Five Star Bancorp Announces Quarterly and Annual Results

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   December 31, 
data)                 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: 
 
                        December   September 
(in thousands)          31, 2024    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% 
 
                        December    December 
(in thousands)          31, 2024    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

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