Five Star Bancorp (Nasdaq: FSBC) (“Five Star” or the
“Company”), a holding company that operates through its wholly
owned banking subsidiary, Five Star Bank (the “Bank”), today
reported net income of $10.8 million for the three months ended
June 30, 2024, as compared to $10.6 million for the three
months ended March 31, 2024 and $12.7 million for the three
months ended June 30, 2023.
Second Quarter Highlights
Performance and operating highlights for the
Company for the periods noted below included the following:
|
Three months ended |
(in thousands, except per
share and share data) |
June 30,2024 |
|
March 31,2024 |
|
June 30,2023 |
Return on average assets
(“ROAA”) |
|
1.23 |
% |
|
|
1.22 |
% |
|
|
1.55 |
% |
Return on average equity
(“ROAE”) |
|
11.72 |
% |
|
|
14.84 |
% |
|
|
19.29 |
% |
Pre-tax income |
$ |
15,152 |
|
|
$ |
14,961 |
|
|
$ |
17,169 |
|
Pre-tax, pre-provision
income(1) |
|
17,152 |
|
|
|
15,861 |
|
|
|
18,419 |
|
Net income |
|
10,782 |
|
|
|
10,631 |
|
|
|
12,729 |
|
Basic earnings per common
share |
$ |
0.51 |
|
|
$ |
0.62 |
|
|
$ |
0.74 |
|
Diluted earnings per common
share |
|
0.51 |
|
|
|
0.62 |
|
|
|
0.74 |
|
Weighted average basic common
shares outstanding |
|
21,039,798 |
|
|
|
17,190,867 |
|
|
|
17,165,344 |
|
Weighted average diluted
common shares outstanding |
|
21,058,085 |
|
|
|
17,272,994 |
|
|
|
17,168,995 |
|
Shares outstanding at end of
period |
|
21,319,583 |
|
|
|
17,353,251 |
|
|
|
17,257,357 |
|
(1) See the
section entitled “Non-GAAP Reconciliation (Unaudited)” for a
reconciliation of this non-GAAP financial measure. |
|
James E. Beckwith, President and Chief Executive
Officer, commented on the financial results:
“We delivered strong second quarter results
driven by continued momentum in the markets we serve. Total loans
increased by $157.2 million, or 20.2% when annualized, and total
deposits increased by $193.9 million, or 26.2% when annualized,
which we attribute to the growing demand for our differentiated
customer experience and the strength of our team.
We are seeing a positive turn in net interest
margin with a 25 basis point increase from 3.14% in the first
quarter to 3.39% in the second quarter of 2024. We are pleased to
have decreased short-term borrowings from $120.0 million to zero.
We are also pleased that, in addition to a first quarter cash
dividend in 2024, we declared a second quarter cash dividend of
$0.20 per share, exemplifying our focus on shareholder value. To
safeguard this value, we diligently monitor changing market
conditions and are confident in the Bank’s resilience in any
interest rate environment.
In the second quarter, our successful public
offering resulted in the issuance of 3,967,500 additional shares of
common stock with net proceeds of approximately $80.9 million,
allowing us to execute on our organic growth strategy and maintain
momentum in the San Francisco Bay Area. We now have 19 employees in
the San Francisco Bay Area who have contributed $161.3 million in
deposits since the expansion began in June 2023. We expect this
momentum to continue and to benefit our shareholders, employees,
clients, and community.
In the first half of 2024, the Company and our
employees received numerous awards and recognition.
The employee awards include a:
- Sacramento
Business Journal’s Women Who Mean Business award
- Sacramento
Business Journal C-Suite award
- National
Association of Women Business Owners Outstanding Women Leader’s
Executive award
- Independent
Community Bankers of American 40 Under 40: Emerging Community Bank
Leaders award
The Company awards include:
- The 2024 Greater
Sacramento Economic Council’s Sustainability award
- The 2023 Raymond
James Community Bankers Cup
- Being listed
among the S&P Global Market Intelligence 2023 Top 20
Best-Performing Community Banks in the nation (banks with assets
between $3 billion and $10 billion).”
Financial highlights during the quarter included
the following:
- The Company sold
an aggregate of 3,967,500 shares of its common stock at a public
offering price of $21.75 per share in a public offering that closed
in April 2024. The net proceeds to the Company, after deducting
underwriting discounts, commissions, and offering expenses, were
approximately $80.9 million.
- The Company’s
San Francisco Bay Area team increased from 15 to 19 employees who
generated deposit balances totaling $161.3 million at June 30,
2024, an increase of $65.1 million from March 31, 2024.
- Cash and cash
equivalents were $190.4 million, representing 6.04% of total
deposits at June 30, 2024, as compared to 6.27% at
March 31, 2024.
- Total deposits
increased by $193.9 million, or 6.56%, during the three months
ended June 30, 2024, due to increases in both non-wholesale
and wholesale deposits, which the Company defines as brokered
deposits and public time deposits. During the three months ended
June 30, 2024, non-wholesale deposits increased by $118.3
million, or 4.26%, and wholesale deposits increased by $75.5
million.
- The Company had
no short-term borrowings at June 30, 2024, a decrease from
$120.0 million at March 31, 2024.
- Consistent,
disciplined management of expenses contributed to our efficiency
ratio of 44.07% for the three months ended June 30, 2024, as
compared to 44.50% for the three months ended March 31,
2024.
- For the three
months ended June 30, 2024, net interest margin was 3.39%, as
compared to 3.14% for the three months ended March 31, 2024
and 3.45% for the three months ended June 30, 2023. The
effective Federal Funds rate remained at 5.33% as of June 30,
2024 and March 31, 2024 and increased from 5.08% as of
June 30, 2023.
- Other
comprehensive income was $0.2 million during the three months ended
June 30, 2024. Unrealized losses, net of tax effect, on
available-for-sale securities were $12.2 million as of
June 30, 2024. Total carrying value of held-to-maturity and
available-for-sale securities represented 0.08% and 2.91% of total
interest-earning assets, respectively, as of June 30,
2024.
- The Company’s
common equity Tier 1 capital ratio was 11.28% and 9.13% as of
June 30, 2024 and March 31, 2024, respectively, with the
additional common stock issued through the public offering that
closed in April 2024 as the leading driver of the increase. The
Bank continues to meet all requirements to be considered
“well-capitalized” under applicable regulatory guidelines.
- Loan and deposit
growth in the three and twelve months ended June 30, 2024 was
as follows:
(in thousands) |
June 30,2024 |
|
March 31,2024 |
|
$ Change |
|
% Change |
Loans held for investment |
$ |
3,266,291 |
|
|
$ |
3,104,130 |
|
|
$ |
162,161 |
|
|
|
5.22 |
% |
Non-interest-bearing deposits |
|
825,733 |
|
|
|
817,388 |
|
|
|
8,345 |
|
|
|
1.02 |
% |
Interest-bearing deposits |
|
2,323,898 |
|
|
|
2,138,384 |
|
|
|
185,514 |
|
|
|
8.68 |
% |
|
|
|
|
|
|
|
|
(in thousands) |
June 30,2024 |
|
June 30,2023 |
|
$ Change |
|
% Change |
Loans held for investment |
$ |
3,266,291 |
|
|
$ |
2,927,411 |
|
|
$ |
338,880 |
|
|
|
11.58 |
% |
Non-interest-bearing deposits |
|
825,733 |
|
|
|
833,707 |
|
|
|
(7,974 |
) |
|
|
(0.96 |
)% |
Interest-bearing deposits |
|
2,323,898 |
|
|
|
2,096,032 |
|
|
|
227,866 |
|
|
|
10.87 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
The ratio of nonperforming loans to loans held for investment at
period end remained at 0.06% at June 30, 2024 and
March 31, 2024.
