Five Star Bancorp Announces Second Quarter 2026 Results
Rhea-AI Summary
Five Star Bancorp (Nasdaq: FSBC) reported second quarter 2026 net income of $19.4 million, up from $18.6 million in Q1 2026 and $14.5 million a year earlier. Basic and diluted EPS were $0.91, compared with $0.87 in Q1 2026 and $0.68 in Q2 2025.
Net interest income rose to $46.1 million, with net interest margin at 3.63%, up 10 bps year-over-year but down 7 bps sequentially. Loans held for investment reached $4.52 billion, up 7.27% quarter-over-quarter and 20.27% year-over-year. Total deposits were $4.80 billion, increasing $330.0 million, or 7.38%, in the quarter, driven by 11.33% growth in non‑wholesale deposits as wholesale balances declined.
ROAA was 1.49% and ROAE 16.67%; the efficiency ratio was 40.91%. The nonperforming loans ratio increased to 0.30% due to one $11.4 million Community Reinvestment Act loan moving to non‑accrual. The common equity Tier 1 capital ratio was 9.98%. According to the company, a $0.25 per share cash dividend was paid in Q2 and another $0.25 dividend was declared for payment on August 10, 2026.
Positive
- Net income up 33.7% year-over-year to $19.4 million
- EPS increased to $0.91, up $0.23 year-over-year
- Net interest income grew 26.2% year-over-year to $46.1 million
- Loans held for investment up 20.3% year-over-year to $4.52 billion
- Total deposits up 7.38% quarter-over-quarter, plus $330.0 million
- Non-wholesale deposits grew 11.33% in the quarter, while wholesale declined
- ROAA 1.49% and ROAE 16.67% for Q2 2026
- Efficiency ratio improved year-over-year to 40.91%
- Quarterly cash dividend of $0.25 per share paid and declared
Negative
- Net interest margin decreased 7 basis points sequentially to 3.63%
- Non-interest expense rose 12.8% quarter-over-quarter and 24.7% year-over-year
- Nonperforming loans ratio increased to 0.30% from 0.07%
- Common equity Tier 1 capital ratio fell to 9.98%
- Non-interest-bearing deposits declined 4.73% quarter-over-quarter
- Total cost of funds increased to 2.23% from 2.20% sequentially
News Explained
At June 30, Five Star reported $2.3 billion of total liquidity, including $685.1 million in cash and $1.6 billion in net uninsured deposits.
The July 22 results release is a completed quarter-end report: at
The company defines total liquidity as cash and cash equivalents plus unused, immediately available borrowing capacity; the
Cash represented
Key Figures
Previous Earnings Reports
| Date | Event | Sentiment | 24h Move | Catalyst |
|---|---|---|---|---|
| Apr 27 | First quarter earnings | Positive | -1.2% | Net income and EPS increased, but the stock recorded a -1.18% 24-hour reaction. |
| Oct 27 | Third quarter earnings | Positive | +4.6% | Net income increased and the stock recorded a 4.64% 24-hour reaction. |
| Jul 23 | Second quarter earnings | Positive | -2.5% | Net income and loan growth improved, but the stock recorded a -2.47% 24-hour reaction. |
| Apr 28 | First quarter earnings | Positive | +2.4% | Loan and deposit growth improved, and the stock recorded a 2.44% 24-hour reaction. |
| Oct 28 | Third quarter earnings | Positive | -1.3% | Net income and loan growth increased, but the stock recorded a -1.28% 24-hour reaction. |
24h Move is the share-price change in the day after each event; other market factors may also have contributed.
FSBC's earnings reactions were mixed, with positive earnings events producing both aligned and divergent outcomes.
Key Terms
net interest margin financial
pre-tax, pre-provision income financial
non-accrual status financial
common equity tier 1 capital ratio regulatory
AI-generated analysis. How Rhea-AI works. Not financial advice.
RANCHO CORDOVA, Calif., July 22, 2026 (GLOBE NEWSWIRE) -- 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
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, 2026 | March 31, 2026 | June 30, 2025 | ||||||||
| Return on average assets (“ROAA”) | 1.49 | % | 1.55 | % | 1.37 | % | |||||
| Return on average equity (“ROAE”) | 16.67 | % | 16.73 | % | 14.17 | % | |||||
| Pre-tax income | $ | 26,089 | $ | 25,031 | $ | 20,099 | |||||
| Pre-tax, pre-provision income(1) | $ | 28,339 | $ | 27,706 | $ | 22,599 | |||||
| Net income | $ | 19,399 | $ | 18,621 | $ | 14,508 | |||||
| Basic earnings per common share | $ | 0.91 | $ | 0.87 | $ | 0.68 | |||||
| Diluted earnings per common share | $ | 0.91 | $ | 0.87 | $ | 0.68 | |||||
| Weighted average basic common shares outstanding | 21,273,902 | 21,253,085 | 21,225,831 | ||||||||
| Weighted average diluted common shares outstanding | 21,338,903 | 21,313,078 | 21,269,265 | ||||||||
| Shares outstanding at end of period | 21,402,864 | 21,376,153 | 21,360,991 | ||||||||
(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:
“Five Star Bank’s differentiated customer experience and reputation continue to power demand for our services. In the second quarter of 2026, we are pleased that net income increased to
Financial highlights as of and during the three months ended June 30, 2026 included the following:
- Total deposits increased by
$330.0 million , or7.38% , during the three months ended June 30, 2026, with growth in non-wholesale deposits exceeding declines in wholesale deposits. The Company defines wholesale deposits as brokered deposits and California Time Deposit Program deposits. During the three months ended June 30, 2026, non-wholesale deposits increased by$463.1 million , or11.33% , and wholesale deposits decreased by$133.1 million , or34.74% . - The number of Business Development Officers increased from 43 at March 31, 2026 to 45 at June 30, 2026.
