Five Star Bancorp Q1 2025 Earnings Call Transcript

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April 29, 2025
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Operator

Please note, this is a closed conference call and you are encouraged to listen via the webcast. After today's presentation, there will be an opportunity for those provided with a dial in number to ask Before we get started, we would like to remind you that today's meeting will include some forward looking statements within the meaning of applicable securities laws. These forward looking statements relate to, among other things, current plans, expectations, events and industry trends that may affect the company's future operating results and financial position. Such statements involve risks and uncertainties, and future activities and results may differ materially from these expectations. For a more complete discussion of the risks and uncertainties that may cause actual results to differ materially from the company's forward looking statements, please see the company's annual report on Form 10 ks for the year ended 12/31/2024, and in particular, the information set forth in Item 1A, Risk Factors.

Operator

Please refer to Slide two of the presentation, which includes disclaimers regarding forward looking statements, industry data, unaudited financial data and non GAAP financial information included in this presentation. Reconciliations of non GAAP financial measures to their most directly comparable GAAP measure figures are included in the appendix to the presentation. Please note this event is being recorded. I would now like to turn the presentation over to James Beckwith, Five Star Bancorp President and CEO. Please go ahead.

James Beckwith
James Beckwith
President & CEO at Five Star Bancorp

Thank you for joining us to review Five Star Bancorp's financial results for the first quarter of twenty twenty five. Joining me today is Heather Luck, Executive Vice President and Chief Financial Officer. Our comments today will refer to the financial information that was included in the earnings announcement released yesterday. To obtain a copy of the release, please visit our website at fivestarbank.com and click on the Investor Relations tab. The first quarter of twenty twenty five was a continuation of building strength in our historical markets as well as our expansion into the San Francisco Bay Area.

James Beckwith
James Beckwith
President & CEO at Five Star Bancorp

We added four more seasoned professionals to support our expansion into the San Francisco Bay Area and continue to add new core deposit accounts and relationships as seen in the increase of non wholesale deposits of $48,400,000 during the three months ended March 3125. In the first quarter, we maintained our ability to conservatively underwrite as evidenced by a 50.03 LTV on commercial real estate, manage expenses with our 42.58% efficiency ratio and deliver value to our shareholders with our $0.20 per share dividend that declared in the first quarter of twenty twenty five. Additionally, in the first quarter, we improved our net interest margin by nine basis points and grew our total loans, assets and deposits over prior periods. Total loans held for investment increased during the quarter by $89,100,000 or 2.52 percent from the prior quarter. Average loan yields increased by one basis point from the prior quarter to 6.02%.

James Beckwith
James Beckwith
President & CEO at Five Star Bancorp

The commercial real estate segment of the loan portfolio increased most significantly quarter over quarter from 80.75% of our loan portfolio excuse me, portfolio as of 12/31/2024 to 81.11% at 03/31/2025. Our commercial real estate concentration is set apart by the diversification within the portfolio and our ability to conservatively underwrite as evidenced by 50.03 LTV. Our pipeline continues to remain solid at the end of the first quarter of twenty twenty five within the verticals in which we have historically operated. Loan originations during the first quarter were $259,300,000 while payoffs and pay downs were $65,600,000 and $104,600,000 respectively. Asset quality continues to remain strong.

James Beckwith
James Beckwith
President & CEO at Five Star Bancorp

Non performing loans remained at 0.05% of loans held for investment from the end of the prior quarter to the end of the first quarter of twenty twenty five. At the end of the first quarter, the allowance for loan losses totaled $39,200,000 We recorded a $1,900,000 provision for credit losses during the first quarter of twenty twenty five, reflecting adjustments to expectations for credit losses based upon economic trends and forecasts. The ratio of the allowance for credit losses to loans held for investment was 1.08% at quarter end. Loans designated as substandard or doubtful totaled approximately $3,700,000 at the end of the quarter, an increase from $2,600,000 at the end of the previous quarter. During the first quarter, deposits increased by $178,400,000 or 5% as compared to the previous quarter.

James Beckwith
James Beckwith
President & CEO at Five Star Bancorp

The quarter over quarter increase was largely driven by increases in non interest bearing demand and substantially all types of interest bearing deposits. Partially offset by a decrease in interest bearing transaction deposits, non interest bearing deposits as a percent of total deposits decreased slightly to 24.99% at the end of the first quarter from 25.93% at the end of the prior quarter. As noted earlier, we are pleased we net non wholesale deposit inflows for the first three months ended March 2025. Our ability to grow deposits accounts supports our differentiated customer centric model that our customers trust and value as seen through the mix of high dollar accounts and the duration of certain customer relationships. We believe we have a reliable core deposit base.