- The Company’s
Board of Directors declared, and the Company subsequently paid, a
cash dividend of $0.20 per share during the three months ended
June 30, 2024. The Company’s Board of Directors subsequently
declared another cash dividend of $0.20 per share on July 18,
2024, which the Company expects to pay on August 12, 2024 to
shareholders of record as of August 5, 2024.
Summary Results
Three months ended June 30, 2024, as
compared to three months ended March 31, 2024
The Company’s net income was $10.8 million for
the three months ended June 30, 2024, as compared to $10.6
million for the three months ended March 31, 2024. Net
interest income increased by $2.3 million, primarily due to an
increase in interest income due to loan growth at higher yields
bolstered by a decrease in interest expense due to lower average
wholesale deposit balances, as compared to the three months ended
March 31, 2024. The provision for credit losses increased by
$1.1 million, with loan growth and increases in net charge-offs in
the three months ended June 30, 2024 as the leading drivers.
Non-interest income decreased by $0.3 million, primarily due to a
reduction in gains from distributions received on equity
investments in venture-backed funds during the three months ended
June 30, 2024, as compared to the three months ended
March 31, 2024. Non-interest expense increased by $0.8
million, primarily related to increases in: (i) commissions related
primarily to higher loan production; (ii) travel, conferences, and
professional membership fees; and (iii) sponsorships and donations,
as compared to the three months ended March 31, 2024.
Three months ended June 30, 2024, as
compared to three months ended June 30, 2023
The Company’s net income was $10.8 million for
the three months ended June 30, 2024, as compared to $12.7
million for the three months ended June 30, 2023. Net interest
income increased by $1.5 million as increases in interest income
due to loan growth at higher yields more than offset increases in
interest expense due to larger average deposit balances at higher
rates. The provision for credit losses increased by $0.8 million
primarily due to loan growth and increases in net charge-offs in
the three months ended June 30, 2024, as compared to the three
months ended June 30, 2023. Non-interest income decreased by
$1.2 million, primarily due to a reduction in gains from
distributions received on equity investments in venture-backed
funds during the three months ended June 30, 2024, as compared
to the three months ended June 30, 2023. Non-interest expense
increased by $1.5 million, with an increase in salaries and
employee benefits related to the Company’s expansion into the San
Francisco Bay Area as the leading driver.
The following is a summary of the components of
the Company’s operating results and performance ratios for the
periods indicated:
|
Three months ended |
|
|
|
|
(in thousands, except per
share data) |
June 30,2024 |
|
March 31,2024 |
|
$ Change |
|
% Change |
Selected operating data: |
|
|
|
|
|
|
|
Net interest income |
$ |
29,092 |
|
|
$ |
26,744 |
|
|
$ |
2,348 |
|
|
|
8.78 |
% |
Provision for credit losses |
|
2,000 |
|
|
|
900 |
|
|
|
1,100 |
|
|
|
122.22 |
% |
Non-interest income |
|
1,573 |
|
|
|
1,833 |
|
|
|
(260 |
) |
|
|
(14.18 |
)% |
Non-interest expense |
|
13,513 |
|
|
|
12,716 |
|
|
|
797 |
|
|
|
6.27 |
% |
Pre-tax income |
|
15,152 |
|
|
|
14,961 |
|
|
|
191 |
|
|
|
1.28 |
% |
Provision for income taxes |
|
4,370 |
|
|
|
4,330 |
|
|
|
40 |
|
|
|
0.92 |
% |
Net income |
$ |
10,782 |
|
|
$ |
10,631 |
|
|
$ |
151 |
|
|
|
1.42 |
% |
Earnings per common
share: |
|
|
|
|
|
|
|
Basic |
$ |
0.51 |
|
|
$ |
0.62 |
|
|
$ |
(0.11 |
) |
|
|
(17.74 |
)% |
Diluted |
|
0.51 |
|
|
|
0.62 |
|
|
|
(0.11 |
) |
|
|
(17.74 |
)% |
Performance and other
financial ratios: |
|
|
|
|
|
|
|
ROAA |
|
1.23 |
% |
|
|
1.22 |
% |
|
|
|
|
ROAE |
|
11.72 |
% |
|
|
14.84 |
% |
|
|
|
|
Net interest margin |
|
3.39 |
% |
|
|
3.14 |
% |
|
|
|
|
Cost of funds |
|
2.56 |
% |
|
|
2.62 |
% |
|
|
|
|
Efficiency ratio |
|
44.07 |
% |
|
|
44.50 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
|
|
(in thousands, except per
share data) |
June 30,2024 |
|
June 30,2023 |
|
$ Change |
|
% Change |
Selected operating data: |
|
|
|
|
|
|
|
Net interest income |
$ |
29,092 |
|
|
$ |
27,578 |
|
|
$ |
1,514 |
|
|
|
5.49 |
% |
Provision for credit losses |
|
2,000 |
|
|
|
1,250 |
|
|
|
750 |
|
|
|
60.00 |
% |
Non-interest income |
|
1,573 |
|
|
|
2,820 |
|
|
|
(1,247 |
) |
|
|
(44.22 |
)% |
Non-interest expense |
|
13,513 |
|
|
|
11,979 |
|
|
|
1,534 |
|
|
|
12.81 |
% |
Pre-tax income |
|
15,152 |
|
|
|
17,169 |
|
|
|
(2,017 |
) |
|
|
(11.75 |
)% |
Provision for income taxes |
|
4,370 |
|
|
|
4,440 |
|
|
|
(70 |
) |
|
|
(1.58 |
)% |
Net income |
$ |
10,782 |
|
|
$ |
12,729 |
|
|
$ |
(1,947 |
) |
|
|
(15.30 |
)% |
Earnings per common
share: |
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.51 |
|
|
$ |
0.74 |
|
|
$ |
(0.23 |
) |
|
|
(31.08 |
)% |
Diluted |
|
0.51 |
|
|
|
0.74 |
|
|
|
(0.23 |
) |
|
|
(31.08 |
)% |
Performance and other
financial ratios: |
|
|
|
|
|
|
|
ROAA |
|
1.23 |
% |
|
|
1.55 |
% |
|
|
|
|
ROAE |
|
11.72 |
% |
|
|
19.29 |
% |
|
|
|
|
Net interest margin |
|
3.39 |
% |
|
|
3.45 |
% |
|
|
|
|
Cost of funds |
|
2.56 |
% |
|
|
2.04 |
% |
|
|
|
|
Efficiency ratio |
|
44.07 |
% |
|
|
39.41 |
% |
|
|
|
|
Balance Sheet Summary
(in thousands) |
June 30,2024 |
|
December 31,2023 |
|
$ Change |
|
% Change |
Selected financial condition
data: |
|
|
|
|
|
|
|
Total assets |
$ |
3,634,217 |
|
|
$ |
3,593,125 |
|
|
$ |
41,092 |
|
|
|
1.14 |
% |
Cash and cash equivalents |
|
190,359 |
|
|
|
321,576 |
|
|
|
(131,217 |
) |
|
|
(40.80 |
)% |
Total loans held for investment |
|
3,266,291 |
|
|
|
3,081,719 |
|
|
|
184,572 |
|
|
|
5.99 |
% |
Total investments |
|
106,177 |
|
|
|
111,160 |
|
|
|
(4,983 |
) |
|
|
(4.48 |
)% |
Total liabilities |
|
3,253,747 |
|
|
|
3,307,351 |
|
|
|
(53,604 |
) |
|
|
(1.62 |
)% |
Total deposits |
|
3,149,631 |
|
|
|
3,026,896 |
|
|
|
122,735 |
|
|
|
4.05 |
% |
Subordinated notes, net |
|
73,822 |
|
|
|
73,749 |
|
|
|
73 |
|
|
|
0.10 |
% |
Total shareholders’ equity |
|
380,470 |
|
|
|
285,774 |
|
|
|
94,696 |
|
|
|
33.14 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
Insured and collateralized deposits were approximately $2.0
billion, representing approximately 64.70% of total deposits as of
June 30, 2024. Net uninsured and uncollateralized deposits
were approximately $1.1 billion as of June 30, 2024.