- Cash and cash equivalents were
$685.1 million , representing14.27% of total deposits at June 30, 2026, as compared to14.42% at March 31, 2026. - Consistent, disciplined management of expenses contributed to our efficiency ratio of
40.91% for the three months ended June 30, 2026, as compared to38.57% for the three months ended March 31, 2026 and41.03% for the three months ended June 30, 2025. - Net interest margin expanded by 10 basis points year-over-year, increasing from
3.53% for the three months ended June 30, 2025 to3.63% for the three months ended June 30, 2026, demonstrating the Company's ability to grow its margin even as the effective federal funds rate declined 70 basis points over the same period from4.33% at June 30, 2025 to3.63% at June 30, 2026. Net interest margin for the three months ended June 30, 2026 contracted by seven basis points from3.70% for the three months ended March 31, 2026, reflecting that strong quarter-over-quarter growth in net interest income was primarily volume driven, as rapid balance sheet expansion modestly diluted the overall yield on earning assets. - Other comprehensive income was
$0.7 million during the three months ended June 30, 2026. Unrealized losses, net of tax effect, on available-for-sale securities were$9.4 million as of June 30, 2026. Total carrying value of held-to-maturity and available-for-sale securities represented0.04% and1.72% of total interest-earning assets, respectively, as of June 30, 2026. - The Company’s common equity Tier 1 capital ratio was
9.98% and10.45% as of June 30, 2026 and March 31, 2026, respectively. The Bank continues to meet all requirements to be considered “well-capitalized” under applicable regulatory guidelines. - Loan and deposit growth as of the dates provided below was as follows:
| (in thousands) | June 30, 2026 | March 31, 2026 | $ Change | % Change | ||||||||
| Loans held for investment | $ | 4,519,681 | $ | 4,213,393 | $ | 306,288 | 7.27 | % | ||||
| Non-interest-bearing deposits | 1,174,406 | 1,232,696 | (58,290 | ) | (4.73 | )% | ||||||
| Interest-bearing deposits | 3,624,977 | 3,236,657 | 388,320 | 12.00 | % | |||||||
| (in thousands) | June 30, 2026 | June 30, 2025 | $ Change | % Change | ||||||||
| Loans held for investment | $ | 4,519,681 | $ | 3,758,025 | $ | 761,656 | 20.27 | % | ||||
| Non-interest-bearing deposits | 1,174,406 | 1,004,061 | 170,345 | 16.97 | % | |||||||
| Interest-bearing deposits | 3,624,977 | 2,890,561 | 734,416 | 25.41 | % | |||||||
- The ratio of nonperforming loans to loans held for investment at period end increased from
0.07% at March 31, 2026 to0.30% at June 30, 2026, due to one Community Reinvestment Act loan that was placed on non-accrual status. The balance of the loan is$11.4 million as of June 30, 2026 and was originally downgraded to substandard in 2025. - The Company’s Board of Directors declared, and the Company subsequently paid, a cash dividend of
$0.25 per share during the three months ended June 30, 2026. The Company’s Board of Directors declared an additional cash dividend of$0.25 per share on July 16, 2026, which the Company expects to pay on August 10, 2026 to shareholders of record as of August 3, 2026.
