Five Star Bancorp Announces Quarterly and Annual Results
RANCHO CORDOVA, Calif., Jan. 26, 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 $17.6 million for the three months ended December 31, 2025, as compared to $16.3 million for the three months ended September 30, 2025 and $13.3 million for the three months ended December 31, 2024. Net income for the year ended December 31, 2025 was $61.6 million, as compared to $45.7 million for the year ended December 31, 2024.
Financial and Other Highlights
Performance highlights and other developments for the Company for the periods noted below included the following:
Three months ended
(in thousands, except per share and share data)
December 31,2025
September 30,2025
December 31,2024
Return on average assets ("ROAA")
1.50
%
1.44
%
1.31
%
Return on average equity ("ROAE")
15.97
%
15.35
%
13.48
%
Pre-tax income
$
23,008
$
22,234
$
19,367
Pre-tax, pre-provision income(1)
$
25,808
$
24,734
$
20,667
Net income
$
17,643
$
16,344
$
13,317
Basic earnings per common share
$
0.83
$
0.77
$
0.63
Diluted earnings per common share
$
0.83
$
0.77
$
0.63
Weighted average basic common shares outstanding
21,231,563
21,231,563
21,182,143
Weighted average diluted common shares outstanding
21,289,056
21,281,818
21,235,318
Shares outstanding at end of period
21,367,387
21,367,387
21,319,083
Year ended
(in thousands, except per share and share data)
December 31,2025
December 31,2024
ROAA
1.41
%
1.23
%
ROAE
14.74
%
12.72
%
Pre-tax income
$
83,732
$
64,721
Pre-tax, pre-provision income(1)
$
93,432
$
71,671
Net income
$
61,606
$
45,671
Basic earnings per common share
$
2.90
$
2.26
Diluted earnings per common share
$
2.90
$
2.26
Weighted average basic common shares outstanding
21,224,788
20,154,385
Weighted average diluted common shares outstanding
21,273,552
20,205,440
Shares outstanding at end of period
21,367,387
21,319,083
(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:
"We proudly look back on 2025 as an outstanding year of achievement and are pleased to have experienced exceptional organic growth across all of the markets we serve, and consistent, strong financial performance. In 2025, Five Star Bank achieved year-over-year growth in total loans and total deposits. Total loans held for investment increased by $542.2 million, or 15%, and total deposits increased by $643.1 million, or 18%. Wholesale deposits decreased by $95.0 million, or 17%, while non-wholesale deposits increased by $738.1 million or 25%. Cost of funds decreased by 21 basis points from the third to the fourth quarter of 2025 and 17 basis points year-over-year. Our efficiency ratio decreased from 43.19% in 2024 to 41.03% in 2025, net income increased by 35%, or $15.9 million, in 2025, and earnings per share increased by $0.64 during 2025 to $2.90. We also experienced continued improvement in net interest margin expansion. We have provided a consistent shareholder dividend and, in recognition of our strong financial performance and commitment to returning value to our investors, we are pleased to announce an increase in the dividend this quarter. As we look ahead to 2026, we believe that managing expenses and executing on conservative underwriting practices will continue to be foundational to our success.
In 2025, we expanded our San Francisco Bay Area market presence with the opening of our Walnut Creek office. We also announced the expansion of our Agribusiness vertical. In 2026, we plan to continue to focus on building all of the verticals and markets we serve by providing high tech and high touch service to clients who appreciate our differentiated client experience. These efforts have helped us maintain a position of distinction and respect with our clients, employees, and community partners. In 2025, we were among Piper Sandler's 2025 Sm-All Stars, and earned an IDC Superior rating and a Bauer Financial rating of 5 stars (out of five). We were also awarded the prestigious 2024 Raymond James Community Bankers Cup, were among S&P Global Market Intelligence's 2024 Top 3 Best-Performing Community banks in the nation (with assets between $3 billion and $10 billion), and were ranked fourth on the 2025 Bank Director Magazine (RankingBanking) Best U.S. Banks with assets less than $5 billion.
In 2025, our senior leadership was recognized by the San Francisco Business Times with a placement on the Newsmaker 100 List and with a 40 Under 40 recognition. We were also recognized by the Sacramento Business Journal with a Champion for DE&I award, a Power 100 List placement, a Women Who Mean Business honor, and a C-Suite award. Senior leadership also received a Sacramento State Alumni Association Distinguished Alumni Award, a Sacramento Cultural Hub Media Foundation Exceptional Women of Color honor, a Commercial Real Estate Women Nancy Hotchkiss Woman of Impact award, a Sacramento Hispanic Chamber of Commerce Champion Latina Estrella award, and a Sacramento Metropolitan Chamber of Commerce Sacramentan of the Year award.
