Five Star Bancorp Announces Quarterly and Annual Results

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Insights

Five Star Bancorp's Q4 2024 results reveal a remarkably well-executed business model with several noteworthy strengths:

Core Performance Metrics: The quarter-over-quarter net income growth of 21.72% to $13.3 million demonstrates strong execution. The efficiency ratio of 41.21% is particularly impressive, ranking among the top quartile for community banks and reflecting excellent cost management.

Asset Quality Excellence: The nonperforming loans ratio of 0.05% is exceptionally low compared to the industry average of around 0.70%, indicating superior underwriting standards and risk management. This is particularly noteworthy given the significant loan growth of 14.63% YoY.

Funding Profile: The bank maintains a robust liquidity position with $1.9 billion in total available liquidity and 66.92% insured/collateralized deposits. The average 9.28-year tenure of large depositors (>$5 million) suggests strong, stable relationships. The success in San Francisco, generating $229.5 million in deposits, demonstrates effective market expansion capabilities.

Capital Management: The common equity Tier 1 ratio of 11.02% provides ample buffer above regulatory requirements while supporting the $0.20 quarterly dividend. The increase in shareholders' equity by 38.79% YoY strengthens the bank's foundation for future growth.

Strategic Positioning: The bank's balanced approach to growth, combining organic expansion with strategic market entry, while maintaining disciplined cost control and credit quality, positions it well for sustainable performance in varying rate environments.

01/27/2025 - 06:30 PM

RANCHO CORDOVA, Calif., Jan. 27, 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 $13.3 million for the three months ended December 31, 2024, as compared to $10.9 million for the three months ended September 30, 2024 and $10.8 million for the three months ended December 31, 2023. Net income for the year ended December 31, 2024 was $45.7 million, as compared to $47.7 million for the year ended December 31, 2023.

Financial and Other Highlights

Performance highlights and other developments for the Company for the periods noted below included the following:

	Three months ended
(in thousands, except per share and share data)	December 31, 2024			September 30, 2024			December 31, 2023
Return on average assets (“ROAA”)		1.31	%		1.18	%		1.26	%
Return on average equity (“ROAE”)		13.48	%		11.31	%		15.45	%
Pre-tax income	$	19,367		$	15,241		$	15,151
Pre-tax, pre-provision income⁽¹⁾	$	20,667		$	17,991		$	15,951
Net income	$	13,317		$	10,941		$	10,799
Basic earnings per common share	$	0.63		$	0.52		$	0.63
Diluted earnings per common share	$	0.63		$	0.52		$	0.63
Weighted average basic common shares outstanding		21,182,143			21,182,143			17,175,445
Weighted average diluted common shares outstanding		21,235,318			21,232,758			17,193,114
Shares outstanding at end of period		21,319,083			21,319,583			17,256,989

	Year ended
(in thousands, except per share and share data)	December 31, 2024			December 31, 2023
ROAA		1.23	%		1.44	%
ROAE		12.72	%		17.85	%
Pre-tax income	$	64,721		$	66,616
Pre-tax, pre-provision income⁽¹⁾	$	71,671		$	70,616
Net income	$	45,671		$	47,734
Basic earnings per common share	$	2.26		$	2.78
Diluted earnings per common share	$	2.26		$	2.78
Weighted average basic common shares outstanding		20,154,385			17,166,592
Weighted average diluted common shares outstanding		20,205,440			17,187,969
Shares outstanding at end of period		21,319,083			17,256,989

⁽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:

“While we focus on the future and maintaining a position of distinction and respect in the markets we serve, we proudly look back at 2024 as another outstanding year of achievement. We experienced consistent, strong financial performance with year-over-year growth in loans and deposits, a consistent shareholder dividend, and stable net interest margin. We also continued our successful execution of our San Francisco market expansion and now have 27 employees in the San Francisco Bay Area who contributed $229.5 million in deposits from June 5, 2023 to December 31, 2024. We have managed expenses and executed on conservative underwriting practices, which are foundational to our success.

Five Star Bank consistently executes on client and community-focused initiatives, and in 2024, we received a Super Premier rating from Findley Reports, an IDC Superior rating, and a Bauer Financial rating of 5 stars (out of five). We were also awarded the prestigious 2023 Raymond James Community Bankers Cup, were among S&P Global Market Intelligence’s 2023 Top 20 Best-Performing Community banks in the nation (with assets between $3 billion and $10 billion), and were ranked fifth on the 2024 Bank Director Magazine (RankingBanking) Best U.S. Banks with assets less than $5 billion. We also received the Greater Sacramento Economic Council’s Sustainability Award recognizing a company that has supported industry growth in the Greater Sacramento region.

In 2024, our senior leadership was recognized by the Sacramento Business Journal with a C-Suite Award, a Women Who Mean Business honor, a 40 Under 40 recognition, and placement on the Power 100 list. Our senior leadership was also recognized on the San Francisco Business Times’ Newsmaker 100 list, as part of the Independent Community Bankers of America’s 40 Under 40: Emerging Community Bank Leaders, among the Association of Latino Professionals for America’s 50 Most Powerful Latinas, and with a National Association of Women Business Owners’ Sacramento Valley Outstanding Women Leaders’ Executive Woman award.

Being recognized as community leaders ensures Five Star Bank remains top of mind in the markets we serve as we continue to build-out our market presence. I am humbled and proud of our team’s accomplishments and look forward to the future.”

