Slide 1: Investor Presentation Fourth Quarter and Year End 2023
Investor Presentation Fourth Quarter and Year End 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 co
Slide 3: Agenda
Agenda Fourth 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 Fourth Quarter 2023 Investor Presentation | 4
Slide 5: Company Overview
Company Overview Nasdaq: Headquarters: Asset Size: Loans Held for Investment: Deposits: Bank Branches: Fourth Quarter 2023 Investor Presentation | 5 FSBC Rancho Cordova, California $3.6 billion $3.1 billion $3.0 billion 7 Note: Balances are as of December 31, 2023. Five Star is a community business
Slide 6: Executive Team
Executive Team Fourth 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 Mich
Slide 7: Financial Highlights
Financial Highlights Fourth 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 $3,397 $3,403 $3,505 $3,593 $1,806 $2,535 $148 $22 Total Assets Excluding PPP Loans PPP Loans 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Consistent and Organic Asset Growth Fourth Quarter 2023 Investor
Slide 9: Financial Highlights
Financial Highlights Fourth Quarter 2023 Investor Presentation | 9 (dollars in thousands except per share data) For the three months ended For the year ended 12/31/2023 9/30/2023 12/31/2022 12/31/2023 12/31/2022 Profitability Net income $ 10,799 $ 11,045 $ 13,282 $ 47,734 $ 44,801 Return on average
Slide 10: Financial Highlights - December 31, 2023
Financial Highlights - December 31, 2023 Fourth Quarter 2023 Investor Presentation | 10 Growth • Continued balance sheet growth with increases in loans held for investment of $290.4 million and increases in deposits of $244.9 million since December 31, 2022. Funding • Non-interest-bearing deposits c
Slide 11: Loans and Credit Quality
Loans and Credit Quality Fourth Quarter 2023 Investor Presentation | 11
Slide 12: Consistent Loan Growth
$148 $22 4.93% 5.28% 5.45% 4.96% 4.71% 5.64%Non-PPP Loans PPP Loans Average Loan Yield Average Loan Yield Excluding PPP Loans Consistent Loan Growth To ta l L oa ns (M ill io ns ) $2,079 $2,381 $2,583 $2,791 $2,870 $2,927 $3,010 $3,082 $2 4.53% 4.48% 4.75% 5.12% 5.36% 5.50% 5.57% 5.64% Q1 2022 Q2 20
Slide 13: Loan Portfolio Composition
Loan Portfolio Composition Fourth Quarter 2023 Investor Presentation | 13 Commercial real estate 87.1% Commercial land and development 0.5% Commercial construction 2.0% Residential construction 0.5% Residential 0.8% Farmland 1.7% Secured 5.4% Unsecured 0.8% Consumer and other 1.2% Types of collatera
Slide 14: CRE Collateral Values
$814M $344M $273M $212M $185M $176M $173M $136M $373M $1,430M $600M $541M $428M $488M $358M $417M $299M $757M 62.28% 61.88% 56.74% 54.26% 46.40% 56.67% 51.57% 52.38% 59.13% 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 Fourth 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 excluding loans held for sale. Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Beginning Bal
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 Credit Losses
Allocation of Allowance for Credit Losses Fourth Quarter 2023 Investor Presentation | 18 (dollars in thousands) December 31, 2022 March 31, 2023 June 30, 2023 September 30, 2023 December 31, 2023 Allowance for Credit Losses Amount % of Total Amount % of Total Amount % of Total Amount % of Total Amou
Slide 19: Risk Grade Migration
Risk Grade Migration Fourth Quarter 2023 Investor Presentation | 19 Classified Loans (Loans Rated Substandard or Doubtful) (dollars in thousands) 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Real estate: Commercial $ 106 $ 102 $ — $ 1,923 $ 1,892 Commercial land & development — — — — — Commercial constructi
Slide 20: Deposit and Capital Overview
Deposit and Capital Overview Fourth Quarter 2023 Investor Presentation | 20
Slide 21: Deposit Composition
Deposit Composition Fourth Quarter 2023 Investor Presentation | 21 Note: Balances are as of December 31, 2023 and include time and wholesale deposits. 1. Types of accounts in “Other” are individuals, trusts, estates, and market verticals that individually make up less than 0.4% of all deposits. 2. L
Slide 22: Diversified Funding
Diversified Funding Fourth Quarter 2023 Investor Presentation | 22 Total Deposits(1) = $3.0 billion 91.5% of Total Liabilities Liability Mix 1. Balance as of December 31, 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 $3.0B $600M $708M $889M $1,001M $1,228M $1,419M $1,423M $1,474M $1,409M$337M $389M $701M $902M $971M $836M $833M $833M $831M $124M $119M $146M $279M $240M $294M $297M $298M $320M $100M $97M $48M $104M $343M $373M $378M $428M $467M Money Market & Saving
Slide 24: Capital Ratios
Capital Ratios Fourth 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% 8.73% 2018 2019 2020 2021 2022 2023 7.48% 8.21% 8.98% 11.44% 8.99
Slide 25: Financial Results
Financial Results Fourth Quarter 2023 Investor Presentation | 25
Slide 26: Earnings Track Record
Earnings Track Record Fourth Quarter 2023 Investor Presentation | 26 $14.5M $16.3M $18.8M $20.0M $19.4M $18.4M $16.8M $16.0M Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 $0.0M $2.5M $5.0M $7.5M $10.0M $12.5M $15.0M $17.5M $20.0M $22.5M 1. A reconciliation of this non-GAAP measure
Slide 27: Operating Metrics
Operating Metrics Fourth Quarter 2023 Investor Presentation | 27 Efficiency RatioNet Interest Margin 3.93% 3.98% 3.68% 3.64% 3.75% 3.42% 2018 2019 2020 2021 2022 2023 42.27% 38.63% 37.92% 42.46% 36.90% 40.35% 2018 2019 2020 2021 2022 2023 Note: All 2023 figures are through December 31, 2023. Total I
Slide 28: Non-interest Income and Expense Comparison
Non-interest Income and Expense Comparison Fourth Quarter 2023 Investor Presentation | 28 (dollars in thousands) For the three months ended For the year ended 12/31/2023 9/30/2023 12/31/2022 12/31/2023 12/31/2022 Non-interest Income Service charges on deposit accounts $ 165 $ 158 $ 97 $ 575 $ 467 Ne
Slide 29: Shareholder Returns
Shareholder Returns Fourth 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 December 31, 2023. 1. See Appendix for more information on this non-GAAP measure. 1.99% 2.15% 1.95% 1.86% 1.57% 1.44% 20
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) Fourth Quarter 2023 Investor Presentation | 32 (dollars in millions) Total assets, excluding PPP loans 12/31/2020 12/31/2021 12/31/2022 3/31/2023 6/30/2023 9/30/2023 12/31/2023 Total assets $ 1,954 $ 2,557 $ 3,227 $ 3,397 $ 3,403 $ 3,505 $ 3,593 Less: PP