Five Star Bancorp Announces Pricing of Common Stock Offering
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With Five Star Bancorp's recent announcement regarding the public offering of 3,450,000 shares, there are several key factors that investors should consider. The offering price of $21.75 per share has been set, with the aim of raising approximately $70.9 million in net proceeds. This is a significant influx of capital, which suggests that Five Star Bancorp is poised to bolster its balance sheet and finance its strategic growth initiatives.
Investors should note that the offering includes an over-allotment option, commonly referred to as a 'green shoe' option, allowing underwriters to purchase up to an additional 517,500 shares. This mechanism can provide additional capital if there is strong investor demand and can also help stabilize the stock price post-offering.
It's important to assess how this capital raise aligns with Five Star Bancorp's growth trajectory and current market valuation. The use of proceeds for general corporate purposes and to support growth indicates a proactive approach to scaling operations, which could lead to enhanced shareholder value in the long term. However, the dilutive effect of the new shares on existing shareholders cannot be overlooked. The immediate impact on earnings per share will hinge on how effectively the raised capital is deployed.
When evaluating the potential market impact of Five Star Bancorp's public offering, one should consider the broader banking sector and market conditions. The pricing of the offering at $21.75 per share gives us an indication of the valuation metrics at play. Benchmarking this against peer institutions and sector averages can provide insights into investor sentiment and market positioning.
Additionally, the involvement of notable financial institutions such as Keefe, Bruyette & Woods and Stephens Inc. as bookrunner and co-managers, respectively, lends credibility to the offering and could influence investor confidence. The partnership with established underwriters often correlates with a well-received offering, as these firms typically have a robust investor network and expertise in pricing and selling shares.
It is also essential to consider market liquidity and investor appetite for bank stocks, which can be affected by macroeconomic factors such as interest rate changes, regulatory developments and economic forecasts. The timing of the offering in relation to these factors could significantly impact the uptake of shares and the subsequent performance of the stock in the market.
The capital raise by Five Star Bancorp through this public offering can be seen as a reflection of the company's economic environment and strategic response to it. The decision to raise funds through equity rather than debt signals management's confidence in the company's equity story and its ability to attract investors even in a potentially tight capital market.
From an economic standpoint, the allocation of the offering's net proceeds towards growth opportunities and working capital is indicative of an expansionary phase. This is particularly noteworthy given the current economic climate, where banks must navigate the challenges of a potentially rising interest rate environment and increased regulatory scrutiny.
The closing of this offering will likely be scrutinized for its timing and execution, as it may coincide with economic data releases or policy announcements that could sway market conditions. Investors will be keen to observe how this capital raise correlates with the company's performance metrics in subsequent quarters, such as return on equity (ROE) and net interest margins (NIM).
RANCHO CORDOVA, Calif., March 28, 2024 (GLOBE NEWSWIRE) -- (March 28, 2024) – 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”), announced today the pricing of the previously announced underwritten public offering of 3,450,000 shares of its common stock at a public offering price of
Keefe, Bruyette & Woods, A Stifel Company is acting as the bookrunner for the offering. Stephens Inc. and D.A. Davidson & Co. are acting as co-managers.
The Company intends to use the net proceeds of this offering for general corporate purposes and to support its continued growth, including through investments in the Bank to pursue growth opportunities, and for working capital.
The Company expects to close the offering, subject to customary conditions, on or about April 2, 2024.
Additional Information Regarding the Offering
The offering of common stock is being made pursuant to a registration statement on Form S-3 (File No. 333-269533) that was declared effective by the Securities and Exchange Commission (“SEC”) on February 13, 2023. A preliminary prospectus supplement has been filed with the SEC to which this communication relates. A final prospectus supplement and accompanying prospectus will be filed with the SEC. Prospective investors should read the final prospectus supplement and the accompanying prospectus and other documents the Company has filed with the SEC for more complete information about the Company and the offering. Copies of these documents are available at no charge by visiting the SEC’s website at www.sec.gov. When available, copies of the final prospectus supplement and the accompanying prospectus related to the offering may be obtained by contacting: Keefe, Bruyette & Woods, A Stifel Company by telephone at (800) 966-1559 or by e-mail at USCapitalMarkets@kbw.com.
No Offer or Solicitation
This press release does not constitute an offer to sell, a solicitation of an offer to sell, or the solicitation of an offer to buy any securities. There will be no sale of securities in any jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
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.
Special Note Concerning 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 SEC 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.
Investor Contact:
Heather C. Luck, Chief Financial Officer
Five Star Bancorp
(916) 626-5008
hluck@fivestarbank.com
Media Contact:
Shelley R. Wetton, Chief Marketing Officer
Five Star Bancorp
(916) 284-7827
swetton@fivestarbank.com
