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 $10.6 million for the three months ended
March 31, 2024, as compared to $10.8 million for the three
months ended December 31, 2023 and $13.2 million for the three
months ended March 31, 2023.
First 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) |
March 31,2024 |
|
December 31,2023 |
|
March 31,2023 |
Return on average assets (“ROAA”) |
|
1.22 |
% |
|
|
1.26 |
% |
|
|
1.65 |
% |
Return on average equity
(“ROAE”) |
|
14.84 |
% |
|
|
15.45 |
% |
|
|
20.94 |
% |
Pre-tax income |
$ |
14,961 |
|
|
$ |
15,151 |
|
|
$ |
18,501 |
|
Pre-tax, pre-provision
income(1) |
|
15,861 |
|
|
|
15,951 |
|
|
|
19,401 |
|
Net income |
|
10,631 |
|
|
|
10,799 |
|
|
|
13,161 |
|
Basic earnings per common
share |
$ |
0.62 |
|
|
$ |
0.63 |
|
|
$ |
0.77 |
|
Diluted earnings per common
share |
|
0.62 |
|
|
|
0.63 |
|
|
|
0.77 |
|
Weighted average basic common
shares outstanding |
|
17,190,867 |
|
|
|
17,175,445 |
|
|
|
17,150,174 |
|
Weighted average diluted
common shares outstanding |
|
17,272,994 |
|
|
|
17,193,114 |
|
|
|
17,194,884 |
|
Shares outstanding at end of
period |
|
17,353,251 |
|
|
|
17,256,989 |
|
|
|
17,258,904 |
|
(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:
“In the first quarter of 2024, we announced the
launch and pricing of an underwritten public offering of 3,450,000
shares of our common stock with the intention of using the net
proceeds for general corporate purposes, to support our continued
growth, and for working capital. We are very pleased that the
offering, which closed on April 2, 2024, was successful, which
is a testimony to the strength of our organization and our
reputation for providing a differentiated approach to
purpose-driven banking. Following this offering, we look forward to
the continued execution of our organic growth strategy as we focus
on the San Francisco Bay Area market. We have hired seasoned
professionals who are committed to maintaining and enhancing the
Bank’s reputation, which was built on trust, a speed to serve, and
a certainty of execution in support of our clients’ success.
While there was continued margin compression in
the first quarter, it is slowing compared to prior quarters. Our
reliance on wholesale deposits decreased by $183.1 million, or
50.85%, during the first quarter of 2024 as a result of our
strategy to grow less costly, non-wholesale deposits, which
increased by $112.0 million, or 4.20%, during the first
quarter. The continuation of disciplined business practices and
expense management have resulted in an efficiency ratio of
44.50%.
In the first quarter, we were pleased to have
declared another cash dividend of $0.20 per share, which
exemplifies 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. As we lean into 2024, we expect our forward momentum
and accelerated growth to benefit our shareholders, employees,
clients, and community.”
- The Company’s
San Francisco Bay Area team increased to 15 employees who generated
deposit balances totaling $96.2 million at March 31, 2024, an
increase of $22.5 million from December 31, 2023.
- Cash and cash
equivalents were $185.3 million, representing 6.27% of total
deposits at March 31, 2024, as compared to 10.62% at
December 31, 2023.
- Total deposits
decreased by $71.1 million, or 2.35%, during the three months
ended March 31, 2024, primarily due to significant decreases
in wholesale deposits, which the Company defines as brokered
deposits and public time deposits. During the three months ended
March 31, 2024, brokered deposits decreased by $58.1 million,
or 58.06%, and public time deposits decreased by $125.0 million, or
48.08%. Non-wholesale deposits increased by $112.0 million, or
4.20%, during the same period.
- The Company’s
short-term borrowings decreased by $50.0 million, or 29.41%, from
$170.0 million at December 31, 2023 to $120.0 million at
March 31, 2024.
- Consistent,
disciplined management of expenses contributed to our efficiency
ratio of 44.50% for the three months ended March 31,
2024.
- For the three
months ended March 31, 2024, net interest margin was 3.14%, as
compared to 3.19% for the three months ended December 31, 2023
and 3.75% for the three months ended March 31, 2023. The
effective Federal Funds rate remained at 5.33% as of March 31,
2024 and December 31, 2023 and increased from 4.83% as of
March 31, 2023.
- Other
comprehensive loss was $0.7 million during the three months ended
March 31, 2024. Unrealized losses, net of tax effect, on
available-for-sale securities were $12.4 million as of
March 31, 2024. Total held-to-maturity and available-for-sale
securities represented 0.09% and 3.10% of total interest-earning
assets, respectively, as of March 31, 2024.
- The Company’s
common equity Tier 1 capital ratio was 9.13% and 9.07% as of
March 31, 2024 and December 31, 2023, respectively. The
Bank continues to meet all requirements to be considered
“well-capitalized” under applicable regulatory guidelines.
- Loan and deposit
growth in the three months ended March 31, 2024 was as
follows:
(in thousands) |
March 31,2024 |
|
December 31,2023 |
|
$ Change |
|
% Change |
Loans held for investment |
$ |
3,104,130 |
|
$ |
3,081,719 |
|
$ |
22,411 |
|
|
0.73 |
% |
Non-interest-bearing deposits |
|
817,388 |
|
|
831,101 |
|
|
(13,713 |
) |
|
(1.65 |
)% |
Interest-bearing deposits |
|
2,138,384 |
|
|
2,195,795 |
|
|
(57,411 |
) |
|
(2.61 |
)% |
|
|
|
|
|
|
|
|
(in thousands) |
March 31,2024 |
|
March 31,2023 |
|
$ Change |
|
% Change |
Loans held for investment |
$ |
3,104,130 |
|
$ |
2,869,848 |
|
$ |
234,282 |
|
|
8.16 |
% |
Non-interest-bearing deposits |
|
817,388 |
|
|
836,673 |
|
|
(19,285 |
) |
|
(2.30 |
)% |
Interest-bearing deposits |
|
2,138,384 |
|
|
2,083,733 |
|
|
54,651 |
|
|
2.62 |
% |
-
The ratio of nonperforming loans to loans held for investment at
period end remained at 0.06% at March 31, 2024 and
December 31, 2023.