James Beckwith
James Beckwith
President & CEO at Five Star Bancorp

To offer more detail of our deposit composition, I want to highlight that deposit relationships totaling greater than $5,000,000,000 constitute 60.87% of total deposits and the average age on these accounts was approximately 8.8 years as of 03/31/2025. Local agency deposits accounted for 22.4% of deposits as of 03/31/2025. Overall deposit balances have increased when compared to the prior quarter. Wholesale deposits, which we defined as broker deposits and California time deposit program deposits increased by $130,000,000 or 23.21% quarter over quarter. Non wholesale deposits increased by 48,400,000 or 1.61% quarter over quarter, driven by a $37,400,000 increase in non wholesale interest bearing deposits and an $11,000,000 increase in non interest bearing deposits.

James Beckwith
James Beckwith
President & CEO at Five Star Bancorp

Cost of total deposits was $2.48 basis points during the first quarter, a decrease of 10 basis points from the previous quarter. We continue to be well capitalized with all capital ratios well above regulatory thresholds for the quarter. Our common equity Tier one ratio decreased from 11.02% to 11% between 12/31/2024 and 03/31/2025. On April 17, our Board declared a cash dividend of $0.20 per share on the company's voting common stock expected to be paid on 05/12/2025 to shareholders of record as of 05/05/2025. On that note, I will hand it over to Heather to discuss the results of operations.

James Beckwith
James Beckwith
President & CEO at Five Star Bancorp

Heather?

Heather Luck
Heather Luck
Executive Vice President & CFO at Five Star Bancorp

Thank you, James, and hello everyone. Net income for the quarter was $13,100,000 return on average assets was 1.3% and return on average equity was 13.28%. Average loan yields for the quarter was 6.02% representing an increase of one basis point over the prior quarter. Our net interest margin was 3.45% for the quarter, while net interest margin for the prior quarter was 3.36% with lower average cost of deposits as the primary driver. As a result of changes in interest rates and other factors, our other comprehensive income was $700,000 during the three months ended 03/31/2025, as unrealized losses, net of tax effect, decreased on available for sale debt securities from $12,400,000 as of 12/31/2024 to $11,600,000 as of 03/31/2025.

Heather Luck
Heather Luck
Executive Vice President & CFO at Five Star Bancorp

Non interest income decreased to 1,400,000 in the first quarter from $1,700,000 in the previous quarter due primarily to a reduction in income received on equity investments in venture backed funds during the three months ended 03/31/2025. Non interest expense grew by 600,000 in the three months ended 03/31/2025 compared to the three months ended 12/31/2024, primarily due to increases in salaries and employee benefits, partially offset by decreases in advertising, promotional and other operating expenses during the quarter. Now that we've discussed the overall results of operations, I will hand it back to James to provide some closing remarks.

James Beckwith
James Beckwith
President & CEO at Five Star Bancorp

Thank you, Heather. I want to thank everyone for joining us as we discussed first quarter results. Five Star Bank has a reputation built on trust, speed to serve and certainty of execution, which support our clients' success. Our financial performance is the result of a truly differentiated customer experience, which continues to power the demand for Five Star Bank's relationship based services. We are very proud to have earned the trust of those who we serve, including our shareholders.

James Beckwith
James Beckwith
President & CEO at Five Star Bancorp

As we move into the second quarter of twenty twenty five, we are confident in the company's resilience and demonstrated ability to adapt to changing economic conditions and remain focused on the future and our long term strategy. We will continue to execute on our organic growth and disciplined business practices, which we believe will benefit our customers, employees, community and shareholders. We appreciate your time today. This concludes today's presentation. Now Heather and I will be happy to take any questions that you might have.

Operator

We will now begin the question and answer session. Today's first question comes from Andrew Terrell with Stephens. Please go ahead.

Andrew Terrell
Managing Director at Stephens Inc

Hey, good morning.

James Beckwith
James Beckwith
President & CEO at Five Star Bancorp

Hey, good morning, Andrew.

Andrew Terrell
Managing Director at Stephens Inc

Hey, just wanted maybe if I could start on loan growth. James, obviously, a very good quarter, especially given the backdrop of maybe some slower growth right now. I think you're tracking I think we talked about 8% or so loan growth last quarter. It looks like you're tracking little bit above that to start the year. Just I know you've got some tailwinds from a hiring standpoint.

