Five Star Bancorp · NASDAQ:FSBC
Five Star Bancorp — Q3 2022 Earnings Presentation
31 slides from Five Star Bancorp's earnings presentation, Oct 25, 2022
Slide 1: Investor Presentation Third Quarter 2022
Investor Presentation Third Quarter 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 Third 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 Third Quarter 2022 Investor Presentation | 4
Slide 5: Company Overview
Company Overview Nasdaq: Headquarters: Asset Size: Loans Held for Investment: Deposits: Bank Branches: Third Quarter 2022 Investor Presentation | 5 FSBC Rancho Cordova, California $3.1 billion $2.6 billion $2.6 billion 7 Note: Balances are as of September 30, 2022. Five Star is a community business
Slide 6: Executive Team
Executive Team Third 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 Micha
Slide 7: Financial Highlights
Financial Highlights Third 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 $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 Consistent and Organic Asset Growth Third Quarter 2022 Investor Present
Slide 9: Financial Highlights
Financial Highlights Third Quarter 2022 Investor Presentation | 9 (dollars in millions) For the three months ended 9/30/2022 6/30/2022 9/30/2021 Profitability Net income $ 11.7 $ 10.0 $ 11.0 Return on average assets ("ROAA") 1.60 % 1.45 % 1.85 % Return on average equity ("ROAE") 19.35 % 17.20 % 19.2
Slide 10: Financial Highlights
Financial Highlights Third Quarter 2022 Investor Presentation | 10 Growth • Continued balance sheet growth with $202.5 million of growth in loans held for investment and $113.0 million in deposit growth since June 30, 2022. Funding • For the most recent quarter ended, non-interest-bearing deposits c
Slide 11: Loans and Credit Quality
Loans and Credit Quality Third Quarter 2022 Investor Presentation | 11
Slide 12: Consistent Loan Growth
To ta l L oa ns (M ill io ns ) $148 $183 $121 $61 $22 $2 4.93% 5.28% 5.45% 4.96% 4.95% 4.73% 4.90% 4.71% 4.53% 4.47% 4.74% Non-PPP Loans PPP Loans Average Loan Yield Average Loan Yield Excluding PPP Loans 2017 2018 2019 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 $0 $200 $400 $600 $
Slide 13: Loan Portfolio Composition
Loan Portfolio Composition Third Quarter 2022 Investor Presentation | 13 Commercial real estate 86.0% Commercial land and development 0.5% Commercial construction 2.9% Residential construction 0.2% Residential 0.9% Farmland 2.1% Secured 5.5% Unsecured 1.0% PPP 0.0% Consumer and other 0.9% Types of c
Slide 14: CRE Collateral Values
$592M $265M $228M $193M $166M $154M $145M $144M $334M $1,016M $500M $391M $437M $362M $281M $386M $313M $691M Loan Balance Collateral Value Manufactured home community Retail RV Park Multifamily Industrial Mini storage Faith-based Office All other types $0M $200M $400M $600M $800M $1,000M $1,200M CR
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 Third 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 Beginning Balance $ 1,70
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 Third Quarter 2022 Investor Presentation | 18 (dollars in thousands) December 31, 2021 March 31, 2022 June 30, 2022 September 30, 2022 Allowance for Loan Losses Amount % of Total Amount % of Total Amount % of Total Amount % of Total Collectively evaluated for
Slide 19: Risk Grade Migration
Risk Grade Migration Third Quarter 2022 Investor Presentation | 19 Classified Loans (Loans Rated Substandard or Doubtful) (dollars in thousands) 2020 2021 Q1 2022 Q2 2022 Q3 2022 Real estate: Commercial $ 35,543 $ 9,256 $ 901 $ 888 $ 110 Commercial land & development — — — — — Commercial constructio
Slide 20: Deposit and Capital Overview
Deposit and Capital Overview Third Quarter 2022 Investor Presentation | 20
Slide 21: Diversified Funding
Diversified Funding Third Quarter 2022 Investor Presentation | 21 Total Deposits(1) = $2.6 billion 92.2% of Total Liabilities Liability Mix 1. Balance as of September 30, 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 $600M $708M $889M $1,001M $1,012M $1,070M $1,131M $337M $389M $701M $902M $941M $1,006M $1,021M $124M $119M $146M $279M $371M $221M $227M $100M $97M $48M $104M $179M $204M $236M Money Market & Savings Non-Interest-Bearing Demand Interest-Bearing Demand Time
Slide 23: Capital Ratios
Capital Ratios Third 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% 8.65% 2017 2018 2019 2020 2021 Q3 2022 9.32% 7.48% 8.21% 8.98% 11.
Slide 24: Financial Results
Financial Results Third Quarter 2022 Investor Presentation | 24
Slide 25: Earnings Track Record
Earnings Track Record Third Quarter 2022 Investor Presentation | 25 $10.9M $10.6M $13.3M $14.1M $14.5M $16.3M $18.8M $10.7M $10.6M $13.3M $12.6M $13.5M $14.0M $16.5M Pre-tax, pre-provision net income Pre-tax net income Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 $0.0M $2.5M $5.0M $7.5M $
Slide 26: Operating Metrics
Operating Metrics Third Quarter 2022 Investor Presentation | 26 Efficiency RatioNet Interest Margin 3.99% 3.93% 3.98% 3.68% 3.64% 3.72% 2017 2018 2019 2020 2021 2022 YTD 37.94% 42.27% 38.63% 37.92% 42.46% 37.68% 2017 2018 2019 2020 2021 2022 YTD Note: All 2022 figures are through September 30, 2022.
Slide 27: Non-interest Income and Expense Comparison
Non-interest Income and Expense Comparison Third Quarter 2022 Investor Presentation | 27 (dollars in thousands) For the three months ended 9/30/2022 6/30/2022 9/30/2021 Non-interest Income Service charges on deposit accounts $ 132 $ 130 $ 112 Net gain on sale of securities — — 435 Gain on sale of lo
Slide 28: Shareholder Returns
Shareholder Returns Third 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 September 30, 2022. 1. A reconciliation of this non-GAAP measure is set forth in the appendix. 2.34% 1.99% 2.15% 1.95% 1.
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) Third Quarter 2022 Investor Presentation | 31 (dollars in millions) Total assets, excluding PPP loans 12/31/2020 12/31/2021 3/31/2022 6/30/2022 9/30/2022 Total assets $ 1,954 $ 2,557 $ 2,778 $ 2,836 $ 3,075 Less: PPP loans 148 22 2 — — Total assets, excl