We are proud of Five Star Bank's achievements in 2025 and are focused on continued success in the future."
Financial highlights included the following:
Total deposits increased by $97.6 million, or 2.38%, during the three months ended December 31, 2025, due to increases in non-wholesale deposits exceeding decreases in wholesale deposits. The Company defines wholesale deposits as brokered deposits and California Time Deposit Program deposits. For the three months ended December 31, 2025, non-wholesale deposits increased by $139.1 million, or 3.87%, while wholesale deposits decreased by $41.4 million, or 8.18%.
The number of Business Development Officers increased from 40 at September 30, 2025 to 42 at December 31, 2025.
Cash and cash equivalents were $506.9 million, representing 12.06% of total deposits at December 31, 2025, as compared to 14.15% at September 30, 2025.
The Company had no short-term borrowings at December 31, 2025 or September 30, 2025.
Consistent, disciplined management of expenses contributed to our efficiency ratio of 40.62% for the three months ended December 31, 2025, as compared to 40.13% for the three months ended September 30, 2025.
For the three months ended December 31, 2025, net interest margin was 3.66%, as compared to 3.56% for the three months ended September 30, 2025 and 3.36% for the three months ended December 31, 2024. For the year ended December 31, 2025, net interest margin was 3.55%, as compared to 3.32% for the year ended December 31, 2024. The effective federal funds rate fell to 3.64% as of December 31, 2025 from 4.09% as of September 30, 2025 and 4.33% as of December 31, 2024.
Other comprehensive income was $0.7 million during the three months ended December 31, 2025. Unrealized losses, net of tax effect, on available-for-sale securities were $9.1 million as of December 31, 2025. Total carrying value of held-to-maturity and available-for-sale securities represented 0.05% and 2.04% of total interest-earning assets, respectively, as of December 31, 2025.
The Company's common equity Tier 1 capital ratio was 10.58% and 10.77% as of December 31, 2025 and September 30, 2025, respectively. The Bank continues to meet all requirements to be considered "well-capitalized" under applicable regulatory guidelines.
Loan and deposit growth in the three and twelve months ended December 31, 2025 was as follows:
(in thousands)
December 31,2025
September 30,2025
$ Change
% Change
Loans held for investment
$
4,074,929
$
3,887,259
$
187,670
4.83
%
Non-interest-bearing deposits
1,084,537
1,059,082
25,455
2.40
%
Interest-bearing deposits
3,116,547
3,044,356
72,191
2.37
%
(in thousands)
December 31, 2025
December 31, 2024
$ Change
% Change
Loans held for investment
$
4,074,929
$
3,532,686
$
542,243
15.35
%
Non-interest-bearing deposits
1,084,537
922,629
161,908
17.55
%
Interest-bearing deposits
3,116,547
2,635,365
481,182
18.26
%
The ratio of nonperforming loans to loans held for investment at period end increased from 0.05% at December 31, 2024 to 0.08% at December 31, 2025.
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 December 31, 2025. The Company's Board of Directors declared an additional cash dividend of $0.25 per share on January 15, 2026, which the Company expects to pay on February 9, 2026 to shareholders of record as of February 2, 2026.
Summary Results
Three months ended December 31, 2025, as compared to three months ended September 30, 2025
The Company's net income was $17.6 million for the three months ended December 31, 2025, as compared to $16.3 million for the three months ended September 30, 2025. Net interest income increased by $2.7 million, primarily due to an increase in interest income driven by a larger average balance of interest-earning assets, augmented by a decrease in interest expense due to a lower average cost of deposits, as compared to the prior quarter. The provision for credit losses increased by $0.3 million, reflecting increases in loan growth and an overall increase in loss rates related to deterioration in the unemployment rate forecast in the three months ended December 31, 2025, as compared to the three months ended September 30, 2025. Non-interest income decreased by $0.6 million, primarily due to an overall decline in earnings related to equity investments in venture-backed funds during the three months ended December 31, 2025, as compared to the prior quarter. Non-interest expense increased by $1.1 million, primarily due to increased salaries and employee benefits due to increased headcount.
Three months ended December 31, 2025, as compared to three months ended December 31, 2024
The Company's net income was $17.6 million for the three months ended December 31, 2025, as compared to $13.3 million for the three months ended December 31, 2024. Net interest income increased by $8.6 million, primarily due to an increase in interest income driven by loan growth and an improvement in the average yield on loans, partially offset by an increase in interest expense due to deposit growth. The provision for credit losses increased by $1.5 million, mainly due to increases in loan growth and an overall increase in loss rates related to the annual current expected credit losses ("CECL") model refresh during the three months ended December 31, 2025, as compared to the three months ended December 31, 2024. Non-interest income decreased by $0.3 million, primarily due to an overall decline in earnings related to equity investments in venture-backed funds during the three months ended December 31, 2025, as compared to the same quarter of the prior year. Non-interest expense increased by $3.2 million, primarily due to increased salaries and employee benefits due to increased headcount.
