Five Star Bancorp · NASDAQ:FSBC
Five Star Bancorp — Q3 2024 Earnings Presentation
32 slides from Five Star Bancorp's earnings presentation, Oct 29, 2024
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 Third Quarter 2024 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 2024 Investor Presentation | 4
Slide 5: Company Overview
Company Overview Nasdaq: Headquarters: Asset Size: Loans HFI: Deposits: Bank Branches: Third Quarter 2024 Investor Presentation | 5 FSBC Rancho Cordova, CA $3.9 billion $3.5 billion $3.4 billion 8 Note: Balances are as of September 30, 2024. References to loans HFI are loans held for investment. Fiv
Slide 6: Executive Team
Executive Team Third Quarter 2024 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 2024 Investor Presentation | 7
Slide 8: Consistent and Organic Asset Growth
$604 $811 $840 $973 $1,272 $1,480 $1,954 $2,557 $3,227 $3,593 $3,887 $1,806 $2,535 $148 $22 Total Assets Excluding PPP Loans PPP Loans 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Q3 2024 Consistent and Organic Asset Growth Third Quarter 2024 Investor Presentation | 8 Note: Dollars are in milli
Slide 9: Financial Highlights
Financial Highlights Third Quarter 2024 Investor Presentation | 9 (in thousands, except per share data) For the three months ended 9/30/2024 6/30/2024 9/30/2023 Profitability Net income $ 10,941 $ 10,782 $ 11,045 Return on average assets ("ROAA") 1.18 % 1.23 % 1.30 % Return on average equity ("ROAE"
Slide 10: Financial Highlights - September 30, 2024
Financial Highlights - September 30, 2024 Third Quarter 2024 Investor Presentation | 10 Growth • Continued balance sheet growth with increases in loans held for investment of $194.3 million and non-wholesale deposits of $92.9 million since June 30, 2024. Funding • Non-interest-bearing deposits compr
Slide 11: Loans and Credit Quality
Loans and Credit Quality Third Quarter 2024 Investor Presentation | 11
Slide 12: Consistent Loan Growth
To ta l L oa ns (M ill io ns ) $1,180 $1,355 $1,912 $2,791 $2,870 $2,927 $3,010 $3,082 $3,104 $3,266 $3,461 $148 $22 5.45% 4.96% 4.82% 4.75% 5.36% 5.50% 5.57% 5.64% 5.71% 5.83% 5.98% Non-PPP Loans PPP Loans Average Loan Yield Average Loan Yield Excluding PPP Loans 2019 2020 2021 2022 Q1 2023 Q2 2023
Slide 13: Loan Portfolio Composition
Commercial real estate, 81.17% Commercial land and development, 0.14% Commercial construction, 2.68% Residential construction, 0.10% Residential, 0.96% Farmland, 1.38% Secured, 5.04% Unsecured, 0.72% PPP, 0.00%Consumer and other, 7.81% Loan Portfolio Composition Third Quarter 2024 Investor Presentat
Slide 14: CRE Collateral Values
$898M $367M $270M $220M $182M $170M $166M $540M $1,600M $642M $539M $486M $485M $348M $359M $1,161M 61.50% 60.97% 56.12% 51.61% 45.82% 56.54% 52.60% 54.45% Loan Balance Collateral Value Weighted Average Loan-to-Value Manufactured home community RV Park Retail Industrial Faith-based Mini storage Mult
Slide 15: Loan Portfolio Diversification
CA, 56.8% TX, 7.2% NC, 3.3% AZ, 3.1% FL, 2.8% NV, 2.5% OR, 2.4% GA, 1.8%TN, 1.7%CO, 1.5% MO, 1.2% WI, 1.2% PA, 1.2% WA, 1.1% Other, 12.2% CML Term CRE NOO, 35.8% CML Term Multifamily, 30.7% CML Term CRE OO, 14.5% CSM Unsecured, 7.6% CML Secured, 3.0% CML Const CRE, 2.7%CML Term Ag RE, 1.4% SBA 7A Se
Slide 16: Loan Rollforward
Loan Rollforward Third Quarter 2024 Investor Presentation | 16Note: Dollars are in millions. Beginning and ending balances are end of period, before allowance for credit losses, including deferred loan fees, and exclude loans held for sale. $135 $254 $135 $144 $150 $390 $334 $(38) $(158) $(39) $(59)
Slide 17: Asset Quality
