0001275168-23-000117 | 10-Q | XBRL Viewer

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Investment Securities - Amortized Cost and Fair Value of Securities Available-for-sale (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Marketable Securities [Line Items]
Amortized Cost	$ 129,215	$ 135,087
Gross unrealized gains	99	103
Gross unrealized losses	(18,520)	(19,202)
Securities available-for-sale	110,794	115,988
U.S. government agencies
Marketable Securities [Line Items]
Amortized Cost	12,239	14,317
Gross unrealized gains	95	81
Gross unrealized losses	(197)	(225)
Securities available-for-sale	12,137	14,173
Mortgage-backed securities
Marketable Securities [Line Items]
Amortized Cost	70,117	73,111
Gross unrealized gains	0	1
Gross unrealized losses	(12,038)	(11,841)
Securities available-for-sale	58,079	61,271
Obligations of states and political subdivisions
Marketable Securities [Line Items]
Amortized Cost	44,458	45,223
Gross unrealized gains	4	21
Gross unrealized losses	(5,983)	(6,818)
Securities available-for-sale	38,479	38,426
Collateralized mortgage obligations
Marketable Securities [Line Items]
Amortized Cost	401	436
Gross unrealized gains	0	0
Gross unrealized losses	(42)	(41)
Securities available-for-sale	359	395
Corporate bonds
Marketable Securities [Line Items]
Amortized Cost	2,000	2,000
Gross unrealized gains	0	0
Gross unrealized losses	(260)	(277)
Securities available-for-sale	$ 1,740	$ 1,723

Long Term Debt and Other Borrowings	6 Months Ended
Long Term Debt and Other Borrowings	Jun. 30, 2023
Debt Disclosure [Abstract]
Long Term Debt and Other Borrowings	Long Term Debt and Other Borrowings Subordinated notes: On August 17, 2022, the Company completed a private placement of $75.0 million of fixed-to-floating rate subordinated notes to certain qualified investors, of which $19.3 million was purchased by existing or former members of the board of directors and their affiliates. The notes will be used for capital management and general corporate purposes, including, without limitation, the redemption of existing subordinated notes. The subordinated notes have a maturity date of September 1, 2032 and bear interest, payable semi-annually, at the rate of 6.00% per annum until September 1, 2027. On that date, the interest rate will be adjusted to float at a rate equal to the three-month Term SOFR plus 329.0 basis points (8.59% as of June 30, 2023) until maturity. The notes include a right of prepayment, on or after August 17, 2027 or, in certain limited circumstances, before that date. The indebtedness evidenced by the subordinated notes, including principal and interest, is unsecured and subordinate and junior in right to payment to general and secured creditors and depositors of the Company. The subordinated notes have been structured to qualify as Tier 2 capital for the Company for regulatory capital purposes. Eligible amounts will be phased out by 20% per year beginning five years before the maturity date of the notes. Debt issuance costs incurred in conjunction with the notes were $1.5 million, of which $0.1 million has been amortized as of June 30, 2023. The Company reflects debt issuance costs as a direct deduction from the face of the note. The debt issuance costs are amortized into interest expense through the maturity period. At June 30, 2023 and December 31, 2022, the Company’s subordinated debt outstanding was $73.7 million and $73.6 million, respectively. Other borrowings: The Company entered into an agreement with the FHLB which granted the FHLB a blanket lien on all loans receivable (except for construction and agricultural loans) as collateral for a borrowing line. Based on the dollar volume of qualifying loan collateral, the Company had a total financing availability of $1.0 billion at June 30, 2023 and $1.0 billion at December 31, 2022. At June 30, 2023 and December 31, 2022, the Company had $100.0 million and $100.0 million of outstanding borrowings, respectively. As of June 30, 2023 and December 31, 2022, the Company had letters of credit (“LCs”) issued on its behalf totaling $606.5 million and $686.5 million, respectively, as discussed below. At June 30, 2023 and December 31, 2022, LCs totaling $186.5 million and $206.5 million, respectively, were pledged to secure State of California deposits, and LCs totaling $420.0 million and $480.0 million, respectively, were pledged to secure local agency deposits. The LCs issued reduced the Company’s available borrowing capacity to $342.6 million and $216.3 million as of June 30, 2023 and December 31, 2022, respectively. At June 30, 2023, the Company had five unsecured federal funds lines of credit with its correspondent banks totaling $175.0 million. At December 31, 2022, the Company had seven unsecured federal funds lines of credit with its correspondent banks totaling $190.0 million. There were no amounts outstanding at June 30, 2023 and December 31, 2022. At June 30, 2023 and December 31, 2022, the Company had the ability to borrow from the Federal Reserve Discount Window. At June 30, 2023 and December 31, 2022, the borrowing capacity under this arrangement was $72.8 million and $21.9 million, respectively. There were no amounts outstanding at June 30, 2023 and December 31, 2022. The borrowing line is secured by liens on the Company’s construction and agricultural loan portfolios and certain available-for-sale securities.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(c))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1

Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 470
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//470/tableOfContent

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (g)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (i)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1C
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1C
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1C
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1E
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1E

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

+ Details

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited) (Parenthetical) - $ / shares	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Statement of Stockholders' Equity [Abstract]
Cash dividends paid (in USD per share)	$ 0.20	$ 0.15	$ 0.35	$ 0.75

Subsequent Events (Details Narrative) - $ / shares	Jul. 20, 2023	Apr. 20, 2023
Subsequent Event [Line Items]
Common stock declared (in USD per share)		$ 0.20
Subsequent Event
Subsequent Event [Line Items]
Common stock declared (in USD per share)	$ 0.20