Financial highlights included the following:

The San Francisco Bay Area team, which increased from 24 to 27 employees during the three months ended December 31, 2024, generated deposit balances totaling $229.5 million at December 31, 2024, an increase of $40.4 million from September 30, 2024.
Cash and cash equivalents were $352.3 million, representing 9.90% of total deposits at December 31, 2024, as compared to 7.38% at September 30, 2024.
Total deposits increased by $158.0 million, or 4.65%, during the three months ended December 31, 2024, due to increases in both non-wholesale and wholesale deposits, which the Company defines as brokered deposits and public time deposits. During the three months ended December 31, 2024, non-wholesale deposits increased by $8.0 million, or 0.27%, and wholesale deposits increased by $150.0 million, or 36.59%.
Consistent, disciplined management of expenses contributed to our efficiency ratio of 41.21% for the three months ended December 31, 2024, as compared to 43.37% for the three months ended September 30, 2024.
For the three months ended December 31, 2024, net interest margin was 3.36%, as compared to 3.37% for the three months ended September 30, 2024 and 3.19% for the three months ended December 31, 2023. For the year ended December 31, 2024, net interest margin was 3.32%, as compared to 3.42% for the year ended December 31, 2023. The effective Federal Funds rate fell to 4.33% as of December 31, 2024 from 4.83% as of September 30, 2024 and 5.33% as of December 31, 2023.
Other comprehensive loss was $2.6 million during the three months ended December 31, 2024. Unrealized losses, net of tax effect, on available-for-sale securities were $12.4 million as of December 31, 2024. Total carrying value of held-to-maturity and available-for-sale securities represented 0.07% and 2.48% of total interest-earning assets, respectively, as of December 31, 2024.
The Company’s common equity Tier 1 capital ratio was 11.02% and 10.93% as of December 31, 2024 and September 30, 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 December 31, 2024 was as follows:

(in thousands)	December 31, 2024		September 30, 2024		$ Change		% Change
Loans held for investment	$	3,532,686	$	3,460,565	$	72,121	2.08	%
Non-interest-bearing deposits		922,629		906,939		15,690	1.73	%
Interest-bearing deposits		2,635,365		2,493,040		142,325	5.71	%

(in thousands)	December 31, 2024		December 31, 2023		$ Change		% Change
Loans held for investment	$	3,532,686	$	3,081,719	$	450,967	14.63	%
Non-interest-bearing deposits		922,629		831,101		91,528	11.01	%
Interest-bearing deposits		2,635,365		2,195,795		439,570	20.02	%

The ratio of nonperforming loans to loans held for investment at period end decreased from 0.06% at December 31, 2023 to 0.05% at December 31, 2024.
The Company’s Board of Directors declared, and the Company subsequently paid, a cash dividend of $0.20 per share during the three months ended December 31, 2024. The Company’s Board of Directors subsequently declared another cash dividend of $0.20 per share on January 16, 2025, which the Company expects to pay on February 10, 2025 to shareholders of record as of February 3, 2025.

Summary Results

Three months ended December 31, 2024, as compared to three months ended September 30, 2024

The Company’s net income was $13.3 million for the three months ended December 31, 2024, as compared to $10.9 million for the three months ended September 30, 2024. Net interest income increased by $3.1 million, primarily due to an increase in interest income driven by a larger average balance of interest-earning assets, partially offset by an increase in interest expense due to a larger average balance of deposits, as compared to September 30, 2024. The provision for credit losses decreased by $1.5 million, reflecting adjustments to expectations for credit losses based on economic trends and forecasts in the three months ended December 31, 2024 compared to the three months ended September 30, 2024. Non-interest income increased by $0.3 million, primarily due to income received on equity investments in venture-backed funds during the three months ended December 31, 2024, combined with a loss from equity investments in venture-backed funds during the three months ended September 30, 2024. Non-interest expense increased by $0.7 million, primarily due to: (i) increased salaries and employee benefits mainly resulting from increased loan production driving higher commissions expense period-over-period; and (ii) increased advertising and promotional expenses due to a larger number of events sponsored and attended period-over-period.

Three months ended December 31, 2024, as compared to three months ended December 31, 2023

The Company’s net income was $13.3 million for the three months ended December 31, 2024, as compared to $10.8 million for the three months ended December 31, 2023. Net interest income increased by $6.8 million, primarily due to an increase in interest income driven by higher average balances and yields on loans, partially offset by an increase in interest expense due to higher average balances and rates on deposits. The provision for credit losses increased by $0.5 million, reflecting adjustments to expectations for credit losses based on economic trends and forecasts in the three months ended December 31, 2024 compared to the three months ended December 31, 2023. Non-interest income decreased by $0.3 million, primarily due to lower swap referral and rate lock fees during the three months ended December 31, 2024 compared to the same quarter of the prior year. Non-interest expense increased by $1.8 million with an increase in salaries and employee benefits related to the Company’s expansion into the San Francisco Bay Area as the leading driver.

Year ended December 31, 2024, as compared to year ended December 31, 2023

The Company’s net income was $45.7 million for the year ended December 31, 2024, as compared to $47.7 million for the year ended December 31, 2023. Net interest income increased by $8.8 million, primarily due to an increase in interest income driven by higher average balances and yields on loans, partially offset by an increase in interest expense due to higher average balances and rates on deposits. The provision for credit losses increased by $3.0 million, or 73.75%, as loan originations in the year ended December 31, 2024 were almost double those for the year ended December 31, 2023. Non-interest income decreased by $1.1 million, primarily due to lower income received on equity investments in venture-backed funds during the year ended December 31, 2024 than during the year ended December 31, 2023. Non-interest expense increased by $6.7 million with an increase in salaries and employee benefits related to the Company’s expansion into the San Francisco Bay Area 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)	December 31, 2024			September 30, 2024			$ Change			% Change
Selected operating data:
Net interest income	$	33,489		$	30,386		$	3,103		10.21	%
Provision for credit losses		1,300			2,750			(1,450	)	(52.73)	%
Non-interest income		1,666			1,381			285		20.64	%
Non-interest expense		14,488			13,776			712		5.17	%
Pre-tax income		19,367			15,241			4,126		27.07	%
Provision for income taxes		6,050			4,300			1,750		40.70	%
Net income	$	13,317		$	10,941		$	2,376		21.72	%
Earnings per common share:
Basic	$	0.63		$	0.52		$	0.11		21.15	%
Diluted	$	0.63		$	0.52		$	0.11		21.15	%
Performance and other financial ratios:
ROAA		1.31	%		1.18	%
ROAE		13.48	%		11.31	%
Net interest margin		3.36	%		3.37	%
Cost of funds		2.65	%		2.72	%
Efficiency ratio		41.21	%		43.37	%

