acknowledges that its non-GAAP financial measures have a number of limitations. See the appendix to this presentation for a reconciliation of these non-GAAP measures to the most directly comparable GAAP financial measures. First Quarter 2025 Investor Presentation | 2
Agenda First Quarter 2025 Investor Presentation | 3 •Company Overview •Financial Highlights •Loans and Credit Quality •Deposit and Capital Overview •Financial Results
Company Overview First Quarter 2025 Investor Presentation | 4
Executive Team First Quarter 2025 Investor Presentation | 5 James Beckwith President and Chief Executive Officer Five Star since 2003 John Dalton Senior Vice President and Chief Credit Officer Five Star since 2011 Mike Lee Senior Vice President and Chief Regulatory Officer Five Star since 2005 Michael Rizzo Executive Vice President and Chief Banking Officer Five Star since 2005 Brett Wait Senior Vice President and Chief Information Officer Five Star since 2011 Lydia Ramirez Executive Vice President and Chief Operating Officer Five Star since 2017 Heather Luck Executive Vice President and Chief Financial Officer Five Star since 2018 Shelley Wetton Senior Vice President and Chief Marketing Officer Five Star since 2015 DJ Kurtze Executive Vice President and San Francisco Bay Area President Five Star since 2023
Company Overview Nasdaq: Headquarters: Asset Size: Loans HFI: Deposits: Bank Branches: First Quarter 2025 Investor Presentation | 6 FSBC Rancho Cordova, CA $4.2 billion $3.6 billion $3.7 billion 8 Note: Balances are as of March 31, 2025. References to loans HFI are loans held for investment. Five Star is a community business bank that was founded to serve the commercial real estate industry. Today, the markets we serve have expanded to meet customer demand and now include manufactured housing and storage, faith-based, government, nonprofits, and more.
Financial Highlights First Quarter 2025 Investor Presentation | 7
$811 $840 $973 $1,272 $1,480 $1,954 $2,557 $3,227 $3,593 $4,053 $4,245 $1,806 $2,535 $148 $22 Total Assets Excluding PPP Loans PPP Loans 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Q1 2025 Consistent and Organic Asset Growth First Quarter 2025 Investor Presentation | 8 Note: Dollars are in millions. Balances are end of period. References to PPP are the Paycheck Protection Program. 1. CAGR is based upon balances as of March 31, 2025. 2. A reconciliation of this non-GAAP measure is set forth in the appendix. (2) CAGR (1) 5 years 10 years Total Assets 20.03 % 19.59 %
Financial Highlights - March 31, 2025 First Quarter 2025 Investor Presentation | 9 Growth • Continued balance sheet growth with increases in loans held for investment of $89.1 million and non-wholesale(1) deposits of $48.4 million since December 31, 2024. Funding • Non-interest-bearing deposits comprised 24.99% of total deposits, as compared to 25.93% of total deposits as of December 31, 2024. • Deposits comprised 97.34% of total liabilities, as compared to 97.30% of total liabilities as of December 31, 2024. Liquidity • Insured and collateralized deposits were approximately $2.5 billion, representing 67.55% of total deposits, as compared to 66.92% as of December 31, 2024. • Cash and cash equivalents were $452.6 million, representing 12.11% of total deposits, as compared to 9.90% as of December 31, 2024. Capital • All capital ratios were above well-capitalized regulatory thresholds. • On January 16, 2025 and April 17, 2025, the Company declared cash dividends of $0.20 per share for the three months ended December 31, 2024 and March 31, 2025, respectively. 1. The Company defines wholesale deposits as brokered deposits and California Time Deposit Program deposits.
