Slide 1: Investor Presentation Second Quarter 2024
Investor Presentation Second 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 Second 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 Second Quarter 2024 Investor Presentation | 4
Slide 5: Company Overview
Company Overview Nasdaq: Headquarters: Asset Size: Loans HFI: Deposits: Bank Branches: Second Quarter 2024 Investor Presentation | 5 FSBC Rancho Cordova, CA $3.6 billion $3.3 billion $3.1 billion 7 Note: Balances are as of June 30, 2024. References to loans HFI are loans held for investment. Five St
Slide 6: Executive Team
Executive Team Second 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 Mich
Slide 7: Financial Highlights
Financial Highlights Second 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 $3,634 $1,806 $2,535 $148 $22 Total Assets Excluding PPP Loans PPP Loans 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Q2 2024 Consistent and Organic Asset Growth Second Quarter 2024 Investor Presentation | 8 Note: Dollars are in mill
Slide 9: Financial Highlights
Financial Highlights Second Quarter 2024 Investor Presentation | 9 (in thousands, except per share data) For the three months ended 6/30/2024 3/31/2024 6/30/2023 Profitability Net income $ 10,782 $ 10,631 $ 12,729 Return on average assets ("ROAA") 1.23 % 1.22 % 1.55 % Return on average equity ("ROAE
Slide 10: Financial Highlights - June 30, 2024
Financial Highlights - June 30, 2024 Second Quarter 2024 Investor Presentation | 10 Growth • Continued balance sheet growth with increases in loans held for investment of $162.2 million and non-wholesale deposits of $118.3 million since March 31, 2024. Funding • Non-interest-bearing deposits compris
Slide 11: Loans and Credit Quality
Loans and Credit Quality Second 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 $148 $22 5.45% 4.96% 4.82% 4.75% 5.36% 5.50% 5.57% 5.64% 5.71% 5.83% Non-PPP Loans PPP Loans Average Loan Yield Average Loan Yield Excluding PPP Loans 2019 2020 2021 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2
Slide 13: Loan Portfolio Composition
Loan Portfolio Composition Second Quarter 2024 Investor Presentation | 13 Commercial real estate, 84.9% Commercial land and development, 0.1% Commercial construction, 2.2% Residential construction, 0.3% Residential, 0.9% Farmland, 1.5% Secured, 4.7% Unsecured, 0.7% PPP, 0.0% Consumer and other, 4.7%
Slide 14: CRE Collateral Values
$868M $358M $272M $207M $184M $179M $177M $528M $1,548M $627M $544M $461M $490M $375M $359M $1,132M 61.75% 61.22% 56.27% 51.50% 46.04% 52.97% 56.61% 54.55% Loan Balance Collateral Value Weighted Average Loan-to-Value Manufactured home community RV Park Retail Industrial Faith-based Multifamily Mini
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 Second 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 $(38) $(158) $(39) $(59) $(5
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 Second Quarter 2024 Investor Presentation | 18 (in thousands) December 31, 2023 March 31, 2024 June 30, 2024 Allowance for Credit Losses Amount % of Total Amount % of Total Amount % of Total Real estate: Commercial $ 29,015 84.27 % $ 28,895 83.40 % $ 24,708
Slide 19: Risk Grade Migration
Risk Grade Migration Second Quarter 2024 Investor Presentation | 19 Classified Loans (Loans Rated Substandard or Doubtful) (in thousands) 2022 2023 Q1 2024 Q2 2024 Real estate: Commercial $ 106 $ 1,892 $ 1,852 $ 1,822 Commercial land and development — — — — Commercial construction — — — — Residentia
Slide 20: Deposit and Capital Overview
Deposit and Capital Overview Second Quarter 2024 Investor Presentation | 20
Slide 21: Deposit Composition
Government, 21.80% Other, 15.45% Commercial Real Estate & Construction, 12.75% Small to Medium Sized Business, 12.46% Professional Service Practice, 9.35% Non- profit, 8.20% Manufactured Home Community, 7.83% Healthcare & Practice, 6.77%Venture Banking, 2.25% Faith-based, 2.20% Agriculture & Ag Tech
Slide 22: Diversified Funding
Diversified Funding Second Quarter 2024 Investor Presentation | 22 Total Deposits(1) = $3.1 billion 96.8% of Total Liabilities Liability Mix 1. Balance as of June 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 Ratio No
Slide 23: Strong Deposit Growth
$1.3B $1.8B $2.3B $2.8B $3.0B $3.0B $3.1B $708M $889M $1,001M $1,228M $1,409M $1,554M $1,691M$389M $701M $902M $971M $831M $817M $826M $119M $146M $279M $240M $320M $296M $300M $97M $48M $104M $343M $467M $288M $333M Money Market & Savings Non-Interest-Bearing Demand Interest-Bearing Demand Time Dep
Slide 24: Capital Ratios
Capital Ratios Second 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% 11.05% 2019 2020 2021 2022 2023 Q2 2024 8.21% 8.98% 11.44% 8.99%
Slide 25: Financial Results
Financial Results Second Quarter 2024 Investor Presentation | 25
Slide 26: Earnings Track Record
Earnings Track Record Second Quarter 2024 Investor Presentation | 26 $19.4M $18.4M $16.8M $16.0M $15.9M $17.2M $18.5M $17.2M $15.8M $15.2M $15.0M $15.2M Pre-tax, pre-provision income Pre-tax income Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 $0.0M $2.5M $5.0M $7.5M $10.0M $12.5M $15.0M $17.5M $2
Slide 27: Operating Metrics
Operating Metrics Second Quarter 2024 Investor Presentation | 27 Efficiency RatioNet Interest Margin 3.98% 3.68% 3.64% 3.75% 3.42% 3.27% 2019 2020 2021 2022 2023 2024 YTD 38.63% 37.92% 42.46% 36.90% 40.35% 44.27% 2019 2020 2021 2022 2023 2024 YTD Note: All 2024 figures are through June 30, 2024.
Slide 28: Non-interest Income and Expense Comparison
Non-interest Income and Expense Comparison Second Quarter 2024 Investor Presentation | 28 (in thousands) For the three months ended 6/30/2024 3/31/2024 6/30/2023 Non-interest Income Service charges on deposit accounts $ 189 $ 188 $ 135 Gain on sale of loans 449 369 641 Loan-related fees 370 429 389
Slide 29: Shareholder Returns
Shareholder Returns Second Quarter 2024 Investor Presentation | 29 ROAA ROAE Value per Share (book and tangible book(1)) Note: All 2024 figures are through June 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% 1.22% 2019 2020 2021 202
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) Second Quarter 2024 Investor Presentation | 32 (in millions) Total assets, excluding PPP loans 12/31/2020 12/31/2021 Total assets $ 1,954 $ 2,557 Less: PPP loans 148 22 Total assets, excluding PPP loans $ 1,806 $ 2,535 (in thousands) Three months ended P