	Three months ended
(in thousands, except per share data)	December 31, 2024			December 31, 2023			$ Change			% Change
Selected operating data:
Net interest income	$	33,489		$	26,678		$	6,811		25.53	%
Provision for credit losses		1,300			800			500		62.50	%
Non-interest income		1,666			1,936			(270	)	(13.95)	%
Non-interest expense		14,488			12,663			1,825		14.41	%
Pre-tax income		19,367			15,151			4,216		27.83	%
Provision for income taxes		6,050			4,352			1,698		39.02	%
Net income	$	13,317		$	10,799		$	2,518		23.32	%
Earnings per common share:
Basic	$	0.63		$	0.63		$	—		—	%
Diluted	$	0.63		$	0.63		$	—		—	%
Performance and other financial ratios:
ROAA		1.31	%		1.26	%
ROAE		13.48	%		15.45	%
Net interest margin		3.36	%		3.19	%
Cost of funds		2.65	%		2.50	%
Efficiency ratio		41.21	%		44.25	%

	Year ended
(in thousands, except per share data)	December 31, 2024			December 31, 2023			$ Change			% Change
Selected operating data:
Net interest income	$	119,711		$	110,880		$	8,831		7.96	%
Provision for credit losses		6,950			4,000			2,950		73.75	%
Non-interest income		6,453			7,511			(1,058	)	(14.09)	%
Non-interest expense		54,493			47,775			6,718		14.06	%
Pre-tax income		64,721			66,616			(1,895	)	(2.84)	%
Provision for income taxes		19,050			18,882			168		0.89	%
Net income	$	45,671		$	47,734		$	(2,063	)	(4.32)	%
Earnings per common share:
Basic	$	2.26		$	2.78		$	(0.52	)	(18.71)	%
Diluted	$	2.26		$	2.78		$	(0.52	)	(18.71)	%
Performance and other financial ratios:
ROAA		1.23	%		1.44	%
ROAE		12.72	%		17.85	%
Net interest margin		3.32	%		3.42	%
Cost of funds		2.64	%		2.10	%
Efficiency ratio		43.19	%		40.35	%

Balance Sheet Summary

(in thousands)	December 31, 2024		December 31, 2023		$ Change			% Change
Selected financial condition data:
Total assets	$	4,053,278	$	3,593,125	$	460,153		12.81	%
Cash and cash equivalents		352,343		321,576		30,767		9.57	%
Total loans held for investment		3,532,686		3,081,719		450,967		14.63	%
Total investments		100,914		111,160		(10,246	)	(9.22)	%
Total liabilities		3,656,654		3,307,351		349,303		10.56	%
Total deposits		3,557,994		3,026,896		531,098		17.55	%
Subordinated notes, net		73,895		73,749		146		0.20	%
Total shareholders’ equity		396,624		285,774		110,850		38.79	%

Insured and collateralized deposits were approximately $2.4 billion, representing 66.92% of total deposits as of December 31, 2024. Net uninsured and uncollateralized deposits were approximately $1.2 billion as of December 31, 2024.
Commercial and consumer deposit accounts constituted 77.00% of total deposits. Deposit relationships of greater than $5 million represented 61.13% of total deposits and had an average age of approximately 9.28 years as of December 31, 2024.
Cash and cash equivalents as of December 31, 2024 were $352.3 million, representing 9.90% of total deposits at December 31, 2024, as compared to 10.62% as of December 31, 2023.
Total liquidity (consisting of cash and cash equivalents and unused and immediately available borrowing capacity as set forth below) was approximately $1.9 billion as of December 31, 2024.

	December 31, 2024
(in thousands)	Line of Credit		Letters of Credit Issued		Borrowings		Available
Federal Home Loan Bank of San Francisco (“FHLB”) advances	$	1,212,209	$	701,500	$	—	$	510,709
Federal Reserve Discount Window		862,136		—		—		862,136
Correspondent bank lines of credit		175,000		—		—		175,000
Cash and cash equivalents		—		—		—		352,343
Total	$	2,249,345	$	701,500	$	—	$	1,900,188

The increase in total assets from December 31, 2023 to December 31, 2024 was primarily due to a $451.0 million increase in total loans held for investment and a $30.8 million increase in cash and cash equivalents, partially offset by a $10.2 million decrease in investments. The $451.0 million increase in total loans held for investment between December 31, 2023 and December 31, 2024 was the result of $1.1 billion in loan originations, partially offset by $263.0 million and $423.0 million in loan payoffs and paydowns, respectively. The $451.0 million increase in total loans held for investment included $281.4 million in purchased loans within the consumer concentration of the loan portfolio. The $30.8 million increase in cash and cash equivalents primarily resulted from net cash inflows related to financing and operating activities of $425.7 million and $52.3 million, respectively, partially offset by net cash outflows related to investing activities of $447.3 million.

The increase in total liabilities from December 31, 2023 to December 31, 2024 was primarily attributable to an increase in deposits of $531.1 million, partially offset by a decrease in other borrowings of $170.0 million. The $531.1 million increase in deposits was largely due to increases in money market, time, and non-interest-bearing demand deposits of $242.9 million, $203.6 million, and $91.5 million, respectively, partially offset by decreases in interest-bearing demand and savings deposits of $5.1 million and $1.8 million, respectively.

The increase in total shareholders’ equity from December 31, 2023 to December 31, 2024 was primarily a result of $80.9 million of additional common stock issued during the year and net income recognized of $45.7 million, partially offset by $16.2 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)	December 31, 2024			September 30, 2024			$ Change		% Change
Interest and fee income	$	57,745		$	52,667		$	5,078	9.64	%
Interest expense		24,256			22,281			1,975	8.86	%
Net interest income	$	33,489		$	30,386		$	3,103	10.21	%
Net interest margin		3.36	%		3.37	%

	Three months ended
(in thousands)	December 31, 2024			December 31, 2023			$ Change		% Change
Interest and fee income	$	57,745		$	46,180		$	11,565	25.04	%
Interest expense		24,256			19,502			4,754	24.38	%
Net interest income	$	33,489		$	26,678		$	6,811	25.53	%
Net interest margin		3.36	%		3.19	%

	Year ended
(in thousands)	December 31, 2024			December 31, 2023			$ Change		% Change
Interest and fee income	$	206,951		$	174,382		$	32,569	18.68	%
Interest expense		87,240			63,502			23,738	37.38	%
Net interest income	$	119,711		$	110,880		$	8,831	7.96	%
Net interest margin		3.32	%		3.42	%

