Slide 1: Investor Presentation Third Quarter 2023
Investor Presentation Third Quarter 2023
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 2023 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 2023 Investor Presentation | 4
Slide 5: Company Overview
Company Overview Nasdaq: Headquarters: Asset Size: Loans Held for Investment: Deposits: Bank Branches: Third Quarter 2023 Investor Presentation | 5 FSBC Rancho Cordova, California $3.5 billion $3.0 billion $3.0 billion 7 Note: Balances are as of September 30, 2023. Five Star is a community business
Slide 6: Executive Team
Executive Team Third Quarter 2023 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 2023 Investor Presentation | 7
Slide 8: Consistent and Organic Asset Growth
$565 $604 $811 $840 $973 $1,272 $1,480 $1,954 $2,557 $3,227 $3,505 $1,806 $2,535 $148 $22 Total Assets Excluding PPP Loans PPP Loans 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Q3 2023 Consistent and Organic Asset Growth Third Quarter 2023 Investor Presentation | 8 Note: Dollars are in million
Slide 9: Financial Highlights
Financial Highlights Third Quarter 2023 Investor Presentation | 9 (dollars in thousands) For the three months ended 9/30/2023 6/30/2023 9/30/2022 Profitability Net income $ 11,045 $ 12,729 $ 11,704 Return on average assets ("ROAA") 1.30 % 1.55 % 1.60 % Return on average equity ("ROAE") 16.09 % 19.29
Slide 10: Financial Highlights - September 30, 2023
Financial Highlights - September 30, 2023 Third Quarter 2023 Investor Presentation | 10 Growth • Continued balance sheet growth with increases in loans held for investment of $82.5 million and increases in deposits of $102.5 million since June 30, 2023. Funding • Non-interest-bearing deposits compri
Slide 11: Loans and Credit Quality
Loans and Credit Quality Third Quarter 2023 Investor Presentation | 11
Slide 12: Consistent Loan Growth
To ta l L oa ns (M ill io ns ) $960 $1,180 $1,355 $1,912 $2,079 $2,381 $2,583 $2,791 $2,870 $2,927 $3,010 $148 $22 $2 5.28% 5.45% 4.96% 4.82% 4.53% 4.48% 4.75% 5.12% 5.36% 5.50% 5.57% Non-PPP Loans PPP Loans Average Loan Yield Average Loan Yield Excluding PPP Loans 2018 2019 2020 2021 Q1 2022 Q2 202
Slide 13: Loan Portfolio Composition
Loan Portfolio Composition Third Quarter 2023 Investor Presentation | 13 Commercial real estate, 86.3% Commercial land and development, 0.5% Commercial construction, 3.2% Residential construction, 0.5% Residential, 0.8% Farmland, 1.7% Secured, 5.2% Unsecured, 0.8% PPP, 0.0% Consumer and other, 1.0%
Slide 14: CRE Collateral Values
$785M $336M $271M $211M $178M $173M $158M $137M $350M $1,373M $579M $522M $426M $470M $416M $323M $301M $714M 62.37% 62.69% 57.08% 54.39% 46.84% 51.67% 56.33% 52.45% 57.11% Loan Balance Collateral Value Weighted Average Loan-to-Value Manufactured home community RV Park Retail Multifamily Faith-based
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 2023 Investor Presentation | 16Note: Dollars are in millions. Beginning and ending balances are as of period end, before allowance for credit losses, including deferred loan fees, and exclude loans held for sale. Q4 2022 Q1 2023 Q2 2023 Q3 2023 Beginning Balance $ 2,58
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 Third Quarter 2023 Investor Presentation | 18 (dollars in thousands) December 31, 2022 March 31, 2023 June 30, 2023 September 30, 2023 Allowance for Credit Losses Amount % of Total Amount % of Total Amount % of Total Amount % of Total Real estate: Commercial
Slide 19: Risk Grade Migration
