Slide 1: Investor Presentation Third Quarter 2024
Investor Presentation Third Quarter 2024
Slide 2: Safe Harbor Statement and Disclaimer
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 co
Slide 3: Agenda
Agenda • Company Overview • Financial Highlights • Loans and Credit Quality • Deposit and Capital Overview • Financial Results Third Quarter 2024 Investor Presentation | 3
Slide 4: Company Overview
Company Overview Third Quarter 2024 Investor Presentation | 4
Slide 5: Company Overview
Company Overview Nasdaq: FSBC Headquarters: Rancho Cordova, CA Asset Size: $3.9 billion Loans HFI: $3.5 billion Deposits: $3.4 billion Bank Branches: 8 Five Star is a community business bank that was founded to serve the commercial real estate industry. Today, the markets we serve have expanded to m
Slide 6: Executive Team
Executive Team James Beckwith John Dalton Mike Lee Heather Luck President and Senior Vice President and Senior Vice President and Senior Vice President and Chief Executive Officer Chief Credit Officer Chief Regulatory Officer Chief Financial Officer Five Star since 2003 Five Star since 2011 Five Sta
Slide 7: Financial Highlights
Financial Highlights Third Quarter 2024 Investor Presentation | 7
Slide 8: Consistent and Organic Asset Growth
Consistent and Organic Asset Growth $3,887 CAGR (1) 5 years 10 years $3,593 Total Assets 22.54 % 21.05 % $3,227 $2,557 $22 $1,954 $148 $1,480 $1,272 $2,535 $973 $811 $840 $1,806 $604 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Q3 2024 (2) Total Assets Excluding PPP Loans PPP Loans Note: Dollar
Slide 9: Financial Highlights
Financial Highlights (in thousands, except per share data) For the three months ended 9/30/2024 6/30/2024 9/30/2023 Net income $ 10,941 $ 10,782 $ 11,045 Return on average assets ("ROAA") 1.18 % 1.23 % 1.30 % Profitability Return on average equity ("ROAE") 11.31 % 11.72 % 16.09 % Earnings per share
Slide 10: Financial Highlights - September 30, 2024
Financial Highlights - September 30, 2024 • Continued balance sheet growth with increases in loans held for investment of $194.3 million Growth and non-wholesale deposits of $92.9 million since June 30, 2024. • Non-interest-bearing deposits comprised 26.67% of total deposits, as compared to 26.22% o
Slide 11: Loans and Credit Quality
Loans and Credit Quality Third Quarter 2024 Investor Presentation | 11
Slide 12: Consistent Loan Growth
Consistent Loan Growth $3,500 CAGR (1) 5 years $3,461 $3,266 $3,000 Total Loans 25.41 % $3,082 $3,104 $3,010 $2,870 $2,927 $2,791 $2,500 Total Loans (Millions) $2,000 $22 $1,912 5.98% $1,500 5.83% $148 5.71% 5.64% $1,355 5.57% 5.50% $1,000 $1,180 5.36% 5.45% $500 4.82% 4.75% 4.96% $0 2019 2020 2021
Slide 13: Loan Portfolio Composition
Loan Portfolio Composition Consumer and PPP, 0.00% other, 7.81% Types of collateral securing Loan Balance # of % of CRE commercial real estate ("CRE") loans ($000s) Loans Unsecured, 0.72% Manufactured home community $ 897,854 406 31.92 % Secured, 5.04% RV Park 367,063 123 13.05 % Farmland, 1.38% Ret
Slide 14: CRE Collateral Values
CRE Collateral Values 61.50% 60.97% $1,750M $1,600M 56.12% 56.54% 54.45% $1,500M 52.60% 51.61% $1,250M $1,161M 45.82% $1,000M $898M Loan Balance Collateral Value $750M $642M Weighted Average Loan-to-Value $539M $540M $486M $485M $500M $367M $348M $359M Total CRE Weighted Average $270M Loan-to-Value
Slide 15: Loan Portfolio Diversification
Loan Portfolio Diversification We focus primarily on commercial lending, with an emphasis on commercial real estate. We offer a variety of loans to small and medium-sized businesses, professionals, and individuals, including commercial real estate, commercial land and construction, and farmland loan
Slide 16: Loan Rollforward
Loan Rollforward $390 $334 $254 Originations & Advances $135 $135 $144 $150 Paydowns Payoffs $(38) $(39) $(59) $(51) $(18) $(13) $(99) $(158) $(13) $(155) $(77) $(41) $(39) $(73) Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Beginning Balance $ 2,791 $ 2,870 $ 2,927 $ 3,010 $ 3,082 $ 3,104
Slide 17: Asset Quality
Asset Quality Our primary objective is to maintain a high level of asset quality in our loan portfolio. Therefore, we: – Place emphasis on our commercial portfolio, where we reevaluate risk assessments as a result of reviewing commercial property operating statements and borrower financials – Monito
Slide 18: Allocation of Allowance for Credit Losses