Loans and Credit Quality First Quarter 2025 Investor Presentation | 10
To ta l L oa ns (M ill io ns ) $1,355 $1,912 $2,791 $3,082 $3,104 $3,266 $3,461 $3,533 $3,622 $148 $22 4.96% 4.82% 4.75% 5.52% 5.71% 5.83% 5.98% 6.01% 6.02% Non-PPP Loans PPP Loans Average Loan Yield Average Loan Yield Excluding PPP Loans 2020 2021 2022 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024 Q1 2025 0 500 1,000 1,500 2,000 2,500 3,000 3,500 Consistent Loan Growth First Quarter 2025 Investor Presentation | 11 Note: Loan balances are end of period loans held for investment. Yields are based on average balance and annualized quarterly interest income. 1. CAGR is based upon balances as of March 31, 2025. 2. A reconciliation of this non-GAAP measure is set forth in the appendix. (2) CAGR (1) 5 years Total Loans 22.99 %
Commercial real estate, 81.11% Commercial land and development, 0.10% Commercial construction, 3.12% Residential construction, 0.16% Residential, 0.94% Farmland, 1.20% Secured, 4.77% Unsecured, 0.96% PPP, 0.00% Consumer and other, 7.64% Loan Portfolio Composition First Quarter 2025 Investor Presentation | 12 Types of collateral securing commercial real estate ("CRE") loans Loan Balance ($000s) # of Loans % of CRE Manufactured home community $ 918,864 419 31.24 % RV Park 378,525 125 12.87 % Retail 272,441 96 9.26 % Industrial 237,128 140 8.06 % Mini storage 198,126 50 6.74 % Faith-based 187,733 105 6.38 % Multifamily 185,543 97 6.31 % All other types (1) 562,841 271 19.14 % Total $ 2,941,201 1,303 100.00 % Note: Balances are net book value as of March 31, 2025, before allowance for credit losses and deferred loan fees, and exclude loans held for sale. 1. Types of collateral in “all other types” are those that individually make up less than 5% CRE concentration.
$919M $379M $272M $237M $198M $188M $186M $563M $1,638M $661M $550M $528M $393M $498M $395M $1,215M 61.11% 60.27% 55.50% 51.68% 57.56% 46.29% 52.96% 54.21% Loan Balance Collateral Value Weighted Average Loan-to-Value Manufactured home community RV Park Retail Industrial Mini storage Faith-based Multifamily All other types $0M $250M $500M $750M $1,000M $1,250M $1,500M $1,750M CRE Collateral Values First Quarter 2025 Investor Presentation | 13 (1) Note: Balances are net book value as of March 31, 2025, before allowance for credit losses, before deferred loan fees, and exclude loans held for sale. 1. Types of collateral in “all other types” are those that individually make up less than 5% CRE concentration. Total CRE Weighted Average Loan-to-Value 50.03%
CA, 57.0% TX, 7.7% NC, 3.2% AZ, 2.7% FL, 2.5% OR, 2.3% NV, 2.2%TN, 2.0%GA, 1.8%CO, 1.3% PA, 1.2% WI, 1.2% MO, 1.2% WA, 1.2% OH, 1.0% Other, 11.5% CML Term CRE NOO, 35.9% CML Term Multifamily, 30.4% CML Term CRE OO, 14.4% CSM Unsecured, 7.5% CML Secured, 3.1% CML Const CRE, 3.1%CML Term Ag RE, 1.2% SBA 7A Secured, 1.1% Others, 3.3% CRE Manufactured Home, 25.4% CRE Other, 11.5% CRE RV Park, 10.4% Commercial Other, 7.7% CRE Retail, 7.5% Consumer Unsecured, 7.5% CRE Industrial, 6.5% CRE Mini Storage, 5.5% CRE Faith- based, 5.2% CRE Multifamily, 5.1%CRE Office, 4.0% Commercial Construction, 3.3% Others, 0.4% Loan Portfolio Diversification We focus primarily on commercial lending, with an emphasis on commercial real estate. We offer a variety of loans to small and medium-sized businesses, professionals, and individuals, including commercial real estate, commercial land and construction, and farmland loans. To a lesser extent, we also offer residential real estate, construction real estate, and consumer loans. First Quarter 2025 Investor Presentation | 14Note: Balances are net book value as of March 31, 2025, before allowance for credit losses, before deferred loan fees, and exclude loans held for sale. Loans by Product Loans by Purpose Real Estate Loans by Geography