Andrew Terrell
Managing Director at Stephens Inc

Maybe just refresh us on where you see loan growth shaking out for the year?

James Beckwith
James Beckwith
President & CEO at Five Star Bancorp

Well, I think we're a little more bullish than the last time we spoke, Andrew. We certainly have seen that in our pipelines and what we've been able to do so far in the second quarter. So, I think you're going to see a 10% to 12% loan growth here on out for the rest of the year. It could be higher. Andrew, we've got 36 BDOs working for us right now, 16 in San Francisco and 20 out here in the capital region in the North State.

James Beckwith
James Beckwith
President & CEO at Five Star Bancorp

So we've got a very experienced and I'm going to say aggressive sales force out there. And I think that's how we have been able to differentiate ourselves in the marketplace. So, I'm bullish on growth on both sides of the balance sheet, Andrew, and probably more bullish than I was the last time we spoke.

Andrew Terrell
Managing Director at Stephens Inc

Yes, that's great. I appreciate it. And then, I could tie it into some of the deposit commentary, maybe just want to understand if I look at the balance sheet in aggregate, I mean, you've got a really strong cash position. The deposit growth outpaced loan growth this quarter, but some of that was more wholesale and I would presume higher cost in nature. With all of that in context together and you obviously sound bullish on the deposit growth as well, but why bring on the maybe higher cost, more wholesale funding this quarter?

Andrew Terrell
Managing Director at Stephens Inc

And then just overall outlook for does that wholesale funding stick around? Do you expect to work that lower and core deposit do you think core deposit growth can match the loan growth?

James Beckwith
James Beckwith
President & CEO at Five Star Bancorp

Yes. We think core deposit growth will match the loan growth. So, we're not anticipating as we sit here today any additional wholesale funding. And we like to maintain 10% in cash, okay, and something less than 100% loan to deposit ratio. So, those are two parameters that I know they're just numbers, okay, but they have some meaning to us as we look at our franchise.

James Beckwith
James Beckwith
President & CEO at Five Star Bancorp

And our long term goals in terms of a fortress balance sheet is to bring those numbers down. And I think that as each quarter unfurls and the opportunities to adding new business, new relationships, new loans, sometimes it requires us to do spot funding, of which we have the ability to do it. We're also Andrew provides us an opportunity to take advantage of the declining rate environment and we're Heather, we're pretty tight in terms of our maturity schedules for our wholesale deposits and we keep them pretty like ninety days out.

Heather Luck
Heather Luck
Executive Vice President & CFO at Five Star Bancorp

We are. Yes. Yes, we've been able to just if you look at the wholesale book compared to last quarter compared to this quarter, just by keeping our those deposits short at both the State of California as well as on the brokerage side, we were able to roll that down by 24 basis points. So that's been a nice way to provide some liquidity while riding the yield curve down as well.

James Beckwith
James Beckwith
President & CEO at Five Star Bancorp

And we expect the beta of that to be 100%, right?

Heather Luck
Heather Luck
Executive Vice President & CFO at Five Star Bancorp

Yes.

James Beckwith
James Beckwith
President & CEO at Five Star Bancorp

And so that's something we look forward to if and when it happens. When that happens is, Andrew, I'll leave it up to your crystal ball.

Andrew Terrell
Managing Director at Stephens Inc

Well, I bank too much on that one, James. But I appreciate all the color there. If I could just ask one more question. There's obviously a lot of conversations going on around tariffs and slowdown in economic growth, specifically some concerns around some of the lower end of the consumer right now given some of those tariff impacts. Maybe just be helpful to remind us how you think the RV manufactured housing business performs in that type of backdrop?

Andrew Terrell
Managing Director at Stephens Inc

Then more broadly, what kind of work have you guys done in terms of analyzing the portfolio to determine where you could or could not see credit stress? Just any extra thoughts there would be helpful.

James Beckwith
James Beckwith
President & CEO at Five Star Bancorp

That'd be great. We thought when this first came up a month or so ago, six weeks ago on what did President Trump call it? What did he call it?

Heather Luck
Heather Luck
Executive Vice President & CFO at Five Star Bancorp

Liberation Day.

James Beckwith
James Beckwith
President & CEO at Five Star Bancorp

Liberation Day. We looked at our portfolio and given the concentrations we have in our mobile home park and RV park, we feel comfortable about that. They operate slightly different, but if you looked at how those books performed or those asset classes performed over the last Great Recession, they were clearly the best performing asset class amongst all CRE. I mean, it wasn't even close. So, we feel comfortable about where that stands.

