Financial Data and Key Metrics Changes - Net income for the first quarter of 2025 was $13.1 million, with a return on average assets of 1.3% and return on average equity of 13.28% [10] - Average loan yields increased by one basis point to 6.02%, while net interest margin improved to 3.45% from 3.36% in the previous quarter [10] - Total loans held for investment rose by $89.1 million or 2.52% from the prior quarter [4] Business Line Data and Key Metrics Changes - The commercial real estate segment of the loan portfolio increased to 81.11% from 80.75% quarter over quarter [5] - Loan originations for the first quarter were $259.3 million, with payoffs and pay downs totaling $65.6 million and $104.6 million respectively [5] - Non-performing loans remained stable at 0.05% of loans held for investment [6] Market Data and Key Metrics Changes - Deposits increased by $178.4 million or 5% compared to the previous quarter, driven by increases in non-interest bearing demand and various types of interest-bearing deposits [6][7] - Non-wholesale deposits increased by $48.4 million or 1.61% quarter over quarter [8] - The cost of total deposits decreased by 10 basis points to 2.48% during the first quarter [9] Company Strategy and Development Direction - The company is focused on organic growth and disciplined business practices, aiming to benefit customers, employees, community, and shareholders [14] - Expansion into the San Francisco Bay Area is supported by adding seasoned professionals and increasing core deposit accounts [4] - The company aims to maintain a fortress balance sheet with a target of 10% cash and a loan-to-deposit ratio below 100% [22] 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, projecting loan growth of 10% to 12% for the remainder of the year [19][20] - Concerns regarding tariffs and economic slowdown were acknowledged, but management believes the bank is well-positioned due to the composition of its loan portfolio [30] - The company remains optimistic about the demand for its services, particularly in the mobile home park and RV park sectors [29] Other Important Information - The company declared a cash dividend of $0.20 per share, expected to be paid on May 12, 2025 [9] - Five Star Bancorp was ranked third on the S&P Global Market Intelligence List of best-performing community banks among banks with assets between $3 billion and $10 billion [61] Q&A Session Summary Question: Loan growth outlook for the year - Management is bullish on loan growth, projecting 10% to 12% for the remainder of the year due to a strong sales force and solid pipelines [19][20] Question: Reason for higher cost wholesale funding - Management indicated that core deposit growth is expected to match loan growth, and they do not anticipate additional wholesale funding [22] Question: Impact of tariffs on RV manufactured housing business - Management feels comfortable with their portfolio's performance in the face of tariffs, citing historical resilience during economic downturns [30] Question: Changes in allowance for loan losses - The increase in allowance was driven by portfolio growth and revised economic forecasts from the FOMC [35] Question: Loan pricing competition - Management acknowledged competitive pricing but remains satisfied with their current loan spreads [40] Question: Customer hesitancy to borrow - Management noted strong demand in certain asset classes and emphasized their robust sales team as a key factor in maintaining loan growth [46][47] Question: Loan demand differences across regions - Management reported no significant challenges in the Bay Area, highlighting strong opportunities and a growing client base [49][50] Question: Small business borrowers' response to economic uncertainty - Management indicated that small business borrowers face high costs of borrowing, but they maintain a high level of reserves against this book [52][54]