Loans and Allowance for Credit Losses - Allowance for Loan Losses (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning Balance	$ 34,172	$ 23,904	$ 28,389	$ 23,243
Charge-offs	(1,261)	(553)	(2,133)	(929)
Recoveries	153	185	646	272
Provision (Benefit)	920	2,250	1,820	3,200
Ending Balance	33,984	25,786	33,984	25,786
Cumulative Effect, Period of Adoption, Adjustment
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning Balance			5,262
Commercial
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning Balance	27,119	13,868	19,216	12,869
Charge-offs	0	0	0	0
Recoveries	0	0	0	0
Provision (Benefit)	434	2,753	731	3,752
Ending Balance	27,553	16,621	27,553	16,621
Commercial \| Cumulative Effect, Period of Adoption, Adjustment
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning Balance			7,606
Commercial land and development
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning Balance	226	66	54	50
Charge-offs	0	0	0	0
Recoveries	0	0	0	0
Provision (Benefit)	(42)	2	56	18
Ending Balance	184	68	184	68
Commercial land and development \| Cumulative Effect, Period of Adoption, Adjustment
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning Balance			74
Commercial construction
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning Balance	1,438	430	645	371
Charge-offs	0	0	0	0
Recoveries	0	0	0	0
Provision (Benefit)	(226)	78	(315)	137
Ending Balance	1,212	508	1,212	508
Commercial construction \| Cumulative Effect, Period of Adoption, Adjustment
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning Balance			882
Residential construction
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning Balance	175	40	49	50
Charge-offs	0	0	0	0
Recoveries	0	0	0	0
Provision (Benefit)	42	11	87	1
Ending Balance	217	51	217	51
Residential construction \| Cumulative Effect, Period of Adoption, Adjustment
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning Balance			81
Residential
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning Balance	181	208	175	192
Charge-offs	0	0	0	0
Recoveries	0	0	0	0
Provision (Benefit)	(29)	(20)	(26)	(4)
Ending Balance	152	188	152	188
Residential \| Cumulative Effect, Period of Adoption, Adjustment
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning Balance			3
Farmland
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning Balance	219	611	644	645
Charge-offs	0	0	0	0
Recoveries	0	0	0	0
Provision (Benefit)	17	5	(12)	(29)
Ending Balance	236	616	236	616
Farmland \| Cumulative Effect, Period of Adoption, Adjustment
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning Balance			(396)
Secured
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning Balance	4,258	7,039	7,098	6,859
Charge-offs	(1,124)	(273)	(1,611)	(582)
Recoveries	47	40	139	85
Provision (Benefit)	570	(522)	1,185	(78)
Ending Balance	3,751	6,284	3,751	6,284
Secured \| Cumulative Effect, Period of Adoption, Adjustment
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning Balance			(3,060)
Unsecured
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning Balance	152	246	116	207
Charge-offs	0	0	0	0
Recoveries	0	0	0	0
Provision (Benefit)	57	19	56	58
Ending Balance	209	265	209	265
Unsecured \| Cumulative Effect, Period of Adoption, Adjustment
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning Balance			37
Paycheck Protection Program (“PPP”)
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning Balance		0		0
Charge-offs		(21)		(21)
Recoveries		0		0
Provision (Benefit)		21		21
Ending Balance		0		0
Consumer and other
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning Balance	404	1,088	347	889
Charge-offs	(137)	(259)	(522)	(326)
Recoveries	106	145	507	187
Provision (Benefit)	97	(437)	58	(213)
Ending Balance	470	537	470	537
Consumer and other \| Cumulative Effect, Period of Adoption, Adjustment
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning Balance			80
Unallocated
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning Balance		308	45	1,111
Charge-offs		0	0	0
Recoveries		0	0	0
Provision (Benefit)		340	0	(463)
Ending Balance	$ 0	$ 648	0	$ 648
Unallocated \| Cumulative Effect, Period of Adoption, Adjustment
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning Balance			$ (45)

Investment Securities - Amortized Cost and Fair Value of Investment Debt Securities by Contractual Maturity (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Amortized Cost
Within one year	$ 326	$ 417
After one but within five years	950	1,015
After five years through ten years	1,375	1,470
After ten years	835	854
Fair Value
Within one year	300	381
After one but within five years	874	927
After five years through ten years	1,266	1,343
After ten years	768	781
Amortized Cost
Within one year	0	501
After one but within five years	0	0
After five years through ten years	5,801	5,320
After ten years	38,657	39,402
Fair Value
Within one year	0	501
After one but within five years	0	0
After five years through ten years	5,204	4,761
After ten years	33,275	33,164
Securities held-to-maturity, at amortized cost	3,486	3,756
Securities held-to-maturity	3,208	3,432
Amortized Cost	129,215	135,087
Securities available-for-sale, at fair value	110,794	115,988
U.S. government agencies
Fair Value
Securities held-to-maturity, at amortized cost	0	0
Securities held-to-maturity	0	0
Amortized Cost	12,239	14,317
Securities available-for-sale, at fair value	12,137	14,173
Mortgage-backed securities
Fair Value
Securities held-to-maturity, at amortized cost	0	0
Securities held-to-maturity	0	0
Amortized Cost	70,117	73,111
Securities available-for-sale, at fair value	58,079	61,271
Collateralized mortgage obligations
Fair Value
Securities held-to-maturity, at amortized cost	0	0
Securities held-to-maturity	0	0
Amortized Cost	401	436
Securities available-for-sale, at fair value	359	395
Corporate bonds
Fair Value
Securities held-to-maturity, at amortized cost	0	0
Securities held-to-maturity	0	0
Amortized Cost	2,000	2,000
Securities available-for-sale, at fair value	$ 1,740	$ 1,723

Loans and Allowance for Credit Losses - Narrative (Details)	3 Months Ended		6 Months Ended
	Jun. 30, 2023 USD ($) loan	Jun. 30, 2022 USD ($)	Jun. 30, 2023 USD ($) loan	Jun. 30, 2022 USD ($)	Dec. 31, 2022 USD ($)
Financing Receivable, Past Due [Line Items]
Financing receivable, gross	$ 2,927,411,000		$ 2,927,411,000		$ 2,791,326,000
Number of collateral dependent loans in process of foreclosure \| loan	1		1
Interest income related to non-accrual loans	$ 26,100	$ 6,900	$ 35,300	$ 25,100
Pledged loans	1,700,000,000		1,700,000,000		1,600,000,000
Commercial Portfolio Segment
Financing Receivable, Past Due [Line Items]
Unpaid principal balance	175,000		175,000
Federal Reserve Bank of San Francisco
Financing Receivable, Past Due [Line Items]
FRB pledged loans	42,000,000		42,000,000		41,900,000
60-89 Days
Financing Receivable, Past Due [Line Items]
Financing receivable, gross	$ 0		$ 0		$ 175,000

Commitments and Contingencies

6 Months Ended

Jun. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Financial Instruments with Off-Balance Sheet Risk

Some financial instruments, such as loan commitments, credit lines, letters of credit, and overdraft protection, are issued to meet customer financing needs. These are agreements to provide credit or to support the credit of others, as long as conditions established in the contract are met, and usually have expiration dates. Commitments may expire without being used. Substantially all of these commitments are at variable interest rates, based on an index, and have fixed expiration dates.

Off-balance sheet risk to loan loss exists up to the face amount of these instruments, although material losses are not anticipated. The Company uses the same credit policies in making commitments to originate loans and lines of credit as it does for on-balance sheet instruments, including obtaining collateral at exercise of the commitment. The contractual

amounts of unfunded loan commitments and standby letters of credit not reflected in the unaudited consolidated balance sheets were as follows:


(in thousands)	June 30, 2023		December 31, 2022
Commercial lines of credit	$	169,726	$	147,021
Undisbursed construction loans	155,408		80,726
Undisbursed commercial real estate loans	85,703		79,121
Agricultural lines of credit	28,121		10,399
Undisbursed residential real estate loans	8,455		8,945
Undisbursed agricultural real estate loans	1,246		1,068
Other	1,657		1,868
Total commitments and standby letters of credit	$	450,316	$	329,148

The Company records an allowance for credit losses on unfunded loan commitments at the consolidated balance sheet date based on estimates of the probability that these commitments will be drawn upon according to historical utilization experience of the different types of commitments and historical loss rates determined for pooled funded loans. The allowance for credit losses on unfunded commitments totaled $1.5 million as of June 30, 2023 and $0.1 million as of December 31, 2022, which is recorded in “Interest payable and other liabilities” in the unaudited consolidated balance sheets.

Concentrations of credit risk: The Company grants real estate mortgage, real estate construction, commercial, and consumer loans to customers primarily in Northern California. Although the Company has a diversified loan portfolio, a substantial portion is secured by commercial and residential real estate.