James Beckwith
James Beckwith
President & CEO at Five Star Bancorp

There are some if I look at the rest of the portfolio, we do have a consumer book that we bought from BHG. We like that position that BHG has provided us and we're not overly concerned about it at this particular point. And there is uncertainty with respect to what's out there from at the consumer level. We don't know how that's going to shake out. But we are a CRE shop and will tariffs ultimately have some impact on us?

James Beckwith
James Beckwith
President & CEO at Five Star Bancorp

Yes, I mean, would be imprudent to think that they wouldn't. But I think relatively speaking, our bank is in a better position given the construct of our loan portfolio than other shops are.

Andrew Terrell
Managing Director at Stephens Inc

Yes. Well, I appreciate your perspective. Thanks for taking the questions.

Operator

Next question comes from Gary Tenner with D. A. Davidson. Please go ahead.

Gary Tenner
MD & Senior Research Analyst at D.A. Davidson Companies

Thanks. Good morning.

James Beckwith
James Beckwith
President & CEO at Five Star Bancorp

A little

Gary Tenner
MD & Senior Research Analyst at D.A. Davidson Companies

bit of a follow-up to that last series of comments. In terms of the allowance and increase this quarter, could you go into a little more color as to kind of changes you made in model that drove that? Any change in weightings or other factors you used in terms of increasing the allowance?

James Beckwith
James Beckwith
President & CEO at Five Star Bancorp

Sure. Growth of the portfolio had a significant impact. And our model, given how the ACL works here is that it's extremely sensitive to any movement in terms of GDP, in terms of unemployment. So Heather?

Heather Luck
Heather Luck
Executive Vice President & CFO at Five Star Bancorp

Yes. So really, to your question there, so we really base our economic forecast model just on the FOMC published models there and that was refreshed as of February. And so we do anticipate that we will likely have some more increases in our economic reserve requirement once we get into Q2 and once we start to see some revisions to the economic model there. From that perspective though, like nothing really from a weighting perspective that really drove the increase in the reserves. It really just was a function of the revised forecast from FOMC, the growth as well as the net charge off of about $700,000

James Beckwith
James Beckwith
President & CEO at Five Star Bancorp

So, there is some sensitivity with respect to the numbers based upon what Federal Reserve is going to tell us. And I don't think we're unlike anybody else. I think a lot of us are using the same construction of ACL. So, we anticipate there will be some impact. We'll see what happens next week.

James Beckwith
James Beckwith
President & CEO at Five Star Bancorp

Yes. In terms of any model changes they may have that comes out of these meetings. And so we'll just have to see how that goes. We like how we're positioned right now because of our low level of non performers. So we'll just have to see how that goes.

James Beckwith
James Beckwith
President & CEO at Five Star Bancorp

I think I have Gary, I have seen people writing on sensitivity in our reserving methodologies to what Federal Reserve will come up with. But again, relatively speaking, we're all in the same boat.

Gary Tenner
MD & Senior Research Analyst at D.A. Davidson Companies

Great. I appreciate the color on that. And then second question, in terms of the loan production, I appreciate the bullish comments on loan growth for the rest of the year. Can you talk a little bit about pricing? We've been hearing a lot over the last several weeks about pretty intent loan pricing competition seems to have picked up.

Gary Tenner
MD & Senior Research Analyst at D.A. Davidson Companies

So any comments or thoughts on that would be appreciated.

James Beckwith
James Beckwith
President & CEO at Five Star Bancorp

Well, I think that we have always worked in a very competitive environment. Spreads have relatively speaking have come in a little bit, especially in the multifamily side. You're seeing some pretty tight spreads. We're still able to get decent pricing when you look at our aggregate loan production, anywhere between 185 over the five all the way to $3.50 over the five. So, is a if you average everything out, we like where our spreads are.

James Beckwith
James Beckwith
President & CEO at Five Star Bancorp

There's no shape to the yield curve. That's not ideal for us folks that are in this business. If you look from funds out to the five year. So, it's really based upon what spreads are going to tell us. And we're getting them.

James Beckwith
James Beckwith
President & CEO at Five Star Bancorp

We're getting something that's pretty decent. Now, having said that, Gary, we still we're seeing a lot of repricing that's happened in the portfolio as those credits that we put on five years ago reprice. In fact, we had a pretty big one in April reprice, and that went up about two twenty basis points. Now, the client was easily going to handle that and we obviously underwrite and re underwrite based upon changes in interest rate environments. And we haven't seen anything that's popped up yet that gives us concern.