Financial Data and Key Metrics Changes - Net income for the first quarter of 2025 was $13.1 million, with a return on average assets of 1.3% and return on average equity of 13.28% [10] - The net interest margin improved to 3.45% from 3.36% in the previous quarter, driven by lower average cost of deposits [10] - Total loans held for investment increased by $89.1 million or 2.52% from the prior quarter [4][10] - Non-performing loans remained stable at 0.05% of loans held for investment [6] Business Line Data and Key Metrics Changes - The commercial real estate segment of the loan portfolio increased from 80.75% to 81.11% quarter over quarter [5] - Loan originations during the first quarter were $259.3 million, while payoffs and pay downs were $65.6 million and $104.6 million respectively [5] - Non-interest income decreased to $1.4 million from $1.7 million in the previous quarter, primarily due to a reduction in income from equity investments [11] Market Data and Key Metrics Changes - Deposits increased by $178.4 million or 5% compared to the previous quarter, driven by increases in non-interest bearing demand and various types of interest-bearing deposits [6][7] - Non-wholesale deposits increased by $48.4 million or 1.61% quarter over quarter [8] - Local agency deposits accounted for 22.4% of total deposits as of March 31, 2025 [8] Company Strategy and Development Direction - The company is focused on organic growth and disciplined business practices, aiming to benefit customers, employees, community, and shareholders [13] - Expansion into the San Francisco Bay Area is a key strategic initiative, supported by the addition of seasoned professionals [4][12] - The company aims to maintain a fortress balance sheet with a target of 10% in cash and a loan-to-deposit ratio below 100% [21] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's resilience and ability to adapt to changing economic conditions [13] - The company anticipates loan growth of 10% to 12% for the remainder of the year, supported by a strong sales force [18][19] - Concerns regarding tariffs and economic slowdown were acknowledged, but management believes the company is well-positioned relative to competitors [30] Other Important Information - The company declared a cash dividend of $0.20 per share, expected to be paid on May 12, 2025 [9] - Five Star Bancorp was ranked third on the S&P Global Market Intelligence List of best-performing community banks in the nation [61] Q&A Session Summary Question: Loan growth outlook for the year - Management is bullish on loan growth, expecting 10% to 12% for the remainder of the year, supported by a strong sales force [18][19] Question: Reason for higher cost wholesale funding - Management indicated that core deposit growth is expected to match loan growth, and they do not anticipate additional wholesale funding [21] Question: Impact of tariffs on RV manufactured housing business - Management feels comfortable about the portfolio's performance, citing historical resilience during economic downturns [30] Question: Changes in allowance for loan losses - The increase in allowance was driven by portfolio growth and revised economic forecasts from the FOMC [34][35] Question: Loan pricing competition - Management acknowledged competitive pricing but remains satisfied with current spreads [38][39] Question: Customer hesitancy to borrow - Management noted strong demand in certain asset classes and emphasized the effectiveness of their sales force [46][47] Question: Small business borrowers' response to economic uncertainty - Management indicated that small business borrowers face high costs of borrowing, but reserves against this book remain high [53][55]

Group 1 - Five Star Bancorp (FSBC) reported quarterly earnings of $0.62 per share, exceeding the Zacks Consensus Estimate of $0.61 per share, with an earnings surprise of 1.64% [1] - The company posted revenues of $35.34 million for the quarter ended March 2025, which was below the Zacks Consensus Estimate by 0.18%, compared to $28.58 million in the same quarter last year [2] - Over the last four quarters, Five Star Bancorp has surpassed consensus EPS estimates two times and topped consensus revenue estimates once [2] Group 2 - The stock has underperformed the market, losing about 10.3% since the beginning of the year, while the S&P 500 declined by 6.1% [3] - The current consensus EPS estimate for the upcoming quarter is $0.66 on revenues of $36.9 million, and for the current fiscal year, it is $2.62 on revenues of $150.6 million [7] - The Zacks Industry Rank for Banks - West is currently in the bottom 33% of over 250 Zacks industries, indicating potential challenges for the stock's performance [8]