Year ended December 31, 2025, as compared to year ended December 31, 2024
The Company's net income was $61.6 million for the year ended December 31, 2025, as compared to $45.7 million for the year ended December 31, 2024. Net interest income increased by $32.2 million, primarily due to an increase in interest income driven by loan growth and an improvement in the average yield on loans, partially offset by an increase in interest expense due to deposit growth. The provision for credit losses increased by $2.8 million, or 39.57%, mainly due to increases in loan growth and an overall increase in loss rates related to the annual CECL model refresh during the three months ended December 31, 2025, as compared to the year ended December 31, 2024. Non-interest income increased by $0.1 million, primarily due to growth across multiple sources of revenue. This growth was substantially negated by a reduction in gain on sale of loans, attributable to the strategic reduction in origination of loans held for sale during the year ended December 31, 2025, as compared to the prior year. Non-interest expense increased by $10.5 million, primarily due to increased salaries and employee benefits due to increased headcount.
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)
December 31,2025
September30, 2025
$ Change
% Change
Selected operating data:
Net interest income
$
42,065
$
39,348
$
2,717
6.91
%
Provision for credit losses
2,800
2,500
300
12.00
%
Non-interest income
1,400
1,966
(566
)
(28.79
)%
Non-interest expense
17,657
16,580
1,077
6.50
%
Pre-tax income
23,008
22,234
774
3.48
%
Provision for income taxes
5,365
5,890
(525
)
(8.91
)%
Net income
$
17,643
$
16,344
$
1,299
7.95
%
Earnings per common share:
Basic
$
0.83
$
0.77
$
0.06
7.79
%
Diluted
$
0.83
$
0.77
$
0.06
7.79
%
Performance and other financial ratios:
ROAA
1.50
%
1.44
%
ROAE
15.97
%
15.35
%
Net interest margin
3.66
%
3.56
%
Cost of funds
2.30
%
2.51
%
Efficiency ratio
40.62
%
40.13
%
Three months ended
(in thousands, except per share data)
December 31,2025
December 31,2024
$ Change
% Change
Selected operating data:
Net interest income
$
42,065
$
33,489
$
8,576
25.61
%
Provision for credit losses
2,800
1,300
1,500
115.38
%
Non-interest income
1,400
1,666
(266
)
(15.97
)%
Non-interest expense
17,657
14,488
3,169
21.87
%
Pre-tax income
23,008
19,367
3,641
18.80
%
Provision for income taxes
5,365
6,050
(685
)
(11.32
)%
Net income
$
17,643
$
13,317
$
4,326
32.48
%
Earnings per common share:
Basic
$
0.83
$
0.63
$
0.20
31.75
%
Diluted
$
0.83
$
0.63
$
0.20
31.75
%
Performance and other financial ratios:
ROAA
1.50
%
1.31
%
ROAE
15.97
%
13.48
%
Net interest margin
3.66
%
3.36
%
Cost of funds
2.30
%
2.65
%
Efficiency ratio
40.62
%
41.21
%
Year ended
(in thousands, except per share data)
December 31,2025
December 31,2024
$ Change
% Change
Selected operating data:
Net interest income
$
151,905
$
119,711
$
32,194
26.89
%
Provision for credit losses
9,700
6,950
2,750
39.57
%
Non-interest income
6,535
6,453
82
1.27
%
Non-interest expense
65,008
54,493
10,515
19.30
%
Pre-tax income
83,732
64,721
19,011
29.37
%
Provision for income taxes
22,126
19,050
3,076
16.15
%
Net income
$
61,606
$
45,671
$
15,935
34.89
%
Earnings per common share:
Basic
$
2.90
$
2.26
$
0.64
28.32
%
Diluted
$
2.90
$
2.26
$
0.64
28.32
%
Performance and other financial ratios:
ROAA
1.41
%
1.23
%
ROAE
14.74
%
12.72
%
Net interest margin
3.55
%
3.32
%
Cost of funds
2.47
%
2.64
%
Efficiency ratio
41.03
%
43.19
%
Balance Sheet Summary
(in thousands)
December 31,2025
September 30,2025
$ Change
% Change
Selected financial condition data:
Total assets
$
4,754,861
$
4,641,770
$
113,091
2.44
%
Cash and cash equivalents
506,851
580,447
(73,596
)
(12.68
)%
Total loans held for investment
4,074,929
3,887,259
187,670
4.83
%
Total investments
96,889
97,825
(936
)
(0.96
)%
Total liabilities
4,309,029
4,210,462
98,567
2.34
%
Total deposits
4,201,084
4,103,438
97,646
2.38
%
Subordinated notes, net
74,041
74,004
37
0.05
%
Total shareholders' equity
445,832
431,308
14,524
3.37
%
Insured and collateralized deposits were approximately $2.8 billion, representing 66.20% of total deposits as of December 31, 2025, as compared to 65.25% as of September 30, 2025. Net uninsured and uncollateralized deposits were approximately $1.4 billion as of December 31, 2025, remaining constant from September 30, 2025.