James Beckwith
James Beckwith
President & CEO at Five Star Bancorp

We are looking at it very intently it relates to impact of repricing. So, right now, where we sit is that we're benefiting from it and with really not no actual concerns. Now, we know it's out there as a risk, But as we sit here right now, we think we're in pretty good shape.

Gary Tenner
MD & Senior Research Analyst at D.A. Davidson Companies

Great. Appreciate the color.

Operator

The next question is from David Feaster with Raymond James. Please go ahead.

Liam Coohill
Liam Coohill
Senior Equity Research Associate at Raymond James

Hi, guys. This is Liam Coohill on for David Feaster. How are you doing today?

James Beckwith
James Beckwith
President & CEO at Five Star Bancorp

Doing great, Liam. I guess David is flying around someplace.

Liam Coohill
Liam Coohill
Senior Equity Research Associate at Raymond James

He is. He's always out and about. But I did want to ask on appreciate all the color on asset quality and tariff impacts, but kind of on the more forward part of the book, I mean originations have been really encouraging, but what have you been seeing from customers in this environment? Is there more of a hesitancy to borrow or is there anything you would note there?

James Beckwith
James Beckwith
President & CEO at Five Star Bancorp

Well, I think that there's a tremendous amount of economic opportunity that exists in certain asset classes still. Our basic engine of MHC seems to be going very strong. There's still these underperforming assets that are professional clients are still very active in terms of buying. So we're still seeing a strong environment on purchase financing and given the depth and breadth of that our penetration in that market, we don't see demand necessarily waning. But in other aspects, it's and here's the interesting thing, Liam.

James Beckwith
James Beckwith
President & CEO at Five Star Bancorp

We just have a lot of salespeople, okay. And I can't maybe stress that enough in terms of its impact, in terms of our ability to generate new relationships. And very purposely, we have built that team, if you will. And relative to other folks in our business, I'm going to and I don't know this empirically, you may, but we just have more people in that function. And so, you want to expect us to grow at an above average rate given our attentions in terms of our sales force.

Liam Coohill
Liam Coohill
Senior Equity Research Associate at Raymond James

Thank you. That makes a lot of sense. And I guess to the point of hiring more people, I mean, it's really encouraging to see the growth in the San Francisco office. Just wondering, have you seen a difference in loan demand across the footprint? I know especially you've been investing in San Francisco recently, but has that market been a little bit more challenging than the capital region?

Liam Coohill
Liam Coohill
Senior Equity Research Associate at Raymond James

Just curious on some thoughts there.

James Beckwith
James Beckwith
President & CEO at Five Star Bancorp

No, I wouldn't say it's been more challenging. I think relatively speaking, we've gone up market in terms of the sophistication of clientele in the Bay Area. We've run into some great operators that we're very happy with, whether they're in the student housing business or just as CRE experienced investors and or they're operators of businesses. So I'm I don't I wouldn't say that we're at all challenged with respect to what's going on in the Bay Area. In fact, those opportunities continue to come up and we're on top of them.

James Beckwith
James Beckwith
President & CEO at Five Star Bancorp

We've got a very, I'm going to say energetic sales force down there that are not only bringing their book over that they once had it, let's say, at other institutions, but also we're seeing that second derivative of new business that previously were not banked by those individuals coming to us because of the reputation that we're building down there. And it's exciting to see that. And I think that's just going to continue. And we're out competing folks, again, because we just have more people, okay. We're very niche and very focused down there, as we are across our entire platform.

James Beckwith
James Beckwith
President & CEO at Five Star Bancorp

So, we're seeing a lot of activity right now, not only in the Bay Area, but also in the Capital Region and in the North State.

Liam Coohill
Liam Coohill
Senior Equity Research Associate at Raymond James

That's great to hear. Just one last one for me would be on the small business borrowers. Have you seen what have you been seeing from them recently in terms of their response to the broader economic environment and uncertainty?

James Beckwith
James Beckwith
President & CEO at Five Star Bancorp

Well, we touched that I think through our SBA book and that's tough. Frankly, that's tough. They have a high cost of borrowing given the spreads that are on that those lending those loans that they have and given where the yield curve is, know, that's hard. A lot of them, their businesses are fundamentally driven by selling through, I'm going to say fulfillment platforms, which are fed in a lot of cases by product from not necessarily generated in The United States. So, know that there's issues there.