The following table shows the components of net interest income and net interest margin for the quarterly periods indicated:

	Three months ended
	December 31, 2024						September 30, 2024						December 31, 2023
(in thousands)	Average Balance		Interest Income/Expense		Yield/Rate		Average Balance		Interest Income/Expense		Yield/Rate		Average Balance		Interest Income/Expense		Yield/Rate
Assets
Interest-earning deposits in banks	$	363,828	$	4,335	4.74	%	$	126,266	$	1,657	5.22	%	$	157,775	$	2,100	5.28	%
Investment securities		103,930		607	2.33	%		106,256		620	2.32	%		106,483		651	2.43	%
Loans held for investment and sale		3,498,109		52,803	6.01	%		3,354,050		50,390	5.98	%		3,055,042		43,429	5.64	%
Total interest-earning assets		3,965,867		57,745	5.79	%		3,586,572		52,667	5.84	%		3,319,300		46,180	5.52	%
Interest receivable and other assets, net		91,736						91,965						80,360
Total assets	$	4,057,603					$	3,678,537					$	3,399,660

Liabilities and shareholders’ equity
Interest-bearing transaction accounts	$	298,518	$	1,249	1.66	%	$	302,188	$	1,237	1.63	%	$	291,967	$	1,091	1.48	%
Savings accounts		127,298		887	2.77	%		124,851		979	3.12	%		130,915		891	2.70	%
Money market accounts		1,596,116		13,520	3.37	%		1,578,244		14,688	3.70	%		1,347,111		10,824	3.19	%
Time accounts		617,596		7,438	4.79	%		326,640		4,172	5.08	%		417,434		5,322	5.06	%
Subordinated notes and other borrowings		73,872		1,162	6.25	%		76,988		1,205	6.23	%		88,401		1,374	6.16	%
Total interest-bearing liabilities		2,713,400		24,256	3.56	%		2,408,911		22,281	3.68	%		2,275,828		19,502	3.40	%
Demand accounts		921,881						852,872						821,651
Interest payable and other liabilities		29,234						32,062						24,886
Shareholders’ equity		393,088						384,692						277,295
Total liabilities & shareholders’ equity	$	4,057,603					$	3,678,537					$	3,399,660

Net interest spread					2.23	%					2.16	%					2.12	%
Net interest income/margin			$	33,489	3.36	%			$	30,386	3.37	%			$	26,678	3.19	%

Net interest income during the three months ended December 31, 2024 increased $3.1 million, or 10.21%, to $33.5 million compared to $30.4 million during the three months ended September 30, 2024. Net interest margin totaled 3.36% for the three months ended December 31, 2024, a decrease of one basis point compared to the prior quarter. The increase in net interest income is primarily attributable to an additional $5.1 million in interest income due to a $379.3 million, or 10.58%, increase in the average balance of interest-earning assets during the three months ended December 31, 2024 compared to the prior quarter. The increase in interest income was partially offset by a $2.0 million increase in deposit interest expense due to a $376.6 million, or 11.83%, increase in the average balance of deposits during the three months ended December 31, 2024 compared to the prior quarter.

As compared to the three months ended December 31, 2023, net interest income increased $6.8 million, or 25.53%, to $33.5 million compared to $26.7 million. Net interest margin totaled 3.36% for the three months ended December 31, 2024, an increase of 17 basis points compared to the same quarter of the prior year. The increase in net interest income is primarily attributable to an additional $9.4 million in loan interest income due to a $443.1 million, or 14.50%, increase in the average balance of loans and a 37 basis point improvement in the average yield on loans during the three months ended December 31, 2024 compared to the same quarter of the prior year. The increase in interest income was partially offset by a $5.0 million increase in deposit interest expense due to a $552.3 million, or 18.36%, increase in the average balance of deposits and a 19 basis point increase in the average cost of deposits during the three months ended December 31, 2024 compared to the same quarter of the prior year.

The following table shows the components of net interest income and net interest margin for the annual periods indicated:

	Year ended
	December 31, 2024						December 31, 2023
(in thousands)	Average Balance		Interest Income/Expense		Yield/Rate		Average Balance		Interest Income/Expense		Yield/Rate
Assets
Interest-earning deposits in banks	$	218,156	$	11,080	5.08	%	$	184,103	$	9,069	4.93	%
Investment securities		106,289		2,530	2.38	%		113,515		2,600	2.29	%
Loans held for investment and sale		3,283,874		193,341	5.89	%		2,947,603		162,713	5.52	%
Total interest-earning assets		3,608,319		206,951	5.74	%		3,245,221		174,382	5.37	%
Interest receivable and other assets, net		90,061						75,741
Total assets	$	3,698,380					$	3,320,962

Liabilities and shareholders’ equity
Interest-bearing transaction accounts	$	298,137	$	4,716	1.58	%	$	312,944	$	3,321	1.06	%
Savings accounts		124,208		3,584	2.89	%		140,060		3,073	2.19	%
Money market accounts		1,533,405		53,750	3.51	%		1,263,539		33,932	2.69	%
Time accounts		412,007		20,348	4.94	%		372,557		17,535	4.71	%
Subordinated notes and other borrowings		77,335		4,842	6.26	%		93,279		5,641	6.05	%
Total interest-bearing liabilities		2,445,092		87,240	3.57	%		2,182,379		63,502	2.91	%
Demand accounts		858,789						844,057
Interest payable and other liabilities		35,331						27,127
Shareholders’ equity		359,168						267,399
Total liabilities & shareholders’ equity	$	3,698,380					$	3,320,962

Net interest spread					2.17	%					2.46	%
Net interest income/margin			$	119,711	3.32	%			$	110,880	3.42	%

Net interest income during the year ended December 31, 2024 increased $8.8 million, or 7.96%, to $119.7 million compared to $110.9 million during the year ended December 31, 2023. Net interest margin totaled 3.32% for the year ended December 31, 2024, a decrease of 10 basis points compared to the prior year. The increase in net interest income is primarily attributable to an additional $30.6 million in loan interest income due to a $336.3 million, or 11.41%, increase in the average balance of loans and a 37 basis point improvement in the average yield on loans as compared to the prior year. The increase in interest income was partially offset by an additional $24.5 million in deposit interest expense due to a $293.4 million, or 10.00%, increase in the average balance of deposits and a 58 basis point increase in the average cost of deposits compared to the prior year.