In management’s judgment, a concentration of loans exists in real estate related loans, which represented approximately 92.44% of the Company’s loan portfolio at June 30, 2023 and 91.84% of the Company’s loan portfolio at December 31, 2022. Although management believes such concentrations have no more than the normal risk of collectability, a substantial decline in the economy in general, or a decline in real estate values in the Company’s primary market areas in particular, could have an adverse impact on the collectability of these loans. Personal and business incomes represent the primary source of repayment for the majority of these loans.

Deposit concentrations: At June 30, 2023, the Company had 86 deposit relationships that exceeded $5.0 million each, totaling $1.8 billion, or approximately 61.78% of total deposits. The Company’s largest single deposit relationship at June 30, 2023 totaled $210.0 million, or approximately 7.17% of total deposits. Management maintains the Company’s liquidity position and lines of credit with correspondent banks to mitigate the risk of large withdrawals by this group of large depositors.

Contingencies: The Company is subject to legal proceedings and claims which arise in the ordinary course of business. In the opinion of management, the amount of ultimate liability with respect to such actions will not materially affect the consolidated financial position or results of operations of the Company.

Correspondent banking agreements: The Company maintains funds on deposit with other FDIC-insured financial institutions under correspondent banking agreements. Uninsured deposits through these agreements totaled $24.1 million and $16.2 million at June 30, 2023 and December 31, 2022, respectively.

Litigation Matters

The Company is subject to legal proceedings and claims which arise in the ordinary course of business. In the opinion of management, the amount of ultimate liability with respect to such actions will not materially affect the consolidated financial position or results of operations of the Company.

Loans and Allowance for Credit Losses (Tables)

6 Months Ended

Jun. 30, 2023

Receivables [Abstract]

Schedule of Accounts, Notes, Loans and Financing Receivable

The following table presents the balance of each major product type within the Company’s portfolio as of the dates indicated.


(in thousands)	June 30, 2023		December 31, 2022
Real estate:
Commercial	$	2,512,741	$	2,394,674
Commercial land and development	15,199		7,477
Commercial construction	100,514		88,669
Residential construction	13,913		6,693
Residential	22,501		24,230
Farmland	51,349		52,478
Commercial:
Secured	158,959		165,186
Unsecured	23,190		25,431

Consumer and other	31,455		28,628
Subtotal	2,929,821		2,793,466
Less: Net deferred loan fees	2,410		2,140
Less: Allowance for credit losses	33,984		28,389
Loans held for investment, net of allowance for credit losses	$	2,893,427	$	2,762,937

Summary of Credit Quality Indicators

The amortized cost basis of the Company’s loans by origination year, where origination is defined as the later of origination or renewal date, and credit quality indicator as of June 30, 2023 was as follows (disclosure not comparative due to adoption of ASC 326 on January 1, 2023 – refer to Note 1, Basis of Presentation and Summary of Significant Accounting Policies, for further details):


	Amortized Cost Basis by Origination Year
(in thousands)	2023		2022		2021		2020		2019		Prior		Revolving Loans		Revolving Converted to Term		Total
Real estate:
Commercial
Pass	$	162,378	$	978,642	$	716,945	$	242,777	$	130,176	$	258,336	$	3,656	$	—	$	2,492,910
Watch	—		2,490		—		7,013		587		5,671		1,392		—		17,153
Substandard	—		—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—		—
Total	162,378		981,132		716,945		249,790		130,763		264,007		5,048		—		2,510,063
Commercial land and development
Pass	8,577		4,152		1,300		186		—		944		—		—		15,159
Watch	—		—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—		—
Total	8,577		4,152		1,300		186		—		944		—		—		15,159
Commercial construction
Pass	2,066		35,919		45,644		10,530		—		—		—		—		94,159
Watch	—		—		—		—		—		5,897		—		—		5,897
Substandard	—		—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—		—
Total	2,066		35,919		45,644		10,530		—		5,897		—		—		100,056
Residential construction
Pass	—		7,033		6,856		—		—		—		—		—		13,889
Watch	—		—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—		—
Total	—		7,033		6,856		—		—		—		—		—		13,889
Residential
Pass	917		4,022		6,341		2,316		1,193		6,255		1,311		—		22,355
Watch	—		—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		176		—		—		176
Doubtful	—		—		—		—		—		—		—		—		—
Total	917		4,022		6,341		2,316		1,193		6,431		1,311		—		22,531
Farmland
Pass	228		8,111		12,889		8,049		12,674		9,366		4		—		51,321
Watch	—		—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—		—
Total	228		8,111		12,889		8,049		12,674		9,366		4		—		51,321
Commercial:
Secured
Pass	11,838		47,918		20,765		14,073		11,456		12,622		39,469		100		158,241
Watch	—		—		8		93		77		858		—		—		1,036
Substandard	—		—		—		—		53		60		—		—		113
Doubtful	—		—		—		—		—		—		—		—		—
Total	11,838		47,918		20,773		14,166		11,586		13,540		39,469		100		159,390


	Amortized Cost Basis by Origination Year
(in thousands)	2023		2022		2021		2020		2019		Prior		Revolving Loans		Revolving Converted to Term		Total
Commercial:
Unsecured
Pass	1,718		3,816		5,101		6,381		2,572		39		3,581		—		23,208
Watch	—		—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—		—
Total	1,718		3,816		5,101		6,381		2,572		39		3,581		—		23,208
Consumer and other
Pass	7,646		13,893		9,887		—		—		346		—		—		31,772
Watch	—		—		—		—		—		—		—		—		—
Substandard	—		22		—		—		—		—		—		—		22
Doubtful	—		—		—		—		—		—		—		—		—
Total	7,646		13,915		9,887		—		—		346		—		—		31,794
Total
Pass	195,368		1,103,506		825,728		284,312		158,071		287,908		48,021		100		2,903,014
Watch	—		2,490		8		7,106		664		12,426		1,392		—		24,086
Substandard	—		22		—		—		53		236		—		—		311
Doubtful	—		—		—		—		—		—		—		—		—
Total	$	195,368	$	1,106,018	$	825,736	$	291,418	$	158,788	$	300,570	$	49,413	$	100	$	2,927,411

Summary of Age Analysis of Past Due Loans

The age analysis of past due loans by class as of June 30, 2023 consisted of the following:


(in thousands)	Past Due
	30-59 Days		60-89 Days		Greater Than 90 Days		Total Past Due		Current		Total Loans Receivable
Real estate:
Commercial	$	—	$	—	$	—	$	—	$	2,510,063	$	2,510,063
Commercial land and development	—		—		—		—		15,159		15,159
Commercial construction	—		—		—		—		100,056		100,056
Residential construction	—		—		—		—		13,889		13,889
Residential	—		—		176		176		22,355		22,531
Farmland	—		—		—		—		51,321		51,321
Commercial:
Secured	—		—		—		—		159,390		159,390
Unsecured	—		—		—		—		23,208		23,208

Consumer and other	109		—		—		109		31,685		31,794
Total	$	109	$	—	$	176	$	285	$	2,927,126	$	2,927,411

The age analysis of past due loans by class as of December 31, 2022 consisted of the following:


(in thousands)	Past Due						Total Past Due		Current		Total Loans Receivable
	30-59 Days		60-89 Days		Greater Than 90 Days
Real estate:
Commercial	$	—	$	—	$	—	$	—	$	2,392,053	$	2,392,053
Commercial land and development	—		—		—		—		7,447		7,447
Commercial construction	—		—		—		—		88,314		88,314
Residential construction	—		—		—		—		6,693		6,693
Residential	—		175		—		175		24,088		24,263
Farmland	—		—		—		—		52,446		52,446
Commercial:
Secured	—		—		—		—		165,609		165,609
Unsecured	—		—		—		—		25,488		25,488

Consumer and other	194		—		—		194		28,819		29,013
Total	$	194	$	175	$	—	$	369	$	2,790,957	$	2,791,326

Schedule of Non-accrual Loans

Non-accrual loans, segregated by class, were as follows as of June 30, 2023 and December 31, 2022:


(in thousands)	June 30, 2023		December 31, 2022
Real estate:
Commercial	$	—	$	106
Residential	175		175
Commercial:
Secured	112		123

Total non-accrual loans	$	287	$	404

Disclosure of Activity in the Allowance For Loan Losses

The following table discloses activity in the allowance for credit losses for the three months ended June 30, 2023.


(in thousands)	Beginning Balance		Charge-offs		Recoveries		Provision (Benefit)		Ending Balance
Real estate:
Commercial	$	27,119	$	—	$	—	$	434	$	27,553
Commercial land and development	226		—		—		(42)		184
Commercial construction	1,438		—		—		(226)		1,212
Residential construction	175		—		—		42		217
Residential	181		—		—		(29)		152
Farmland	219		—		—		17		236
Commercial:
Secured	4,258		(1,124)		47		570		3,751
Unsecured	152		—		—		57		209

Consumer and other	404		(137)		106		97		470

Total	$	34,172	$	(1,261)	$	153	$	920	$	33,984

The following table discloses activity in the allowance for credit losses for the three months ended June 30, 2022.


(in thousands)	Beginning Balance		Charge-offs		Recoveries		Provision (Benefit)		Ending Balance
Real estate:
Commercial	$	13,868	$	—	$	—	$	2,753	$	16,621
Commercial land and development	66		—		—		2		68
Commercial construction	430		—		—		78		508
Residential construction	40		—		—		11		51
Residential	208		—		—		(20)		188
Farmland	611		—		—		5		616
Commercial:
Secured	7,039		(273)		40		(522)		6,284
Unsecured	246		—		—		19		265
PPP	—		(21)		—		21		—
Consumer and other	1,088		(259)		145		(437)		537
Unallocated	308		—		—		340		648
Total	$	23,904	$	(553)	$	185	$	2,250	$	25,786

The following table discloses activity in the allowance for credit losses for the six months ended June 30, 2023.


(in thousands)	Beginning Balance		Effect of Adoption of ASC 326		Charge-offs		Recoveries		Provision (Benefit)		Ending Balance
Real estate:
Commercial	$	19,216	$	7,606	$	—	$	—	$	731	$	27,553
Commercial land and development	54		74		—		—		56		184
Commercial construction	645		882		—		—		(315)		1,212
Residential construction	49		81		—		—		87		217
Residential	175		3		—		—		(26)		152
Farmland	644		(396)		—		—		(12)		236
Commercial:
Secured	7,098		(3,060)		(1,611)		139		1,185		3,751
Unsecured	116		37		—		—		56		209

Consumer and other	347		80		(522)		507		58		470
Unallocated	45		(45)		—		—		—		—
Total	$	28,389	$	5,262	$	(2,133)	$	646	$	1,820	$	33,984

The following table discloses activity in the allowance for credit losses for the six months ended June 30, 2022.


(in thousands)	Beginning Balance		Charge-offs		Recoveries		Provision (Benefit)		Ending Balance
Real estate:
Commercial	$	12,869	$	—	$	—	$	3,752	$	16,621
Commercial land and development	50		—		—		18		68
Commercial construction	371		—		—		137		508
Residential construction	50		—		—		1		51
Residential	192		—		—		(4)		188
Farmland	645		—		—		(29)		616
Commercial:
Secured	6,859		(582)		85		(78)		6,284
Unsecured	207		—		—		58		265
PPP	—		(21)		—		21		—
Consumer and other	889		(326)		187		(213)		537
Unallocated	1,111		—		—		(463)		648
Total	$	23,243	$	(929)	$	272	$	3,200	$	25,786

Prior to adoption of ASC 326, provisions for unfunded loan commitments were included in “Other operating expenses” in the unaudited consolidated statements of income.


	Three months ended				Six months ended
(in thousands)	June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022
Balance at beginning of period	$	1,217	$	102	$	125	$	102
Effect of adoption of ASC 326	—		—		1,092		—
Provision	330		23		330		23


Balance at end of period	$	1,547	$	125	$	1,547	$	125

Investment Securities

6 Months Ended

Jun. 30, 2023

Investments, Debt and Equity Securities [Abstract]

Investment Securities

The Company’s investment securities portfolio includes obligations of states and political subdivisions, securities issued by U.S. federal government agencies, such as the SBA, and securities issued by U.S. GSEs, such as FNMA, FHLMC, and FHLB. The Company also invests in residential and commercial mortgage-backed securities, collateralized mortgage obligations issued or guaranteed by government sponsored entities, and corporate bonds, as reflected in the following tables.

A summary of the amortized cost and fair value related to securities held-to-maturity as of June 30, 2023 and December 31, 2022 is presented below.


(in thousands)	Amortized Cost		Gross Unrealized				Fair Value
			Gains		(Losses)
June 30, 2023
Obligations of states and political subdivisions	$	3,486	$	—	$	(278)	$	3,208
Total held-to-maturity	$	3,486	$	—	$	(278)	$	3,208
December 31, 2022
Obligations of states and political subdivisions	$	3,756	$	—	$	(324)	$	3,432
Total held-to-maturity	$	3,756	$	—	$	(324)	$	3,432

For securities issued by states and political subdivisions, for purposes of evaluating whether to recognize credit loss expense, management considers: (i) issuer and/or guarantor credit ratings; (ii) historical probability of default and loss given default rates for given bond ratings and remaining maturity; (iii) whether issuers continue to make timely principal and interest payments under the contractual terms of the securities; (iv) internal credit review of the financial information; and (v) whether or not such securities have credit enhancements such as guarantees, contain a defeasance clause, or are pre-refunded by the issuers.

The Company adopted ASC 326 on January 1, 2023, which affects accounting of credit loss expense on held-to-maturity and available-for-sale securities. Refer to Note 1, Basis of Presentation and Summary of Significant Accounting Policies, for further detail.

A summary of the amortized cost and fair value related to securities available-for-sale as of June 30, 2023 and December 31, 2022 is presented below.