- Commercial and
consumer deposit accounts constituted approximately 78% of total
deposits. Deposit relationships of at least $5 million represented
approximately 60% of total deposits and had an average age of
approximately 8.46 years as of June 30, 2024.
- Cash and cash
equivalents as of June 30, 2024 were $190.4 million,
representing 6.04% of total deposits at June 30, 2024, as
compared to 6.27% as of March 31, 2024.
- Total liquidity
(consisting of cash and cash equivalents and unused and immediately
available borrowing capacity as set forth below) was approximately
$1.6 billion as of June 30, 2024.
|
June 30, 2024 |
|
Available |
(in thousands) |
Line of Credit |
|
Letters of Credit Issued |
|
Borrowings |
|
FHLB advances |
$ |
1,004,397 |
|
|
$ |
571,500 |
|
|
$ |
— |
|
|
$ |
432,897 |
|
Federal Reserve Discount Window |
|
829,179 |
|
|
|
— |
|
|
|
— |
|
|
|
829,179 |
|
Correspondent bank lines of credit |
|
175,000 |
|
|
|
— |
|
|
|
— |
|
|
|
175,000 |
|
Cash and cash equivalents |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
190,359 |
|
Total |
$ |
2,008,576 |
|
|
$ |
571,500 |
|
|
$ |
— |
|
|
$ |
1,627,435 |
|
|
The increase in total assets from
December 31, 2023 to June 30, 2024 was primarily due to a
$184.6 million increase in total loans held for investment,
partially offset by a $131.2 million decrease in cash and cash
equivalents. The $184.6 million increase in total loans held for
investment between December 31, 2023 and June 30, 2024
was a result of $539.9 million in loan originations and advances,
partially offset by $150.0 million and $205.3 million in loan
payoffs and paydowns, respectively. The $184.6 million increase in
total loans held for investment included a purchase of loans within
the consumer concentration of the loan portfolio, representing
$73.3 million. The $131.2 million decrease in cash and cash
equivalents primarily resulted from net cash outflows related to
investing activities of $173.4 million, partially offset by net
cash inflows related to financing and operating activities of $25.9
million and $16.3 million, respectively.
The decrease in total liabilities from
December 31, 2023 to June 30, 2024 was primarily due to a
decrease in other borrowings of $170.0 million, partially
offset by an increase in interest-bearing deposits of $128.1
million. The increase in interest-bearing deposits was largely due
to an increase in money market deposits of $281.8 million,
partially offset by decreases in time deposits and interest-bearing
demand deposits of $133.1 million and $20.5 million,
respectively.
The increase in total shareholders’ equity from
December 31, 2023 to June 30, 2024 was primarily a result
of $80.9 million of additional common stock outstanding and net
income recognized of $21.4 million, partially offset by $7.7
million in cash distributions paid during the period.
Net Interest Income and Net Interest
Margin
The following is a summary of the components of
net interest income for the periods indicated:
|
Three months ended |
|
|
|
|
(in thousands) |
June 30,2024 |
|
March 31,2024 |
|
$ Change |
|
% Change |
Interest and fee income |
$ |
48,998 |
|
|
$ |
47,541 |
|
|
$ |
1,457 |
|
|
|
3.06 |
% |
Interest expense |
|
19,906 |
|
|
|
20,797 |
|
|
|
(891 |
) |
|
|
(4.28 |
)% |
Net interest income |
$ |
29,092 |
|
|
$ |
26,744 |
|
|
$ |
2,348 |
|
|
|
8.78 |
% |
Net interest margin |
|
3.39 |
% |
|
|
3.14 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
|
|
(in thousands) |
June 30,2024 |
|
June 30,2023 |
|
$ Change |
|
% Change |
Interest and fee income |
$ |
48,998 |
|
|
$ |
42,793 |
|
|
$ |
6,205 |
|
|
|
14.50 |
% |
Interest expense |
|
19,906 |
|
|
|
15,215 |
|
|
|
4,691 |
|
|
|
30.83 |
% |
Net interest income |
$ |
29,092 |
|
|
$ |
27,578 |
|
|
$ |
1,514 |
|
|
|
5.49 |
% |
Net interest margin |
|
3.39 |
% |
|
|
3.45 |
% |
|
|
|
|
|
The following table shows the components of net
interest income and net interest margin for the quarterly periods
indicated:
|
Three months ended |
|
June 30, 2024 |
|
March 31, 2024 |
|
June 30, 2023 |
(in thousands) |
AverageBalance |
|
InterestIncome/Expense |
|
Yield/Rate |
|
AverageBalance |
|
InterestIncome/Expense |
|
Yield/Rate |
|
AverageBalance |
|
InterestIncome/Expense |
|
Yield/Rate |
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-earning deposits in banks |
$ |
148,936 |
|
|
$ |
1,986 |
|
|
|
5.36 |
% |
|
$ |
233,002 |
|
|
$ |
3,102 |
|
|
|
5.35 |
% |
|
$ |
179,894 |
|
|
$ |
2,218 |
|
|
|
4.95 |
% |
Investment securities |
|
105,819 |
|
|
|
650 |
|
|
|
2.47 |
% |
|
|
109,177 |
|
|
|
653 |
|
|
|
2.41 |
% |
|
|
116,107 |
|
|
|
646 |
|
|
|
2.23 |
% |
Loans held for investment and sale |
|
3,197,921 |
|
|
|
46,362 |
|
|
|
5.83 |
% |
|
|
3,082,290 |
|
|
|
43,786 |
|
|
|
5.71 |
% |
|
|
2,914,388 |
|
|
|
39,929 |
|
|
|
5.50 |
% |
Total interest-earning assets |
|
3,452,676 |
|
|
|
48,998 |
|
|
|
5.71 |
% |
|
|
3,424,469 |
|
|
|
47,541 |
|
|
|
5.58 |
% |
|
|
3,210,389 |
|
|
|
42,793 |
|
|
|
5.35 |
% |
Interest receivable and other assets, net |
|
84,554 |
|
|
|
|
|
|
|
93,983 |
|
|
|
|
|
|
|
75,416 |
|
|
|
|
|
Total assets |
$ |
3,537,230 |
|
|
|
|
|
|
$ |
3,518,452 |
|
|
|
|
|
|
$ |
