Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to ________ Commission File Number 001-40379 FIVE STAR BANCORP (Exact name of Registrant as specified in its charter) California 75-3100966 (St ...

Five Star Bancorp (FSBC) appears an attractive pick, as it has been recently upgraded to a Zacks Rank #2 (Buy). This rating change essentially reflects an upward trend in earnings estimates -- one of the most powerful forces impacting stock prices.The sole determinant of the Zacks rating is a company's changing earnings picture. The Zacks Consensus Estimate -- the consensus of EPS estimates from the sell-side analysts covering the stock -- for the current and following years is tracked by the system.Individ ...

Financial Data and Key Metrics Changes - The company reported net income of $14.5 million for Q2 2025, with earnings per share of $0.068, a return on average assets of 1.37%, and a return on average equity of 14.17% [4] - Net interest margin expanded by 8 basis points to 3.53%, while the cost of total deposits declined by 2 basis points to 2.46% [5] - The efficiency ratio was reported at 41.03% for the second quarter [5] - Total assets increased by $168.4 million, driven by loan portfolio growth, particularly in commercial real estate [6] Business Line Data and Key Metrics Changes - Loans held for investment grew by $136.2 million, or 15% on an annualized basis, while deposits increased by approximately $158.3 million, or 17% on an annualized basis [5] - Non-interest income rose to $1.8 million from $1.4 million in the previous quarter, primarily due to improved earnings from investments in venture-backed funds [9] Market Data and Key Metrics Changes - Non-interest bearing deposits made up 26% of total deposits as of June 30, 2025, an increase from 25% at the end of the prior quarter [8] - Approximately 59.9% of deposit relationships total more than $5 million, indicating a stable funding base for future growth [8] Company Strategy and Development Direction - The company announced the expansion of its food and agribusiness vertical and the opening of a new office in Walnut Creek in September 2025 [11] - The focus remains on building a strong presence in the San Francisco Bay Area, with plans for future expansion into the South Bay [25][26] - The company aims to balance its loan portfolio by reducing concentrations in commercial real estate through the new agribusiness vertical [61] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's resilience and ability to adapt to changing economic conditions while executing its long-term strategic plan [12] - The management team highlighted the importance of maintaining strong relationships with clients and community partners as a foundation for future growth [66] Other Important Information - The company recorded a provision for credit losses of $2.5 million during the quarter, with non-performing loans representing only 6 basis points of total loans held for investment [6][7] - The company is well-capitalized, with all capital ratios above regulatory thresholds [6] Q&A Session Summary Question: Impressive core deposit growth - Management attributed success to having 40 motivated business development officers driving growth across all verticals and geographies [18] Question: Bay Area business environment - Management noted a positive change in the Bay Area's business environment and expressed excitement about the Walnut Creek opening and future expansion [24][25] Question: Efficiency ratio and investments - Management indicated a commitment to continue investing in the business while acknowledging the potential for achieving a sub-40% efficiency ratio [29][30] Question: Run rate for expenses with Walnut Creek office - Management estimated an increase of $500,000 to $750,000 in expenses for the next quarter due to the new office [33] Question: Sustainability of non-interest bearing deposit growth - Management believes the growth in non-interest bearing deposits is sustainable due to the addition of new relationships [34] Question: Loan growth outlook - Management remains comfortable with a loan growth target of 10% to 12% for the full year, supported by a strong pipeline [59] Question: New food and agribusiness vertical - Management highlighted the potential for growth in the agribusiness sector, led by an experienced team targeting underserved markets [60][61]

Company Overview - Five Star Bancorp's asset size is $44 billion[19] - Loans held for investment (HFI) totaled $38 billion[19] - Total deposits reached $39 billion[19] - The company operates with 8 bank branches[19] Financial Highlights (Q2 2025) - Net income was $1451 million, resulting in a return on average assets (ROAA) of 137% and a return on average equity (ROAE) of 1417%[26] - Basic and diluted earnings per share were $068[26] - The net interest margin was 353%, with an average loan yield of 609%[26] - Non-interest-bearing deposits accounted for 2578% of total deposits[28] Loan Portfolio - Loans held for investment increased by $1362 million since March 31, 2025[28] - Commercial real estate (CRE) loans constitute 8155% of the loan portfolio[49] - Manufactured home community loans represent 3052% of CRE loans, totaling $936047 million[49]

Core Viewpoint - Five Star Bancorp (FSBC) reported quarterly earnings of $0.68 per share, exceeding the Zacks Consensus Estimate of $0.65 per share, and showing an increase from $0.51 per share a year ago, indicating a positive earnings surprise of +4.62% [1] Financial Performance - The company achieved revenues of $38.33 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 0.59%, and up from $30.67 million in the same quarter last year [2] - Over the last four quarters, Five Star Bancorp has exceeded consensus EPS estimates three times and topped consensus revenue estimates two times [2] Stock Performance and Outlook - Five Star Bancorp shares have increased approximately 1.3% since the beginning of the year, while the S&P 500 has gained 7.3% [3] - The company's earnings outlook will be crucial for future stock performance, with current consensus EPS estimates at $0.71 for the coming quarter and $2.64 for the current fiscal year [4][7] Industry Context - The Banks - West industry, to which Five Star Bancorp belongs, is currently ranked in the top 34% of over 250 Zacks industries, suggesting a favorable environment for performance [8] - Avidbank Holdings Inc. (AVBH), another company in the same industry, is expected to report quarterly earnings of $0.75 per share, reflecting a year-over-year increase of +63% [9]

PRESS RELEASE FOR IMMEDIATE RELEASE Five Star Bancorp Announces Second Quarter 2025 Results RANCHO CORDOVA, CA July 23, 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 $14.5 million for the three months ended June 30, 2025, as compared to $13.1 million for the three months ended March 31, 2025 and $10.8 million for the three months en ...