(in thousands)	Amortized Cost		Gross Unrealized				Fair Value
			Gains		(Losses)
June 30, 2023
U.S. government agencies	$	12,239	$	95	$	(197)	$	12,137
Mortgage-backed securities	70,117		—		(12,038)		58,079
Obligations of states and political subdivisions	44,458		4		(5,983)		38,479
Collateralized mortgage obligations	401		—		(42)		359
Corporate bonds	2,000		—		(260)		1,740
Total available-for-sale	$	129,215	$	99	$	(18,520)	$	110,794
December 31, 2022
U.S. government agencies	$	14,317	$	81	$	(225)	$	14,173
Mortgage-backed securities	73,111		1		(11,841)		61,271
Obligations of states and political subdivisions	45,223		21		(6,818)		38,426
Collateralized mortgage obligations	436		—		(41)		395
Corporate bonds	2,000		—		(277)		1,723
Total available-for-sale	$	135,087	$	103	$	(19,202)	$	115,988

The amortized cost and fair value of investment securities by contractual maturity at June 30, 2023 and December 31, 2022 are shown below. Expected maturities may differ from contractual maturities if the issuers of the securities have the right to call or prepay obligations with or without call or prepayment penalties.


(in thousands)	June 30, 2023								December 31, 2022
	Held-to-Maturity				Available-for-Sale				Held-to-Maturity				Available-for-Sale
	Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value
Within one year	$	326	$	300	$	—	$	—	$	417	$	381	$	501	$	501
After one but within five years	950		874		—		—		1,015		927		—		—
After five years through ten years	1,375		1,266		5,801		5,204		1,470		1,343		5,320		4,761
After ten years	835		768		38,657		33,275		854		781		39,402		33,164

Investment securities not due at a single maturity date:
U.S. government agencies	—		—		12,239		12,137		—		—		14,317		14,173
Mortgage-backed securities	—		—		70,117		58,079		—		—		73,111		61,271
Collateralized mortgage obligations	—		—		401		359		—		—		436		395
Corporate bonds	—		—		2,000		1,740		—		—		2,000		1,723
Total	$	3,486	$	3,208	$	129,215	$	110,794	$	3,756	$	3,432	$	135,087	$	115,988

Sales of investment securities and gross gains and losses are shown in the following table:


(in thousands)	For the three months ended				For the six months ended
	June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022
Available-for-sale:
Sales proceeds	$	—	$	—	$	—	$	1,623
Gross realized gains	—		—		—		5

Pledged investment securities are shown in the following table:


(in thousands)	June 30, 2023		December 31, 2022
Pledged to:
The State of California, securing deposits of public funds and borrowings	$	57,688	$	40,465
The Federal Reserve Discount Window, increasing borrowing capacity	52,215		—
Total pledged investment securities	$	109,903	$	40,465

The following table details the gross unrealized losses and fair values aggregated by investment category and length of time that individual available-for-sale securities have been in a continuous unrealized loss position at June 30, 2023 and December 31, 2022:


	Less than 12 months				12 months or more				Total securities in a loss position
(in thousands)	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
June 30, 2023
U.S. government agencies	$	2,404	$	(26)	$	8,158	$	(171)	$	10,562	$	(197)
Mortgage-backed securities	391		(6)		57,686		(12,032)		58,077		(12,038)
Obligations of states and political subdivisions	—		—		36,952		(5,983)		36,952		(5,983)
Collateralized mortgage obligations	—		—		359		(42)		359		(42)
Corporate bonds	—		—		1,740		(260)		1,740		(260)
	$	2,795	$	(32)	$	104,895	$	(18,488)	$	107,690	$	(18,520)

December 31, 2022
U.S. government agencies	$	3,090	$	(125)	$	8,392	$	(100)	$	11,482	$	(225)
Mortgage-backed securities	4,360		(470)		56,908		(11,371)		61,268		(11,841)
Obligations of states and political subdivisions	24,707		(4,097)		11,670		(2,721)		36,377		(6,818)
Collateralized mortgage obligations	395		(41)		—		—		395		(41)
Corporate bonds	—		—		1,723		(277)		1,723		(277)
	$	32,552	$	(4,733)	$	78,693	$	(14,469)	$	111,245	$	(19,202)

There were 153 and 152 available-for-sale securities in unrealized loss positions at June 30, 2023 and December 31, 2022, respectively. As of June 30, 2023, the investment portfolio included 148 investment securities that had been in a continuous loss position for twelve months or more and five investment securities that had been in a loss position for less than twelve months.

There was one held-to-maturity security in a continuous unrealized loss position at June 30, 2023, which had been in a continuous loss position for more than twelve months.

Obligations issued or guaranteed by government agencies such as GNMA and the SBA or GSEs under conservatorship such as the FNMA and the FHLMC, are guaranteed or sponsored by agencies of the U.S. government and have strong credit profiles. The Company therefore expects to receive all contractual interest payments on time and believes the risk of credit losses on these securities is remote.

The Company’s investment in obligations of states and political subdivisions are deemed credit worthy after management’s comprehensive analysis of the issuers’ latest financial information, credit ratings by major credit agencies, and/or credit enhancements.

Non-Marketable Securities Included in Other Assets

FHLB capital stock: As a member of the FHLB, the Company is required to maintain a minimum investment in FHLB capital stock determined by the board of directors of the FHLB. The minimum investment requirements can increase in the event the Company increases its total asset size or borrowings with the FHLB. Shares cannot be purchased or sold except between the FHLB and its members at the $100 per share par value. The Company held $15.0 million and $10.9 million of FHLB stock at June 30, 2023 and December 31, 2022, respectively. The carrying amounts of these investments are reasonable estimates of fair value because the securities are restricted to member banks and do not have a readily determinable market value. Based on management’s analysis of the FHLB’s financial condition and certain qualitative factors, management determined that the FHLB stock was not impaired at June 30, 2023 and December 31, 2022. On April 27, 2023, the FHLB announced a cash dividend for the first quarter of 2023 at an annualized dividend rate of 7.00%, which was paid on May 11, 2023. Cash dividends received on FHLB capital stock amounted to $0.2 million and $0.1 million for the three months ended June 30, 2023 and 2022, respectively, and $0.4 million and $0.2 million for the six months ended June 30, 2023 and 2022, respectively, and were recorded as non-interest income on the unaudited consolidated statements of income.

Long Term Debt and Other Borrowings (Details)	Aug. 17, 2022 USD ($)	Jun. 30, 2023 USD ($) federal_fund	Dec. 31, 2022 USD ($) federal_fund
Debt Instrument [Line Items]
Subordinated debt, net		$ 73,677,000	$ 73,606,000
Number of unsecured federal funds \| federal_fund		5	7
FHLB Agreement
Debt Instrument [Line Items]
Line of credit		$ 100,000,000	$ 100,000,000
Subordinated Debt
Debt Instrument [Line Items]
Debt issuance costs		1,500,000
Amortization, debt issuance costs		$ 100,000
Subordinated Debt \| Fixed-to-floating Rate Subordinated Notes Issued August 2022
Debt Instrument [Line Items]
Subordinated debt, net	$ 75,000,000
Interest rate (in percent)	6.00%
Floating interest rate (in percent)		8.59%
Subordinated Debt \| Fixed-to-floating Rate Subordinated Notes Issued August 2022 \| Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate
Debt Instrument [Line Items]
Basis spread on variable rate	3.29%
Subordinated Debt \| Entity controlled by existing and former board members and their affiliates
Debt Instrument [Line Items]
Face amount	$ 19,300,000
Letter of Credit \| FHLB Agreement
Debt Instrument [Line Items]
Maximum borrowing capacity		$ 1,000,000,000	1,000,000,000
Letters of credit amount		606,500,000	686,500,000
Line of Credit
Debt Instrument [Line Items]
Line of credit		0	0
Line of Credit \| Secure State of California Deposits
Debt Instrument [Line Items]
Letters of credit amount		186,500,000	206,500,000
Line of Credit \| Secure Local Agency Deposit
Debt Instrument [Line Items]
Letters of credit amount		420,000,000	480,000,000
Line of Credit \| Federal Reserve Discount Window
Debt Instrument [Line Items]
Maximum borrowing capacity		72,800,000	21,900,000
Line of credit outstanding		0	0
Line of Credit \| FHLB Agreement
Debt Instrument [Line Items]
Remaining borrowing capacity		342,600,000	216,300,000
Line of Credit \| Five Unsecured Federal Funds Line Of Credit
Debt Instrument [Line Items]
Line of credit		$ 175,000,000	$ 190,000,000