- 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
March 31, 2024. The Company’s Board of Directors subsequently
declared another cash dividend of $0.20 per share on April 18,
2024, which the Company expects to pay on May 13, 2024 to
shareholders of record as of May 6, 2024.
Summary Results
Three months ended March 31, 2024, as
compared to three months ended December 31, 2023
The Company’s net income was $10.6 million for
the three months ended March 31, 2024, as compared to $10.8
million for the three months ended December 31, 2023. Net
interest income increased by $0.1 million as increases in interest
income more than offset increases in interest expense, with an
increase in the average balance of interest-earning assets as the
leading driver. The provision for credit losses increased by $0.1
million as increases in quantitative reserves more than offset
reductions in reserves for qualitative factors in the three months
ended March 31, 2024, as compared to the three months ended
December 31, 2023. Non-interest income decreased by $0.1
million, primarily due to a reduction in gains from distributions
on investments in venture-backed funds and the recognition of rate
lock and swap referral fees, partially offset by a reduction in net
losses on the sale of securities during the three months ended
March 31, 2024, as compared to the three months ended
December 31, 2023. Non-interest expense increased by $53.0
thousand as decreases in advertising, promotional, and other
operating expenses were more than offset by increases in all other
expenses.
Three months ended March 31, 2024, as
compared to three months ended March 31, 2023
The Company’s net income was $10.6 million for
the three months ended March 31, 2024, as compared to $13.2
million for the three months ended March 31, 2023. Net
interest income decreased by $2.4 million as increases in interest
expense exceeded increases in interest income, with increases in
rates paid on interest-bearing liabilities as the leading driver.
The provision for credit losses remained at $0.9 million as
increases in quantitative reserves offset reductions in reserves
for qualitative factors in the three months ended March 31,
2024, as compared to the three months ended March 31, 2023.
Non-interest income increased by $0.5 million, primarily due to an
increase in gains from distributions on investments in
venture-backed funds, Federal Home Loan Bank of San Francisco
(“FHLB”) dividend income, and the recognition of rate lock and swap
referral fees during the three months ended March 31, 2024, as
compared to the three months ended March 31, 2023.
Non-interest expense increased by $1.6 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) |
|
March 31,2024 |
|
December 31,2023 |
|
$ Change |
|
% Change |
Selected operating data: |
|
|
|
|
|
|
|
|
Net interest income |
|
$ |
26,744 |
|
|
$ |
26,678 |
|
|
$ |
66 |
|
|
0.25 |
% |
Provision for credit losses |
|
|
900 |
|
|
|
800 |
|
|
|
100 |
|
|
12.50 |
% |
Non-interest income |
|
|
1,833 |
|
|
|
1,936 |
|
|
|
(103 |
) |
|
(5.32 |
)% |
Non-interest expense |
|
|
12,716 |
|
|
|
12,663 |
|
|
|
53 |
|
|
0.42 |
% |
Pre-tax income |
|
|
14,961 |
|
|
|
15,151 |
|
|
|
(190 |
) |
|
(1.25 |
)% |
Provision for income taxes |
|
|
4,330 |
|
|
|
4,352 |
|
|
|
(22 |
) |
|
(0.51 |
)% |
Net income |
|
$ |
10,631 |
|
|
$ |
10,799 |
|
|
$ |
(168 |
) |
|
(1.56 |
)% |
Earnings per common
share: |
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.62 |
|
|
$ |
0.63 |
|
|
$ |
(0.01 |
) |
|
(1.59 |
)% |
Diluted |
|
|
0.62 |
|
|
|
0.63 |
|
|
|
(0.01 |
) |
|
(1.59 |
)% |
Performance and other
financial ratios: |
|
|
|
|
|
|
|
|
ROAA |
|
|
1.22 |
% |
|
|
1.26 |
% |
|
|
|
|
ROAE |
|
|
14.84 |
% |
|
|
15.45 |
% |
|
|
|
|
Net interest margin |
|
|
3.14 |
% |
|
|
3.19 |
% |
|
|
|
|
Cost of funds |
|
|
2.62 |
% |
|
|
2.50 |
% |
|
|
|
|
Efficiency ratio |
|
|
44.50 |
% |
|
|
44.25 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
|
|
(in thousands, except per
share data) |
|
March 31,2024 |
|
March 31,2023 |
|
$ Change |
|
% Change |
Selected operating data: |
|
|
|
|
|
|
|
|
Net interest income |
|
$ |
26,744 |
|
|
$ |
29,148 |
|
|
$ |
(2,404 |
) |
|
(8.25 |
)% |
Provision for credit losses |
|
|
900 |
|
|
|
900 |
|
|
|
— |
|
|
— |
% |
Non-interest income |
|
|
1,833 |
|
|
|
1,371 |
|
|
|
462 |
|
|
33.70 |
% |
Non-interest expense |
|
|
12,716 |
|
|
|
11,118 |
|
|
|
1,598 |
|
|
14.37 |
% |
Pre-tax income |
|
|
14,961 |
|
|
|
18,501 |
|
|
|
(3,540 |
) |
|
(19.13 |
)% |
Provision for income taxes |
|
|
4,330 |
|
|
|
5,340 |
|
|
|
(1,010 |
) |
|
(18.91 |
)% |
Net income |
|
$ |
10,631 |
|
|
$ |
13,161 |
|
|
$ |
(2,530 |
) |
|
(19.22 |
)% |
Earnings per common
share: |
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.62 |
|
|
$ |
0.77 |
|
|
$ |
(0.15 |
) |
|
(19.48 |
)% |
Diluted |
|
|
0.62 |
|
|
|
0.77 |
|
|
|
(0.15 |
) |
|
(19.48 |
)% |
Performance and other
financial ratios: |
|
|
|
|
|
|
|
|
ROAA |
|
|
1.22 |
% |
|
|
1.65 |
% |
|
|
|
|
ROAE |
|
|
14.84 |
% |
|
|
20.94 |
% |
|
|
|
|
Net interest margin |
|
|
3.14 |
% |
|
|
3.75 |
% |
|
|
|
|
Cost of funds |
|
|
2.62 |
% |
|
|
1.53 |
% |
|
|
|
|
Efficiency ratio |
|
|
44.50 |
% |
|
|
36.43 |
% |
|
|
|
|
|
Balance Sheet Summary
(in thousands) |
|
March 31,2024 |
|
December 31,2023 |
|
$ Change |
|
% Change |
Selected financial condition
data: |
|
|
|
|
|
|
|
|
Total assets |
|
$ |
3,476,360 |
|
$ |
3,593,125 |
|
$ |
(116,765 |
) |
|
(3.25 |
)% |
Cash and cash equivalents |
|
|
185,325 |
|
|
321,576 |
|
|
(136,251 |
) |
|
(42.37 |
)% |
Total loans held for investment |
|
|
3,104,130 |
|
|
3,081,719 |
|
|
22,411 |
|
|
0.73 |
% |
Total investments |
|
|
108,006 |
|
|
111,160 |
|
|
(3,154 |
) |
|
(2.84 |
)% |
Total liabilities |
|
|
3,183,780 |
|
|
3,307,351 |
|
|
(123,571 |
) |
|
(3.74 |
)% |
Total deposits |
|
|
2,955,772 |
|
|
3,026,896 |
|
|
(71,124 |
) |
|
(2.35 |
)% |
Subordinated notes, net |
|
|
73,786 |
|
|
73,749 |
|
|
37 |
|
|
0.05 |
% |
Total shareholders’ equity |
|
|
292,580 |
|
|
285,774 |
|
|
6,806 |
|
|
2.38 |
% |
-
Insured and collateralized deposits were approximately $1.9
billion, representing approximately 63.02% of total deposits as of
March 31, 2024. Net uninsured and uncollateralized deposits
were approximately $1.1 billion as of March 31, 2024.