Loans by Type

The following table provides loan balances, excluding deferred loan fees, by type as of December 31, 2024:

(in thousands)
Real estate:
Commercial	$	2,857,173
Commercial land and development		3,849
Commercial construction		111,318
Residential construction		4,561
Residential		32,774
Farmland		47,241
Commercial:
Secured		170,548
Unsecured		27,558
Consumer and other		279,584
Net deferred loan fees		(1,920	)
Total loans held for investment	$	3,532,686

Interest-bearing Deposits

The following table provides interest-bearing deposit balances by type as of December 31, 2024:

(in thousands)
Interest-bearing demand accounts	$	315,217
Money market accounts		1,525,293
Savings accounts		124,702
Time accounts		670,153
Total interest-bearing deposits	$	2,635,365

Asset Quality

Allowance for Credit Losses

At December 31, 2024, the Company’s allowance for credit losses was $37.8 million, as compared to $34.4 million at December 31, 2023. The $3.4 million increase in the allowance is due to a $7.5 million provision for credit losses recorded during the twelve months ended December 31, 2024, partially offset by net charge-offs of $4.1 million, mainly attributable to commercial and industrial loans, during the same period.

The Company’s ratio of nonperforming loans to loans held for investment decreased from 0.06% at December 31, 2023 to 0.05% at December 31, 2024. Loans designated as watch increased from $39.6 million to $123.4 million between December 31, 2023 and December 31, 2024. Loans designated as substandard increased from $2.0 million to $2.6 million between December 31, 2023 and December 31, 2024. There were no loans with doubtful risk grades at December 31, 2024 or December 31, 2023.

A summary of the allowance for credit losses by loan class is as follows:

	December 31, 2024				December 31, 2023
(in thousands)	Amount		% of Total		Amount		% of Total
Real estate:
Commercial	$	25,864	68.44	%	$	29,015	84.27	%
Commercial land and development		78	0.21	%		178	0.52	%
Commercial construction		2,268	6.00	%		718	2.08	%
Residential construction		64	0.17	%		89	0.26	%
Residential		270	0.71	%		151	0.44	%
Farmland		607	1.61	%		399	1.16	%
		29,151	77.14	%		30,550	88.73	%
Commercial:
Secured		5,866	15.52	%		3,314	9.62	%
Unsecured		278	0.74	%		189	0.55	%
		6,144	16.26	%		3,503	10.17	%
Consumer and other		2,496	6.60	%		378	1.10	%
Total allowance for credit losses	$	37,791	100.00	%	$	34,431	100.00	%

The ratio of allowance for credit losses to loans held for investment was 1.07% at December 31, 2024, as compared to 1.12% at December 31, 2023.

Non-interest Income

The following table presents the key components of non-interest income for the periods indicated:

	Three months ended
(in thousands)	December 31, 2024		September 30, 2024		$ Change			% Change
Service charges on deposit accounts	$	179	$	165	$	14		8.48	%
Gain on sale of loans		150		306		(156	)	(50.98)	%
Loan-related fees		400		406		(6	)	(1.48)	%
FHLB stock dividends		332		327		5		1.53	%
Earnings on bank-owned life insurance		182		162		20		12.35	%
Other income		423		15		408		2,720.00	%
Total non-interest income	$	1,666	$	1,381	$	285		20.64	%

Gain on sale of loans. The decrease related primarily to an overall decline in the volume of loans sold during the three months ended December 31, 2024 compared to the three months ended September 30, 2024. During the three months ended December 31, 2024, approximately $2.0 million of loans were sold with an effective yield of 7.60%, as compared to approximately $4.4 million of loans sold with an effective yield of 7.03% during the three months ended September 30, 2024.

Other income. The increase resulted primarily from $0.3 million of income received on equity investments in venture-backed funds during the three months ended December 31, 2024, combined with a $0.1 million loss from equity investments in venture-backed funds during the three months ended September 30, 2024.

The following table presents the key components of non-interest income for the periods indicated:

	Three months ended
(in thousands)	December 31, 2024		December 31, 2023			$ Change			% Change
Service charges on deposit accounts	$	179	$	165		$	14		8.48	%
Net gain (loss) on sale of securities		—		(167	)		167		(100.00)	%
Gain on sale of loans		150		317			(167	)	(52.68)	%
Loan-related fees		400		667			(267	)	(40.03)	%
FHLB stock dividends		332		314			18		5.73	%
Earnings on bank-owned life insurance		182		155			27		17.42	%
Other income		423		485			(62	)	(12.78)	%
Total non-interest income	$	1,666	$	1,936		$	(270	)	(13.95)	%

Net gain (loss) on sale of securities. The decrease in the net loss on sale of securities related to the sale of two municipal securities with a par value of approximately $0.8 million for a loss of approximately $0.2 million during the three months ended December 31, 2023, with no sales occurring during the three months ended December 31, 2024.

Gain on sale of loans. The decrease resulted from an overall decline in the volume of loans sold during the three months ended December 31, 2024, as compared to the three months ended December 31, 2023. During the three months ended December 31, 2024, approximately $2.0 million of loans were sold with an effective yield of 7.60%, as compared to approximately $5.9 million of loans sold with an effective yield of 5.41% during the three months ended December 31, 2023.

Loan-related fees. The decrease resulted from the recognition of $0.2 million lower rate lock fees and $0.1 million lower swap referral fees during the three months ended December 31, 2024 than the three months ended December 31, 2023.