Interest Bearing Deposits - Maturities of Time Deposits (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Interest-bearing Deposits
2023	$ 299,516
2024	55,928
2025	21,125
2026	1,331
2027	0
Total time deposits	$ 377,900	$ 342,500

Fair Value of Assets and Liabilities

6 Months Ended

Jun. 30, 2023

Fair Value Disclosures [Abstract]

Fair Value of Assets and Liabilities

Fair Value Hierarchy and Fair Value Measurement

Accounting standards require the Company to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:

Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the Company has the ability to access as of the measurement date.

Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.

Level 3: Significant unobservable inputs that reflect the Company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

The fair values of securities are determined by obtaining quoted prices on nationally recognized securities exchanges (Level 1 inputs) or matrix pricing, which is a mathematical technique widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities, but rather by relying on the securities’ relationship to other benchmark quoted securities (Level 2 inputs).

The following table summarizes the Company’s assets and liabilities that were required to be recorded at fair value on a recurring basis.


(in thousands)	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Measurement Categories: Changes in Fair Value Recorded In
June 30, 2023
Assets:
Securities available-for-sale:
U.S. government agencies, mortgage-backed securities, obligations of states and political subdivisions, collateralized mortgage obligations, and corporate bonds	$	110,794	$	—	$	110,794	$	—	OCI
Derivatives – interest rate swap	8		—		8		—		NI
Liabilities:
Derivatives – interest rate swap	8		—		8		—		NI

December 31, 2022
Assets:
Securities available-for-sale:
U.S. government agencies, mortgage-backed securities, obligations of states and political subdivisions, collateralized mortgage obligations, and corporate bonds	$	115,988	$	—	$	115,988	$	—	OCI
Derivatives – interest rate swap	16		—		16		—		NI
Liabilities:
Derivatives – interest rate swap	16		—		16		—		NI

Available-for-sale securities are recorded at fair value on a recurring basis. When available, quoted market prices (Level 1 inputs) are used to determine the fair value of available-for-sale securities. If quoted market prices are not available, management obtains pricing information from a reputable third-party service provider, who may utilize valuation techniques that use current market-based or independently sourced parameters, such as bid/ask prices, dealer-quoted prices, interest rates, benchmark yield curves, prepayment speeds, probability of default, loss severity, and credit spreads (Level 2 inputs). Level 2 securities include U.S. agencies’ or government-sponsored agencies’ debt securities, mortgage-backed securities, government agency-issued bonds, privately issued collateralized mortgage obligations, and corporate bonds. Level 3 securities are based on unobservable inputs that are supported by little or no market activity. In addition, values use discounted cash flow models and may include significant management judgment and estimation. As of June 30, 2023 and December 31, 2022, there were no Level 1 available-for-sale securities and no transfers between Level 1 and Level 2 classifications for assets or liabilities measured at fair value on a recurring basis.

On a recurring basis, derivative financial instruments are recorded at fair value, which is based on the income approach using observable Level 2 market inputs, reflecting market expectations of future interest rates as of the measurement date. Standard valuation techniques are used to calculate the present value of the future expected cash flows assuming an orderly transaction. Valuation adjustments may be made to reflect both the Company’s credit risk and the counterparties’ credit risk in determining the fair value of the derivatives. A similar credit risk adjustment, correlated to the credit standing of the counterparty, is made when collateral posted by the counterparty does not fully cover their liability to the Company.

Certain financial assets may be measured at fair value on a non-recurring basis. These assets are subject to fair value adjustments that result from the application of the lower of cost or fair value accounting or write-downs of individual assets, such as collateral dependent loans and other real estate owned. As of June 30, 2023 and December 31, 2022, the carrying amount of assets measured at fair value on a non-recurring basis was immaterial to the Company.

Disclosures about Fair Value of Financial Instruments

The table below is a summary of fair value estimates for financial instruments as of June 30, 2023 and December 31, 2022. The carrying amounts in the following table are recorded in the consolidated balance sheets under the indicated captions. Further, management has not disclosed the fair value of financial instruments specifically excluded from disclosure requirements, such as BOLI.


	June 30, 2023					December 31, 2022
(in thousands)	Carrying Amounts		Fair Value		Fair Value Hierarchy	Carrying Amounts		Fair Value		Fair Value Hierarchy
Financial assets:
Cash and cash equivalents	$	300,123	$	300,123	Level 1	$	259,991	$	259,991	Level 1
Time deposits in banks	7,343		7,343		Level 1	9,849		9,849		Level 1
Securities available-for-sale	110,794		110,794		Level 2	115,988		115,988		Level 2
Securities held-to-maturity	3,486		3,208		Level 3	3,756		3,432		Level 3
Loans held for sale	8,559		9,460		Level 2	9,416		9,785		Level 2
Loans held for investment, net of allowance for credit losses	2,893,427		2,715,210		Level 3	2,762,937		2,570,176		Level 3
FHLB stock and other investments	21,693		N/A		N/A	16,570		N/A		N/A
Interest rate swap	8		8		Level 2	16		16		Level 2
Financial liabilities:
Interest rate swap	8		8		Level 2	16		16		Level 2
FHLB advances	100,000		100,000		Level 2	100,000		100,000		Level 2
Subordinated notes	73,677		72,178		Level 3	73,606		72,273		Level 3

The following methods and assumptions were used by the Company to estimate the fair value of its financial instruments at June 30, 2023 and December 31, 2022:

Cash and cash equivalents and time deposits in banks: The carrying amount is estimated to be fair value due to the liquid nature of the assets and their short-term maturities.

Investment securities: See discussion above for the methods and assumptions used by the Company to estimate the fair value of investment securities. Fair value of held-to-maturity securities is based on observable market data, such as interest rates and yield curves (observable at commonly quoted intervals) as provided by an independent third party.

Loans held for sale: For loans held for sale, the fair value is based on what secondary markets are currently offering for portfolios with similar characteristics.

Loans held for investment, net of allowance for credit losses: For variable rate loans that reprice frequently with no significant change in credit risk, fair values are based on carrying values. Fair values for other loans are estimated using discounted cash flow analyses, which use interest rates being offered at each reporting date for loans with similar terms to borrowers of comparable creditworthiness without considering widening credit spreads due to market illiquidity, which approximates the exit price notion. The allowance for credit losses is considered to be a reasonable estimate of loan discount for credit quality concerns.