- Commercial and
consumer deposit accounts constituted approximately 76% of total
deposits. Deposit relationships of at least $5 million represented
approximately 58% of total deposits and had an average age of
approximately 8.64 years as of March 31, 2024.
- Cash and cash
equivalents as of March 31, 2024 were $185.3 million,
representing 6.27% of total deposits at March 31, 2024, as
compared to 10.62% as of December 31, 2023.
- Total liquidity
(consisting of cash and cash equivalents and unused and immediately
available borrowing capacity as set forth below) was approximately
$1.5 billion as of March 31, 2024.
|
|
March 31, 2024 |
|
Available |
(in thousands) |
|
Line of Credit |
|
Letters of Credit Issued |
|
Borrowings |
|
FHLB advances |
|
$ |
1,002,910 |
|
$ |
571,500 |
|
$ |
20,000 |
|
$ |
411,410 |
Federal Reserve Discount
Window |
|
|
807,143 |
|
|
— |
|
|
100,000 |
|
|
707,143 |
Correspondent bank lines of
credit |
|
|
175,000 |
|
|
— |
|
|
— |
|
|
175,000 |
Cash and cash equivalents |
|
|
— |
|
|
— |
|
|
— |
|
|
185,325 |
Total |
|
$ |
1,985,053 |
|
$ |
571,500 |
|
$ |
120,000 |
|
$ |
1,478,878 |
|
The decrease in total assets from
December 31, 2023 to March 31, 2024 was primarily due to
a $136.3 million decrease in cash and cash equivalents,
partially offset by a $22.4 million increase in total
loans held for investment. The decrease in cash and cash
equivalents primarily resulted from net cash used in financing and
investing activities of $124.6 million and $11.9 million,
respectively, partially offset by net cash provided from operating
activities of $0.2 million. The $22.4 million increase in total
loans held for investment between December 31, 2023 and
March 31, 2024 was a result of $149.9 million in loan
originations, partially offset by $77.2 million and $50.3 million
in loan payoffs and paydowns, respectively.
The decrease in total liabilities from
December 31, 2023 to March 31, 2024 was primarily
attributable to decreases in deposits and other borrowings
of $71.1 million and $50.0 million, respectively. The decrease
in deposits was largely due to decreases in wholesale deposits,
interest-bearing demand deposits, and non-interest-bearing demand
deposits of $183.1 million, $24.6 million, and $13.7 million,
respectively, partially offset by an increase in money market
deposits of $150.6 million.
The increase in total shareholders’ equity from
December 31, 2023 to March 31, 2024 was primarily a
result of net income recognized of $10.6 million, partially offset
by $3.5 million in cash distributions paid during the period and an
increase of $0.7 million in accumulated other comprehensive
loss.
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) |
|
March 31,2024 |
|
December 31,2023 |
|
$ Change |
|
% Change |
Interest and fee income |
|
$ |
47,541 |
|
|
$ |
46,180 |
|
|
$ |
1,361 |
|
|
2.95 |
% |
Interest expense |
|
|
20,797 |
|
|
|
19,502 |
|
|
|
1,295 |
|
|
6.64 |
% |
Net interest income |
|
$ |
26,744 |
|
|
$ |
26,678 |
|
|
$ |
66 |
|
|
0.25 |
% |
Net interest margin |
|
|
3.14 |
% |
|
|
3.19 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
|
|
(in thousands) |
|
March 31,2024 |
|
March 31,2023 |
|
$ Change |
|
% Change |
Interest and fee income |
|
$ |
47,541 |
|
|
$ |
40,311 |
|
|
$ |
7,230 |
|
|
17.94 |
% |
Interest expense |
|
|
20,797 |
|
|
|
11,163 |
|
|
|
9,634 |
|
|
86.30 |
% |
Net interest income |
|
$ |
26,744 |
|
|
$ |
29,148 |
|
|
$ |
(2,404 |
) |
|
(8.25 |
)% |
Net interest margin |
|
|
3.14 |
% |
|
|
3.75 |
% |
|
|
|
|
|
The following table shows the components of net
interest income and net interest margin for the quarterly periods
indicated:
|
|
Three months ended |
|
|
March 31, 2024 |
|
December 31, 2023 |
|
March 31, 2023 |
(in thousands) |
|
AverageBalance |
|
Interest Income/Expense |
|
Yield/ Rate |
|
AverageBalance |
|
Interest Income/Expense |
|
Yield/ Rate |
|
AverageBalance |
|
Interest Income/Expense |
|
Yield/ Rate |
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-earning deposits in banks |
|
$ |
233,002 |
|
$ |
3,102 |
|
5.35 |
% |
|
$ |
157,775 |
|
$ |
2,100 |
|
5.28 |
% |
|
$ |
200,541 |
|
$ |
2,167 |
|
4.38 |
% |