Loan Rollforward First Quarter 2025 Investor Presentation | 15Note: Dollars are in millions. Beginning and ending balances are end of period, before allowance for credit losses, including deferred loan fees, and exclude loans held for sale. $150 $390 $334 $263 $259 $(51) $(155) $(99) $(119) $(105) $(77) $(73) $(41) $(72) $(66) Originations & Advances Paydowns Payoffs Q1 2024 Q2 2024 Q3 2024 Q4 2024 Q1 2025 Beginning Balance $ 3,082 $ 3,104 $ 3,266 $ 3,461 $ 3,533 Ending Balance $ 3,104 $ 3,266 $ 3,461 $ 3,533 $ 3,622
1.48% 1.20% 1.02% 1.12% 1.07% 1.08% 0.12% 0.04% 0.07% 0.11% 0.12% 0.02% Allowance for Credit Losses to Loans HFI Net Charge-offs to Average Loans HFI 2020 2021 2022 2023 2024 Q1 2025 Asset Quality First Quarter 2025 Investor Presentation | 16 Nonperforming Loan Trend Allowance for Credit Losses and Net Charge-off Trend Note: References to loans HFI are loans held for investment, which are the equivalent of total loans outstanding at each period end. References to average loans HFI are average loans held for investment during the period. $0.5M $0.6M $0.4M $2.0M $1.8M $1.8M 0.03% 0.03% 0.01% 0.06% 0.05% 0.05% Nonperforming Loans Nonperforming Loans to Loans HFI 2020 2021 2022 2023 2024 Q1 2025 Our primary objective is to maintain a high level of asset quality in our loan portfolio. Therefore, we: – Place emphasis on our commercial portfolio, where we reevaluate risk assessments as a result of reviewing commercial property operating statements and borrower financials – Monitor payment performance, delinquencies, tax compliance, and property insurance compliance of our borrowers – Design our practices to facilitate the early detection and remediation of problems within our loan portfolio – Employ the use of an outside, independent consulting firm to evaluate our underwriting and risk assessment process
Allocation of Allowance for Credit Losses First Quarter 2025 Investor Presentation | 17 (dollars in thousands) December 31, 2024 March 31, 2025 Allowance for Credit Losses Amount % of Total Amount % of Total Real estate: Commercial $ 25,864 68.44 % $ 27,027 68.91 % Commercial land & development 78 0.21 % 70 0.18 % Commercial construction 2,268 6.00 % 2,227 5.68 % Residential construction 64 0.17 % 78 0.20 % Residential 270 0.71 % 279 0.71 % Farmland 607 1.61 % 598 1.52 % Total real estate loans 29,151 77.14 % 30,279 77.20 % Commercial: Secured 5,866 15.52 % 5,905 15.05 % Unsecured 278 0.74 % 403 1.03 % Total commercial loans 6,144 16.26 % 6,308 16.08 % Consumer and other 2,496 6.60 % 2,637 6.72 % Total allowance for credit losses $ 37,791 100.00 % $ 39,224 100.00 %
Risk Grade Migration First Quarter 2025 Investor Presentation | 18 Classified Loans (Loans Rated Substandard or Doubtful) (dollars in thousands) 2023 2024 Q1 2025 Real estate: Commercial $ 1,892 $ 2,587 $ 3,653 Commercial land and development — — — Commercial construction — — — Residential construction — — — Residential — — — Farmland — — — Commercial: Secured 72 48 43 Unsecured — — — Consumer and other 12 9 8 Total $ 1,976 $ 2,644 $ 3,704 % of Loan Portfolio Outstanding by Risk Grade: Pass 98.66 % 96.44 % 96.81 % Watch 1.28 % 3.49 % 3.09 % Substandard 0.06 % 0.07 % 0.10 % Note: Loan portfolio outstanding is total balance of loans outstanding at period end, before deferred loan fees, before allowance for credit losses, and exclude loans held for sale.
Deposit and Capital Overview First Quarter 2025 Investor Presentation | 19
$1.8B $2.3B $2.8B $3.0B $3.6B $3.7B $889M $1,001M $1,228M $1,409M $1,650M $1,706M $701M $902M $971M $831M $923M $934M $146M $279M $240M $320M $315M $296M $48M $104M $343M $467M $670M $801M Money Market & Savings Non-Interest-Bearing Demand Interest-Bearing Transaction Time Deposits 2020 2021 2022 2023 2024 Q1 2025 Strong Deposit Growth First Quarter 2025 Investor Presentation | 20 Note: Balances are end of period. Cost of total deposits is based on total average balance of interest-bearing and non-interest-bearing deposits and annualized quarterly deposit interest expense. 1. CAGR is based upon balances as of March 31, 2025. Cost of Total Deposits 0.44% 0.11% 0.43% 1.97% 2.56% 2.48% CAGR (1) 5 years Total Deposits 19.00 %