Risk Grade Migration Third Quarter 2023 Investor Presentation | 19 Classified Loans (Loans Rated Substandard or Doubtful) (dollars in thousands) 2021 2022 Q1 2023 Q2 2023 Q3 2023 Real estate: Commercial $ 9,256 $ 106 $ 102 $ — $ 1,923 Commercial land & development — — — — — Commercial construction —
Slide 20: Deposit and Capital Overview
Deposit and Capital Overview Third Quarter 2023 Investor Presentation | 20
Slide 21: Deposit Composition
Government, 22.70% Other, 17.01% Commercial Real Estate and Construction, 13.53% Small to Medium Sized Business, 11.38% Professional Service Practices, 9.57% Manufactured Home Communities, 7.04% Non-profits, 6.73% Healthcare and Practice, 6.40% Faith-based, 2.08% Venture Banking, 2.01% Agriculture a
Slide 22: Diversified Funding
Diversified Funding Third Quarter 2023 Investor Presentation | 22 Total Deposits(1) = $3.0 billion 93.8% of Total Liabilities Liability Mix 1. Balance as of September 30, 2023. 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 23: Strong Deposit Growth
$1.2B $1.3B $1.8B $2.3B $2.8B $2.9B $2.9B $3.0B $601M $708M $889M $1,001M $1,228M $1,419M $1,423M $1,474M$337M $388M $703M $902M $969M $836M $833M $833M $124M $119M $147M $279M $243M $294M $297M $298M $100M $97M $46M $104M $343M $373M $378M $428M Money Market & Savings Non-Interest-Bearing Demand In
Slide 24: Capital Ratios
Capital Ratios Third Quarter 2023 Investor Presentation | 24 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. 6.81% 7.51% 6.58% 9.47% 8.60% 8.58% 2018 2019 2020 2021 2022 Q3 2023 7.48% 8.21% 8.98% 11.44% 8.
Slide 25: Financial Results
Financial Results Third Quarter 2023 Investor Presentation | 25
Slide 26: Earnings Track Record
Earnings Track Record Third Quarter 2023 Investor Presentation | 26 $14.5M $16.3M $18.8M $20.0M $19.4M $18.4M $16.8M $13.5M $14.0M $16.5M $18.8M $18.5M $17.2M $15.8M Pre-tax, pre-provision income Pre-tax income Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 $0.0M $2.5M $5.0M $7.5M $10.0M $1
Slide 27: Operating Metrics
Operating Metrics Third Quarter 2023 Investor Presentation | 27 Efficiency RatioNet Interest Margin 3.93% 3.98% 3.68% 3.64% 3.75% 3.50% 2018 2019 2020 2021 2022 2023 YTD 42.27% 38.63% 37.92% 42.46% 36.90% 39.11% 2018 2019 2020 2021 2022 2023 YTD Note: All 2023 figures are through September 30, 2023.
Slide 28: Non-interest Income and Expense Comparison
Non-interest Income and Expense Comparison Third Quarter 2023 Investor Presentation | 28 (dollars in thousands) For the three months ended 9/30/2023 6/30/2023 9/30/2022 Non-interest Income Service charges on deposit accounts $ 158 $ 135 $ 132 Gain on sale of loans 396 641 548 Loan-related fees 355 3
Slide 29: Shareholder Returns
Shareholder Returns Third Quarter 2023 Investor Presentation | 29 ROAA ROAE EPS (basic and diluted) Value per Share (book and tangible book(1)) Note: All 2023 figures are through September 30, 2023. 1. A reconciliation of this non-GAAP measure is set forth in the appendix. 1.99% 2.15% 1.95% 1.86% 1.
Slide 30: Five Star Bank proudly supports women in business and those serving our region’s most
Five Star Bank proudly supports women in business and those serving our region’s most vulnerable. Our customers advocate for communities, drive collaboration, and foster responsive, community-based programs that promote healthy relationships while supporting survivors of sexual assault, domestic vio
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) Third Quarter 2023 Investor Presentation | 32 (dollars in millions) Total assets, excluding PPP loans 12/31/2020 12/31/2021 12/31/2022 9/30/2023 Total assets $ 1,954 $ 2,557 $ 3,227 $ 3,505 Less: PPP loans 148 22 — — Total assets, excluding PPP loans $ 1