[Q1 2025 Financial Performance Overview](index=1&type=section&id=Five%20Star%20Bancorp%20Announces%20First%20Quarter%202025%20Results) This section provides a comprehensive overview of Five Star Bancorp's Q1 2025 financial results, including income statement analysis and key performance drivers [Q1 2025 Performance Highlights](index=1&type=section&id=First%20Quarter%20Highlights) Five Star Bancorp reported a strong Q1 2025 with net income of **$13.1 million**, a significant **23.3% increase year-over-year**, though slightly down from the previous quarter, driven by robust loan and deposit growth, an expanded net interest margin of **3.45%**, and continued expansion in the San Francisco Bay Area, while maintaining a stable dividend of **$0.20 per share** and earning recognition as a top-performing bank by S&P Global Market Intelligence | (in thousands, except per share data) | Q1 2025 | Q4 2024 | Q1 2024 | | :--- | :--- | :--- | :--- | | Net Income | $13,111 | $13,317 | $10,631 | | Diluted EPS | $0.62 | $0.63 | $0.62 | | ROAA | 1.30% | 1.31% | 1.22% | | ROAE | 13.28% | 13.48% | 14.84% | | Net Interest Margin | 3.45% | 3.36% | 3.14% | - Total loans held for investment grew by **$89.1 million** (**2.52% QoQ**) and total deposits increased by **$178.4 million** (**5.01% QoQ**)[4](index=4&type=chunk) - The company declared a cash dividend of **$0.20 per share**, consistent with the previous quarter[5](index=5&type=chunk)[7](index=7&type=chunk) - Expansion in the San Francisco Bay Area continues, with the team growing to **31 employees** and generating **$379.8 million** in total deposits as of March 31, 2025[3](index=3&type=chunk)[8](index=8&type=chunk) [Income Statement Analysis](index=3&type=section&id=Summary%20Results) Net income for Q1 2025 was **$13.1 million**, decreasing slightly by **1.55%** QoQ due to higher non-interest expenses and provision for credit losses, while growing strongly by **23.33%** YoY, primarily driven by a **$7.2 million** increase in net interest income [QoQ Performance Comparison (Q1 2025 vs. Q4 2024)](index=3&type=section&id=Three%20months%20ended%20March%2031%2C%202025%2C%20as%20compared%20to%20three%20months%20ended%20December%2031%2C%202024) Net income decreased by **$0.2 million** to **$13.1 million** from Q4 2024, driven by increased provision for credit losses and non-interest expense, partially offset by higher net interest income from lower deposit interest costs | (in thousands) | Q1 2025 | Q4 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Net interest income | $33,977 | $33,489 | $488 | 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% | | Net income | $13,111 | $13,317 | ($206) | (1.55)% | [YoY Performance Comparison (Q1 2025 vs. Q1 2024)](index=3&type=section&id=Three%20months%20ended%20March%2031%2C%202025%2C%20as%20compared%20to%20three%20months%20ended%20March%2031%2C%202024) Net income increased by **$2.5 million** (**23.3%**) to **$13.1 million** from Q1 2024, primarily fueled by a **$7.2 million** increase in net interest income, partially offset by higher provision for credit losses and non-interest expenses | (in thousands) | Q1 2025 | Q1 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Net interest income | $33,977 | $26,744 | $7,233 | 27.05% | | Provision for credit losses | $1,900 | $900 | $1,000 | 111.11% | | Non-interest expense | $15,045 | $12,716 | $2,329 | 18.32% | | Net income | $13,111 | $10,631 | $2,480 | 23.33% | [Net Interest Income and Margin](index=5&type=section&id=Net%20Interest%20Income%20and%20Net%20Interest%20Margin) Net interest income (NII) for Q1 2025 was **$34.0 million**, with a net interest margin (NIM) of **3.45%**, showing QoQ growth due to lower deposit interest costs and YoY expansion driven by increased loan balances and yields - QoQ, NII increased by **1.46%** to **$34.0 million**, and NIM rose to **3.45%** from **3.36%** in Q4 2024, primarily due to a **$1.1 million** decrease in interest expense[20](index=20&type=chunk)[22](index=22&type=chunk) - YoY, NII increased by **27.05%** from **$26.7 million**, and NIM expanded to **3.45%** from **3.14%** in Q1 2024, driven by a **$485.7 million** increase in average loan balance and a **31 basis point** improvement in loan yields[20](index=20&type=chunk)[23](index=23&type=chunk) | (in thousands) | Q1 2025 | Q4 2024 | Q1 2024 | | :--- | :--- | :--- | :--- | | Average Interest-Earning Assets | $3,997,037 | $3,965,867 | $3,424,469 | | Net Interest Income | $33,977 | $33,489 | $26,744 | | Net Interest Margin | 3.45% | 3.36% | 3.14% | | Cost of Funds | 2.56% | 2.65% | 2.62% | [Non-Interest Income](index=8&type=section&id=Non-interest%20Income) Total non-interest income for Q1 2025 was **$1.4 million**, decreasing both QoQ and YoY primarily due to the non-recurrence of income from equity investments in venture-backed funds and lower gain on sale of loans - QoQ, non-interest income fell by **$0.3 million**, mainly because **$0.3 million** income from venture-backed fund investments in Q4 2024 did not recur[29](index=29&type=chunk)[31](index=31&type=chunk) - YoY, non-interest income fell by **$0.5 million**, also due to non-recurring income from venture-backed funds and a **$0.2 million** decrease in gain on sale of loans[31](index=31&type=chunk)[32](index=32&type=chunk) [Non-Interest Expense](index=9&type=section&id=Non-interest%20Expense) Non-interest expense totaled **$15.0 million** in Q1 2025, increasing both QoQ and YoY primarily due to higher salaries and employee benefits reflecting increased headcount for company expansion - QoQ, non-interest expense increased by **$0.6 million**, with salaries and benefits rising by **$0.8 million** due to higher salary, bonus, and lower deferred loan origination costs[33](index=33&type=chunk) - YoY, non-interest expense increased by **$2.3 million**, with salaries and benefits rising by **$1.6 million** largely due to a **13.19%** increase in headcount, alongside a **$0.3 million** increase in data processing and software costs[36](index=36&type=chunk)[37](index=37&type=chunk) [Provision for Income Taxes](index=10&type=section&id=Provision%20for%20Income%20Taxes) The provision for income taxes was **$5.3 million** in Q1 2025, with an effective tax rate of **28.71%**, decreasing QoQ due to a non-recurring true-up adjustment and increasing YoY due to higher pre-tax income - The effective tax rate was **28.71%** in Q1 2025, compared to **31.24%** in Q4 2024 and **28.94%** in Q1 2024[40](index=40&type=chunk)[41](index=41&type=chunk) - The QoQ decrease in tax provision was due to slightly lower taxable income and a **$0.6 million** provision true-up in Q4 2024 that did not recur[40](index=40&type=chunk) [Balance Sheet and Asset Quality](index=4&type=section&id=Balance%20Sheet%20and%20Asset%20Quality) This section analyzes the company's balance sheet structure, loan and deposit portfolio composition, and asset quality metrics as of Q1 2025 [Balance Sheet Analysis](index=4&type=section&id=Balance%20Sheet%20Summary) As of March 31, 2025, total assets grew to **$4.25 billion**, a **4.73%** increase QoQ, driven by strong loan and cash growth, with total deposits increasing by **5.01%** to **$3.74 billion**, while maintaining approximately **$2.0 billion** in liquidity and no short-term borrowings | (in thousands) | Mar 31, 2025 | Dec 31, 2024 | % Change | | :--- | :--- | :--- | :--- | | Total Assets | $4,245,057 | $4,053,278 | 4.73% | | Total Loans Held for Investment | $3,621,819 | $3,532,686 | 2.52% | | Total Deposits | $3,736,354 | $3,557,994 | 5.01% | | Total Shareholders' Equity | $406,451 | $396,624 | 2.48% | - Total liquidity, including cash and available borrowing capacity, was approximately **$2.0 billion**[16](index=16&type=chunk)[17](index=17&type=chunk) - Insured and collateralized deposits represented **67.55%** of total deposits, up slightly from **66.92%** in the prior quarter[13](index=13&type=chunk) - The company had no short-term borrowings at the end of Q1 2025, consistent with the prior quarter[8](index=8&type=chunk) [Loan