Diversified Funding First Quarter 2025 Investor Presentation | 21 Total Deposits(1) = $3.7 billion 97.3% of Total Liabilities Liability Mix(1) 1. Balance as of March 31, 2025. 2. Loan balance in loan to deposit ratio is total loans held for investment and sale at period end. Loan(2) to Deposit Ratio Non-Interest-Bearing Deposits to Total Deposits 84.5% 85.1% 100.7% 102.2% 99.4% 97.0% 2020 2021 2022 2023 2024 Q1 2025 39.3% 39.5% 34.9% 27.5% 25.9% 25.0% 2020 2021 2022 2023 2024 Q1 2025 Money Market, 41.1% Non-Interest- Bearing Demand, 24.3% Time Deposits, 20.9% Interest- Bearing Transaction, 7.7% Savings, 3.3% Borrowings & Subordinated Notes, 1.9% Other Liabilities, 0.8%
Government, 22.56% Other, 22.14% Commercial Real Estate & Construction, 13.65% Small to Medium Sized Business, 8.99% Professional Service Practice, 8.03% Non-profit, 7.37% Healthcare & Practice, 6.17% Manufactured Home Community, 5.81%Faith-based, 2.07% Venture Banking, 2.04% Agriculture & Ag Tech, 1.17% Deposit Composition 8.80 Years Average Age of Relationships > $5 million Note: Balances are as of March 31, 2025 and include time and wholesale deposits. 1. Types of accounts in “Other” are brokered deposits, which comprise 10.70% of total deposits, individuals, trusts, estates, and market verticals that individually make up less than 0.40% of all deposits. 2. Government and Local Agency Depositors include State of California, which comprises 7.76% of total deposits. $267,000 Average Deposit Account Balance Relationships > $5 million, 60.87% Relationships ≤ $5 million, 39.13% Total Deposits by Relationship Size Local Agency BreakoutTotal Deposits by Market Vertical Local Agency Depositors, 22.46% All Other Depositors, 77.54% First Quarter 2025 Investor Presentation | 22 (2) (1) (2)
Capital Ratios First Quarter 2025 Investor Presentation | 23 Tier 1 Leverage Ratio Tier 1 Capital to RWA Total Capital to RWA Common Equity Tier 1 to RWA Note: References to RWA are risk-weighted assets. 6.58% 9.47% 8.60% 8.73% 10.05% 10.17% 2020 2021 2022 2023 2024 Q1 2025 8.98% 11.44% 8.99% 9.07% 11.02% 11.00% 2020 2021 2022 2023 2024 Q1 2025 8.98% 11.44% 8.99% 9.07% 11.02% 11.00% 2020 2021 2022 2023 2024 Q1 2025 12.18% 13.98% 12.46% 12.30% 13.99% 13.97% 2020 2021 2022 2023 2024 Q1 2025
Financial Results First Quarter 2025 Investor Presentation | 24
Financial Highlights First Quarter 2025 Investor Presentation | 25 (dollars in thousands, except per share data) For the three months ended 3/31/2025 12/31/2024 3/31/2024 Profitability Net income $ 13,111 $ 13,317 $ 10,631 Return on average assets ("ROAA") 1.30 % 1.31 % 1.22 % Return on average equity ("ROAE") 13.28 % 13.48 % 14.84 % Earnings per share (basic and diluted) $ 0.62 $ 0.63 $ 0.62 Net Interest Margin Net interest margin 3.45 % 3.36 % 3.14 % Average loan yield 6.02 % 6.01 % 5.71 % Average cost of interest-bearing deposits 3.33 % 3.48 % 3.46 % Average cost of total deposits 2.48 % 2.58 % 2.53 % Total cost of funds 2.56 % 2.65 % 2.62 % 3/31/2025 12/31/2024 Deposits and Securities Non-interest-bearing deposits $ 933,652 $ 922,629 Interest-bearing deposits 2,802,702 2,635,365 Total deposits 3,736,354 3,557,994 Total securities 99,696 100,914 Total securities to interest-earning assets 2.41 % 2.55 % Asset Quality Nonperforming loans to loans held for investment 0.05 % 0.05 % Allowance for credit losses to loans held for investment 1.08 % 1.07 % Note: Yields are based on average balance and annualized quarterly interest income. Costs are based on average balance and annualized quarterly interest expense.
Operating Metrics First Quarter 2025 Investor Presentation | 26 Efficiency RatioNet Interest Margin 3.75% 3.42% 3.32% 3.45% 2022 2023 2024 2025 YTD 36.90% 40.35% 43.19% 42.58% 2022 2023 2024 2025 YTD Note: All 2025 figures are through March 31, 2025.