Summary Results
Three months ended June 30, 2026, as compared to three months ended March 31, 2026
The Company’s net income was
Three months ended June 30, 2026, as compared to three months ended June 30, 2025
The Company’s net income was
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, 2026 | March 31, 2026 | $ Change | % Change | |||||||||||
| Selected operating data: | |||||||||||||||
| Net interest income | $ | 46,083 | $ | 43,457 | $ | 2,626 | 6.04 | % | |||||||
| Provision for credit losses | 2,250 | 2,675 | (425 | ) | (15.89 | )% | |||||||||
| Non-interest income | 1,872 | 1,643 | 229 | 13.94 | % | ||||||||||
| Non-interest expense | 19,616 | 17,394 | 2,222 | 12.77 | % | ||||||||||
| Pre-tax income | 26,089 | 25,031 | 1,058 | 4.23 | % | ||||||||||
| Provision for income taxes | 6,690 | 6,410 | 280 | 4.37 | % | ||||||||||
| Net income | $ | 19,399 | $ | 18,621 | $ | 778 | 4.18 | % | |||||||
| Earnings per common share: | |||||||||||||||
| Basic | $ | 0.91 | $ | 0.87 | $ | 0.04 | 4.60 | % | |||||||
| Diluted | $ | 0.91 | $ | 0.87 | $ | 0.04 | 4.60 | % | |||||||
| Performance and other financial ratios: | |||||||||||||||
| ROAA | 1.49 | % | 1.55 | % | |||||||||||
| ROAE | 16.67 | % | 16.73 | % | |||||||||||
| Net interest margin | 3.63 | % | 3.70 | % | |||||||||||
| Total cost of funds(1) | 2.23 | % | 2.20 | % | |||||||||||
| Efficiency ratio | 40.91 | % | 38.57 | % | |||||||||||
| Three months ended | |||||||||||||||
| (in thousands, except per share data) | June 30, 2026 | June 30, 2025 | $ Change | % Change | |||||||||||
| Selected operating data: | |||||||||||||||
| Net interest income | $ | 46,083 | $ | 36,515 | $ | 9,568 | 26.20 | % | |||||||
| Provision for credit losses | 2,250 | 2,500 | (250 | ) | (10.00 | )% | |||||||||
| Non-interest income | 1,872 | 1,810 | 62 | 3.43 | % | ||||||||||
| Non-interest expense | 19,616 | 15,726 | 3,890 | 24.74 | % | ||||||||||
| Pre-tax income | 26,089 | 20,099 | 5,990 | 29.80 | % | ||||||||||
| Provision for income taxes | 6,690 | 5,591 | 1,099 | 19.66 | % | ||||||||||
| Net income | $ | 19,399 | $ | 14,508 | $ | 4,891 | 33.71 | % | |||||||
| Earnings per common share: | |||||||||||||||
| Basic | $ | 0.91 | $ | 0.68 | $ | 0.23 | 33.82 | % | |||||||
| Diluted | $ | 0.91 | $ | 0.68 | $ | 0.23 | 33.82 | % | |||||||
| Performance and other financial ratios: | |||||||||||||||
| ROAA | 1.49 | % | 1.37 | % | |||||||||||
| ROAE | 16.67 | % | 14.17 | % | |||||||||||
| Net interest margin | 3.63 | % | 3.53 | % | |||||||||||
| Total cost of funds(1) | 2.23 | % | 2.53 | % | |||||||||||
| Efficiency ratio | 40.91 | % | 41.03 | % | |||||||||||
(1) Total cost of funds reflects the average cost of all funding sources, including both interest-bearing and non-interest-bearing deposits and borrowings.
Balance Sheet Summary
| (in thousands) | June 30, 2026 | March 31, 2026 | $ Change | % Change | |||||||||||
| Selected financial condition data: | |||||||||||||||
| Total assets | $ | 5,377,062 | $ | 5,031,751 | $ | 345,311 | 6.86 | % | |||||||
| Cash and cash equivalents | 685,074 | 644,359 | 40,715 | 6.32 | % | ||||||||||
| Total loans held for investment | 4,519,681 | 4,213,393 | 306,288 | 7.27 | % | ||||||||||
| Total investments | 92,719 | 93,850 | (1,131 | ) | (1.21 | )% | |||||||||
| Total liabilities | 4,903,291 | 4,573,232 | 330,059 | 7.22 | % | ||||||||||
| Total deposits | 4,799,383 | 4,469,353 | 330,030 | 7.38 | % | ||||||||||
| Subordinated notes, net | 74,114 | 74,077 | 37 | 0.05 | % | ||||||||||
| Total shareholders’ equity | 473,771 | 458,519 | 15,252 | 3.33 | % | ||||||||||
- Insured and collateralized deposits were approximately
$3.2 billion , representing65.80% of total deposits as of June 30, 2026, as compared to65.55% as of March 31, 2026. Net uninsured and uncollateralized deposits were approximately$1.6 billion as of June 30, 2026, increasing from$1.5 billion at March 31, 2026. - Non-wholesale deposit balances constituted
94.79% of total deposits as of June 30, 2026, as compared to91.43% as of March 31, 2026. Deposit relationships of greater than$5 million represented63.88% of total deposits as of June 30, 2026, as compared to60.67% as of March 31, 2026, and had an average age of approximately 7.39 years as of June 30, 2026, as compared to 7.98 years as of March 31, 2026. - Total deposits as of June 30, 2026 were
$4.8 billion , an increase of$330.0 million , or7.38% , from March 31, 2026, comprised of an increase in interest-bearing deposits, partially offset by a decrease in non-interest-bearing deposits. - Cash and cash equivalents as of June 30, 2026 were
$685.1 million , representing14.27% of total deposits at June 30, 2026, as compared to14.42% as of March 31, 2026. - Total liquidity (consisting of cash and cash equivalents as well as unused and immediately available borrowing capacity as set forth below) was approximately
$2.3 billion as of June 30, 2026, as compared to$2.2 billion at March 31, 2026.