1.26% 1.48% 1.20% 1.02% 1.12% 1.12% 1.08% 1.09% 0.21% 0.12% 0.04% 0.07% 0.11% 0.03% 0.04% 0.02% Allowance for Credit Losses to Loans HFI Net Charge-offs to Average Loans HFI 2019 2020 2021 2022 2023 Q1 2024 Q2 2024 Q3 2024 Asset Quality Our primary objective is to maintain a high level of asset qual
Slide 18: Allocation of Allowance for Credit Losses
Allocation of Allowance for Credit Losses Third Quarter 2024 Investor Presentation | 18 (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 $ 29,01
Slide 19: Risk Grade Migration
Risk Grade Migration Third Quarter 2024 Investor Presentation | 19 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 —
Slide 20: Deposit and Capital Overview
Deposit and Capital Overview Third Quarter 2024 Investor Presentation | 20
Slide 21: Deposit Composition
Government, 18.87% Other, 19.25% Commercial Real Estate & Construction, 15.33% Small to Medium Sized Business, 11.74% Professional Service Practice, 10.28% Non- profit, 7.38% Manufactured Home Community, 6.96% Healthcare & Practice, 5.02%Faith-based, 2.00% Venture Banking, 1.80% Agriculture & Ag Tec
Slide 22: Diversified Funding
Diversified Funding Third Quarter 2024 Investor Presentation | 22 Total Deposits(1) = $3.4 billion 97.2% of Total Liabilities Liability Mix 1. Balance as of September 30, 2024. 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
$1.3B $1.8B $2.3B $2.8B $3.0B $3.0B $3.1B $3.4B $708M $889M $1,001M $1,228M $1,409M $1,554M $1,691M $1,678M$389M $701M $902M $971M $831M $817M $826M $907M $119M $146M $279M $240M $320M $296M $300M $324M $97M $48M $104M $343M $467M $288M $333M $491M Money Market & Savings Non-Interest-Bearing Demand
Slide 24: Capital Ratios
Capital Ratios Third Quarter 2024 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. 7.51% 6.58% 9.47% 8.60% 8.73% 10.83% 2019 2020 2021 2022 2023 Q3 2024 8.21% 8.98% 11.44% 8.99% 9
Slide 25: Financial Results
Financial Results Third Quarter 2024 Investor Presentation | 25
Slide 26: Earnings Track Record
Earnings Track Record Third Quarter 2024 Investor Presentation | 26 $19.4M $18.4M $16.8M $16.0M $15.9M $17.2M $18.0M $18.5M $17.2M $15.8M $15.2M $15.0M $15.2M $15.2M Pre-tax, pre-provision income Pre-tax income Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 $0.0M $2.5M $5.0M $7.5M $10.0M $1
Slide 27: Operating Metrics
Operating Metrics Third Quarter 2024 Investor Presentation | 27 Efficiency RatioNet Interest Margin 3.98% 3.68% 3.64% 3.75% 3.42% 3.30% 2019 2020 2021 2022 2023 2024 YTD 38.63% 37.92% 42.46% 36.90% 40.35% 43.96% 2019 2020 2021 2022 2023 2024 YTD Note: All 2024 figures are through September 30, 2024.
Slide 28: Non-interest Income and Expense Comparison
Non-interest Income and Expense Comparison Third Quarter 2024 Investor Presentation | 28 (in thousands) For the three months ended 9/30/2024 6/30/2024 9/30/2023 Non-interest Income Service charges on deposit accounts $ 165 $ 189 $ 158 Gain on sale of loans 306 449 396 Loan-related fees 406 370 355 F
Slide 29: Shareholder Returns
Shareholder Returns Third Quarter 2024 Investor Presentation | 29 ROAA ROAE Value per Share (book and tangible book(1)) Note: All 2024 figures are through September 30, 2024. 1. A reconciliation of this non-GAAP measure is set forth in the appendix. 2.15% 1.95% 1.86% 1.57% 1.44% 1.21% 2019 2020 2021
Slide 30: Five Star Bank customers
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) Third Quarter 2024 Investor Presentation | 32 (in millions) Total assets, excluding PPP loans 12/31/2020 12/31/2021 12/31/2022 12/31/2023 3/31/2024 6/30/2024 9/30/2024 Total assets $ 1,954 $ 2,557 $ 3,227 $ 3,593 $ 3,476 $ 3,634 $ 3,887 Less: PPP loans 1