Non-wholesale deposit accounts constituted 88.93% of total deposits as of December 31, 2025, as compared to 87.66% at September 30, 2025. Deposit relationships of greater than $5 million represented 60.90% of total deposits as of December 31, 2025, as compared to 60.14% of total deposits as of September 30, 2025, and had an average age of approximately 7.67 years as of December 31, 2025, as compared to 7.98 years as of September 30, 2025.
Total deposits as of December 31, 2025 were $4.2 billion, an increase of $97.6 million, or 2.38%, from September 30, 2025, comprised of increases in both interest-bearing and non-interest-bearing deposits.
Cash and cash equivalents as of December 31, 2025 were $506.9 million, representing 12.06% of total deposits at December 31, 2025, as compared to 14.15% at September 30, 2025.
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 December 31, 2025, remaining constant from September 30, 2025.
December 31, 2025
(in thousands)
Line of Credit
Letters of Credit Issued
Borrowings
Available
Federal Home Loan Bank of San Francisco ("FHLB") advances
$
1,518,680
$
887,500
$
—
$
631,180
Federal Reserve Discount Window
957,362
—
—
957,362
Correspondent bank lines of credit
185,000
—
—
185,000
Cash and cash equivalents
—
—
—
506,851
Total
$
2,661,042
$
887,500
$
—
$
2,280,393
(in thousands)
December 31,2025
December 31,2024
$ Change
% Change
Selected financial condition data:
Total assets
$
4,754,861
$
4,053,278
$
701,583
17.31
%
Cash and cash equivalents
506,851
352,343
154,508
43.85
%
Total loans held for investment
4,074,929
3,532,686
542,243
15.35
%
Total investments
96,889
100,914
(4,025
)
(3.99
)%
Total liabilities
4,309,029
3,656,654
652,375
17.84
%
Total deposits
4,201,084
3,557,994
643,090
18.07
%
Subordinated notes, net
74,041
73,895
146
0.20
%
Total shareholders' equity
445,832
396,624
49,208
12.41
%
The increase in total assets from December 31, 2024 to December 31, 2025 was primarily due to a $542.2 million increase in total loans held for investment and a $154.5 million increase in cash and cash equivalents. The $542.2 million increase in total loans held for investment between December 31, 2024 and December 31, 2025 was the result of $1.4 billion in loan originations and advances, partially offset by $338.5 million and $502.6 million in loan payoffs and paydowns, respectively. The $542.2 million increase in total loans held for investment included $92.1 million in purchased loans within the consumer concentration of the loan portfolio. The $154.5 million increase in cash and cash equivalents primarily resulted from the net increase in cash inflows from growth in total deposits of $643.1 million and cash outflows from growth in total loans held for investment of $542.2 million.
The increase in total liabilities from December 31, 2024 to December 31, 2025 was primarily attributable to an increase in deposits of $643.1 million. The $643.1 million increase in deposits was largely due to increases in money market, non-interest-bearing demand, interest-bearing transaction, and savings deposits of $553.3 million, $161.9 million, $29.0 million, and $14.5 million, respectively. These increases were partially offset by decreases in time deposits of $115.5 million, largely driven by a $95.0 million decrease in wholesale deposits.
The increase in total shareholders' equity from December 31, 2024 to December 31, 2025 was primarily a result of $61.6 million recognized as net income, partially offset by $17.1 million in cash dividends paid during the period.
Net Interest Income and Net Interest Margin
The following is a summary of the components of net interest income for the periods indicated:
Three months ended
(in thousands)
December 31,2025
September30, 2025
$ Change
% Change
Interest and fee income
$
66,421
$
64,845
$
1,576
2.43
%
Interest expense
24,356
25,497
(1,141
)
(4.48
)%
Net interest income
$
42,065
$
39,348
$
2,717
6.91
%
Net interest margin
3.66
%
3.56
%
Three months ended
(in thousands)
December 31,2025
December 31,2024
$ Change
% Change
Interest and fee income
$
66,421
$
57,745
$
8,676
15.02
%
Interest expense
24,356
24,256
100
0.41
%
Net interest income
$
42,065
$
33,489
$
8,576
25.61
%
Net interest margin