| June 30, 2026 | ||||||||||||
| (in thousands) | Line of Credit | Letters of Credit Issued | Borrowings | Available | ||||||||
| Federal Home Loan Bank of San Francisco (“FHLB”) advances | $ | 1,629,065 | $ | 1,297,500 | $ | — | $ | 331,565 | ||||
| Federal Reserve Discount Window | 1,074,577 | — | — | 1,074,577 | ||||||||
| Correspondent bank lines of credit | 185,000 | — | — | 185,000 | ||||||||
| Cash and cash equivalents | — | — | — | 685,074 | ||||||||
| Total | $ | 2,888,642 | $ | 1,297,500 | $ | — | $ | 2,276,216 | ||||
| (in thousands) | June 30, 2026 | December 31, 2025 | $ Change | % Change | ||||||
| Selected financial condition data: | ||||||||||
| Total assets | 5,377,062 | 4,754,861 | 622,201 | 13.09 | % | |||||
| Cash and cash equivalents | 685,074 | 506,851 | 178,223 | 35.16 | % | |||||
| Total loans held for investment | 4,519,681 | 4,074,929 | 444,752 | 10.91 | % | |||||
| Total investments | 92,719 | 96,889 | (4,170 | ) | (4.30 | )% | ||||
| Total liabilities | 4,903,291 | 4,309,029 | 594,262 | 13.79 | % | |||||
| Total deposits | 4,799,383 | 4,201,084 | 598,299 | 14.24 | % | |||||
| Subordinated notes, net | 74,114 | 74,041 | 73 | 0.10 | % | |||||
| Total shareholders’ equity | 473,771 | 445,832 | 27,939 | 6.27 | % | |||||
The increase in total assets from December 31, 2025 to June 30, 2026 was primarily comprised of a
The increase in total liabilities from December 31, 2025 to June 30, 2026 was primarily due to an increase in deposits of
The increase in total shareholders’ equity from December 31, 2025 to June 30, 2026 was primarily a result of
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, 2026 | March 31, 2026 | $ Change | % Change | ||||||||||
| Interest and fee income | $ | 72,327 | $ | 67,347 | $ | 4,980 | 7.39 | % | ||||||
| Interest expense | 26,244 | 23,890 | 2,354 | 9.85 | % | |||||||||
| Net interest income | $ | 46,083 | $ | 43,457 | $ | 2,626 | 6.04 | % | ||||||
| Net interest margin | 3.63 | % | 3.70 | % | ||||||||||
| Three months ended | ||||||||||||||
| (in thousands) | June 30, 2026 | June 30, 2025 | $ Change | % Change | ||||||||||
| Interest and fee income | $ | 72,327 | $ | 60,580 | $ | 11,747 | 19.39 | % | ||||||
| Interest expense | 26,244 | 24,065 | 2,179 | 9.05 | % | |||||||||
| Net interest income | $ | 46,083 | $ | 36,515 | $ | 9,568 | 26.20 | % | ||||||
| Net interest margin | 3.63 | % | 3.53 | % | ||||||||||
The following table shows the components of net interest income and net interest margin for the quarterly periods indicated:
| Three months ended | |||||||||||||||||||||||||||
| June 30, 2026 | March 31, 2026 | June 30, 2025 | |||||||||||||||||||||||||
| (in thousands) | Average Balance | Interest Income/ Expense | Yield/ Rate | Average Balance | Interest Income/ Expense | Yield/ Rate | Average Balance | Interest Income/ Expense | Yield/ Rate | ||||||||||||||||||
| Assets | |||||||||||||||||||||||||||
| Interest-earning deposits in banks | $ | 677,149 | $ | 6,253 | 3.70 | % | $ | 512,308 | $ | 4,687 | 3.71 | % | $ | 361,866 | $ | 3,987 | 4.42 | % | |||||||||
| Investment securities | 93,553 | 509 | 2.18 | % | 96,787 | 544 | 2.28 | % | 97,886 | 577 | 2.37 | % | |||||||||||||||
| Loans held for investment and sale | 4,328,304 | 65,565 | 6.08 | % | 4,150,446 | 62,116 | 6.07 | % | 3,691,616 | 56,016 | 6.09 | % | |||||||||||||||
| Total interest-earning assets | 5,099,006 | 72,327 | 5.69 | % | 4,759,541 | 67,347 | 5.74 | % | 4,151,368 | 60,580 | 5.85 | % | |||||||||||||||
| Interest receivable and other assets, net | 123,354 | 118,967 | 101,632 | ||||||||||||||||||||||||
| Total assets | $ | 5,222,360 | $ | 4,878,508 | $ | 4,253,000 | |||||||||||||||||||||
| Liabilities and shareholders’ equity | |||||||||||||||||||||||||||
| Interest-bearing transaction accounts | $ | 389,136 | $ | 1,297 | 1.34 | % | $ | 343,663 | $ | 1,133 | 1.34 | % | $ | 283,369 | $ | 1,043 | 1.48 | % | |||||||||
| Savings accounts | 143,818 | 844 | 2.35 | % | 138,125 | 830 | 2.44 | % | 121,692 | 801 | 2.64 | % | |||||||||||||||
| Money market accounts | 2,556,482 | 19,318 | 3.03 | % | 2,185,347 | 15,851 | 2.94 | % | 1,647,628 | 13,270 | 3.23 | % | |||||||||||||||
| Time accounts | 396,923 | 3,623 | 3.66 | % | 531,031 | 4,915 | 3.75 | % | 726,295 | 7,790 | 4.30 | % | |||||||||||||||
| Subordinated notes and other borrowings | 74,091 | 1,162 | 6.29 | % | 74,072 | 1,161 | 6.36 | % | 73,967 | 1,161 | 6.30 | % | |||||||||||||||