FHLB stock and other investments: Carrying amounts of these investments are reasonable estimates of fair value because the securities are restricted to member banks and do not have a readily determinable market value.

Derivatives - interest rate swap: See above for a discussion of the methods and assumptions used by the Company to estimate the fair value of derivatives.

FHLB advances: For FHLB advances, the carrying amount is estimated to be fair value.

Subordinated notes: The fair value is estimated by discounting the future cash flow using the current three-month CME Term SOFR. The Company’s subordinated notes are not registered securities and were issued through private placements, resulting in a Level 3 classification. The notes are recorded at carrying value.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Shareholders' Equity - Summary of Unvested Shares Activity (Details) - Restricted Stock - $ / shares	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Shares
Beginning of the period balance (in shares)	108,363	138,856	96,826	127,751
Shares granted (in shares)	0	1,438	16,978	23,639
Shares vested (in shares)	(24,492)	(30,816)	(29,933)	(41,062)
Shares forfeited (in shares)	(1,547)	(1,654)	(1,547)	(2,504)
End of the period balance (in shares)	82,324	107,824	82,324	107,824
Weighted Average Grant Date Fair Value
Beginning of the period balance (in USD per share)	$ 21.43	$ 20.95	$ 20.34	$ 19.95
Shares granted (in USD per share)	0	25.02	28.52	28.29
Shares vested (in USD per share)	20.00	21.25	20.78	22.15
Shares forfeited (in USD per share)	26.95	23.79	26.95	22.50
End of the period balance (in USD per share)	$ 21.75	$ 20.88	$ 21.75	$ 20.88

Fair Value of Assets and Liabilities - Fair Value Estimates for Financial Instruments by Balance Sheet Grouping (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Financial assets:
Securities available-for-sale	$ 110,794	$ 115,988
Securities held-to-maturity	3,208	3,432
Carrying Amounts
Financial assets:
Cash and cash equivalents	300,123	259,991
Time deposits in banks	7,343	9,849
Securities available-for-sale	110,794	115,988
Securities held-to-maturity	3,486	3,756
Loans held for sale	8,559	9,416
Loans held for investment, net of allowance for credit losses	2,893,427	2,762,937
FHLB stock and other investments	21,693	16,570
Interest rate swap	8	16
Financial liabilities:
Interest rate swap	8	16
FHLB advances	100,000	100,000
Subordinated notes	73,677	73,606
Fair Value \| Quoted Prices in Active Markets for Identical Assets (Level 1)
Financial assets:
Cash and cash equivalents	300,123	259,991
Time deposits in banks	7,343	9,849
Fair Value \| Significant Other Observable Inputs (Level 2)
Financial assets:
Securities available-for-sale	110,794	115,988
Loans held for sale	9,460	9,785
Interest rate swap	8	16
Financial liabilities:
Interest rate swap	8	16
FHLB advances	100,000	100,000
Fair Value \| Significant Unobservable Inputs (Level 3)
Financial assets:
Securities held-to-maturity	3,208	3,432
Loans held for investment, net of allowance for credit losses	2,715,210	2,570,176
Financial liabilities:
Subordinated notes	$ 72,178	$ 72,273

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Cash flows from operating activities:
Net income	$ 25,890	$ 19,815
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses	2,150	3,200
Depreciation and amortization	824	812
Amortization of deferred loan fees and costs	270	158
Amortization of premiums and discounts on securities	612	659
Amortization of subordinated debt issuance costs	71	34
Stock compensation expense	478	579
Earnings on BOLI	(228)	(191)
Deferred tax provision	70	0
Loans originated for sale	(32,126)	(36,964)
Gain on sale of loans	(1,239)	(1,749)
Proceeds from sale of loans	24,806	25,728
Net gain on sale of securities available-for-sale	0	(5)
Decrease in operating lease liability	(482)	(482)
Cost method of investment-related gain	(1,274)	0
Net changes in:
Interest receivable and other assets	(3,478)	(1,557)
Interest payable and other liabilities	9,277	1,295
Net cash provided by operating activities	25,621	11,332
Cash flows from investing activities:
Proceeds from sale of securities available-for-sale	0	1,623
Maturities, prepayments, and calls of securities available-for-sale	5,512	8,977
Purchases of securities available-for-sale	0	(1,641)
Net change in time deposits in banks	2,506	3,623
Loan originations, net of repayments	(128,757)	(436,195)
Purchase of premises and equipment	(335)	(311)
Purchase of FHLB stock	(4,110)	(4,223)
Purchase of BOLI	(2,000)	(3,050)
Net cash used in investing activities	(127,184)	(431,197)
Cash flows from financing activities:
Net change in deposits	147,735	215,421
FHLB advances	0	60,000
Cash dividends paid	(6,040)	(10,127)
Net cash provided by financing activities	141,695	265,294
Net change in cash and cash equivalents	40,132	(154,571)
Cash and cash equivalents at beginning of period	259,991	425,329
Cash and cash equivalents at end of period	300,123	270,758
Supplemental disclosure of cash flow information:
Interest paid	2,716	1,345
Income taxes paid	686	5,200
Supplemental disclosure of noncash items:
Transfer from loans held for sale to loans held for investment	9,416	10,671
Unrealized gain (loss) on securities	679	(17,287)
Operating lease liabilities recorded in conjunction with adoption of ASC 842	0	5,221
ROUA recorded in conjunction with adoption of ASC 842	1,513	4,974
ROUA acquired	(1,534)	0
Cumulative effect of adoption of ASC 842 and 326 on retained earnings	62,095
Cumulative Effect, Period of Adoption, Adjustment \| Accounting Standards Update 2018-01
Supplemental disclosure of noncash items:
Cumulative effect of adoption of ASC 842 and 326 on retained earnings		$ 68
Cumulative Effect, Period of Adoption, Adjustment \| Accounting Standards Update 2019-11
Supplemental disclosure of noncash items:
Cumulative effect of adoption of ASC 842 and 326 on retained earnings	$ (4,491)

