Five Star Bancorp Announces Second Quarter 2025 Results

Core Viewpoint - Five Star Bancorp reported strong financial performance for the second quarter of 2025, with significant increases in net income, loans, and deposits, reflecting the success of its organic growth strategy and operational efficiencies [1][3][8]. Financial Performance - Net income for the three months ended June 30, 2025, was $14.5 million, up from $13.1 million in the previous quarter and $10.8 million in the same quarter last year [1][8]. - Return on average assets (ROAA) improved to 1.37% from 1.30% in the previous quarter and 1.23% a year ago [2][12]. - Return on average equity (ROAE) increased to 14.17% from 13.28% in the previous quarter and 11.72% a year ago [2][12]. Loan and Deposit Growth - Total loans held for investment rose by $136.2 million, or 3.76% (15.04% annualized), reaching $3.76 billion [3][7]. - Total deposits increased by $158.3 million, or 4.24% (16.94% annualized), totaling $3.89 billion [3][9]. - Non-wholesale deposits grew by $191.6 million, or 6.29%, while wholesale deposits decreased by $33.4 million, or 4.84% [9][16]. Interest Income and Margin - Net interest income increased by $2.5 million, or 7.47%, to $36.5 million compared to the previous quarter, driven by loan growth and improved yields [12][20]. - Net interest margin improved to 3.53%, up from 3.45% in the previous quarter and 3.39% a year ago [2][12]. Expense Management - Non-interest expense rose by $0.7 million during the quarter, attributed to increased business development activities [8][11]. - The efficiency ratio improved to 41.03% from 42.58% in the previous quarter and 44.07% a year ago, indicating better cost management [9][12]. Capital and Asset Quality - The common equity Tier 1 capital ratio was 10.85%, maintaining the "well-capitalized" status under regulatory guidelines [9][14]. - The allowance for credit losses increased to $40.2 million, with a ratio of nonperforming loans to loans held for investment rising slightly to 0.06% [26][27]. Future Outlook - The company plans to expand its services to the Walnut Creek market with a new office expected to open in the third quarter of 2025 [5][6]. - Continued growth is anticipated in business verticals such as Food, Agribusiness, and Diversified Industries, leveraging global trade services and treasury management tools [5][6].