3,285,805 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and shareholders’ equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing demand |
$ |
291,470 |
|
|
$ |
1,104 |
|
|
|
1.52 |
% |
|
$ |
300,325 |
|
|
$ |
1,126 |
|
|
|
1.51 |
% |
|
$ |
290,404 |
|
|
$ |
825 |
|
|
|
1.14 |
% |
Savings |
|
120,080 |
|
|
|
856 |
|
|
|
2.87 |
% |
|
|
124,561 |
|
|
|
861 |
|
|
|
2.78 |
% |
|
|
139,522 |
|
|
|
758 |
|
|
|
2.18 |
% |
Money market |
|
1,547,814 |
|
|
|
13,388 |
|
|
|
3.48 |
% |
|
|
1,410,264 |
|
|
|
12,155 |
|
|
|
3.47 |
% |
|
|
1,283,353 |
|
|
|
8,136 |
|
|
|
2.54 |
% |
Time |
|
272,887 |
|
|
|
3,369 |
|
|
|
4.96 |
% |
|
|
429,586 |
|
|
|
5,369 |
|
|
|
5.03 |
% |
|
|
370,864 |
|
|
|
4,250 |
|
|
|
4.60 |
% |
Subordinated debt and other borrowings |
|
75,747 |
|
|
|
1,189 |
|
|
|
6.31 |
% |
|
|
82,775 |
|
|
|
1,286 |
|
|
|
6.25 |
% |
|
|
80,192 |
|
|
|
1,246 |
|
|
|
6.23 |
% |
Total interest-bearing liabilities |
|
2,307,998 |
|
|
|
19,906 |
|
|
|
3.47 |
% |
|
|
2,347,511 |
|
|
|
20,797 |
|
|
|
3.56 |
% |
|
|
2,164,335 |
|
|
|
15,215 |
|
|
|
2.82 |
% |
Demand accounts |
|
817,668 |
|
|
|
|
|
|
|
842,105 |
|
|
|
|
|
|
|
828,748 |
|
|
|
|
|
Interest payable and other liabilities |
|
41,429 |
|
|
|
|
|
|
|
40,730 |
|
|
|
|
|
|
|
28,034 |
|
|
|
|
|
Shareholders’ equity |
|
370,135 |
|
|
|
|
|
|
|
288,106 |
|
|
|
|
|
|
|
264,688 |
|
|
|
|
|
Total liabilities & shareholders’ equity |
$ |
3,537,230 |
|
|
|
|
|
|
$ |
3,518,452 |
|
|
|
|
|
|
$ |
3,285,805 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest spread |
|
|
|
|
|
2.24 |
% |
|
|
|
|
|
|
2.02 |
% |
|
|
|
|
|
|
2.53 |
% |
Net interest income/margin |
|
|
$ |
29,092 |
|
|
|
3.39 |
% |
|
|
|
$ |
26,744 |
|
|
|
3.14 |
% |
|
|
|
$ |
27,578 |
|
|
|
3.45 |
% |
|
Net interest income during the three months
ended June 30, 2024 increased $2.3 million and net interest
margin increased 25 basis points compared to the three months ended
March 31, 2024. Interest income increased $1.5 million
compared to the prior quarter, primarily due to loan growth at
higher yields. Average loan yields increased 12 basis points
compared to the prior quarter, while average balances increased
3.75%. The increase in interest income compared to the prior
quarter was bolstered by a $0.9 million decrease in interest
expense, primarily due to lower average wholesale deposit balances.
Average cost of wholesale deposits, individually, decreased 11
basis points compared to the prior quarter, while average balances
decreased 38.93%. Average cost of total deposits, including
wholesale deposits, decreased 6 basis points compared to the prior
quarter, while average balances decreased 1.83%.
As compared to the three months ended
June 30, 2023, net interest income increased $1.5 million and
net interest margin decreased 6 basis points. The increase in net
interest income is primarily attributable to loan growth at higher
yields, partially offset by deposit growth at higher interest
rates. Interest income increased by $6.2 million, as compared to
the same quarter of the prior year. Average loan yields increased
33 basis points while average balances increased 9.73%, as compared
to the same quarter of the prior year. The increase in interest
income was partially offset by an additional $4.7 million in
interest expense compared to the same quarter of the prior year.
Average cost of total deposits, including wholesale deposits,
increased 55 basis points compared to the same quarter of the prior
year, while average balances increased 4.70%. Average cost of
wholesale deposits, individually, increased 23 basis points
compared to the same quarter of the prior year, while average
balances decreased 29.52%. In addition, the average balance of
non-interest-bearing deposits decreased by $11.1 million compared
to the same quarter of the prior year.
Loans by Type
The following table provides loan balances,
excluding deferred loan fees, by type as of June 30, 2024:
(in thousands) |
|
Real estate: |
|
Commercial |
$ |
2,774,001 |
|
Commercial land and development |
|
4,766 |
|
Commercial construction |
|
72,444 |
|
Residential construction |
|
9,011 |
|
Residential |
|
29,641 |
|
Farmland |
|
48,852 |
|
Commercial: |
|
Secured |
|
154,080 |
|
Unsecured |
|
23,198 |
|
Consumer and other |
|
152,564 |
|
Net deferred loan fees |
|
(2,266 |
) |
Total loans held for investment |
$ |
3,266,291 |
|
Interest-bearing Deposits
The following table provides interest-bearing
deposit balances by type as of June 30, 2024:
(in thousands) |
|
Interest-bearing demand accounts |
$ |
299,815 |
|
Money market accounts |
|
1,564,120 |
|
Savings accounts |
|
126,532 |
|
Time accounts |
|
333,431 |
|
Total interest-bearing deposits |
$ |
2,323,898 |
|
Asset Quality
Allowance for Credit Losses
At June 30, 2024, the Company’s allowance
for credit losses was $35.4 million, as compared to $34.4 million
at December 31, 2023. The $1.0 million increase in the
allowance is due to a $3.0 million provision for credit losses
recorded during the six months ended June 30, 2024, partially
offset by net charge-offs of $2.0 million, mainly attributable to
commercial and industrial loans, during the same period.