and Deposit Portfolio Composition](index=7&type=section&id=Loans%20and%20Deposits%20by%20Type) The loan portfolio as of March 31, 2025, totaled **$3.62 billion**, heavily concentrated in commercial real estate at **$2.94 billion**, while the **$2.80 billion** interest-bearing deposit base is dominated by money market and time accounts Loan Composition (in thousands) | Loan Type | Amount | | :--- | :--- | | Commercial Real Estate | $2,941,201 | | Commercial (Secured & Unsecured) | $205,495 | | Consumer and other | $277,093 | | Other Real Estate & Construction | $199,948 | | **Total Loans Held for Investment** | **$3,621,819** | Interest-Bearing Deposit Composition (in thousands) | Deposit Type | Amount | | :--- | :--- | | Money market accounts | $1,577,473 | | Time accounts | $801,386 | | Interest-bearing transaction accounts | $295,633 | | Savings accounts | $128,210 | | **Total Interest-Bearing Deposits** | **$2,802,702** | [Asset Quality and Allowance for Credit Losses](index=8&type=section&id=Asset%20Quality) Asset quality remained strong in Q1 2025, with nonperforming loans to total loans held for investment stable at **0.05%**, and the allowance for credit losses increasing to **$39.2 million** (**1.08%** of loans) reflecting provisions partially offset by net charge-offs - The ratio of nonperforming loans to loans held for investment remained stable at **0.05%**[27](index=27&type=chunk) - The allowance for credit losses increased by **$1.4 million** to **$39.2 million**, representing **1.08%** of loans held for investment[26](index=26&type=chunk)[28](index=28&type=chunk) - Loans designated as 'watch' decreased from **$123.4 million** to **$112.0 million**, while 'substandard' loans increased slightly from **$2.6 million** to **$3.7 million**[27](index=27&type=chunk) [Supplementary and Non-GAAP Information](index=11&type=section&id=Supplementary%20Information) This section presents unaudited condensed financial data and reconciliations of non-GAAP financial measures to their GAAP equivalents [Condensed Financial Data (Unaudited)](index=12&type=section&id=Condensed%20Financial%20Data%20%28Unaudited%29) This section provides detailed unaudited financial statements for the quarter ended March 31, 2025, with comparative data, including the income statement, balance sheet, and key financial ratios - Provides detailed breakdowns of the income statement, balance sheet, per share data, financial ratios, and credit quality metrics[47](index=47&type=chunk)[48](index=48&type=chunk)[49](index=49&type=chunk) [Non-GAAP Reconciliation](index=16&type=section&id=Non-GAAP%20Reconciliation%20%28Unaudited%29) The company provides reconciliations for non-GAAP financial measures, such as Pre-tax, pre-provision income, which was **$20.3 million** for Q1 2025, to their most directly comparable GAAP measures - The company uses non-GAAP measures like Tangible Book Value Per Share and Pre-tax, Pre-provision Income to supplement GAAP results[51](index=51&type=chunk) Pre-tax, pre-provision income reconciliation (in thousands) | | Q1 2025 | Q4 2024 | Q1 2024 | | :--- | :--- | :--- | :--- | | Pre-tax income (GAAP) | $18,391 | $19,367 | $14,961 | | Add: provision for credit losses | $1,900 | $1,300 | $900 | | **Pre-tax, pre-provision income (Non-GAAP)** | **$20,291** | **$20,667** | **$15,861** |

RANCHO CORDOVA, Calif., 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 ...

RANCHO CORDOVA, Calif., April 15, 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"), expects to report its financial results for the quarter ended March 31, 2025, after the stock market closes on Monday, April 28, 2025. Management will host a live webcast for analysts and investors to review this information at 1:00 PM ET (10:00 AM PT) on April 29, 2025. The live we ...

RANCHO CORDOVA, Calif., April 15, 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”), expects to report its financial results for the quarter ended March 31, 2025, after the stock market closes on Monday, April 28, 2025. Management will host a live webcast for analysts and investors to review this information at 1:00 PM ET (10:00 AM PT) on April 29, 2025. The live w ...