Earnings Track Record First Quarter 2025 Investor Presentation | 27 $15.9M $17.2M $18.0M $20.7M $20.3M $15.0M $15.2M $15.2M $19.4M $18.4M Pre-tax, pre-provision income Pre-tax income Q1 2024 Q2 2024 Q3 2024 Q4 2024 Q1 2025 $0.0M $2.5M $5.0M $7.5M $10.0M $12.5M $15.0M $17.5M $20.0M $22.5M 1. A reconciliation of this non-GAAP measure is set forth in the appendix. (1)
Non-interest Income and Expense Comparison First Quarter 2025 Investor Presentation | 28 (dollars in thousands) For the three months ended 3/31/2025 12/31/2024 3/31/2024 Non-interest Income Service charges on deposit accounts $ 215 $ 179 $ 188 Gain on sale of loans 125 150 369 Loan-related fees 448 400 429 FHLB stock dividends 331 332 332 Earnings on bank-owned life insurance 161 182 142 Other income 79 423 373 Total non-interest income $ 1,359 $ 1,666 $ 1,833 Non-interest Expense Salaries and employee benefits $ 9,134 $ 8,360 $ 7,577 Occupancy and equipment 637 649 626 Data processing and software 1,457 1,369 1,157 Federal Deposit Insurance Corporation insurance 455 440 400 Professional services 913 774 707 Advertising and promotional 522 752 460 Loan-related expenses 319 321 297 Other operating expenses 1,608 1,823 1,492 Total non-interest expense $ 15,045 $ 14,488 $ 12,716
Shareholder Returns First Quarter 2025 Investor Presentation | 29 ROAA ROAE Value per Share (book and tangible book(1)) Note: All 2025 figures are through March 31, 2025. 1. A reconciliation of this non-GAAP measure is set forth in the appendix. 1.57% 1.44% 1.23% 1.30% 2022 2023 2024 2025 YTD 18.80% 17.85% 12.72% 13.28% 2022 2023 2024 2025 YTD $14.66 $16.56 $18.60 $19.06 2022 2023 2024 2025 YTD
Five Star Bank customer, Visit Sacramento, ensures our region is a leading destination for meetings, conventions, travel trade and leisure, which support the vitality of our regional economy by driving almost $200 million in visitor spending annually. Their vision is for every person in the world to say, “I want to visit Sacramento!” David Eadie, Chief Sports & Entertainment Officer Sonya Bradley, Chief DEI & Community Relations Officer Mariles Krock, Chief Convention Sales & Services Officer Kari Miskit, Chief Operating Officer & Media Relations Mike Testa, President & CEO Five Star Bank customer, Cristo Rey High School Sacramento, is a Catholic, fully-accredited college preparatory high school. They offer a focused curriculum designed to support students not only in being accepted to college, but in graduating from college. Their goal is to educate the “whole person,” that is the mind, body and spirit of each student. They offer a challenging academic curriculum, as well as opportunities for co-curricular, spiritual and religious formation. Dave Lucchetti, Five Star Bancorp Retired Board Chair Father Christopher Calderon, President Cristo Rey Students Five Star Bank supports our customer, Street Soccer USA ("SSUSA"), and their mission to fight poverty and strengthen communities through soccer. SSUSA serves youth and special needs populations including families experiencing homelessness, and adults recovering from addiction/substance abuse and mental health diagnoses. SSUSA is the official partner of the Homeless World Cup and Street Child World Cup. We share their mission to fight poverty and strengthen others as they encourage positive changes in their players' lives. Sienna Jackson, Homeless World Cup 2023 Sacramento, California – Team USA Lisa Wrightsman, Managing Director, SSUSA and Homeless World Cup 2010 Rio De Janeiro, Brazil – Team USA Angela Draws, Homeless World Cup 2014 Santiago, Chile – Team USA We strive to become the top business bank in all markets we serve through exceptional service, deep connectivity, and customer empathy. We are dedicated to serving real estate, agricultural, faith-based, and small to medium-sized enterprises. We aim to consistently deliver value that meets or exceeds the expectations of our shareholders, customers, employees, business partners, and community.