Investment securities |
|
|
109,177 |
|
|
653 |
|
2.41 |
% |
|
|
106,483 |
|
|
651 |
|
2.43 |
% |
|
|
119,489 |
|
|
650 |
|
2.21 |
% |
Loans held for investment and sale |
|
|
3,082,290 |
|
|
43,786 |
|
5.71 |
% |
|
|
3,055,042 |
|
|
43,429 |
|
5.64 |
% |
|
|
2,836,070 |
|
|
37,494 |
|
5.36 |
% |
Total interest-earning assets |
|
|
3,424,469 |
|
|
47,541 |
|
5.58 |
% |
|
|
3,319,300 |
|
|
46,180 |
|
5.52 |
% |
|
|
3,156,100 |
|
|
40,311 |
|
5.18 |
% |
Interest receivable and other assets, net |
|
|
93,983 |
|
|
|
|
|
|
80,360 |
|
|
|
|
|
|
69,253 |
|
|
|
|
Total assets |
|
$ |
3,518,452 |
|
|
|
|
|
$ |
3,399,660 |
|
|
|
|
|
$ |
3,225,353 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and shareholders’ equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing demand |
|
$ |
300,325 |
|
$ |
1,126 |
|
1.51 |
% |
|
$ |
291,967 |
|
$ |
1,091 |
|
1.48 |
% |
|
$ |
379,593 |
|
$ |
433 |
|
0.46 |
% |
Savings |
|
|
124,561 |
|
|
861 |
|
2.78 |
% |
|
|
130,915 |
|
|
891 |
|
2.70 |
% |
|
|
155,233 |
|
|
545 |
|
1.42 |
% |
Money market |
|
|
1,410,264 |
|
|
12,155 |
|
3.47 |
% |
|
|
1,347,111 |
|
|
10,824 |
|
3.19 |
% |
|
|
1,087,122 |
|
|
5,436 |
|
2.03 |
% |
Time |
|
|
429,586 |
|
|
5,369 |
|
5.03 |
% |
|
|
417,434 |
|
|
5,322 |
|
5.06 |
% |
|
|
300,952 |
|
|
2,964 |
|
3.99 |
% |
Subordinated debt and other borrowings |
|
|
82,775 |
|
|
1,286 |
|
6.25 |
% |
|
|
88,401 |
|
|
1,374 |
|
6.16 |
% |
|
|
125,691 |
|
|
1,785 |
|
5.76 |
% |
Total interest-bearing liabilities |
|
|
2,347,511 |
|
|
20,797 |
|
3.56 |
% |
|
|
2,275,828 |
|
|
19,502 |
|
3.40 |
% |
|
|
2,048,591 |
|
|
11,163 |
|
2.21 |
% |
Demand accounts |
|
|
842,105 |
|
|
|
|
|
|
821,651 |
|
|
|
|
|
|
901,491 |
|
|
|
|
Interest payable and other liabilities |
|
|
40,730 |
|
|
|
|
|
|
24,886 |
|
|
|
|
|
|
20,344 |
|
|
|
|
Shareholders’ equity |
|
|
288,106 |
|
|
|
|
|
|
277,295 |
|
|
|
|
|
|
254,927 |
|
|
|
|
Total liabilities & shareholders’ equity |
|
$ |
3,518,452 |
|
|
|
|
|
$ |
3,399,660 |
|
|
|
|
|
$ |
3,225,353 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest spread |
|
|
|
|
|
2.02 |
% |
|
|
|
|
|
2.12 |
% |
|
|
|
|
|
2.97 |
% |
Net interest income/margin |
|
|
|
$ |
26,744 |
|
3.14 |
% |
|
|
|
$ |
26,678 |
|
3.19 |
% |
|
|
|
$ |
29,148 |
|
3.75 |
% |
|
Net interest income during the three months
ended March 31, 2024 increased $66.0 thousand compared to the
three months ended December 31, 2023. Net interest margin
decreased 5 basis points compared to the prior quarter. Interest
income increased $1.4 million compared to the prior quarter due to
increases in interest rates on and average balances of both
interest-earning deposits in banks and loans. The average yield on
interest-earning deposits in banks increased 7 basis points
compared to the prior quarter, while average balances increased
47.68%. Average loan yields increased 7 basis points compared to
the prior quarter, while average balances increased 0.89%. The
increase in interest income compared to the prior quarter was
partially offset by an additional $1.3 million in interest expense.
The cost of interest-bearing deposits increased 17 basis points
compared to the prior quarter, while average balances increased
3.53%.
As compared to the three months ended
March 31, 2023, net interest income decreased $2.4 million and
net interest margin decreased 61 basis points. The decrease in net
interest income is primarily attributable to an additional $10.1
million in interest expense on deposits due to increases in
interest rates and average balances compared to the same quarter of
the prior year. The cost of interest-bearing deposits increased 148
basis points compared to the same quarter of the prior year, while
average balances increased 17.78%. In addition, the average balance
of non-interest-bearing deposits decreased by $59.4 million
compared to the same quarter of the prior year. The increase in
interest expense was partially offset by an increase in total
interest income of $7.2 million, as compared to the same quarter of
the prior year. Average loan yields increased 35 basis points
compared to the same quarter of the prior year, while average
balances increased 8.68%.