Non-interest income for the periods indicated:

	Year ended
(in thousands)	December 31, 2024		December 31, 2023			$ Change			% Change
Service charges on deposit accounts	$	721	$	575		$	146		25.39	%
Net gain (loss) on sale of securities		—		(167	)		167		(100.00)	%
Gain on sale of loans		1,274		1,952			(678	)	(34.73)	%
Loan-related fees		1,605		1,719			(114	)	(6.63)	%
FHLB stock dividends		1,320		970			350		36.08	%
Earnings on bank-owned life insurance		644		510			134		26.27	%
Other income		889		1,952			(1,063	)	(54.46)	%
Total non-interest income	$	6,453	$	7,511		$	(1,058	)	(14.09)	%

Service charges on deposit accounts. The increase resulted primarily from a $0.2 million increase in wire transfer fees recognized, partially offset by a small decrease in other fees recognized during the year ended December 31, 2024 compared to the year ended December 31, 2023.

Net gain (loss) on sale of securities. The decrease in the net loss on sale of securities resulted from the sale of two municipal securities with a par value of approximately $0.8 million for a loss of approximately $0.2 million during the year ended December 31, 2023, with no sales occurring during the year ended December 31, 2024.

Gain on sale of loans. The decrease related primarily to an overall decline in the volume of loans sold during the year ended December 31, 2024 compared to the year ended December 31, 2023. During the year ended December 31, 2024, approximately $18.3 million of loans were sold with an effective yield of 6.96%, as compared to approximately $36.5 million of loans sold with an effective yield of 5.35% during the year ended December 31, 2023.

Loan-related fees. The decrease was primarily a result of a $0.2 million net decrease in income earned from the credit card program, partially offset by a small increase in loan fee income earned on various loan types and services.

FHLB stock dividends. The increase primarily relates to a 50 basis point increase in the annualized dividend rate earned year-over-year, while the average shares outstanding remained consistent.

Earnings on bank-owned life insurance. The increase was primarily due to additional policies purchased between December 31, 2024 and December 31, 2023.

Other income. The decrease resulted primarily from $0.5 million in income received on equity investments in venture-backed funds during the year ended December 31, 2024, as compared to $1.7 million in income received on equity investments in venture-back funds during the year ended December 31, 2023.

Non-interest Expense

The following table presents the key components of non-interest expense for the periods indicated:

	Three months ended
(in thousands)	December 31, 2024		September 30, 2024		$ Change			% Change
Salaries and employee benefits	$	8,360	$	7,969	$	391		4.91	%
Occupancy and equipment		649		626		23		3.67	%
Data processing and software		1,369		1,327		42		3.17	%
Federal Deposit Insurance Corporation (“FDIC”) insurance		440		405		35		8.64	%
Professional services		774		830		(56	)	(6.75)	%
Advertising and promotional		752		584		168		28.77	%
Loan-related expenses		321		292		29		9.93	%
Other operating expenses		1,823		1,743		80		4.59	%
Total non-interest expense	$	14,488	$	13,776	$	712		5.17	%

Salaries and employee benefits. The increase was primarily a result of: (i) a $0.1 million increase in salaries, benefits, and bonus expense; and (ii) a $0.5 million increase in commissions expense due to higher loan production, net of purchased consumer loans. These increases were partially offset by a $0.2 million increase in loan origination costs due to higher loan production, net of purchased consumer loans, period-over-period.

Advertising and promotional. The increase was primarily due to the timing of events sponsored and attended during the three months ended December 31, 2024 compared to the three months ended September 30, 2024.

The following table presents the key components of non-interest expense for the periods indicated:

	Three months ended
(in thousands)	December 31, 2024		December 31, 2023		$ Change		% Change
Salaries and employee benefits	$	8,360	$	7,182	$	1,178	16.40	%
Occupancy and equipment		649		583		66	11.32	%
Data processing and software		1,369		1,110		259	23.33	%
FDIC insurance		440		370		70	18.92	%
Professional services		774		658		116	17.63	%
Advertising and promotional		752		717		35	4.88	%
Loan-related expenses		321		268		53	19.78	%
Other operating expenses		1,823		1,775		48	2.70	%
Total non-interest expense	$	14,488	$	12,663	$	1,825	14.41	%

Salaries and employee benefits. The increase was primarily a result of: (i) a $1.0 million increase in salaries, benefits, and bonus expense, of which approximately $0.8 million related to employees hired to support expansion into the San Francisco Bay Area; and (ii) a $0.7 million increase in commissions expense due to higher loan production, net of purchased consumer loans. These increases were partially offset by a $0.5 million increase in loan origination costs due to higher loan production, 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 increased audit and examination fees for services provided for the three months ended December 31, 2024 compared to the three months ended December 31, 2023.

The following table presents the key components of non-interest expense for the periods indicated:

	Year ended
(in thousands)	December 31, 2024		December 31, 2023		$ Change		% Change
Salaries and employee benefits	$	31,709	$	27,097	$	4,612	17.02	%
Occupancy and equipment		2,547		2,218		329	14.83	%
Data processing and software		5,088		4,015		1,073	26.72	%
FDIC insurance		1,635		1,557		78	5.01	%
Professional services		3,078		2,575		503	19.53	%
Advertising and promotional		2,411		2,403		8	0.33	%
Loan-related expenses		1,207		1,192		15	1.26	%
Other operating expenses		6,818		6,718		100	1.49	%
Total non-interest expense	$	54,493	$	47,775	$	6,718	14.06	%

Salaries and employee benefits. The increase was the result of: (i) a $3.5 million increase in salaries, benefits, and bonus, of which approximately $3.3 million related to employees hired to support expansion into the San Francisco Bay Area; and (ii) a $1.4 million increase in commissions paid, primarily to employees in the San Francisco Bay Area. The increase was partially offset by a $0.3 million increase in loan origination costs due to higher loan production, net of purchased consumer loans, period-over-period.

Occupancy and equipment. The increase related to rent expense for the San Francisco branch office and a new office lease to support back office staff during the year ended December 31, 2024, which did not exist for the full year ended December 31, 2023.

Data processing and software. The increase related 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 due to an increase in audit, IT support, and other consulting fees for services provided for the year ended December 31, 2024 compared to the year ended December 31, 2023.

Other operating expenses. The increase is primarily related to a $0.2 million increase in IntraFi Network fees resulting from an overall increase in balances carried in the network, partially offset by a $0.1 million decrease in conference and training expenses.

