Slide 1: Investor Presentation Fourth Quarter and Year End 2022
Investor Presentation Fourth Quarter and Year End 2022
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 con
Slide 3: Agenda
Agenda Fourth Quarter 2022 Investor Presentation | 3 •Company Overview •Financial Highlights •Loans and Credit Quality •Deposit and Capital Overview •Financial Results
Slide 4: Company Overview
Company Overview Fourth Quarter 2022 Investor Presentation | 4
Slide 5: Company Overview
Company Overview Nasdaq: Headquarters: Asset Size: Loans Held for Investment: Deposits: Bank Branches: Fourth Quarter 2022 Investor Presentation | 5 FSBC Rancho Cordova, California $3.2 billion $2.8 billion $2.8 billion 7 Note: Balances are as of December 31, 2022. Five Star is a community business
Slide 6: Executive Team
Executive Team Fourth Quarter 2022 Investor Presentation | 6 James Beckwith President and Chief Executive Officer Five Star since 2003 John Dalton Senior Vice President and Chief Credit Officer Five Star since 2011 Mike Lee Senior Vice President and Chief Regulatory Officer Five Star since 2005 Mich
Slide 7: Financial Highlights
Financial Highlights Fourth Quarter 2022 Investor Presentation | 7
Slide 8: Consistent and Organic Asset Growth
$547 $565 $604 $811 $840 $973 $1,272 $1,480 $1,954 $2,557 $2,778 $2,836 $3,075 $3,227 $1,806 $2,535 $2,776 $148 $22 $2 Total Assets Excluding PPP Loans PPP Loans 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Consistent and Organic Asset Growth Fourth Quarter 2022
Slide 9: Financial Highlights
Financial Highlights Fourth Quarter 2022 Investor Presentation | 9 (dollars in millions except per share data) For the three months ended For the year ended 12/31/2022 9/30/2022 12/31/2021 12/31/2022 12/31/2021 Profitability Net income $ 13.3 $ 11.7 $ 11.3 $ 44.8 $ 42.4 Return on average assets ("RO
Slide 10: Financial Highlights - December 31, 2022
Financial Highlights - December 31, 2022 Fourth Quarter 2022 Investor Presentation | 10 Growth • Continued balance sheet growth with $856.9 million of growth in loans held for investment and $496.1 million in deposit growth since December 31, 2021. Funding • Non-interest-bearing deposits comprised 3
Slide 11: Loans and Credit Quality
Loans and Credit Quality Fourth Quarter 2022 Investor Presentation | 11
Slide 12: Consistent Loan Growth
$148 $22 4.93% 5.28% 5.45% 4.96% 4.71% 5.12%Non-PPP Loans PPP Loans Average Loan Yield Average Loan Yield Excluding PPP Loans Consistent Loan Growth To ta l L oa ns (M ill io ns ) $183 $121 $61 $22 $2 4.95% 4.73% 4.90% 4.71% 4.53% 4.48% 4.75% 5.12% Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3
Slide 13: Loan Portfolio Composition
Loan Portfolio Composition Fourth Quarter 2022 Investor Presentation | 13 Commercial real estate 85.7% Commercial land and development 0.3% Commercial construction 3.2% Residential construction 0.2% Residential 0.9% Farmland 1.9% Secured 5.9% Unsecured 0.9% PPP 0.0% Consumer and other 1.0% Types of
Slide 14: CRE Collateral Values
$674M $293M $265M $202M $166M $159M $147M $146M $343M $1,175M $506M $490M $460M $366M $290M $383M $310M $705M Loan Balance Collateral Value Manufactured home community RV Park Retail Multifamily Industrial Mini storage Faith-based Office All other types $0M $200M $400M $600M $800M $1,000M $1,200M $1
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 Fourth Quarter 2022 Investor Presentation | 16Note: Dollars are in millions. Beginning and ending balances are as of period end, before allowance for loan losses, including deferred loan fees, and excluding loans held for sale. Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Beginning Balan
Slide 17: Asset Quality
Asset Quality Our primary objective is to maintain a high level of asset quality in our loan portfolio. In order to maintain our strong asset quality, we: – Place emphasis on our commercial portfolio, where we reevaluate risk assessments as a result of reviewing commercial property operating stateme