Loans by Type
The following table provides loan balances,
excluding deferred loan fees, by type as of March 31,
2024:
(in thousands) |
|
|
Real estate: |
|
|
Commercial |
|
$ |
2,687,456 |
|
Commercial land and development |
|
|
14,678 |
|
Commercial construction |
|
|
62,513 |
|
Residential construction |
|
|
18,141 |
|
Residential |
|
|
28,685 |
|
Farmland |
|
|
51,422 |
|
Commercial: |
|
|
Secured |
|
|
143,273 |
|
Unsecured |
|
|
26,175 |
|
Consumer and other |
|
|
73,917 |
|
Net deferred loan fees |
|
|
(2,130 |
) |
Total loans held for investment |
|
$ |
3,104,130 |
|
|
Interest-bearing Deposits
The following table provides interest-bearing
deposit balances by type as of March 31, 2024:
(in thousands) |
|
|
Interest-bearing demand accounts |
|
$ |
295,799 |
Money market accounts |
|
|
1,433,000 |
Savings accounts |
|
|
121,417 |
Time accounts |
|
|
288,168 |
Total interest-bearing deposits |
|
$ |
2,138,384 |
|
Asset Quality
Allowance for Credit Losses - Loans
At March 31, 2024, the Company’s allowance
for credit losses was $34.7 million, as compared to $34.4 million
at December 31, 2023. The $0.3 million increase in the
allowance is due to a $1.1 million provision for credit losses
recorded during the three months ended March 31, 2024,
partially offset by net charge-offs of $0.8 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% at December 31,
2023 and March 31, 2024. Loans designated as watch increased
from $39.6 million to $51.9 million between December 31, 2023
and March 31, 2024. Loans designated as substandard decreased
from $2.0 million to $1.9 million between December 31, 2023
and March 31, 2024. There were no loans with doubtful risk
grades at March 31, 2024 or December 31, 2023.
A summary of the allowance for credit losses by
loan class is as follows:
|
|
March 31, 2024 |
|
December 31, 2023 |
(in thousands) |
|
Amount |
|
% of Total |
|
Amount |
|
% of Total |
Real estate: |
|
|
|
|
|
|
|
|
Commercial |
|
$ |
28,895 |
|
83.40 |
% |
|
$ |
29,015 |
|
84.27 |
% |
Commercial land and development |
|
|
164 |
|
0.47 |
% |
|
|
178 |
|
0.52 |
% |
Commercial construction |
|
|
697 |
|
2.01 |
% |
|
|
718 |
|
2.08 |
% |
Residential construction |
|
|
114 |
|
0.33 |
% |
|
|
89 |
|
0.26 |
% |
Residential |
|
|
164 |
|
0.47 |
% |
|
|
151 |
|
0.44 |
% |
Farmland |
|
|
438 |
|
1.26 |
% |
|
|
399 |
|
1.16 |
% |
|
|
|
30,472 |
|
87.94 |
% |
|
|
30,550 |
|
88.73 |
% |
Commercial: |
|
|
|
|
|
|
|
|
Secured |
|
|
3,262 |
|
9.41 |
% |
|
|
3,314 |
|
9.62 |
% |
Unsecured |
|
|
259 |
|
0.75 |
% |
|
|
189 |
|
0.55 |
% |
|
|
|
3,521 |
|
10.16 |
% |
|
|
3,503 |
|
10.17 |
% |
Consumer and other |
|
|
660 |
|
1.90 |
% |
|
|
378 |
|
1.10 |
% |
Total allowance for credit
losses |
|
$ |
34,653 |
|
100.00 |
% |
|
$ |
34,431 |
|
100.00 |
% |
|
The ratio of allowance for credit losses to
loans held for investment was 1.12% at March 31, 2024 and
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) |
|
March 31,2024 |
|
December 31,2023 |
|
$ Change |
|
% Change |
Service charges on deposit accounts |
|
$ |
188 |
|
$ |
165 |
|
|
$ |
23 |
|
|
13.94 |
% |
Net loss on sale of
securities |
|
|
— |
|
|
(167 |
) |
|
|
167 |
|
|
(100.00 |
)% |
Gain on sale of loans |
|
|
369 |
|
|
317 |
|
|
|
52 |
|
|
16.40 |
% |
Loan-related fees |
|
|
429 |
|
|
667 |
|
|
|
(238 |
) |
|
(35.68 |
)% |
FHLB stock dividends |
|
|
332 |
|
|
314 |
|
|
|
18 |
|
|
5.73 |
% |
Earnings on bank-owned life
insurance |
|
|
142 |
|
|
155 |
|
|
|
(13 |
) |
|
(8.39 |
)% |
Other income |
|
|
373 |
|
|
485 |
|
|
|
(112 |
) |
|
(23.09 |
)% |
Total non-interest income |
|
$ |
1,833 |
|
$ |
1,936 |
|
|
$ |
(103 |
) |
|
(5.32 |
)% |
|
Net loss on sale of securities. The increase
related to the sale of two municipal securities with a par value of
approximately $0.8 million for a loss of approximately $0.2 million
during the three months ended December 31, 2023, which did not
occur during the three months ended March 31, 2024.
Gain on sale of loans. The increase resulted
from an increase in the effective yield of loans sold during the
three months ended March 31, 2024, as compared to the three
months ended December 31, 2023. During the three months ended
March 31, 2024, approximately $5.2 million of loans were sold
with an effective yield of 7.08%, as compared to approximately $5.9
million of loans sold with an effective yield of 5.41% during the
three months ended December 31, 2023.
Loan-related fees. The decrease was primarily
due to a $0.1 million decline in rate lock fees and a $0.1 million
decline in swap referral fees earned for the three months ended
March 31, 2024, as compared to the three months ended
December 31, 2023.
Other income. The decrease resulted primarily
from a $0.3 million gain recorded for distributions received on
investments in venture-backed funds during the three months ended
March 31, 2024, as compared to $0.4 million during the three
months ended December 31, 2023.
The following table presents the key components
of non-interest income for the periods indicated:
|
|
Three months ended |
|
|
|
(in thousands) |
|
March 31,2024 |
|
March 31,2023 |
|
$ Change |
|
% Change |
Service charges on deposit accounts |
|
$ |
188 |
|
$ |
117 |
|
$ |
71 |
|
|
60.68 |
% |
Gain on sale of loans |
|
|
369 |
|
|
598 |
|
|
(229 |
) |
|
(38.29 |
)% |
Loan-related fees |
|
|
429 |
|
|
308 |
|
|
121 |
|
|
39.29 |
% |
FHLB stock dividends |
|
|
332 |
|
|
193 |
|
|
139 |
|
|
72.02 |
% |
Earnings on bank-owned life
insurance |
|
|
142 |
|
|
102 |
|
|
40 |
|
|
39.22 |
% |
Other income |
|
|
373 |
|
|
53 |
|
|
320 |
|
|
603.77 |
% |
Total non-interest income |
|
$ |
1,833 |
|
$ |
1,371 |
|
$ |
462 |
|
|
33.70 |
% |
|
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 March 31, 2024, as compared
to the three months ended March 31, 2023. During the three
months ended March 31, 2024, approximately $5.2 million of
loans were sold with an effective yield of 7.08%, as compared to
approximately $12.7 million of loans sold with an effective yield
of 4.72% during the three months ended March 31, 2023.