The Company’s ratio of nonperforming loans to
loans held for investment remained at 0.06% between June 30,
2024 and December 31, 2023. Loans designated as watch
increased from $39.6 million to $58.0 million between
December 31, 2023 and June 30, 2024. Loans designated as
substandard decreased from $2.0 million to $1.9 million between
December 31, 2023 and June 30, 2024. There were no loans
with doubtful risk grades at June 30, 2024 or
December 31, 2023.
A summary of the allowance for credit losses by
loan class is as follows:
|
June 30, 2024 |
|
December 31, 2023 |
(in thousands) |
Amount |
|
% of Total |
|
Amount |
|
% of Total |
Real estate: |
|
|
|
|
|
|
|
Commercial |
$ |
24,708 |
|
|
|
69.79 |
% |
|
$ |
29,015 |
|
|
|
84.27 |
% |
Commercial land and development |
|
72 |
|
|
|
0.20 |
% |
|
|
178 |
|
|
|
0.52 |
% |
Commercial construction |
|
1,097 |
|
|
|
3.10 |
% |
|
|
718 |
|
|
|
2.08 |
% |
Residential construction |
|
100 |
|
|
|
0.28 |
% |
|
|
89 |
|
|
|
0.26 |
% |
Residential |
|
195 |
|
|
|
0.55 |
% |
|
|
151 |
|
|
|
0.44 |
% |
Farmland |
|
402 |
|
|
|
1.14 |
% |
|
|
399 |
|
|
|
1.16 |
% |
|
|
26,574 |
|
|
|
75.06 |
% |
|
|
30,550 |
|
|
|
88.73 |
% |
Commercial: |
|
|
|
|
|
|
|
Secured |
|
7,386 |
|
|
|
20.86 |
% |
|
|
3,314 |
|
|
|
9.62 |
% |
Unsecured |
|
214 |
|
|
|
0.60 |
% |
|
|
189 |
|
|
|
0.55 |
% |
|
|
7,600 |
|
|
|
21.46 |
% |
|
|
3,503 |
|
|
|
10.17 |
% |
Consumer and other |
|
1,232 |
|
|
|
3.48 |
% |
|
|
378 |
|
|
|
1.10 |
% |
Total allowance for credit
losses |
$ |
35,406 |
|
|
|
100.00 |
% |
|
$ |
34,431 |
|
|
|
100.00 |
% |
|
The ratio of allowance for credit losses to
loans held for investment was 1.08% at June 30, 2024, as
compared to 1.12% at December 31, 2023.
Non-interest Income
The following table presents the key components
of non-interest income for the periods indicated:
|
Three months ended |
|
|
|
|
(in thousands) |
June 30,2024 |
|
March 31,2024 |
|
$ Change |
|
% Change |
Service charges on deposit accounts |
$ |
189 |
|
|
$ |
188 |
|
|
$ |
1 |
|
|
|
0.53 |
% |
Gain on sale of loans |
|
449 |
|
|
|
369 |
|
|
|
80 |
|
|
|
21.68 |
% |
Loan-related fees |
|
370 |
|
|
|
429 |
|
|
|
(59 |
) |
|
|
(13.75 |
)% |
FHLB stock dividends |
|
329 |
|
|
|
332 |
|
|
|
(3 |
) |
|
|
(0.90 |
)% |
Earnings on bank-owned life
insurance |
|
158 |
|
|
|
142 |
|
|
|
16 |
|
|
|
11.27 |
% |
Other income |
|
78 |
|
|
|
373 |
|
|
|
(295 |
) |
|
|
(79.09 |
)% |
Total non-interest income |
$ |
1,573 |
|
|
$ |
1,833 |
|
|
$ |
(260 |
) |
|
|
(14.18 |
)% |
|
Gain on sale of loans. The increase resulted
from an increase in the volume of loans sold, partially offset by a
decline in the effective yield of loans sold. During the three
months ended June 30, 2024, approximately $6.8 million of
loans were sold with an effective yield of 6.60%, as compared to
approximately $5.2 million of loans sold with an effective yield of
7.08% during the three months ended March 31, 2024.
Other income. The decrease resulted primarily
from a $0.3 million gain from distributions received on equity
investments in venture-backed funds during the three months ended
March 31, 2024, which did not occur during the three months
ended June 30, 2024.
The following table presents the key components
of non-interest income for the periods indicated:
|
Three months ended |
|
|
|
(in thousands) |
June 30,2024 |
|
June 30,2023 |
|
$ Change |
|
% Change |
Service charges on deposit accounts |
$ |
189 |
|
|
$ |
135 |
|
|
$ |
54 |
|
|
|
40.00 |
% |
Gain on sale of loans |
|
449 |
|
|
|
641 |
|
|
|
(192 |
) |
|
|
(29.95 |
)% |
Loan-related fees |
|
370 |
|
|
|
389 |
|
|
|
(19 |
) |
|
|
(4.88 |
)% |
FHLB stock dividends |
|
329 |
|
|
|
189 |
|
|
|
140 |
|
|
|
74.07 |
% |
Earnings on bank-owned life
insurance |
|
158 |
|
|
|
126 |
|
|
|
32 |
|
|
|
25.40 |
% |
Other income |
|
78 |
|
|
|
1,340 |
|
|
|
(1,262 |
) |
|
|
(94.18 |
)% |
Total non-interest income |
$ |
1,573 |
|
|
$ |
2,820 |
|
|
$ |
(1,247 |
) |
|
|
(44.22 |
)% |
|
Gain on sale of loans. The decrease related
primarily to an overall decline in the volume of loans sold,
partially offset by an improvement in the effective yield of loans
sold. During the three months ended June 30, 2024,
approximately $6.8 million of loans were sold with an effective
yield of 6.60%, as compared to approximately $10.9 million of loans
sold with an effective yield of 5.89% during the three months ended
June 30, 2023.
FHLB stock dividends. The increase related to
increases in the annualized dividend rate and total average shares
outstanding to 8.75% and 150,000 for the three months ended
June 30, 2024 from 7.00% and 108,901 shares for the three
months ended June 30, 2023.
Other income. The decrease related to a $1.3
million gain from distributions received on equity investments in
venture-backed funds during the three months ended June 30,
2023, which did not occur during the three months ended
June 30, 2024.