Slide 18: Allocation of Allowance for Loan Losses
Allocation of Allowance for Loan Losses Fourth Quarter 2022 Investor Presentation | 18 (dollars in thousands) December 31, 2021 March 31, 2022 June 30, 2022 September 30, 2022 December 31, 2022 Allowance for Loan Losses Amount % of Total Amount % of Total Amount % of Total Amount % of Total Amount %
Slide 19: Risk Grade Migration
Risk Grade Migration Fourth Quarter 2022 Investor Presentation | 19 Classified Loans (Loans Rated Substandard or Doubtful) (dollars in thousands) 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Real estate: Commercial $ 9,256 $ 901 $ 888 $ 110 $ 106 Commercial land & development — — — — — Commercial constructi
Slide 20: Deposit and Capital Overview
Deposit and Capital Overview Fourth Quarter 2022 Investor Presentation | 20
Slide 21: Diversified Funding
Diversified Funding Fourth Quarter 2022 Investor Presentation | 21 Total Deposits(1) = $2.8 billion 93.5% of Total Liabilities Liability Mix 1. Balance as of December 31, 2022. 2. Loan balance in loan to deposit ratio is total loans held for investment and sale at period end. Loan(2) to Deposit Rati
Slide 22: Strong Deposit Growth
$1.2B $1.3B $1.8B $2.3B $2.5B $2.5B $2.6B $2.8B $600M $708M $889M $1,001M $1,012M $1,070M $1,131M $1,228M $337M $389M $701M $902M $941M $1,006M $1,021M $971M $124M $119M $146M $279M $371M $221M $227M $240M $100M $97M $48M $104M $179M $204M $236M $343M Money Market & Savings Non-Interest-Bearing Dema
Slide 23: Capital Ratios
Capital Ratios Fourth Quarter 2022 Investor Presentation | 23 Tier 1 Leverage Ratio Tier 1 Capital to RWA Total Capital to RWA Common Equity Tier 1 to RWA Note: References to RWA are risk-weighted assets. 8.26% 6.81% 7.51% 6.58% 9.47% 8.60% 2017 2018 2019 2020 2021 2022 9.32% 7.48% 8.21% 8.98% 11.44
Slide 24: Financial Results
Financial Results Fourth Quarter 2022 Investor Presentation | 24
Slide 25: Earnings Track Record
Earnings Track Record Fourth Quarter 2022 Investor Presentation | 25 $10.9M $10.6M $13.3M $14.1M $14.5M $16.3M $18.8M $20.0M Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 $0.0M $2.5M $5.0M $7.5M $10.0M $12.5M $15.0M $17.5M $20.0M $22.5M 1. A reconciliation of this non-GAAP measure
Slide 26: Operating Metrics
Operating Metrics Fourth Quarter 2022 Investor Presentation | 26 Efficiency RatioNet Interest Margin 3.99% 3.93% 3.98% 3.68% 3.64% 3.75% 2017 2018 2019 2020 2021 2022 37.94% 42.27% 38.63% 37.92% 42.46% 36.90% 2017 2018 2019 2020 2021 2022 Note: All 2022 figures are through December 31, 2022. Total I
Slide 27: Non-interest Income and Expense Comparison
Non-interest Income and Expense Comparison Fourth Quarter 2022 Investor Presentation | 27 (dollars in thousands) For the three months ended For the year ended 12/31/2022 9/30/2022 12/31/2021 12/31/2022 12/31/2021 Non-interest Income Service charges on deposit accounts $ 97 $ 132 $ 116 $ 467 $ 424 Ne
Slide 28: Shareholder Returns
Shareholder Returns Fourth Quarter 2022 Investor Presentation | 28 ROAA ROAE EPS (basic and diluted) Value per Share (book and tangible book(1)) Note: All 2022 figures are through December 31, 2022. 1. See Appendix for more information on this non-GAAP measure. 2.34% 1.99% 2.15% 1.95% 1.86% 1.57% 20
Slide 29: We strive to become the top business bank in all markets we serve through
We strive to become the top business bank in all markets we serve through exceptional service, deep connectivity, and customer empathy. We are dedicated to serving real estate, agricultural, faith-based, and small to medium-sized enterprises. We aim to consistently deliver value that meets or exceed
Slide 30: 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 31: Appendix: Non-GAAP Reconciliation (Unaudited)
Appendix: Non-GAAP Reconciliation (Unaudited) Fourth Quarter 2022 Investor Presentation | 31 (dollars in millions) Total assets, excluding PPP loans 12/31/2021 3/31/2022 6/30/2022 9/30/2022 12/31/2022 Total assets $ 2,557 $ 2,778 $ 2,836 $ 3,075 $ 3,227 Less: PPP loans 22 2 — — — Total assets, exclu