Loan-related fees. The increase related to the
recognition of $0.1 million of swap referral fees during the three
months ended March 31, 2024, which did not occur during the
three months ended March 31, 2023.
FHLB stock dividends. The increase related to
increases in the annualized dividend rate and total average shares
outstanding from 7.00% and 108,901 shares for the three months
ended March 31, 2023 to 8.75% and 150,000 for the three months
ended March 31, 2024.
Other income. The increase related to a $0.3
million gain recorded for distributions received on investments in
venture-backed funds during the three months ended March 31,
2024, which did not occur during the three months ended
March 31, 2023.
Non-interest Expense
The following table presents the key components
of non-interest expense for the periods indicated:
|
|
Three months ended |
|
|
|
|
(in thousands) |
|
March 31,2024 |
|
December 31,2023 |
|
$ Change |
|
% Change |
Salaries and employee benefits |
|
$ |
7,577 |
|
$ |
7,182 |
|
$ |
395 |
|
|
5.50 |
% |
Occupancy and equipment |
|
|
626 |
|
|
583 |
|
|
43 |
|
|
7.38 |
% |
Data processing and
software |
|
|
1,157 |
|
|
1,110 |
|
|
47 |
|
|
4.23 |
% |
Federal Deposit Insurance
Corporation (“FDIC”) insurance |
|
|
400 |
|
|
370 |
|
|
30 |
|
|
8.11 |
% |
Professional services |
|
|
707 |
|
|
658 |
|
|
49 |
|
|
7.45 |
% |
Advertising and
promotional |
|
|
460 |
|
|
717 |
|
|
(257 |
) |
|
(35.84 |
)% |
Loan-related expenses |
|
|
297 |
|
|
268 |
|
|
29 |
|
|
10.82 |
% |
Other operating expenses |
|
|
1,492 |
|
|
1,775 |
|
|
(283 |
) |
|
(15.94 |
)% |
Total non-interest expense |
|
$ |
12,716 |
|
$ |
12,663 |
|
$ |
53 |
|
|
0.42 |
% |
|
Salaries and employee benefits. The increase
during the three months ended March 31, 2024, as compared to
the three months ended December 31, 2023, related primarily
to: (i) a $0.2 million increase in bonus expense related to
increased base salaries used to calculate bonus payouts; (ii) a
$0.1 million increase in salaries and benefits for new employees
hired to support expansion into the San Francisco Bay Area; and
(iii) a $0.1 million increase in commissions related to increased
deposit production.
Advertising and promotional. The decrease during
the three months ended March 31, 2024 related primarily to an
overall decline in sponsorships and donations made, as fewer events
were sponsored and attended as compared to the three months ended
December 31, 2023.
Other operating expenses. The decrease in other
operating expenses was primarily due to a $0.2 million decline in
travel, conference fees, and professional membership fees during
the three months ended March 31, 2024, as compared to the
three months ended December 31, 2023.
The following table presents the key components
of non-interest expense for the periods indicated:
|
|
Three months ended |
|
|
|
|
(in thousands) |
|
March 31,2024 |
|
March 31,2023 |
|
$ Change |
|
% Change |
Salaries and employee benefits |
|
$ |
7,577 |
|
$ |
6,618 |
|
$ |
959 |
|
|
14.49 |
% |
Occupancy and equipment |
|
|
626 |
|
|
523 |
|
|
103 |
|
|
19.69 |
% |
Data processing and
software |
|
|
1,157 |
|
|
872 |
|
|
285 |
|
|
32.68 |
% |
FDIC insurance |
|
|
400 |
|
|
402 |
|
|
(2 |
) |
|
(0.50 |
)% |
Professional services |
|
|
707 |
|
|
631 |
|
|
76 |
|
|
12.04 |
% |
Advertising and
promotional |
|
|
460 |
|
|
418 |
|
|
42 |
|
|
10.05 |
% |
Loan-related expenses |
|
|
297 |
|
|
255 |
|
|
42 |
|
|
16.47 |
% |
Other operating expenses |
|
|
1,492 |
|
|
1,399 |
|
|
93 |
|
|
6.65 |
% |
Total non-interest expense |
|
$ |
12,716 |
|
$ |
11,118 |
|
$ |
1,598 |
|
|
14.37 |
% |
|
Salaries and employee benefits. The increase
during the three months ended March 31, 2024, as compared to
the three months ended March 31, 2023 related primarily to:
(i) a $0.6 million increase in salaries and benefits for new
employees hired since June 2023 to support expansion into the San
Francisco Bay Area; (ii) a $0.2 million increase in commissions
earned, largely due to commissions paid to the San Francisco Bay
Area team, which did not exist during the three months ended
March 31, 2023; and (iii) a $0.1 million decrease in loan
origination costs due to lower loan production
period-over-period.
Occupancy and equipment. The $0.1 million
increase related to rent expense for temporary office space to
support the San Francisco Bay Area expansion during the three
months ended March 31, 2024, which did not exist during the
three months ended March 31, 2023.
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.
Other operating expenses. The increase was
primarily due to a $0.1 million increase in IntraFi Network fees
resulting from an overall increase in balances carried in the
network.
Provision for Income Taxes
Three months ended March 31, 2024, as
compared to three months ended December 31, 2023
Provision for income taxes decreased slightly to
$4.3 million for the three months ended March 31, 2024 from
$4.4 million for the three months ended December 31, 2023,
primarily driven by an overall decrease in taxable income. The
effective tax rate was 28.94% and 28.72% for the three months ended
March 31, 2024 and December 31, 2023, respectively.
Three months ended March 31, 2024, as
compared to three months ended March 31, 2023
Provision for income taxes decreased by $1.0
million, or 18.91%, for the three months ended March 31, 2024
compared to the three months ended March 31, 2023, primarily
driven by an overall decrease in taxable income. The effective tax
rate was 28.94% and 28.86% for the three months ended
March 31, 2024 and March 31, 2023, respectively.