RANCHO CORDOVA, Calif., July 23, 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 $14.5 million for the three months ended June 30, 2025, as compared to $13.1 million for the three months ended March 31, 2025 and $10.8 million for the three months ended June 30, 2024. Second Quarter Highlights Performance and operating highlights fo ...

Core Insights - Five Star Bancorp reported a net income of $14.5 million for Q2 2025, an increase from $13.1 million in Q1 2025 and $10.8 million in Q2 2024 [1][8][9] Financial Performance - Return on average assets (ROAA) improved to 1.37% in Q2 2025 from 1.30% in Q1 2025 and 1.23% in Q2 2024 [2][12] - Return on average equity (ROAE) increased to 14.17% in Q2 2025 from 13.28% in Q1 2025 and 11.72% in Q2 2024 [2][12] - Pre-tax income rose to $20.1 million in Q2 2025, up from $18.4 million in Q1 2025 and $15.2 million in Q2 2024 [2][12] - Basic and diluted earnings per share were both $0.68 in Q2 2025, compared to $0.62 in Q1 2025 and $0.51 in Q2 2024 [2][12] Loan and Deposit Growth - Total loans held for investment increased by $136.2 million, or 3.76% (15.04% annualized), from Q1 2025 to Q2 2025 [3][7] - Total deposits rose by $158.3 million, or 4.24% (16.94% annualized), during the same period [3][7] - Non-wholesale deposits increased by $191.6 million, or 6.29%, while wholesale deposits decreased by $33.4 million, or 4.84% [6][7] Interest Income and Margin - Net interest income for Q2 2025 was $36.5 million, an increase of $2.5 million, or 7.47%, from Q1 2025 [2][21] - Net interest margin improved to 3.53% in Q2 2025 from 3.45% in Q1 2025 [2][12] Expense Management - Non-interest expense increased by $0.7 million in Q2 2025 compared to Q1 2025, primarily due to higher business travel and promotional expenses [8][9] - The efficiency ratio improved to 41.03% in Q2 2025 from 42.58% in Q1 2025 [10][12] Asset Quality - The ratio of nonperforming loans to loans held for investment increased slightly from 0.05% at the end of Q1 2025 to 0.06% at the end of Q2 2025 [11][27] - The allowance for credit losses was $40.2 million as of June 30, 2025, up from $37.8 million at the end of 2024 [26][28] Market Expansion - The company plans to open a new office in Walnut Creek in Q3 2025, expanding its presence in the San Francisco Bay Area [5][6] - The team in the Bay Area has grown to 34 employees, with deposits totaling $456.9 million as of June 30, 2025 [5][6]

Core Viewpoint - Five Star Bancorp is set to announce its financial results for the quarter ending June 30, 2025, on July 23, 2025, after market close, with a subsequent live webcast scheduled for July 24, 2025 [1]. Group 1 - Five Star Bancorp operates through its wholly owned banking subsidiary, Five Star Bank, which has eight branches located in Northern California [3]. - The live webcast for analysts and investors will be available on the Company's website, and pre-registration is required [2]. - The archived version of the webcast will be accessible for 90 days following the event [2]. Group 2 - The Company is headquartered in Rancho Cordova, California, and provides banking services through its subsidiary [3]. - Investor and media contacts are provided for further inquiries, including the Chief Financial Officer and Chief Marketing Officer [4].

Core Insights - Five Star Bancorp is expanding its presence in the Bay Area with a new office in Walnut Creek, reflecting its commitment to providing concierge commercial banking services to local businesses and non-profits [1][2][3] Group 1: Expansion Strategy - The new Walnut Creek office, approximately 4,128 square feet, is set to open in the third quarter of 2025, enhancing Five Star Bank's ability to serve a growing client portfolio in the East Bay [2][3] - This expansion follows the opening of a San Francisco office in September 2024, indicating a broader growth strategy in Northern California [2][3] Group 2: Market Opportunity - Walnut Creek has seen steady commercial growth and increased demand for high-tech financial services, driven by post-pandemic migration and a vibrant small business sector [2] - Existing client relationships in Walnut Creek, including local businesses like Original Joe's and Calicraft Brewing Co., position Five Star Bank to effectively meet the needs of East Bay clients [2] Group 3: Community Commitment - The new office is described as a natural extension of Five Star Bank's commitment to the East Bay communities, emphasizing personalized, relationship-based banking [3] - The location is chosen for its thriving business landscape, skilled workforce, and strong community values, aligning with the bank's strategic investment goals [3]