Non-interest Expense
The following table presents the key components
of non-interest expense for the periods indicated:
|
Three months ended |
|
|
|
|
(in thousands) |
June 30,2024 |
|
March 31,2024 |
|
$ Change |
|
% Change |
Salaries and employee benefits |
$ |
7,803 |
|
|
$ |
7,577 |
|
|
$ |
226 |
|
|
|
2.98 |
% |
Occupancy and equipment |
|
646 |
|
|
|
626 |
|
|
|
20 |
|
|
|
3.19 |
% |
Data processing and software |
|
1,235 |
|
|
|
1,157 |
|
|
|
78 |
|
|
|
6.74 |
% |
Federal Deposit Insurance Corporation (“FDIC”) insurance |
|
390 |
|
|
|
400 |
|
|
|
(10 |
) |
|
|
(2.50 |
)% |
Professional services |
|
767 |
|
|
|
707 |
|
|
|
60 |
|
|
|
8.49 |
% |
Advertising and promotional |
|
615 |
|
|
|
460 |
|
|
|
155 |
|
|
|
33.70 |
% |
Loan-related expenses |
|
297 |
|
|
|
297 |
|
|
|
— |
|
|
|
— |
% |
Other operating expenses |
|
1,760 |
|
|
|
1,492 |
|
|
|
268 |
|
|
|
17.96 |
% |
Total non-interest expense |
$ |
13,513 |
|
|
$ |
12,716 |
|
|
$ |
797 |
|
|
|
6.27 |
% |
|
Salaries and employee benefits. The increase
related primarily to: (i) a $0.5 million increase in commissions
related primarily to higher loan production; and (ii) a $0.3
million increase in salaries, benefits, and bonus expense related
to a 2.75% increase in headcount during the quarter. These
increases were partially offset by a $0.6 million increase in loan
origination costs due to higher loan production.
Advertising and promotional. The increase
related primarily to an overall increase in in sponsorships and
donations made, as more events were sponsored and attended compared
to the three months ended March 31, 2024.
Other operating expenses. The increase in other
operating expenses was primarily due to a $0.2 million increase in
travel, conference fees, and professional membership fees, as
compared to the three months ended March 31, 2024.
The following table presents the key components
of non-interest expense for the periods indicated:
|
Three months ended |
|
|
|
|
(in thousands) |
June 30,2024 |
|
June 30,2023 |
|
$ Change |
|
% Change |
Salaries and employee benefits |
$ |
7,803 |
|
|
$ |
6,421 |
|
|
$ |
1,382 |
|
|
|
21.52 |
% |
Occupancy and equipment |
|
646 |
|
|
|
551 |
|
|
|
95 |
|
|
|
17.24 |
% |
Data processing and
software |
|
1,235 |
|
|
|
1,013 |
|
|
|
222 |
|
|
|
21.92 |
% |
FDIC insurance |
|
390 |
|
|
|
410 |
|
|
|
(20 |
) |
|
|
(4.88 |
)% |
Professional services |
|
767 |
|
|
|
586 |
|
|
|
181 |
|
|
|
30.89 |
% |
Advertising and
promotional |
|
615 |
|
|
|
733 |
|
|
|
(118 |
) |
|
|
(16.10 |
)% |
Loan-related expenses |
|
297 |
|
|
|
324 |
|
|
|
(27 |
) |
|
|
(8.33 |
)% |
Other operating expenses |
|
1,760 |
|
|
|
1,941 |
|
|
|
(181 |
) |
|
|
(9.33 |
)% |
Total non-interest expense |
$ |
13,513 |
|
|
$ |
11,979 |
|
|
$ |
1,534 |
|
|
|
12.81 |
% |
|
Salaries and employee benefits. The increase
during the three months ended June 30, 2024 compared to the
three months ended June 30, 2023 related primarily to: (i) a
$0.9 million increase in salaries, benefits, and bonus expense
for new employees hired since June 2023 to support expansion into
the San Francisco Bay Area; (ii) a $0.3 million increase in
commissions earned, largely due to commissions paid to the San
Francisco Bay Area team, which did not occur during the three
months ended June 30, 2023; and (iii) a $0.2 million
decrease in loan origination costs due to lower loan production
period-over-period.
Data processing and software. The increase was
primarily due to: (i) increased usage of our digital banking
platform; (ii) higher transaction volumes related to the increased
number of loan and deposit accounts; and (iii) an increased number
of licenses required for new users on our loan origination and
documentation system.
Professional services. The increase was
primarily due to: (i) a $0.1 million increase of audit fees
for 2024 audits; and (ii) a $0.1 million increase in IT
consulting services due to an overall increase in service
charges.
Advertising and promotional. The decrease
related primarily to an overall decline in sponsorships and
donations made, as fewer events were sponsored and attended
compared to the three months ended June 30, 2023.
Other operating expenses. The decrease was
primarily due to a $0.2 million decrease in travel, conference
fees, and professional membership fees, as compared to the three
months ended June 30, 2023.
Provision for Income Taxes
Three months ended June 30, 2024, as
compared to three months ended March 31, 2024
Provision for income taxes increased slightly to
$4.4 million for the three months ended June 30, 2024 from
$4.3 million for the three months ended March 31, 2024,
primarily driven by an overall increase in pre-tax income. The
effective tax rates were 28.84% and 28.94% for the three months
ended June 30, 2024 and March 31, 2024, respectively.
Three months ended June 30, 2024, as
compared to three months ended June 30, 2023
Provision for income taxes decreased by $0.1
million, or 1.58%, for the three months ended June 30, 2024
compared to the three months ended June 30, 2023, primarily
driven by a $0.5 million state tax benefit recorded during the
three months ended June 30, 2023 relating to an overall reduction
in the state tax blended rate for the Company since its transition
to a C Corporation, which did not occur during the three months
ended June 30, 2024. The effective tax rates for the three
months ended June 30, 2024 and June 30, 2023, were 28.84%
and 25.86% respectively.
Webcast Details
Five Star Bancorp will host a live webcast for
analysts and investors on Thursday, July 25, 2024 at 1:00 p.m. ET
(10:00 a.m. PT) to discuss its second quarter financial results. To
view the live webcast, visit the “News & Events” section of the
Company’s website under “Events” at
https://investors.fivestarbank.com/news-events/events. The webcast
will be archived on the Company’s website for a period of 90
days.
About Five Star
Bancorp
Five Star is a bank holding company
headquartered in Rancho Cordova, California. Five Star operates
through its wholly owned banking subsidiary, Five Star Bank. The
Bank has seven branches in Northern California.
Forward-Looking Statements
This press release contains forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. These forward-looking statements represent
plans, estimates, objectives, goals, guidelines, expectations,
intentions, projections, and statements of the Company’s beliefs
concerning future events, business plans, objectives, expected
operating results, and the assumptions upon which those statements
are based. Forward-looking statements include without limitation,
any statement that may predict, forecast, indicate, or imply future
results, performance, or achievements, and are typically identified
with words such as “may,” “could,” “should,” “will,” “would,”
“believe,” “anticipate,” “estimate,” “expect,” “aim,” “intend,”
“plan,” or words or phases of similar meaning. The Company cautions
that the forward-looking statements are based largely on the
Company’s expectations and are subject to a number of known and
unknown risks and uncertainties that are subject to change based on
factors which are, in many instances, beyond the Company’s control.
Such forward-looking statements are based on various assumptions
(some of which may be beyond the Company’s control) and are subject
to risks and uncertainties, which change over time, and other
factors, which could cause actual results to differ materially from
those currently anticipated. New risks and uncertainties may emerge
from time to time, and it is not possible for the Company to
predict their occurrence or how they will affect the Company. If
one or more of the factors affecting the Company’s forward-looking
information and statements proves incorrect, then the Company’s
actual results, performance, or achievements could differ
materially from those expressed in, or implied by, forward-looking
information and statements contained in this press release.
