Five Star Bancorp · NASDAQ:FSBC
Five Star Bancorp — IPO Roadshow (April 2021)
35 slides from Five Star Bancorp's IPO roadshow presentation, Apr 26, 2021
Slide 1: Five Star Bancorp Investor Presentation April/May 2021
‘Free Writing Prospectus Filed pursuant to Rule 433 ‘Registration Statement No. 333-255143 ated Apel 26, 2021 we FIVE STAR BANCORP Investor Presentation April/May 2021
Slide 2: Notice to and Undertaking by Recipients
2 Notice to and Undertaking by Recipients Five Star Bancorp (“Five Star,” the “Company,” “we” or “us”) has filed a registration statement on Form S - 1 (including a prospectus, which is preliminary and subject to completion) with the U . S . Securities and Exchange Commission (“SEC”) for the offerin
Slide 3: Offering Summary
3 Five Star Bancorp Issuer Filing Range $18.00 - $20.00 Base Offering Size (1) Approximately $100 million (prior to underwriters’ option) Bookrunner Keefe, Bruyette & Woods, A Stifel Company Exchange / Ticker NASDAQ Global Select / FSBC Base Shares Offered 5,265,000 Underwriters’ Option 15% Co - Man
Slide 4: Executive Management Team
4 James Beckwith President and Chief Executive Officer • Joined the Company in 2003 • Currently the Chair - Elect of the Western Bankers Association • Previously served as CFO, CCO, and COO at National Bank of the Redwoods in Santa Rosa, CA Heather Luck Senior Vice President and Chief Financial Offi
Slide 5: Agenda
1. Introduction to Five Star 2. Financial Highlights 3. Appendix 5
Slide 6: Introduction to Five Star
Introduction to Five Star * 4% FIVE STAR BANCORP ek
Slide 7: FY 2020 Financial Information and Branch Footprint
FY 2020 Financial Information Balance Sheet Data ($mm) Assets $1,954 Total Loans $1,508 Deposits $1,784 Performance Ratios ROAA - C Corp (1) 1.42% ROAE - C Corp (1) 22.75% Efficiency Ratio (2) 37.92% Asset Quality Metrics ALLL / Loans HFI 1.47% NPAs / Assets 0.02% NCOs / Average Loans 0.12% CA Reddi
Slide 8: Awards and Recognition
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Slide 9: Board of Directors
Name Title % Ownership (1) Current / Prior Experience David J. Lucchetti Chairperson of the Board 2.52% • Has served as Chairman of the Board since 2019 • Currently serves as President, CEO, & Director of Pacific Coast Building Products and Director of the Greater Sacramento Economic Council David F
Slide 10: Summary Market Demographics by MSA
13.0% 12.7% 12.2% 8.3% Sacramento- Roseville- Folsom Redding Chico Yuba City 3.6% 0.9% (0.2%) 2.7% Sacramento- Roseville- Folsom Redding Chico Yuba City Projected Population Growth by MSA (2021 - 2026) Projected Median HHI (1) Growth by MSA ( 2021 - 2026) Summary Market Demographics by MSA Source: S
Slide 11: Attractive Sacramento Market Economy
• Large, innovative economy with 2.6 million residents • The Greater Sacramento Area has a profitable and productive economy driven by the governmental, education, technology, health care, agricultural, and manufacturing sectors • Favorable demographics trends relative to the United States as whole
Slide 12: Deposit Market Share in Sacramento
Source: S&P Global and FDIC Summary of Deposits. Deposit market share data as of 6/30/2020. Excludes non - retail deposits. Five Star Has Cemented its Position in the Capitol Region and the Sacramento Valley Markets Deposits Market Rank Institution (ST) ($mm) Share Branches 1 U.S. Bancorp $9,311 22.