| Total interest-bearing liabilities | 3,560,450 | 26,244 | 2.96 | % | 3,272,238 | 23,890 | 2.96 | % | 2,852,951 | 24,065 | 3.38 | % | |||||||||||||||
| Demand accounts | 1,163,991 | 1,122,062 | 957,034 | ||||||||||||||||||||||||
| Interest payable and other liabilities | 31,140 | 32,739 | 32,406 | ||||||||||||||||||||||||
| Shareholders’ equity | 466,779 | 451,469 | 410,609 | ||||||||||||||||||||||||
| Total liabilities & shareholders’ equity | $ | 5,222,360 | $ | 4,878,508 | $ | 4,253,000 | |||||||||||||||||||||
| Net interest spread | 2.73 | % | 2.78 | % | 2.47 | % | |||||||||||||||||||||
| Net interest income/margin | $ | 46,083 | 3.63 | % | $ | 43,457 | 3.70 | % | $ | 36,515 | 3.53 | % | |||||||||||||||
Net interest income during the three months ended June 30, 2026 increased by
As compared to the three months ended June 30, 2025, net interest income during the three months ended June 30, 2026 increased by
Loans by Type
The following table provides loan balances, excluding deferred loan fees, by type as of the dates shown:
| (in thousands) | June 30, 2026 | March 31, 2026 | ||||||
| Real estate: | ||||||||
| Commercial | $ | 3,597,173 | $ | 3,421,902 | ||||
| Commercial land and development | 2,507 | 2,519 | ||||||
| Commercial construction | 124,053 | 108,179 | ||||||
| Residential construction | 21,809 | 17,808 | ||||||
| Residential | 41,874 | 43,195 | ||||||
| Farmland | 59,900 | 61,090 | ||||||
| Commercial: | ||||||||
| Secured | 258,736 | 243,140 | ||||||
| Unsecured | 41,263 | 41,971 | ||||||
| Consumer and other | 374,614 | 275,891 | ||||||
| Net deferred loan fees | (2,248 | ) | (2,302 | ) | ||||
| Total loans held for investment | $ | 4,519,681 | $ | 4,213,393 | ||||
Interest-bearing Deposits
The following table provides interest-bearing deposit balances by type as of the dates shown:
| (in thousands) | June 30, 2026 | March 31, 2026 | ||||||
| Interest-bearing transaction accounts | $ | 500,256 | $ | 349,138 | ||||
| Savings accounts | 147,435 | 141,961 | ||||||
| Money market accounts | 2,669,295 | 2,291,215 | ||||||
| Time accounts | 307,991 | 454,343 | ||||||
| Total interest-bearing deposits | $ | 3,624,977 | $ | 3,236,657 | ||||
Asset Quality
Allowance for Credit Losses
At June 30, 2026, the Company’s allowance for credit losses was
The Company’s nonperforming loans increased from
A summary of the allowance for credit losses by loan class is as follows:
| June 30, 2026 | December 31, 2025 | |||||||||||
| (in thousands) | Amount | % of Total | Amount | % of Total | ||||||||
| Real estate: | ||||||||||||
| Commercial | $ | 28,371 | 59.92 | % | $ | 25,219 | 56.77 | % | ||||
| Commercial land and development | 90 | 0.19 | % | 56 | 0.13 | % | ||||||
| Commercial construction | 4,444 | 9.39 | % | 4,050 | 9.12 | % | ||||||
| Residential construction | 533 | 1.13 | % | 213 | 0.48 | % | ||||||
| Residential | 419 | 0.89 | % | 362 | 0.82 | % | ||||||
| Farmland | 468 | 0.99 | % | 467 | 1.05 | % | ||||||
| 34,325 | 72.51 | % | 30,367 | 68.37 | % | |||||||
| Commercial: | ||||||||||||
| Secured | 9,594 | 20.27 | % | 11,204 | 25.23 | % | ||||||
| Unsecured | 486 | 1.03 | % | 482 | 1.09 | % | ||||||
| 10,080 | 21.30 | % | 11,686 | 26.32 | % | |||||||
| Consumer and other | 2,930 | 6.19 | % | 2,356 | 5.31 | % | ||||||
| Total allowance for credit losses | $ | 47,335 | 100.00 | % | $ | 44,409 | 100.00 | % | ||||
The ratio of allowance for credit losses to loans held for investment was
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, 2026 | March 31, 2026 | $ Change | % Change | ||||||||||
| Service charges on deposit accounts | $ | 122 | $ | 135 | $ | (13 | ) | (9.63 | )% | |||||
| Loan-related fees | 679 | 1,265 | (586 | ) | (46.32 | )% | ||||||||
| FHLB stock dividends | 191 | 762 | (571 | ) | (74.93 | )% | ||||||||
| Earnings on bank-owned life insurance | 265 | 225 | 40 | 17.78 | % | |||||||||
| Other income | 615 | (744 | ) | 1,359 | (182.66 | )% | ||||||||
| Total non-interest income | $ | 1,872 | $ | 1,643 | $ | 229 | 13.94 | % | ||||||
Loan-related fees. The decrease resulted primarily from a decrease of
FHLB stock dividends. The decrease related primarily to a
Other income. The increase related primarily to an overall improvement in earnings related to investments in venture-backed funds during the three months ended June 30, 2026, as compared to the three months ended March 31, 2026.