Webcast Details
Five Star Bancorp will host a live webcast for
analysts and investors on Tuesday, April 30, 2024 at 1:00 p.m. ET
(10:00 a.m. PT) to discuss its first 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 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) |
|
March 31,2024 |
|
December 31,2023 |
|
March 31,2023 |
Revenue and Expense
Data |
|
|
|
|
|
|
Interest and fee income |
|
$ |
47,541 |
|
|
$ |
46,180 |
|
|
$ |
40,311 |
|
Interest expense |
|
|
20,797 |
|
|
|
19,502 |
|
|
|
11,163 |
|
Net interest income |
|
|
26,744 |
|
|
|
26,678 |
|
|
|
29,148 |
|
Provision for credit
losses |
|
|
900 |
|
|
|
800 |
|
|
|
900 |
|
Net interest income after
provision |
|
|
25,844 |
|
|
|
25,878 |
|
|
|
28,248 |
|
Non-interest income: |
|
|
|
|
|
|
Service charges on deposit accounts |
|
|
188 |
|
|
|
165 |
|
|
|
117 |
|
Net gain (loss) on sale of securities |
|
|
— |
|
|
|
(167 |
) |
|
|
— |
|
Gain on sale of loans |
|
|
369 |
|
|
|
317 |
|
|
|
598 |
|
Loan-related fees |
|
|
429 |
|
|
|
667 |
|
|
|
308 |
|
FHLB stock dividends |
|
|
332 |
|
|
|
314 |
|
|
|
193 |
|
Earnings on bank-owned life insurance |
|
|
142 |
|
|
|
155 |
|
|
|
102 |
|
Other income |
|
|
373 |
|
|
|
485 |
|
|
|
53 |
|
Total non-interest income |
|
|
1,833 |
|
|
|
1,936 |
|
|
|
1,371 |
|
Non-interest expense: |
|
|
|
|
|
|
Salaries and employee benefits |
|
|
7,577 |
|
|
|
7,182 |
|
|
|
6,618 |
|
Occupancy and equipment |
|
|
626 |
|
|
|
583 |
|
|
|
523 |
|
Data processing and software |
|
|
1,157 |
|
|
|
1,110 |
|
|
|
872 |
|
FDIC insurance |
|
|
400 |
|
|
|
370 |
|
|
|
402 |
|
Professional services |
|
|
707 |
|
|
|
658 |
|
|
|
631 |
|
Advertising and promotional |
|
|
460 |
|
|
|
717 |
|
|
|
418 |
|
Loan-related expenses |
|
|
297 |
|
|
|
268 |
|
|
|
255 |
|
Other operating expenses |
|
|
1,492 |
|
|
|
1,775 |
|
|
|
1,399 |
|
Total non-interest
expense |
|
|
12,716 |
|
|
|
12,663 |
|
|
|
11,118 |
|
Income before provision for
income taxes |
|
|
14,961 |
|
|
|
15,151 |
|
|
|
18,501 |
|
Provision for income taxes |
|
|
4,330 |
|
|
|
4,352 |
|
|
|
5,340 |
|
Net income |
|
$ |
10,631 |
|
|
$ |
10,799 |
|
|
$ |
13,161 |
|
|
|
|
|
|
|
|
Comprehensive Income |
|
|
|
|
|
|
Net income |
|
$ |
10,631 |
|
|
$ |
10,799 |
|
|
$ |
13,161 |
|
Net unrealized holding gain (loss) on securities available-for-sale
during the period |
|
|
(955 |
) |
|
|
5,744 |
|
|
|
2,140 |
|
Reclassification for net (gain) loss on sale of securities included
in net income |
|
|
— |
|
|
|
167 |
|
|
|
— |
|
Less: Income tax expense (benefit) related to other comprehensive
income (loss) |
|
|
(282 |
) |
|
|
1,747 |
|
|
|
632 |
|
Other comprehensive income (loss) |
|
|
(673 |
) |
|
|
4,164 |
|
|
|
1,508 |
|
Total comprehensive income |
|
$ |
9,958 |
|
|
$ |
14,963 |
|
|
$ |
14,669 |
|
|
|
|
|
|
|
|
Share and Per Share Data |
|
|
|
|
|
|
Earnings per common share: |
|
|
|
|
|
|
Basic |
|
$ |
0.62 |
|
|
$ |
0.63 |
|
|
$ |
0.77 |
|
Diluted |
|
|
0.62 |
|
|
|
0.63 |
|
|
|
0.77 |
|
Book value per share |
|
|
16.86 |
|
|
|
16.56 |
|
|
|
15.10 |
|
Tangible book value per share(1) |
|
|
16.86 |
|
|
|
16.56 |
|
|
|
15.10 |
|
Weighted average basic common shares outstanding |
|
|
17,190,867 |
|
|
|
17,175,445 |
|
|
|
17,150,174 |
|
Weighted average diluted common shares outstanding |
|
|
17,272,994 |
|
|
|
17,193,114 |
|
|
|
17,194,884 |
|
Shares outstanding at end of period |
|
|
17,353,251 |
|
|
|
17,256,989 |
|
|
|
17,258,904 |
|
|
|
|
|
|
|
|
Credit Quality |
|
|
|
|
|
|
Allowance for credit losses to period end nonperforming loans |
|
|
1,806.73 |
% |
|
|
1,752.70 |
% |
|
|
8,167.68 |
% |
Nonperforming loans to loans held for investment |
|
|
0.06 |
% |
|
|
0.06 |
% |
|
|
0.01 |
% |
Nonperforming assets to total assets |
|
|
0.06 |
% |
|
|
0.05 |
% |
|
|
0.01 |
% |
Nonperforming loans plus performing loan modifications to loans
held for investment |
|
|
0.06 |
% |
|
|
0.06 |
% |
|
|
0.01 |
% |
|
|
|
|
|
|
|
Selected Financial Ratios |
|
|
|
|
|
|
ROAA |
|
|
1.22 |
% |
|
|
1.26 |
% |
|
|
1.65 |
% |
ROAE |
|
|
14.84 |
% |
|
|
15.45 |
% |
|
|
20.94 |
% |
Net interest margin |
|
|
3.14 |
% |
|
|
3.19 |
% |
|
|
3.75 |
% |
Loan to deposit |
|
|
105.37 |
% |
|
|
102.19 |
% |
|
|
98.66 |
% |
(1) See the section entitled “Non-GAAP Reconciliation
(Unaudited)” for a reconciliation of this non-GAAP financial
measure.