Slide 13: Customer and Community Centric Focus, Specialized Lending, Risk Management
Customer and Community Centric Focus Specialized Lending Products Risk Management • Deep connectivity to the geographic and industry markets we serve • Emphasis on centers of influence within geographic and industry markets • Focus on bringing solutions one customer at a time • Banking larger, more
Slide 14: Lending Verticals
14 Commercial Real Estate Small Business Administration (SBA) Construction Faith - Based Lending Agriculture Manufacturing & Distribution Manufactured Home Communities Healthcare Venture Banking & Technology Professional Services Non - Profit Government
Slide 15: Technology Platforms
Technology is a driver in maintaining and expanding client relationships, competing for new business, and improving profitability through efficiencies nCino Loan Origination System | scalable loan origination system and document repository facilitating a loan portfolio that offers fintech - sourced
Slide 16: Operating Leverage and Expense Management
40.32% 37.94% 42.27% 38.63% 37.92% 1.52% 1.58% 1.77% 1.65% 1.53% 2016 2017 2018 2019 2020 Efficiency Ratio Noninterest Expense / Avg Assets $29.9 $38.1 $47.8 $58.5 $73.1 $29.9 $38.1 $47.5 $58.4 $74.5 $12.1 $14.4 $20.1 $22.6 $28.3 2016 2017 2018 2019 2020 Adjusted Operating Revenue Operating Revenue
Slide 17: Commitment to Environmental, Social & Governance
Commitment to Environmental, Social & Governance Dedication to Diversity, Equity & Inclusion We are executing, and plan to scale - up, an ESG strategy that focuses on environmental impacts of our business, social factors and the governance of our Board of Directors to drive positive change Environme
Slide 18: Our Mission and Core Values
Our Mission 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 me
Slide 19: Financial Highlights
Financial Highlights FIVE STAR BANCORP
Slide 20: Total Assets, Loans and Deposits Growth
$761 $865 $1,161 $1,312 $1,784 $235 $264 $335 $387 $696 2016 2017 2018 2019 2020 Total Deposits Noninterest-Bearing Deposits $642 $776 $967 $1,187 $1,508 2016 2017 2018 2019 2020 $840 $973 $1,272 $1,480 $1,954 2016 2017 2018 2019 2020 Total Assets ($mm) Total Loans ($mm) Total Deposits ($mm) 20
Slide 21: Loan Growth, Yield and Composition
Total Loan Growth ($mm) Yield on Loans Loan Composition – Held for Investment (“HFI”) Real Estate Loan Balances by Geography CA , 83.9% OR , 3.2% AZ , 2.2% FL , 1.7% NV , 1.2% NC , 1.1% Other , 6.7% 4.86% 4.93% 5.28% 5.45% 4.96% 2016 2017 2018 2019 2020 $642 $776 $967 $1,187 $1,508 2016 2017 2018 20
Slide 22: Loans by Type
Others 3.5% CRE Manufactured Home 16.1% CRE Other 13.6% Commercial SBA 7A PPP 9.8% CRE Office 7.7% CRE Retail 7.0% CRE Faith Based 6.2% Commercial Construction 6.1% Commercial Other 5.8% CRE Mini Storage 4.6% CRE Industrial 4.6% CRE Multifamily 4.4% CRE Mixed Use 4.2% Commercial SBA 7A 3.1% CRE Agri
Slide 23: Asset Quality: NPAs, ALLL and Net Charge-offs
23 Non - performing Assets (“NPAs”) (Including Troubled Debt Restructurings) Allowance for Loan Losses (“ALLL”) / Loans HFI & Net Charge - offs (“NCOs”) / Average Loans $1.5 $3.1 $2.1 $0.8 $0.5 0.18% 0.32% 0.16% 0.05% 0.02% 2016 2017 2018 2019 2020 NPAs ($mm) NPAs / Assets 1.30% 1.25% 1.21% 1.26% 1.