The following table presents the key components of non-interest income for the periods indicated:
| Three months ended | ||||||||||||||
| (in thousands) | June 30, 2026 | June 30, 2025 | $ Change | % Change | ||||||||||
| Service charges on deposit accounts | $ | 122 | $ | 196 | $ | (74 | ) | (37.76 | )% | |||||
| Gain on sale of loans | — | 119 | (119 | ) | (100.00 | )% | ||||||||
| Loan-related fees | 679 | 468 | 211 | 45.09 | % | |||||||||
| FHLB stock dividends | 191 | 325 | (134 | ) | (41.23 | )% | ||||||||
| Earnings on bank-owned life insurance | 265 | 220 | 45 | 20.45 | % | |||||||||
| Other income | 615 | 482 | 133 | 27.59 | % | |||||||||
| Total non-interest income | $ | 1,872 | $ | 1,810 | $ | 62 | 3.43 | % | ||||||
Gain on sale of loans. The decrease related to an overall decline in the volume of SBA loans sold due to a strategic, intentional reduction in originations of loans held for sale. During the three months ended June 30, 2026, no SBA loans were sold, as compared to approximately
Loan-related fees. The increase resulted primarily from an increase of
FHLB stock dividends. The decrease related primarily to the FHLB’s transition to a tier-based dividend structure, which lowered the Bank’s effective dividend rate received.
Other income. The increase related primarily to an overall improvement in earnings related to investments in venture-backed funds during the three months ended June 30, 2026 compared to the three months ended June 30, 2025.
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, 2026 | March 31, 2026 | $ Change | % Change | ||||||||||
| Salaries and employee benefits | $ | 11,421 | $ | 11,430 | $ | (9 | ) | (0.08 | )% | |||||
| Occupancy and equipment | 873 | 829 | 44 | 5.31 | % | |||||||||
| Data processing and software | 1,709 | 1,551 | 158 | 10.19 | % | |||||||||
| Federal Deposit Insurance Corporation (“FDIC”) insurance | 585 | 545 | 40 | 7.34 | % | |||||||||
| Professional services | 952 | 926 | 26 | 2.81 | % | |||||||||
| Advertising and promotional | 959 | 744 | 215 | 28.90 | % | |||||||||
| Loan-related expenses | 304 | 247 | 57 | 23.08 | % | |||||||||
| Other operating expenses | 2,813 | 1,122 | 1,691 | 150.71 | % | |||||||||
| Total non-interest expense | $ | 19,616 | $ | 17,394 | $ | 2,222 | 12.77 | % | ||||||
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.
Advertising and promotional. The increase related primarily to additional expenses incurred to support the expansion of the Bank’s business development teams, including
Other operating expenses. The increase related primarily to the release of a
The following table presents the key components of non-interest expense for the periods indicated:
| Three months ended | ||||||||||||||
| (in thousands) | June 30, 2026 | June 30, 2025 | $ Change | % Change | ||||||||||
| Salaries and employee benefits | $ | 11,421 | $ | 8,910 | $ | 2,511 | 28.18 | % | ||||||
| Occupancy and equipment | 873 | 657 | 216 | 32.88 | % | |||||||||
| Data processing and software | 1,709 | 1,508 | 201 | 13.33 | % | |||||||||
| FDIC insurance | 585 | 470 | 115 | 24.47 | % | |||||||||
| Professional services | 952 | 918 | 34 | 3.70 | % | |||||||||
| Advertising and promotional | 959 | 865 | 94 | 10.87 | % | |||||||||
| Loan-related expenses | 304 | 423 | (119 | ) | (28.13 | )% | ||||||||
| Other operating expenses | 2,813 | 1,975 | 838 | 42.43 | % | |||||||||
| Total non-interest expense | $ | 19,616 | $ | 15,726 | $ | 3,890 | 24.74 | % | ||||||
Salaries and employee benefits. The increase related primarily to: (i) a
Occupancy and equipment. The increase was primarily due to expenses for the Walnut Creek branch office and Newport Beach non-depository office during the three months ended June 30, 2026, which did not exist for the three months ended June 30, 2025.
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.
FDIC insurance. The increase was primarily due to a
Loan-related expenses. The decrease related primarily to lower inspection and legal expenses. Although loan originations were higher period-over-period, a greater mix of purchased loans and large credit relationships reduced per-unit inspection costs, and inspection activity was delayed relative to the prior period.