Financial Overview - As of December 31, 2024, Five Star Bancorp had total assets of $4.1 billion, total loans held for investment of $3.5 billion, and total deposits of $3.6 billion[20]. - Total deposits as of December 31, 2024, included $922.6 million in non-interest-bearing deposits, representing 25.61% of total deposits[39]. - The company's 49 largest deposit relationships, each over $10 million, totaled $1.8 billion, or 50.35% of total deposits as of December 31, 2024[44]. - The investment portfolio had a carrying value of $100.9 million, representing 2.49% of total assets, with an average effective yield of 2.09%[45]. - The allowance for credit losses was $37.8 million as of December 31, 2024, reflecting management's judgment of probable losses in the loan portfolio[181]. Loan Portfolio - As of December 31, 2024, commercial real estate loans totaled $2.9 billion, representing 80.75% of total loans before deferred fees[27]. - The company had $115.2 million in commercial land and construction loans, accounting for 3.26% of total loans before deferred fees as of December 31, 2024[28]. - As of December 31, 2024, the total commercial SBA portfolio held for investment was $42.8 million, representing 1.21% of total loans before deferred fees[32]. - The company's 30 largest borrowing relationships totaled approximately $1.4 billion, representing 38.68% of total loans held for investment[179]. - Commercial real estate loans represent a significant portion of the loan portfolio and involve higher credit risks, particularly during economic downturns[153]. Regulatory Environment - The company is subject to comprehensive supervision and regulation by federal and state banking laws, which may impact its growth and operations[72]. - The Company reported a common equity Tier 1 capital ratio of 11.02% as of December 31, 2024, exceeding the minimum requirement of 7.00%[93]. - The Bank's Tier 1 leverage ratio was 11.50% as of December 31, 2024, indicating it was "well-capitalized" under prompt corrective action provisions[93]. - The Company and the Bank are required to maintain a total capital to risk-weighted assets ratio of at least 10.50%[90]. - The Federal Reserve requires bank holding companies to obtain prior approval for acquisitions that would result in owning 5% or more of a bank's voting shares[78]. Risk Management - The board of directors oversees risk management processes, including quarterly assessments of various risk exposures[56][57]. - The Bank is subject to regular examinations by regulatory agencies, which can impact its operations and growth[99]. - The company is subject to various risks, including credit, market, liquidity, and compliance risks, which could adversely affect its financial condition and results of operations[139]. - The company may not adequately measure and limit credit risk, which could adversely affect profitability and result in increased provisions for credit losses[151]. - The company faces risks from rapid technological changes in the financial services industry, which could adversely affect its competitive position and profitability[147]. Market Conditions - Interest rate changes significantly impact the Bank's net interest income, with variable rate liabilities repricing faster than variable rate assets as of December 31, 2024[142]. - The Federal Reserve has indicated a potential decrease in the federal funds rate target range in 2025, which may affect the Bank's profitability[143]. - The Bank's operations are concentrated in Northern California, making it sensitive to local economic downturns[137]. - The Bank faces increasing competition from traditional and new financial services providers, which may pressure loan and deposit pricing[145]. - The rapid rise in interest rates during 2022 and 2023 has resulted in volatility and uncertainty in the banking system, impacting the company's financial condition[171]. Corporate Governance and Employee Relations - The company has 205 full-time employees and five part-time employees as of December 31, 2024, with no labor disagreements reported[61]. - Five Star provides a competitive compensation and benefits program, including annual bonuses and a 401(k) plan with employer matching contributions[62]. - Significant shareholders own approximately 34.47% of the company's common stock, allowing them to influence corporate activities and decisions[213]. - The company is classified as an "emerging growth company," allowing it to utilize reduced disclosure requirements, which may affect its attractiveness to investors[210]. - The company may not pay dividends in the future, and its ability to do so is subject to federal regulatory considerations[215]. Technology and Innovation - The company has made significant investments in information technology systems to enhance capabilities, improve customer experience, and support future growth[49]. - The majority of the company's systems, including electronic funds transfer and online banking services, are hosted by third-party service providers, ensuring scalability for growth[52]. - The company anticipates that model-derived insights will be used more widely in decision-making in the future, enhancing operational efficiency[148]. - The company is dependent on data and modeling for decision-making and regulatory compliance, with potential risks from faulty data or flawed quantitative approaches[148]. - The company may face increased costs and risks associated with foreclosure processes due to changes in consumer protection laws[161]. Environmental, Social, and Governance (ESG) - The company is committed to environmental, social, and governance (ESG) strategies, focusing on reducing its carbon footprint and supporting community initiatives[65][66]. - Federal, state, and local consumer lending laws may increase the company's risk of liability and compliance costs[176]. - The company is required to comply with anti-money laundering regulations, with potential penalties for deficiencies in its compliance program[206]. - The Bank received a "Satisfactory" rating in its most recent CRA evaluation, covering activities from 2021 to July 22, 2024[128]. - The final rule amending CRA regulations will apply to large banks, including the Bank, starting January 1, 2026, with new data reporting requirements effective January 1, 2027[130].