Provision for Income Taxes

Three months ended December 31, 2024, as compared to the three months ended September 30, 2024

Provision for income taxes for the quarter ended December 31, 2024 increased by $1.8 million, or 40.70%, to $6.1 million, as compared to $4.3 million for the quarter ended September 30, 2024, which was primarily due to: (i) the increase in taxable income recognized during the three months ended December 31, 2024; 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 occur during the three months ended September 30, 2024. The effective tax rate was 31.24% and 28.21% for the three months ended December 31, 2024 and September 30, 2024, respectively.

Three months ended December 31, 2024, as compared to the three months ended December 31, 2023

Provision for income taxes increased by $1.7 million, or 39.02%, to $6.1 million for the three months ended December 31, 2024, as compared to $4.4 million for the three months ended December 31, 2023. This increase is due to: (i) the increase in taxable income for the three months ended December 31, 2024 compared to the three months ended December 31, 2023; 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 occur during the three months ended December 31, 2023. The effective tax rate was 31.24% and 28.72% for the three months ended December 31, 2024 and December 31, 2023, respectively.

Year ended December 31, 2024, as compared to the year ended December 31, 2023

Provision for income taxes increased by $0.2 million, or 0.89%, to $19.1 million for the year ended December 31, 2024, as compared to $18.9 million for the year ended December 31, 2023. This increase is due to a $0.6 million provision to return true-up recorded during the year ended December 31, 2024, partially offset by a decline in taxable income year-over-year. The effective tax rate was 29.43% and 28.34% for the years ended December 31, 2024 and December 31, 2023, respectively.

Webcast Details

Five Star Bancorp will host a live webcast for analysts and investors on Tuesday, January 28, 2025, at 1:00 pm ET (10:00 am PT), to discuss its fourth quarter and annual 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, 2023 and Quarterly Reports on Form 10-Q for the three months ended March 31, 2024, June 30, 2024, and September 30, 2024, in each case 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)	December 31, 2024			September 30, 2024			December 31, 2023
Revenue and Expense Data
Interest and fee income	$	57,745		$	52,667		$	46,180
Interest expense		24,256			22,281			19,502
Net interest income		33,489			30,386			26,678
Provision for credit losses		1,300			2,750			800
Net interest income after provision		32,189			27,636			25,878
Non-interest income:
Service charges on deposit accounts		179			165			165
Net gain (loss) on sale of securities		—			—			(167	)
Gain on sale of loans		150			306			317
Loan-related fees		400			406			667
FHLB stock dividends		332			327			314
Earnings on bank-owned life insurance		182			162			155
Other income		423			15			485
Total non-interest income		1,666			1,381			1,936
Non-interest expense:
Salaries and employee benefits		8,360			7,969			7,182
Occupancy and equipment		649			626			583
Data processing and software		1,369			1,327			1,110
FDIC insurance		440			405			370
Professional services		774			830			658
Advertising and promotional		752			584			717
Loan-related expenses		321			292			268
Other operating expenses		1,823			1,743			1,775
Total non-interest expense		14,488			13,776			12,663
Income before provision for income taxes		19,367			15,241			15,151
Provision for income taxes		6,050			4,300			4,352
Net income	$	13,317		$	10,941		$	10,799

Comprehensive Income
Net income	$	13,317		$	10,941		$	10,799
Net unrealized holding (loss) gain on securities available-for-sale during the period		(3,747	)		3,549			5,744
Reclassification for net loss on sale of securities included in net income		—			—			167
Less: Income tax (benefit) expense related to other comprehensive (loss) income		(1,108	)		1,049			1,747
Other comprehensive (loss) income		(2,639	)		2,500			4,164
Total comprehensive income	$	10,678		$	13,441		$	14,963

Share and Per Share Data
Earnings per common share:
Basic	$	0.63		$	0.52		$	0.63
Diluted	$	0.63		$	0.52		$	0.63
Book value per share	$	18.60		$	18.29		$	16.56
Tangible book value per share⁽¹⁾	$	18.60		$	18.29		$	16.56
Weighted average basic common shares outstanding		21,182,143			21,182,143			17,175,445
Weighted average diluted common shares outstanding		21,235,318			21,232,758			17,193,114
Shares outstanding at end of period		21,319,083			21,319,583			17,256,989

Credit Quality
Allowance for credit losses to period end nonperforming loans		2,101.78	%		2,041.44	%		1,752.70	%
Nonperforming loans to loans held for investment		0.05	%		0.05	%		0.06	%
Nonperforming assets to total assets		0.05	%		0.05	%		0.05	%
Nonperforming loans plus performing loan modifications to loans held for investment		0.05	%		0.05	%		0.06	%

Selected Financial Ratios
ROAA		1.31	%		1.18	%		1.26	%
ROAE		13.48	%		11.31	%		15.45	%
Net interest margin		3.36	%		3.37	%		3.19	%
Loan to deposit		99.38	%		101.87	%		102.19	%

⁽¹⁾ See the section entitled “Non-GAAP Reconciliation (Unaudited)” for a reconciliation of this non-GAAP financial measure.

	Year ended
(in thousands, except per share and share data)	December 31, 2024			December 31, 2023
Revenue and Expense Data
Interest and fee income	$	206,951		$	174,382
Interest expense		87,240			63,502
Net interest income		119,711			110,880
Provision for credit losses		6,950			4,000
Net interest income after provision		112,761			106,880
Non-interest income:
Service charges on deposit accounts		721			575
Net gain (loss) on sale of securities		—			(167	)
Gain on sale of loans		1,274			1,952
Loan-related fees		1,605			1,719
FHLB stock dividends		1,320			970
Earnings on bank-owned life insurance		644			510
Other income		889			1,952
Total non-interest income		6,453			7,511
Non-interest expense:
Salaries and employee benefits		31,709			27,097
Occupancy and equipment		2,547			2,218
Data processing and software		5,088			4,015
FDIC insurance		1,635			1,557
Professional services		3,078			2,575
Advertising and promotional		2,411			2,403
Loan-related expenses		1,207			1,192
Other operating expenses		6,818			6,718
Total non-interest expense		54,493			47,775
Income before provision for income taxes		64,721			66,616
Provision for income taxes		19,050			18,882
Net income	$	45,671		$	47,734