Other operating expenses. The increase related primarily to: (i) a
Provision for Income Taxes
Three months ended June 30, 2026, as compared to three months ended March 31, 2026
Provision for income taxes increased by
Three months ended June 30, 2026, as compared to three months ended June 30, 2025
Provision for income taxes increased by
Webcast Details
Five Star Bancorp will host a live webcast for analysts and investors on Thursday, July 23, 2026 at 1:00 PM ET (10:00 AM 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 ten branches in California, following the opening of a branch in Lodi in July 2026.
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 phrases 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, 2025 and Quarterly Report on Form 10-Q for the three months ended March 31, 2026, 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, 2026 | March 31, 2026 | June 30, 2025 | |||||||||
| Revenue and Expense Data | ||||||||||||
| Interest and fee income | $ | 72,327 | $ | 67,347 | $ | 60,580 | ||||||
| Interest expense | 26,244 | 23,890 | 24,065 | |||||||||
| Net interest income | 46,083 | 43,457 | 36,515 | |||||||||
| Provision for credit losses | 2,250 | 2,675 | 2,500 | |||||||||
| Net interest income after provision | 43,833 | 40,782 | 34,015 | |||||||||
| Non-interest income: | ||||||||||||
| Service charges on deposit accounts | 122 | 135 | 196 | |||||||||
| Gain on sale of loans | — | — | 119 | |||||||||
| Loan-related fees | 679 | 1,265 | 468 | |||||||||
| FHLB stock dividends | 191 | 762 | 325 | |||||||||
| Earnings on bank-owned life insurance | 265 | 225 | 220 | |||||||||
| Other income | 615 | (744 | ) | 482 | ||||||||
| Total non-interest income | 1,872 | 1,643 | 1,810 | |||||||||
| Non-interest expense: | ||||||||||||
| Salaries and employee benefits | 11,421 | 11,430 | 8,910 | |||||||||
| Occupancy and equipment | 873 | 829 | 657 | |||||||||
| Data processing and software | 1,709 | 1,551 | 1,508 | |||||||||
| FDIC insurance | 585 | 545 | 470 | |||||||||
| Professional services | 952 | 926 | 918 | |||||||||
| Advertising and promotional | 959 | 744 | 865 | |||||||||
| Loan-related expenses | 304 | 247 | 423 | |||||||||
| Other operating expenses | 2,813 | 1,122 | 1,975 | |||||||||
| Total non-interest expense | 19,616 | 17,394 | 15,726 | |||||||||
| Income before provision for income taxes | 26,089 | 25,031 | 20,099 | |||||||||
| Provision for income taxes | 6,690 | 6,410 | 5,591 | |||||||||
| Net income | $ | 19,399 | $ | 18,621 | $ | 14,508 | ||||||
| Comprehensive Income | ||||||||||||
| Net income | $ | 19,399 | $ | 18,621 | $ | 14,508 | ||||||
| Net unrealized holding gain (loss) on securities available-for-sale during the period | 946 | (1,173 | ) | 190 | ||||||||
| Less: Income tax expense (benefit) related to other comprehensive income (loss) | 246 | (201 | ) | 502 | ||||||||
| Other comprehensive income (loss) | 700 | (972 | ) | (312 | ) | |||||||
| Total comprehensive income | $ | 20,099 | $ | 17,649 | $ | 14,196 | ||||||
| Share and Per Share Data | ||||||||||||
| Earnings per common share: | ||||||||||||
| Basic | $ | 0.91 | $ | 0.87 | $ | 0.68 | ||||||
| Diluted | $ | 0.91 | $ | 0.87 | $ | 0.68 | ||||||
| Book value per share | $ | 22.14 | $ | 21.45 | $ | 19.51 | ||||||
| Tangible book value per share(1) | $ | 22.14 | $ | 21.45 | $ | 19.51 | ||||||
| Weighted average basic common shares outstanding | 21,273,902 | 21,253,085 | 21,225,831 | |||||||||
| Weighted average diluted common shares outstanding | 21,338,903 | 21,313,078 | 21,269,265 | |||||||||
| Shares outstanding at end of period | 21,402,864 | 21,376,153 | 21,360,991 | |||||||||
| Selected Financial Ratios | ||||||||||||
| ROAA | 1.49 | % | 1.55 | % | 1.37 | % | ||||||
| ROAE | 16.67 | % | 16.73 | % | 14.17 | % | ||||||
| Net interest margin | 3.63 | % | 3.70 | % | 3.53 | % | ||||||
| Loan to deposit(2) | 94.17 | % | 94.27 | % | 96.50 | % | ||||||
(1) See the section entitled “Non-GAAP Reconciliation (Unaudited)” for a reconciliation of this non-GAAP financial measure.