Slide 24: Deposit Growth, Composition and Cost of Funds
Total Deposit Growth ($mm) Noninterest Bearing (“NIB”) Deposit Growth ($mm) Deposit Composition Cost of Funds $761 $865 $1,161 $1,312 $1,784 2016 2017 2018 2019 2020 Money market 47% Noninterest bearing 39% Interest checking 8% Savings 3% Time, over $250K 1% Other time 2% $235 $264 $335 $387 $696 20
Slide 25: Profitability: ROAA, ROAE, NIM, Efficiency Ratio
14.78% 16.71% 21.36% 22.91% 22.75% 2016 2017 2018 2019 2020 1.20% 1.41% 1.45% 1.57% 1.42% 2016 2017 2018 2019 2020 Return on Average Assets – C Corp (1) Return on Average Equity – C Corp (1) Net Interest Margin Efficiency Ratio (2) 40.32% 37.94% 42.27% 38.63% 37.92% 2016 2017 2018 2019 2020 3.72% 3.
Slide 26: Net Tangible Book Value, Dividends and Net Income
$10.48 $10.93 $10.88 $11.25 $12.16 $2.40 $5.00 $8.05 $11.10 $13.73 2016 2017 2018 2019 2020 Net Tangible Book Value per Share (NTBVPS) Cum. Dividends per Share (CDPS) $17.9 $23.6 $27.4 $35.9 $46.3 2016 2017 2018 2019 2020 26 (1) In connection with an initial public offering of our securities, we int
Slide 27: Recent Developments and Q1 2021 Highlights
27 • Net income growth driven by Paycheck Protection Program (“PPP”) loans, lower cost of funds, and a decline in provision for loan losses • Continued balance sheet growth with increases in total loans and total deposits • In the three months ended March 31, 2021 we provided an additional $ 109.2 m
Slide 28: Peer Comparison
28 Source: S&P Global. Financial data as of 12/31/2020. (1) Regional peers include major exchange - traded banks with total assets between $1.5bn - $15.0bn headquartered in CA, OR, and WA, exc luding merger targets and ethnic banks. (2) High Performing peers include major exchange - traded banks wit
Slide 29: Regulatory Capital Ratios
Common Equity Tier 1 to Risk Weighted Assets 10.81% 9.32% 7.48% 8.21% 8.98% 2016 2017 2018 2019 2020 29 Tier 1 Capital to Average Assets 9.66% 8.26% 6.81% 7.51% 6.58% 2016 2017 2018 2019 2020 Tier 1 Capital to Risk Weighted Assets 10.81% 9.32% 7.48% 8.21% 8.98% 2016 2017 2018 2019 2020 Total Capital
Slide 30: Investment Highlights
• Experienced board of directors and management team • Attractive markets driving future growth potential • Proven organic growth capabilities • Attractive core deposit franchise • Scalable and efficient operating model • Differentiated approach to banking • Committed to serving and developing the l
Slide 31: Appendix
Appendix * 4% FIVE STAR BANCORP ek
Slide 32: Executive Management Experience
Name Title Years of Experience Years with Five Star Prior Experience James Beckwith President and Chief Executive Officer 30 18 • Joined the Company in 2003 • Currently the Chair - Elect of the Western Bankers Association • Previously served as CFO, CCO, and COO at National Bank of the Redwoods in S
Slide 33: Footnotes and Definitions
33 (1) In connection with the offering described herein, we intend to terminate our S Corporation status. We calculate C Corporation net income, return on average assets, or ROAA C - Corp, and C Corporation return on average shareholders’ equity, or ROAE C - Corp, by using a combined statutory tax r
Slide 34: Income Statement and Balance Sheet Summary
34 (1) This is a non - GAAP financial measure. For a reconciliation of this non - GAAP measure to the most directly comparable GAAP financi al measure, see the non - GAAP financial measures. Income Statement ($000) For the year ending December 31, 2016 2017 2018 2019 2020 Total interest income $30,2
Slide 35: Non-GAAP Financial Measures
Some of the financial measures discussed herein are non - GAAP financial measures . In accordance with SEC rules, we classify a financial measure as being a non - GAAP financial measure if that financial measure excludes or includes amounts, or is subject to adjustments that have the effect of exclu