Comprehensive Income
Net income	$	45,671		$	47,734
Net unrealized holding (loss) gain on securities available-for-sale during the period		(858	)		2,228
Reclassification for net loss on sale of securities included in net income		—			167
Less: Income tax (benefit) expense related to other comprehensive (loss) income		(254	)		708
Other comprehensive (loss) income		(604	)		1,687
Total comprehensive income	$	45,067		$	49,421

Share and Per Share Data
Earnings per common share:
Basic	$	2.26		$	2.78
Diluted	$	2.26		$	2.78
Book value per share	$	18.60		$	16.56
Tangible book value per share⁽¹⁾	$	18.60		$	16.56
Weighted average basic common shares outstanding		20,154,385			17,166,592
Weighted average diluted common shares outstanding		20,205,440			17,187,969
Shares outstanding at end of period		21,319,083			17,256,989

Credit Quality
Allowance for credit losses to period end nonperforming loans		2,101.78	%		1,752.70	%
Nonperforming loans to loans held for investment		0.05	%		0.06	%
Nonperforming assets to total assets		0.05	%		0.05	%
Nonperforming loans plus performing loan modifications to loans held for investment		0.05	%		0.06	%

Selected Financial Ratios
ROAA		1.23	%		1.44	%
ROAE		12.72	%		17.85	%
Net interest margin		3.32	%		3.42	%
Loan to deposit		99.38	%		102.19	%

⁽¹⁾ See the section entitled “Non-GAAP Reconciliation (Unaudited)” for a reconciliation of this non-GAAP financial measure.

(in thousands)	December 31, 2024			September 30, 2024			December 31, 2023
Balance Sheet Data
Cash and due from financial institutions	$	33,882		$	44,531		$	26,986
Interest-bearing deposits in banks		318,461			206,321			294,590
Time deposits in banks		4,121			4,118			5,858
Securities - available-for-sale, at fair value		98,194			104,238			108,083
Securities - held-to-maturity, at amortized cost		2,720			2,720			3,077
Loans held for sale		3,247			2,910			11,464
Loans held for investment		3,532,686			3,460,565			3,081,719
Allowance for credit losses		(37,791	)		(37,583	)		(34,431	)
Loans held for investment, net of allowance for credit losses		3,494,895			3,422,982			3,047,288
FHLB stock		15,000			15,000			15,000
Operating leases, right-of-use asset		6,245			6,590			5,284
Premises and equipment, net		1,584			1,657			1,623
Bank-owned life insurance		19,375			19,192			17,180
Interest receivable and other assets		55,554			56,745			56,692
Total assets	$	4,053,278		$	3,887,004		$	3,593,125

Non-interest-bearing deposits	$	922,629		$	906,939		$	831,101
Interest-bearing deposits		2,635,365			2,493,040			2,195,795
Total deposits		3,557,994			3,399,979			3,026,896
Subordinated notes, net		73,895			73,859			73,749
Other borrowings		—			—			170,000
Operating lease liability		6,857			7,101			5,603
Interest payable and other liabilities		17,908			16,135			31,103
Total liabilities		3,656,654			3,497,074			3,307,351

Common stock		302,531			302,251			220,505
Retained earnings		106,464			97,411			77,036
Accumulated other comprehensive loss, net of taxes		(12,371	)		(9,732	)		(11,767	)
Total shareholders’ equity		396,624			389,930			285,774
Total liabilities and shareholders’ equity	$	4,053,278		$	3,887,004		$	3,593,125

Quarterly Average Balance Data
Average loans held for investment and sale	$	3,498,109		$	3,354,050		$	3,055,042
Average interest-earning assets		3,965,867			3,586,572			3,319,300
Average total assets		4,057,603			3,678,537			3,399,660
Average deposits		3,561,409			3,184,795			3,009,078
Average total equity		393,088			384,692			277,295

Capital Ratios
Total shareholders’ equity to total assets		9.79	%		10.03	%		7.95	%
Tangible shareholders’ equity to tangible assets⁽¹⁾		9.79	%		10.03	%		7.95	%
Total capital (to risk-weighted assets)		13.99	%		13.94	%		12.30	%
Tier 1 capital (to risk-weighted assets)		11.02	%		10.93	%		9.07	%
Common equity Tier 1 capital (to risk-weighted assets)		11.02	%		10.93	%		9.07	%
Tier 1 leverage ratio		10.05	%		10.83	%		8.73	%

⁽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. 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. 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.

The following reconciliation tables provide a more detailed analysis of this non-GAAP financial measure:

	Three months ended
(in thousands)	December 31, 2024		September 30, 2024		December 31, 2023
Pre-tax, pre-provision income
Pre-tax income	$	19,367	$	15,241	$	15,151
Add: provision for credit losses		1,300		2,750		800
Pre-tax, pre-provision income	$	20,667	$	17,991	$	15,951

	Year ended
(in thousands)	December 31, 2024		December 31, 2023
Pre-tax, pre-provision income
Pre-tax income	$	64,721	$	66,616
Add: provision for credit losses		6,950		4,000
Pre-tax, pre-provision income	$	71,671	$	70,616

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

FAQ

What was Five Star Bancorp's (FSBC) net income for Q4 2024?

Five Star Bancorp reported net income of $13.3 million for Q4 2024, up from $10.9 million in Q3 2024 and $10.8 million in Q4 2023.

How much did FSBC's deposits grow in 2024?

Total deposits increased by $531.1 million or 17.55% year-over-year, reaching $3.56 billion by December 31, 2024.

What was FSBC's loan growth in 2024?

Loans held for investment grew by $451.0 million or 14.63% year-over-year, reaching $3.53 billion by December 31, 2024.

What is FSBC's current dividend payment?

FSBC declared a cash dividend of $0.20 per share, payable on February 10, 2025, to shareholders of record as of February 3, 2025.

What was FSBC's net interest margin in Q4 2024?

FSBC's net interest margin was 3.36% in Q4 2024, compared to 3.37% in Q3 2024 and 3.19% in Q4 2023.

Five Star Bancorp Announces Quarterly and Annual Results

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What was Five Star Bancorp's (FSBC) net income for Q4 2024?

How much did FSBC's deposits grow in 2024?

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