Therefore, the Company cautions you not to place undue reliance on
the Company’s forward-looking information and statements. Important
factors that could cause actual results to differ materially from
those in the forward-looking statements are set forth in the
Company’s Annual Report on Form 10-K for the year ended
December 31, 2023 and Quarterly Report on Form 10-Q for the
three months ended March 31, 2024, in each case under the section
entitled “Risk Factors,” and other documents filed by the Company
with the Securities and Exchange Commission from time to time.
The Company disclaims any duty to revise or
update the forward-looking statements, whether written or oral, to
reflect actual results or changes in the factors affecting the
forward-looking statements, except as specifically required by
law.
Condensed Financial Data (Unaudited)
|
Three months ended |
(in thousands, except per share and share data) |
June 30,2024 |
|
March 31,2024 |
|
June 30,2023 |
Revenue and Expense Data |
|
|
|
|
|
Interest and fee income |
$ |
48,998 |
|
|
$ |
47,541 |
|
|
$ |
42,793 |
|
Interest expense |
|
19,906 |
|
|
|
20,797 |
|
|
|
15,215 |
|
Net interest income |
|
29,092 |
|
|
|
26,744 |
|
|
|
27,578 |
|
Provision for credit losses |
|
2,000 |
|
|
|
900 |
|
|
|
1,250 |
|
Net interest income after provision |
|
27,092 |
|
|
|
25,844 |
|
|
|
26,328 |
|
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 |
|
FHLB stock dividends |
|
329 |
|
|
|
332 |
|
|
|
189 |
|
Earnings on bank-owned life insurance |
|
158 |
|
|
|
142 |
|
|
|
126 |
|
Other income |
|
78 |
|
|
|
373 |
|
|
|
1,340 |
|
Total non-interest income |
|
1,573 |
|
|
|
1,833 |
|
|
|
2,820 |
|
Non-interest expense: |
|
|
|
|
|
Salaries and employee benefits |
|
7,803 |
|
|
|
7,577 |
|
|
|
6,421 |
|
Occupancy and equipment |
|
646 |
|
|
|
626 |
|
|
|
551 |
|
Data processing and software |
|
1,235 |
|
|
|
1,157 |
|
|
|
1,013 |
|
FDIC insurance |
|
390 |
|
|
|
400 |
|
|
|
410 |
|
Professional services |
|
767 |
|
|
|
707 |
|
|
|
586 |
|
Advertising and promotional |
|
615 |
|
|
|
460 |
|
|
|
733 |
|
Loan-related expenses |
|
297 |
|
|
|
297 |
|
|
|
324 |
|
Other operating expenses |
|
1,760 |
|
|
|
1,492 |
|
|
|
1,941 |
|
Total non-interest expense |
|
13,513 |
|
|
|
12,716 |
|
|
|
11,979 |
|
Income before provision for income taxes |
|
15,152 |
|
|
|
14,961 |
|
|
|
17,169 |
|
Provision for income taxes |
|
4,370 |
|
|
|
4,330 |
|
|
|
4,440 |
|
Net income |
$ |
10,782 |
|
|
$ |
10,631 |
|
|
$ |
12,729 |
|
|
|
|
|
|
|
Comprehensive Income |
|
|
|
|
|
Net income |
$ |
10,782 |
|
|
$ |
10,631 |
|
|
$ |
12,729 |
|
Net unrealized holding gain (loss) on securities available-for-sale
during the period |
|
295 |
|
|
|
(955 |
) |
|
|
(1,462 |
) |
Less: Income tax expense (benefit) related to other comprehensive
income (loss) |
|
87 |
|
|
|
(282 |
) |
|
|
(432 |
) |
Other comprehensive income (loss) |
|
208 |
|
|
|
(673 |
) |
|
|
(1,030 |
) |
Total comprehensive income |
$ |
10,990 |
|
|
$ |
9,958 |
|
|
$ |
11,699 |
|
|
|
|
|
|
|
Share and Per Share Data |
|
|
|
|
|
Earnings per common share: |
|
|
|
|
|
Basic |
$ |
0.51 |
|
|
$ |
0.62 |
|
|
$ |
0.74 |
|
Diluted |
|
0.51 |
|
|
|
0.62 |
|
|
|
0.74 |
|
Book value per share |
|
17.85 |
|
|
|
16.86 |
|
|
|
15.60 |
|
Tangible book value per share(1) |
|
17.85 |
|
|
|
16.86 |
|
|
|
15.60 |
|
Weighted average basic common shares outstanding |
|
21,039,798 |
|
|
|
17,190,867 |
|
|
|
17,165,344 |
|
Weighted average diluted common shares outstanding |
|
21,058,085 |
|
|
|
17,272,994 |
|
|
|
17,168,995 |
|
Shares outstanding at end of period |
|
21,319,583 |
|
|
|
17,353,251 |
|
|
|
17,257,357 |
|
|
|
|
|
|
|
Credit Quality |
|
|
|
|
|
Allowance for credit losses to period end nonperforming loans |
|
1,882.30 |
% |
|
|
1,806.73 |
% |
|
|
11,839.25 |
% |
Nonperforming loans to loans held for investment |
|
0.06 |
% |
|
|
0.06 |
% |
|
|
0.01 |
% |
Nonperforming assets to total assets |
|
0.05 |
% |
|
|
0.06 |
% |
|
|
0.01 |
% |
Nonperforming loans plus performing loan modifications to loans
held for investment |
|
0.06 |
% |
|
|
0.06 |
% |
|
|
0.01 |
% |
|
|
|
|
|
|
Selected Financial Ratios |
|
|
|
|
|
ROAA |
|
1.23 |
% |
|
|
1.22 |
% |
|
|
1.55 |
% |
ROAE |
|
11.72 |
% |
|
|
14.84 |
% |
|
|
19.29 |
% |
Net interest margin |
|
3.39 |
% |
|
|
3.14 |
% |
|
|
3.45 |
% |
Loan to deposit |
|
103.87 |
% |
|
|
105.37 |
% |
|
|
100.21 |
% |
(1) See the section entitled “Non-GAAP Reconciliation (Unaudited)”
for a reconciliation of this non-GAAP financial measure. |
(in thousands) |
June 30,2024 |
|
March 31,2024 |
|
June 30,2023 |
Balance Sheet Data |
|
|
|
|
|
Cash and due from financial institutions |
$ |
28,572 |
|
|
$ |
29,750 |
|
|
$ |
28,568 |
|
Interest-bearing deposits in banks |
|
161,787 |
|
|
|
155,575 |
|
|
|
271,555 |
|
Time deposits in banks |
|
4,097 |
|
|
|
5,878 |
|
|
|
7,343 |
|
Securities - available-for-sale, at fair value |
|
103,204 |
|
|
|
105,006 |
|
|
|
110,794 |
|
Securities - held-to-maturity, at amortized cost |
|
2,973 |
|
|
|
3,000 |
|
|
|
3,486 |
|
Loans held for sale |
|
5,322 |
|
|
|
10,243 |
|
|
|
8,559 |
|
Loans held for investment |
|
3,266,291 |
|
|
|
3,104,130 |
|
|
|
2,927,411 |
|
Allowance for credit losses |
|
(35,406 |
) |
|
|
(34,653 |
) |
|
|
(33,984 |
) |
Loans held for investment, net of allowance for credit losses |
|
3,230,885 |
|
|
|
3,069,477 |
|
|
|
2,893,427 |
|
FHLB stock |
|
15,000 |
|
|
|
15,000 |
|
|
|
15,000 |
|
Operating leases, right-of-use asset |
|
6,630 |
|
|
|
6,932 |
|
|
|
5,032 |