(in thousands) |
|
March 31,2024 |
|
December 31,2023 |
|
March 31,2023 |
Balance Sheet
Data |
|
|
|
|
|
|
Cash and due from financial institutions |
|
$ |
29,750 |
|
|
$ |
26,986 |
|
|
$ |
26,556 |
|
Interest-bearing deposits in
banks |
|
|
155,575 |
|
|
|
294,590 |
|
|
|
321,383 |
|
Time deposits in banks |
|
|
5,878 |
|
|
|
5,858 |
|
|
|
9,617 |
|
Securities -
available-for-sale, at fair value |
|
|
105,006 |
|
|
|
108,083 |
|
|
|
115,140 |
|
Securities - held-to-maturity,
at amortized cost |
|
|
3,000 |
|
|
|
3,077 |
|
|
|
3,514 |
|
Loans held for sale |
|
|
10,243 |
|
|
|
11,464 |
|
|
|
11,315 |
|
Loans held for investment |
|
|
3,104,130 |
|
|
|
3,081,719 |
|
|
|
2,869,848 |
|
Allowance for credit losses -
loans |
|
|
(34,653 |
) |
|
|
(34,431 |
) |
|
|
(34,172 |
) |
Loans held for investment, net
of allowance for credit losses |
|
|
3,069,477 |
|
|
|
3,047,288 |
|
|
|
2,835,676 |
|
FHLB stock |
|
|
15,000 |
|
|
|
15,000 |
|
|
|
10,890 |
|
Operating leases, right-of-use
asset |
|
|
6,932 |
|
|
|
5,284 |
|
|
|
5,175 |
|
Premises and equipment,
net |
|
|
1,569 |
|
|
|
1,623 |
|
|
|
1,677 |
|
Bank-owned life insurance |
|
|
18,872 |
|
|
|
17,180 |
|
|
|
16,771 |
|
Interest receivable and other
assets |
|
|
55,058 |
|
|
|
56,692 |
|
|
|
39,594 |
|
Total assets |
|
$ |
3,476,360 |
|
|
$ |
3,593,125 |
|
|
$ |
3,397,308 |
|
|
|
|
|
|
|
|
Non-interest-bearing
deposits |
|
$ |
817,388 |
|
|
$ |
831,101 |
|
|
$ |
836,673 |
|
Interest-bearing deposits |
|
|
2,138,384 |
|
|
|
2,195,795 |
|
|
|
2,083,733 |
|
Total deposits |
|
|
2,955,772 |
|
|
|
3,026,896 |
|
|
|
2,920,406 |
|
Subordinated notes, net |
|
|
73,786 |
|
|
|
73,749 |
|
|
|
73,640 |
|
Other borrowings |
|
|
120,000 |
|
|
|
170,000 |
|
|
|
120,000 |
|
Operating lease liability |
|
|
7,320 |
|
|
|
5,603 |
|
|
|
5,433 |
|
Interest payable and other
liabilities |
|
|
26,902 |
|
|
|
31,103 |
|
|
|
17,173 |
|
Total liabilities |
|
|
3,183,780 |
|
|
|
3,307,351 |
|
|
|
3,136,652 |
|
|
|
|
|
|
|
|
Common stock |
|
|
220,804 |
|
|
|
220,505 |
|
|
|
219,785 |
|
Retained earnings |
|
|
84,216 |
|
|
|
77,036 |
|
|
|
52,817 |
|
Accumulated other
comprehensive loss, net of taxes |
|
|
(12,440 |
) |
|
|
(11,767 |
) |
|
|
(11,946 |
) |
Total shareholders’ equity |
|
|
292,580 |
|
|
|
285,774 |
|
|
|
260,656 |
|
Total liabilities and shareholders’ equity |
|
$ |
3,476,360 |
|
|
$ |
3,593,125 |
|
|
$ |
3,397,308 |
|
|
|
|
|
|
|
|
Quarterly Average
Balance Data |
|
|
|
|
|
|
Average loans held for
investment and sale |
|
$ |
3,082,290 |
|
|
$ |
3,055,042 |
|
|
$ |
2,836,070 |
|
Average interest-earning
assets |
|
|
3,424,469 |
|
|
|
3,319,300 |
|
|
|
3,156,100 |
|
Average total assets |
|
|
3,518,452 |
|
|
|
3,399,660 |
|
|
|
3,225,353 |
|
Average deposits |
|
|
3,106,841 |
|
|
|
3,009,078 |
|
|
|
2,824,391 |
|
Average total equity |
|
|
288,106 |
|
|
|
277,295 |
|
|
|
254,927 |
|
|
|
|
|
|
|
|
Capital
Ratios |
|
|
|
|
|
|
Total shareholders’ equity to
total assets |
|
|
8.42 |
% |
|
|
7.95 |
% |
|
|
7.67 |
% |
Tangible shareholders’ equity
to tangible assets(1) |
|
|
8.42 |
% |
|
|
7.95 |
% |
|
|
7.67 |
% |
Total capital (to
risk-weighted assets) |
|
|
12.34 |
% |
|
|
12.30 |
% |
|
|
12.50 |
% |
Tier 1 capital (to
risk-weighted assets) |
|
|
9.13 |
% |
|
|
9.07 |
% |
|
|
9.02 |
% |
Common equity Tier 1 capital
(to risk-weighted assets) |
|
|
9.13 |
% |
|
|
9.07 |
% |
|
|
9.02 |
% |
Tier 1 leverage ratio |
|
|
8.63 |
% |
|
|
8.73 |
% |
|
|
8.53 |
% |
(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) |
|
March 31,2024 |
|
December 31,2023 |
|
March 31,2023 |
Pre-tax, pre-provision
income |
|
|
|
|
|
|
Pre-tax income |
|
$ |
14,961 |
|
$ |
15,151 |
|
$ |
18,501 |
Add: provision for credit
losses |
|
|
900 |
|
|
800 |
|
|
900 |
Pre-tax, pre-provision income |
|
$ |
15,861 |
|
$ |
15,951 |
|
$ |
19,401 |
|
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
Five Star Bancorp (NASDAQ:FSBC)
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