Appendix: Non-GAAP Reconciliation (Unaudited) The Company uses financial information in its analysis of the Company's performance that is not in conformity with GAAP. The Company believes that these non- GAAP financial measures provide useful information to management and investors that is supplementary to the Company's financial condition, results of operations, and cash flows computed in accordance with GAAP. However, the Company acknowledges that its non-GAAP financial measures have a number of limitations. As such, investors should not view these disclosures as a substitute for results determined in accordance with GAAP. Additionally, these non-GAAP measures are not necessarily comparable to non-GAAP financial measures that other banking companies use. Other banking companies may use names similar to those the Company uses for the non-GAAP financial measures the Company discloses but may calculate them differently. Investors should understand how the Company and other companies each calculate their non-GAAP financial measures when making comparisons. Average loan yield, excluding PPP loans, is defined as the daily average loan yield, excluding PPP loans, and includes both performing and nonperforming loans. The most directly comparable GAAP financial measure is average loan yield. Management believes that average loan yield, excluding PPP loans, is a useful financial measure because it enables management, investors, and others to assess the Company's ability to manage yield on core loans. We had no PPP loans nor interest and fee income on PPP loans for the periods shown in this presentation other than the years ended December 31, 2020, 2021, and 2022. As a result, average loan yield, excluding PPP loans, is the same as daily average loan yield for all periods presented other than the years ended December 31, 2020, 2021, and 2022. Reconciliations for such periods are provided below. Total assets, excluding PPP loans, is defined as total assets less PPP loans. The most directly comparable GAAP financial measure is total assets. Management believes that total assets, excluding PPP loans, is a useful financial measure because it enables management, investors, and others to assess the Company's ability to manage core assets. We had no PPP loans as of the period ends shown in this presentation other than as of December 31, 2020 and 2021. As a result, total assets, excluding PPP loans, is the same as total assets for all periods presented, other than as of December 31, 2020 and 2021. Reconciliations for such periods are provided below. Pre-tax, pre-provision income is defined as pre-tax income plus provision for credit losses. The most directly comparable GAAP financial measure is pre-tax income. Management believes that pre-tax, pre-provision income is a useful financial measure because it enables management, investors, and others to assess the Company's ability to generate operating profit and capital. Tangible book value per share is defined as total shareholders’ equity less goodwill and other intangible assets, divided by the outstanding number of common shares at the end of the period. The most directly comparable GAAP financial measure is book value per share. Management believes that tangible book value per share is a useful financial measure because it enables management, investors, and others to assess the Company's value and use of equity. We had no goodwill or other intangible assets at the end of any period indicated. As a result, tangible book value per share is the same as book value per share at the end of each of the periods indicated. First Quarter 2025 Investor Presentation | 31
Appendix: Non-GAAP Reconciliation (Unaudited) First Quarter 2025 Investor Presentation | 32 (dollars in millions) As of Total assets, excluding PPP loans 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/31/2024 3/31/2025 Total assets $ 1,954 $ 2,557 $ 3,227 $ 3,593 $ 4,053 $ 4,245 Less: PPP loans 148 22 — — — — Total assets, excluding PPP loans $ 1,806 $ 2,535 $ 3,227 $ 3,593 $ 4,053 $ 4,245 (dollars in thousands) Three months ended Pre-tax, pre-provision income 3/31/2024 6/30/2024 9/30/2024 12/31/2024 3/31/2025 Pre-tax income $ 14,961 $ 15,152 $ 15,241 $ 19,367 $ 18,391 Add: provision for credit losses 900 2,000 2,750 1,300 1,900 Pre-tax, pre-provision income $ 15,861 $ 17,152 $ 17,991 $ 20,667 $ 20,291 (dollars in thousands) Year ended Three months ended Average loan yield, excluding PPP loans 12/31/2020 12/31/2021 12/31/2022 12/31/2023 3/31/2024 6/30/2024 9/30/2024 12/31/2024 3/31/2025 Interest and fee income on loans $ 71,405 $ 78,894 $ 111,795 $ 162,713 $ 43,786 $ 46,362 $ 50,390 $ 52,803 $ 52,931 Less: interest and fee income on PPP loans 6,535 7,417 635 — — — — — — Interest and fee income on loans, excluding PPP loans 64,870 71,477 111,160 162,713 43,786 46,362 50,390 52,803 52,931 Annualized interest and fee income on loans, excluding PPP loans (numerator) 64,870 71,477 111,160 162,713 176,106 186,467 200,465 210,064 214,665 Average loans held for investment and sale 1,439,380 1,637,280 2,353,148 2,947,603 3,082,290 3,197,921 3,354,050 3,498,109 3,567,992 Less: average PPP loans 165,414 116,652 2,297 — — — — — — Average loans held for investment and sale, excluding PPP loans (denominator) 1,273,966 1,520,628 2,350,851 2,947,603 3,082,290 3,197,921 3,354,050 3,498,109 3,567,992 Average loan yield, excluding PPP loans 5.09 % 4.70 % 4.73 % 5.52 % 5.71 % 5.83 % 5.98 % 6.01 % 6.02 %