Financial Data and Key Metrics Changes - Net income for Q4 2024 was $13.3 million, with a return on average assets of 1.31% and return on average equity of 13.48% [19] - For the year 2024, net income totaled $45.7 million, with a return on average assets of 1.23% and return on average equity of 12.72% [19] - The net interest margin for Q4 2024 was 3.36%, slightly down from 3.37% in the prior quarter, while the annual net interest margin was 3.32%, down from 3.42% in 2023 [21] - Non-interest income increased to $1.7 million in Q4 from $1.4 million in the previous quarter, but decreased to $6.5 million for the year from $7.5 million in 2023 [21] Business Line Data and Key Metrics Changes - Loans held for investment increased by $72.1 million or 2.08% from the prior quarter and $451 million or 14.63% year-over-year [8] - The commercial real estate concentration decreased from 86.76% as of December 31, 2023, to 80.75% as of December 31, 2024, while consumer and other loan concentrations increased from 1.2% to 7.9% year-over-year [9] - Loan originations in Q4 were $263.3 million, with total loan originations for 2024 at $1.1 billion [10] Market Data and Key Metrics Changes - Deposits increased by $158 million or 4.65% in Q4 and by $531.1 million or 17.55% for the year [12] - Non-interest-bearing deposits as a percentage of total deposits decreased to 25.93% at the end of Q4 from 26.67% in the prior quarter [13] - Wholesale deposits increased by $150 million or 36.59% quarter-over-quarter, while non-wholesale deposits increased by $8 million or 0.27% [16] Company Strategy and Development Direction - The company is focused on organic growth and disciplined business practices, targeting an annual growth rate of about 8% for both deposits and loans in 2025 [36][42] - Continued expansion in the San Francisco market is a priority, with plans for further geographic growth in the East Bay [62] - The company aims to maintain a $300 million book with BHG loans, indicating a strategy to remain active in loan purchases [79] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's resilience and long-term strategy, emphasizing a commitment to customer-centric services [24] - The competitive landscape for core deposits remains challenging, with management noting the need for active engagement to attract deposits [35] - Management anticipates slight margin expansion in 2025, driven by investments made in personnel and technology [41][42] Other Important Information - The company maintained a strong asset quality, with non-performing loans at 0.05% of loans held for investment [11] - The allowance for credit losses totaled $37.8 million, with a provision of $1.3 million recorded in Q4 [11] - The company received multiple awards and recognitions in 2024, highlighting its strong performance and community engagement [94] Q&A Session Summary Question: Insights on deposit growth and duration - Management noted that deposit growth was primarily on the wholesale side, with short-term CDs set to reprice every three months, allowing for potential benefits from future rate cuts [28][31] Question: Outlook for organic core deposit generation - Management acknowledged the competitive nature of attracting core deposits but targeted an 8% annual growth rate for 2025 [36] Question: Expense growth expectations for 2025 - Management indicated that expenses in the first half of 2025 would likely align with Q4 2024 levels, with ongoing investments in personnel and technology [83] Question: Trends in loan originations and payoffs - Management highlighted that loan growth is driven by active business development efforts, while payoffs are a natural progression in the commercial real estate portfolio [56][57] Question: Market conditions in the Bay Area - Management expressed optimism about the Bay Area market, noting ongoing expansion efforts and the potential for continued market share gains [62]

Investor Presentation Fourth Quarter and Year End 2024 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 ...