(2) Loan balance in loan to deposit ratio is total loans held for investment and sale at period end. Deposit balance in loan to deposit ratio is total deposits at period end.
| (in thousands) | June 30, 2026 | March 31, 2026 | June 30, 2025 | |||||||||
| Balance Sheet Data | ||||||||||||
| Cash and due from financial institutions | $ | 45,966 | $ | 46,123 | $ | 53,724 | ||||||
| Interest-bearing deposits in banks | 639,108 | 598,236 | 430,086 | |||||||||
| Time deposits in banks | — | 100 | 849 | |||||||||
| Securities - available-for-sale, at fair value | 90,584 | 91,715 | 94,990 | |||||||||
| Securities - held-to-maturity, at amortized cost | 2,135 | 2,135 | 2,585 | |||||||||
| Loans held for sale | — | — | 309 | |||||||||
| Loans held for investment | 4,519,681 | 4,213,393 | 3,758,025 | |||||||||
| Allowance for credit losses | (47,335 | ) | (46,439 | ) | (40,167 | ) | ||||||
| Loans held for investment, net of allowance for credit losses | 4,472,346 | 4,166,954 | 3,717,858 | |||||||||
| FHLB stock | 15,000 | 15,000 | 15,000 | |||||||||
| Operating leases, right-of-use asset | 10,138 | 10,428 | 7,094 | |||||||||
| Premises and equipment, net | 2,333 | 2,090 | 1,606 | |||||||||
| Bank-owned life insurance | 28,759 | 28,494 | 23,466 | |||||||||
| Interest receivable and other assets | 70,693 | 70,476 | 65,906 | |||||||||
| Total assets | $ | 5,377,062 | $ | 5,031,751 | $ | 4,413,473 | ||||||
| Non-interest-bearing deposits | $ | 1,174,406 | $ | 1,232,696 | $ | 1,004,061 | ||||||
| Interest-bearing deposits | 3,624,977 | 3,236,657 | 2,890,561 | |||||||||
| Total deposits | 4,799,383 | 4,469,353 | 3,894,622 | |||||||||
| Subordinated notes, net | 74,114 | 74,077 | 73,968 | |||||||||
| Operating lease liability | 11,262 | 11,547 | 7,744 | |||||||||
| Interest payable and other liabilities | 18,532 | 18,255 | 20,397 | |||||||||
| Total liabilities | 4,903,291 | 4,573,232 | 3,996,731 | |||||||||
| Common stock | 304,868 | 304,372 | 303,155 | |||||||||
| Retained earnings | 178,318 | 164,262 | 125,545 | |||||||||
| Accumulated other comprehensive loss, net of taxes | (9,415 | ) | (10,115 | ) | (11,958 | ) | ||||||
| Total shareholders’ equity | 473,771 | 458,519 | 416,742 | |||||||||
| Total liabilities and shareholders’ equity | $ | 5,377,062 | $ | 5,031,751 | $ | 4,413,473 | ||||||
| Quarterly Average Balance Data | ||||||||||||
| Average loans held for investment and sale | $ | 4,328,304 | $ | 4,150,446 | $ | 3,691,616 | ||||||
| Average interest-earning assets | 5,099,006 | 4,759,541 | 4,151,368 | |||||||||
| Average total assets | 5,222,360 | 4,878,508 | 4,253,000 | |||||||||
| Average deposits | 4,650,350 | 4,320,228 | 3,736,018 | |||||||||
| Average total equity | 466,779 | 451,469 | 410,609 | |||||||||
| Credit Quality | ||||||||||||
| Allowance for credit losses to nonperforming loans | 354.57 | % | 1,649.11 | % | 1,763.26 | % | ||||||
| Nonperforming loans to loans held for investment | 0.30 | % | 0.07 | % | 0.06 | % | ||||||
| Nonperforming assets to total assets | 0.25 | % | 0.06 | % | 0.05 | % | ||||||
| Nonperforming loans plus performing loan modifications to loans held for investment | 0.30 | % | 0.07 | % | 0.06 | % | ||||||
| Capital Ratios | ||||||||||||
| Total shareholders’ equity to total assets | 8.81 | % | 9.11 | % | 9.44 | % | ||||||
| Tangible shareholders’ equity to tangible assets(1) | 8.81 | % | 9.11 | % | 9.44 | % | ||||||
| Total capital (to risk-weighted assets) | 12.51 | % | 13.17 | % | 13.73 | % | ||||||
| Tier 1 capital (to risk-weighted assets) | 9.98 | % | 10.45 | % | 10.85 | % | ||||||
| Common equity Tier 1 capital (to risk-weighted assets) | 9.98 | % | 10.45 | % | 10.85 | % | ||||||
| Tier 1 leverage ratio | 9.21 | % | 9.56 | % | 10.03 | % | ||||||
(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. Management believes that tangible shareholders’ equity to tangible assets is a useful financial measure because it enables management, investors, and others to assess the Company’s financial health based on tangible capital. 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. Management believes that tangible book value per share is a useful financial measure because it enables management, investors, and others to assess the Company’s value and use of equity. 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. Management believes that pre-tax, pre-provision income is a useful financial measure because it enables management, investors, and others to assess the Company’s ability to generate operating profit and capital.
The following reconciliation table provides a more detailed analysis of this non-GAAP financial measure:
| Three months ended | |||||||||
| (in thousands) | June 30, 2026 | March 31, 2026 | June 30, 2025 | ||||||
| Pre-tax, pre-provision income | |||||||||
| Pre-tax income | $ | 26,089 | $ | 25,031 | $ | 20,099 | |||
| Add: provision for credit losses | 2,250 | 2,675 | 2,500 | ||||||
| Pre-tax, pre-provision income | $ | 28,339 | $ | 27,706 | $ | 22,599 | |||
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