|
Premises and equipment, net |
|
1,610 |
|
|
|
1,569 |
|
|
|
1,599 |
|
Bank-owned life insurance |
|
19,030 |
|
|
|
18,872 |
|
|
|
16,897 |
|
Interest receivable and other assets |
|
55,107 |
|
|
|
55,058 |
|
|
|
40,441 |
|
Total assets |
$ |
3,634,217 |
|
|
$ |
3,476,360 |
|
|
$ |
3,402,701 |
|
|
|
|
|
|
|
Non-interest-bearing deposits |
$ |
825,733 |
|
|
$ |
817,388 |
|
|
$ |
833,707 |
|
Interest-bearing deposits |
|
2,323,898 |
|
|
|
2,138,384 |
|
|
|
2,096,032 |
|
Total deposits |
|
3,149,631 |
|
|
|
2,955,772 |
|
|
|
2,929,739 |
|
Subordinated notes, net |
|
73,822 |
|
|
|
73,786 |
|
|
|
73,677 |
|
Other borrowings |
|
— |
|
|
|
120,000 |
|
|
|
100,000 |
|
Operating lease liability |
|
7,077 |
|
|
|
7,320 |
|
|
|
5,275 |
|
Interest payable and other liabilities |
|
23,217 |
|
|
|
26,902 |
|
|
|
24,870 |
|
Total liabilities |
|
3,253,747 |
|
|
|
3,183,780 |
|
|
|
3,133,561 |
|
|
|
|
|
|
|
Common stock |
|
301,968 |
|
|
|
220,804 |
|
|
|
220,021 |
|
Retained earnings |
|
90,734 |
|
|
|
84,216 |
|
|
|
62,095 |
|
Accumulated other comprehensive loss, net of taxes |
|
(12,232 |
) |
|
|
(12,440 |
) |
|
|
(12,976 |
) |
Total shareholders’ equity |
|
380,470 |
|
|
|
292,580 |
|
|
|
269,140 |
|
Total liabilities and shareholders’ equity |
$ |
3,634,217 |
|
|
$ |
3,476,360 |
|
|
$ |
3,402,701 |
|
|
|
|
|
|
|
Quarterly Average Balance Data |
|
|
|
|
|
Average loans held for investment and sale |
$ |
3,197,921 |
|
|
$ |
3,082,290 |
|
|
$ |
2,914,388 |
|
Average interest-earning assets |
|
3,452,676 |
|
|
|
3,424,469 |
|
|
|
3,210,389 |
|
Average total assets |
|
3,537,230 |
|
|
|
3,518,452 |
|
|
|
3,285,805 |
|
Average deposits |
|
3,049,919 |
|
|
|
3,106,841 |
|
|
|
2,912,891 |
|
Average total equity |
|
370,135 |
|
|
|
288,106 |
|
|
|
264,688 |
|
|
|
|
|
|
|
Capital Ratios |
|
|
|
|
|
Total shareholders’ equity to total assets |
|
10.47 |
% |
|
|
8.42 |
% |
|
|
7.91 |
% |
Tangible shareholders’ equity to tangible assets(1) |
|
10.47 |
% |
|
|
8.42 |
% |
|
|
7.91 |
% |
Total capital (to risk-weighted assets) |
|
14.38 |
% |
|
|
12.34 |
% |
|
|
12.43 |
% |
Tier 1 capital (to risk-weighted assets) |
|
11.28 |
% |
|
|
9.13 |
% |
|
|
9.05 |
% |
Common equity Tier 1 capital (to risk-weighted assets) |
|
11.28 |
% |
|
|
9.13 |
% |
|
|
9.05 |
% |
Tier 1 leverage ratio |
|
11.05 |
% |
|
|
8.63 |
% |
|
|
8.66 |
% |
(1) See the section entitled “Non-GAAP Reconciliation (Unaudited)”
for a reconciliation of this non-GAAP financial measure. |
Non-GAAP Reconciliation
(Unaudited)
The Company uses financial information in its
analysis of the Company’s performance that is not in conformity
with accounting principles generally accepted in the United States
of America (“GAAP”). The Company believes that these non-GAAP
financial measures provide useful information to management and
investors that is supplementary to the Company’s financial
condition, results of operations, and cash flows computed in
accordance with GAAP. However, the Company acknowledges that its
non-GAAP financial measures have a number of limitations. As such,
investors should not view these disclosures as a substitute for
results determined in accordance with GAAP. Additionally, these
non-GAAP measures are not necessarily comparable to non-GAAP
financial measures that other banking companies use. Other banking
companies may use names similar to those the Company uses for the
non-GAAP financial measures the Company discloses, but may
calculate them differently. Investors should understand how the
Company and other companies each calculate their non-GAAP financial
measures when making comparisons.
Tangible shareholders’ equity to tangible assets
is defined as total equity less goodwill and other intangible
assets, divided by total assets less goodwill and other intangible
assets. The most directly comparable GAAP financial measure is
total shareholders’ equity to total assets. We had no goodwill or
other intangible assets at the end of any period indicated. As a
result, tangible shareholders’ equity to tangible assets is the
same as total shareholders’ equity to total assets at the end of
each of the periods indicated.
Tangible book value per share is defined as
total shareholders’ equity less goodwill and other intangible
assets, divided by the outstanding number of common shares at the
end of the period. The most directly comparable GAAP financial
measure is book value per share. We had no goodwill or other
intangible assets at the end of any period indicated. As a result,
tangible book value per share is the same as book value per share
at the end of each of the periods indicated.
Pre-tax, pre-provision income is defined as
pre-tax income plus provision for credit losses. The most directly
comparable GAAP financial measure is pre-tax income.
The following reconciliation table provides a
more detailed analysis of this non-GAAP financial measure:
|
Three months ended |
(in thousands) |
June 30,2024 |
|
March 31,2024 |
|
June 30,2023 |
Pre-tax, pre-provision
income |
|
|
|
|
|
Pre-tax income |
$ |
15,152 |
|
|
$ |
14,961 |
|
|
$ |
17,169 |
|
Add: provision for credit
losses |
|
2,000 |
|
|
|
900 |
|
|
|
1,250 |
|
Pre-tax, pre-provision income |
$ |
17,152 |
|
|
$ |
15,861 |
|
|
$ |
18,419 |
|
|
Investor Contact:Heather C. Luck, Chief
Financial OfficerFive Star Bancorp(916)
626-5008hluck@fivestarbank.com
Media Contact:Shelley R. Wetton, Chief
Marketing OfficerFive Star Bancorp(916)
284-7827swetton@fivestarbank.com
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