Allocation of Allowance for Credit Losses (in thousands) December 31, 2023 March 31, 2024 June 30, 2024 September 30, 2024 Allowance for Credit Losses Amount % of Total Amount % of Total Amount % of Total Amount % of Total Real estate: Commercial $ 29,015 84.27 % $ 28,895 83.40 % $ 24,708 69.79 % $
Slide 19: Risk Grade Migration
Risk Grade Migration Classified Loans (Loans Rated Substandard or Doubtful) (in thousands) 2022 2023 Q1 2024 Q2 2024 Q3 2024 Real estate: Commercial $ 106 $ 1,892 $ 1,852 $ 1,822 $ 1,787 Commercial land and development — — — — — Commercial construction — — — — — Residential construction — — — — — Re
Slide 20: Deposit and Capital Overview
Deposit and Capital Overview Third Quarter 2024 Investor Presentation | 20
Slide 21: Deposit Composition
Deposit Composition Total Deposits by Relationship Size Total Deposits by Market Vertical Local Agency Breakout Commercial Real Estate & (1) Other, Construction, Local Agency (2) 19.25% 15.33% Depositors, Relationships Small to Medium Sized 18.77% ≤ $5 million, Business, 11.74% 39.42% Relationships
Slide 22: Diversified Funding
Diversified Funding Liability Mix Loan(2) to Deposit Ratio 102.2% 105.4% 103.9% 101.9% 100.7% 90.5% 84.5% 85.1% Non-Interest- Bearing Demand, 25.9% Money Market, 44.2% Time Deposits, 14.0% 2019 2020 2021 2022 2023 Q1 2024 Q2 2024 Q3 2024 Interest- Bearing Non-Interest-Bearing Deposits to Total Depos
Slide 23: Strong Deposit Growth
Strong Deposit Growth $3.4B $3.1B CAGR (1) 5 years $3.0B $491M $3.0B $333M $2.8B Total Deposits 22.20 % $467M $288M $324M $343M $300M $296M $2.3B $320M $240M $104M $826M $907M $279M Money Market & Savings $1.8B $817M $831M Non-Interest-Bearing Demand $48M $971M $146M Interest-Bearing Transaction $1.
Slide 24: Capital Ratios
Capital Ratios Tier 1 Leverage Ratio Common Equity Tier 1 to RWA 10.83% 11.44% 10.93% 9.47% 8.98% 8.99% 9.07% 8.60% 8.73% 8.21% 7.51% 6.58% 2019 2020 2021 2022 2023 Q3 2024 2019 2020 2021 2022 2023 Q3 2024 Tier 1 Capital to RWA Total Capital to RWA 11.44% 10.93% 13.98% 13.94% 8.98% 8.99% 9.07% 12.18
Slide 25: Financial Results
Financial Results Third Quarter 2024 Investor Presentation | 25
Slide 26: Earnings Track Record
Earnings Track Record $22.5M $20.0M $19.4M $18.5M $18.4M $18.0M $17.5M $17.2M $16.8M $17.2M $15.8M $16.0M $15.9M $15.2M $15.0M $15.2M $15.2M $15.0M $12.5M $10.0M $7.5M $5.0M $2.5M $0.0M Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 (1) Pre-tax, pre-provision income Pre-tax income 1. A reco
Slide 27: Operating Metrics
Operating Metrics Net Interest Margin Efficiency Ratio 43.96% 3.98% 42.46% 40.35% 38.63% 37.92% 3.75% 36.90% 3.68% 3.64% 3.42% 3.30% 2019 2020 2021 2022 2023 2024 YTD 2019 2020 2021 2022 2023 2024 YTD Note: All 2024 figures are through September 30, 2024. Third Quarter 2024 Investor Presentation | 2
Slide 28: Non-interest Income and Expense Comparison
Non-interest Income and Expense Comparison (in thousands) For the three months ended 9/30/2024 6/30/2024 9/30/2023 Service charges on deposit accounts $ 165 $ 189 $ 158 Gain on sale of loans 306 449 396 Loan-related fees 406 370 355 Non-interest FHLB stock dividends 327 329 274 Income Earnings on ba
Slide 29: Shareholder Returns
Shareholder Returns ROAA ROAE 2.15% 31.40% 31.16% 1.95% 1.86% 1.57% 22.49% 1.44% 1.21% 18.80% 17.85% 12.43% 2019 2020 2021 2022 2023 2024 YTD 2019 2020 2021 2022 2023 2024 YTD Value per Share (book and tangible book(1)) $18.29 $16.56 $14.66 $13.65 $11.25 $12.16 2019 2020 2021 2022 2023 2024 Note: Al
Slide 30: We strive to become the top business bank in all markets we serve
Five Star Bank customer, Visit Sacramento, ensures our region is a leading destination for meetings, conventions, travel trade and leisure, which support the vitality of our regional economy by driving almost $200 million in visitor spending annually. Their vision is for every person in the world to
Slide 31: Appendix: Non-GAAP Reconciliation (Unaudited)
Appendix: Non-GAAP Reconciliation (Unaudited) The Company uses financial information in its analysis of the Company's performance that is not in conformity with GAAP. The Company believes that these non-GAAP financial measures provide useful information to management and investors that is supplement
Slide 32: Appendix: Non-GAAP Reconciliation (Unaudited)
Appendix: Non-GAAP Reconciliation (Unaudited) (in thousands) Year ended Three months ended Average loan yield, excluding PPP loans 12/31/2020 12/31/2021 12/31/2022 12/31/2023 3/31/2024 6/30/2024 9/30/2024 Interest and fee income on loans $ 71,405 $ 78,894 $ 111,795 $ 162,713 $ 43,786 $ 46,362 $ 50,3