James Beckwith
James Beckwith
President & CEO at Five Star Bancorp

Now, historically, we've had always had high degree of reserves against that book. So, nothing is surprising us at all.

Heather Luck
Heather Luck
Executive Vice President & CFO at Five Star Bancorp

Yes, we're at almost 9% per reserve for that book.

James Beckwith
James Beckwith
President & CEO at Five Star Bancorp

Yes.

James Beckwith
James Beckwith
President & CEO at Five Star Bancorp

But that is, I was going to say that's really principally how we touch small business. So, in terms of some of the Ag business, have seen, I think time will tell what that's going to look like on the rice side, on the Walnut side, on the almond side. There has been some rebounding on the Walnut side. We don't have that big of a book. And so, we'll see what impact tariffs are going to have on this, but and you just don't know how it's going to work out.

James Beckwith
James Beckwith
President & CEO at Five Star Bancorp

And I know that, that means that, you know, everybody's in a wait and see mode, right?

Liam Coohill
Liam Coohill
Senior Equity Research Associate at Raymond James

No, I We're trying to

James Beckwith
James Beckwith
President & CEO at Five Star Bancorp

talk ourselves into a recession. Although there are some media outlets that are trying to talk everybody into recession. The only thing we can do is choose not to listen to them.

Liam Coohill
Liam Coohill
Senior Equity Research Associate at Raymond James

Yes, that's true. Thank you guys so much for the color on your markets and on some of the subcategories. I'll step back.

James Beckwith
James Beckwith
President & CEO at Five Star Bancorp

You bet. Thank you, Liam.

Operator

This concludes our question and answer session. I would like to turn the conference back over to management for any closing remarks.

James Beckwith
James Beckwith
President & CEO at Five Star Bancorp

Thank

James Beckwith
James Beckwith
President & CEO at Five Star Bancorp

you. Five Star Bancorp is expected to continue on our current path of growth as we execute on strategic initiatives, which include growing our verticals and geographies, while attracting and retaining talent. Our people, technology, operating efficiencies, conservative underwriting practices and expense management have also contributed to the successes we share with our employees and shareholders. These successes include numerous ratings and awards. In the first quarter of twenty twenty five, '5 Star Bancorp was ranked third on the S and P Global Market Intelligence List of best performing community banks in the nation among banks with assets between $3,000,000,000 and $10,000,000,000 The company was also listed among the Sacramento Business Journal's fastest growing banks by deposits in the Sacramento area.

James Beckwith
James Beckwith
President & CEO at Five Star Bancorp

And bank executives were honored among the Sacramento Business Journal's Power 100 list, Women Who Mean Business and Champions of D, E and I, as well as the San Francisco Business Times 40 Under 40 and Newsmaker one hundred list. The company has also an employee named as the Reading Chamber of Commerce Ambassador of the Year. Five Star Bancorp continues to be a driving force for economic development, a trusted resource for our customers and committed advocate for our community. We look forward to speaking with you again in July to discuss the earnings for the second quarter of twenty twenty five. Have a great day and thank you for listening.

Operator

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect your lines.

Executives
    • James Beckwith
      James Beckwith
      President & CEO
    • Heather Luck
      Heather Luck
      Executive Vice President & CFO
Analysts
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Key Takeaways

  • Five Star achieved 2.52% loan growth this quarter as loans held for investment rose by $89.1 million to an average yield of 6.02%, while net interest margin improved nine basis points to 3.45% and total deposits grew 5% ($178.4 million).
  • Asset quality remained strong with non-performing loans steady at 0.05% of the portfolio, an allowance for loan losses of $39.2 million (1.08% of loans), and a modest provision for credit losses of $1.9 million.
  • Non-wholesale core deposits increased by $48.4 million, supported by a 60.9% share of relationships over $5 million (averaging 8.8 years) and a declining cost of total deposits to 2.48 basis points—down ten basis points quarter-over-quarter.
  • The bank declared a first-quarter dividend of $0.20 per share and delivered net income of $13.1 million, driving returns of 1.3% ROAA and 13.28% ROAE.
  • Five Star continues to invest in strategic growth, adding four seasoned professionals in the San Francisco Bay Area, maintaining a conservative underwriting stance (50.03% LTV on CRE), and sustaining an efficiency ratio of 42.58%.
AI Generated. May Contain Errors.
Earnings Conference Call
Five Star Bancorp Q1 2025
00:00 / 00:00

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