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited) - USD ($) $ in Thousands	Total	Cumulative Effect, Period of Adoption, Adjustment	Common Stock	Retained Earnings	Retained Earnings Cumulative Effect, Period of Adoption, Adjustment	Accumulated Other Comprehensive Income (Loss)
Beginning balance (in shares) at Dec. 31, 2021			17,224,848
Beginning balance at Dec. 31, 2021	$ 235,046	$ 68	$ 218,444	$ 17,168	$ 68	$ (566)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	19,815			19,815
Other comprehensive income (loss)	(12,181)					(12,181)
Stock issued under stock award plans, net (in shares)			23,639
Stock issued under stock award plans, net	0
Stock compensation expense	579		$ 579
Stock forfeitures (in shares)			(2,504)
Stock forfeitures	0
Cash dividends paid	(10,127)			(10,127)
Ending balance (in shares) at Jun. 30, 2022			17,245,983
Ending balance at Jun. 30, 2022	233,200		$ 219,023	26,924		(12,747)
Beginning balance (in shares) at Dec. 31, 2021			17,224,848
Beginning balance at Dec. 31, 2021	$ 235,046	68	$ 218,444	17,168	68	(566)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Accounting Standards Update [Extensible Enumeration]	Accounting Standards Update 2016-13 [Member]
Ending balance (in shares) at Dec. 31, 2022			17,241,926
Ending balance at Dec. 31, 2022	$ 252,825	(4,491)	$ 219,543	46,736	(4,491)	(13,454)
Beginning balance (in shares) at Mar. 31, 2022			17,246,199
Beginning balance at Mar. 31, 2022	231,061		$ 218,721	19,558		(7,218)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	9,953			9,953
Other comprehensive income (loss)	(5,529)					(5,529)
Stock issued under stock award plans, net (in shares)			1,438
Stock issued under stock award plans, net	0
Stock compensation expense	302		$ 302
Stock forfeitures (in shares)			(1,654)
Stock forfeitures	0
Cash dividends paid	(2,587)			(2,587)
Ending balance (in shares) at Jun. 30, 2022			17,245,983
Ending balance at Jun. 30, 2022	233,200		$ 219,023	26,924		(12,747)
Beginning balance (in shares) at Dec. 31, 2022			17,241,926
Beginning balance at Dec. 31, 2022	252,825	$ (4,491)	$ 219,543	46,736	$ (4,491)	(13,454)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	25,890			25,890
Other comprehensive income (loss)	478					478
Stock issued under stock award plans, net (in shares)			16,978
Stock issued under stock award plans, net	0
Stock compensation expense	478		$ 478
Stock forfeitures (in shares)			(1,547)
Stock forfeitures	0
Cash dividends paid	(6,040)			(6,040)
Ending balance (in shares) at Jun. 30, 2023			17,257,357
Ending balance at Jun. 30, 2023	269,140		$ 220,021	62,095		(12,976)
Beginning balance (in shares) at Mar. 31, 2023			17,258,904
Beginning balance at Mar. 31, 2023	260,656		$ 219,785	52,817		(11,946)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	12,729			12,729
Other comprehensive income (loss)	(1,030)					(1,030)
Stock compensation expense	236		$ 236
Stock forfeitures (in shares)			(1,547)
Stock forfeitures	0
Cash dividends paid	(3,451)			(3,451)
Ending balance (in shares) at Jun. 30, 2023			17,257,357
Ending balance at Jun. 30, 2023	$ 269,140		$ 220,021	$ 62,095		$ (12,976)

Shareholders’ Equity - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands		3 Months Ended		6 Months Ended
	Apr. 20, 2023	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock declared (in USD per share)	$ 0.20
Dividends payable	$ 3,500
Stock compensation expense		$ 200	$ 300	$ 478	$ 579
Unvested restricted shares (in shares)		82,324	107,824	82,324	107,824
Unrecognized compensation expense				$ 1,600
Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted average remaining term on the unvested restricted shares (in years)				2 years 11 months 1 day
Employee \| Officer
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation, payment award, vesting period (in years)				5 years
Employee \| Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation, payment award, vesting period (in years)				3 years
Employee \| Maximum \| Executive Officer
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation, payment award, vesting period (in years)				7 years
Executives and Directors \| Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation, payment award, vesting period (in years)				1 year
Executives and Directors \| Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation, payment award, vesting period (in years)				3 years

Basis of Presentation and Summary of Significant Accounting Policies (Policies)	6 Months Ended
	Jun. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Organization	Organization Five Star Bank (the “Bank”) was chartered on October 26, 1999 and began operations on December 20, 1999. Five Star Bancorp (“Bancorp” or the “Company”) was incorporated on September 16, 2002 and subsequently obtained approval from the Federal Reserve to be a bank holding company in connection with its acquisition of the Bank. The Company became the sole shareholder of the Bank on June 2, 2003 in a statutory merger, pursuant to which each outstanding share of the Bank’s common stock was exchanged for one share of common stock of the Company. The Company, through the Bank, provides financial services to customers who are predominately small and middle-market businesses, professionals, and individuals residing in the Northern California region. The Company’s primary loan products are commercial real estate loans, land development loans, construction loans, and operating lines of credit, and its primary deposit products are checking accounts, savings accounts, money market accounts, and term certificate accounts. The Bank currently has seven branch offices in Roseville, Natomas, Rancho Cordova, Redding, Elk Grove, Chico, and Yuba City, and one loan production office in Sacramento.
Basis of Financial Statement Presentation and Consolidation and Emerging Growth Company	Basis of Financial Statement Presentation and Consolidation The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) as contained within the Financial Accounting Standards Board’s (“FASB”) ASC and the rules and regulations of the SEC, including the instructions to Regulation S-X. These interim unaudited consolidated financial statements reflect all adjustments (consisting solely of normal recurring adjustments and accruals) which, in the opinion of management, are necessary for a fair presentation of financial position, results of operations and comprehensive income, changes in shareholders’ equity, and cash flows for the interim periods presented. These unaudited consolidated financial statements have been prepared on a basis consistent with, and should be read in conjunction with, the audited consolidated financial statements as of and for the year ended December 31, 2022, and the notes thereto, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 (the “2022 Annual Report on Form 10-K”), which was filed with the SEC on February 24, 2023. The unaudited consolidated financial statements include Five Star Bancorp and its wholly owned subsidiary, Five Star Bank. All significant intercompany transactions and balances are eliminated in consolidation. The results of operations for the three and six months ended June 30, 2023 are not necessarily indicative of the results of operations that may be expected for any other interim period or for the year ending December 31, 2023. The Company’s accounting and reporting policies conform to GAAP and to general practices within the banking industry. Emerging Growth CompanyThe Company qualifies as an emerging growth company as defined in the Jumpstart Our Business Startups Act of 2012, and, as such, may take advantage of specified reduced reporting requirements and deferred accounting standards adoption dates, and is relieved of other significant requirements that are otherwise generally applicable to other public companies. The Company will remain an Emerging Growth Company for five years after its IPO date, unless one of the following occurs: (i) total annual gross revenues are $1.235 billion or more; (ii) the Company issues more than $1 billion in non-convertible debt; or (iii) the Company becomes a large accelerated filer with a public float of more than $0.7 billion.
Reclassifications	Certain amounts reported in previous consolidated financial statements have been reclassified to conform to current period presentation. These reclassifications did not affect previously reported amounts of net income, total assets, or total shareholders’ equity.
Segments	SegmentsWhile the Company’s chief decision-makers monitor the revenue streams of the various products and services, operations are managed, and financial performance is evaluated, on a Company-wide basis. Discrete financial information is not available other than on a Company-wide basis. Accordingly, all of the financial service operations are considered by management to be aggregated in one reportable operating segment.
Allowance for Credit Losses (“ACL”), Individually Assessed Loans and TDRs and Other Loan Modifications	Allowance for Credit Losses (“ACL”) The ACL is a valuation account that offsets the amortized cost basis of loans receivable and certain other financial assets, including unfunded loan commitments and held-to-maturity debt securities. Under ASC 326, amortized cost basis is the basis on which the ACL is determined. Amortized cost basis on loans receivable is principal outstanding, net of any purchase premiums and discounts, and net of any deferred loan fees and costs. Credit losses are charged off when management believes that the collectability of at least some portion of outstanding principal is unlikely. These charge-offs are recorded as a reversal to, thereby reducing, the allowance for credit losses. Subsequent recoveries of previously charged-off amounts, if any, are recorded as a provision to, thereby increasing, the allowance for credit losses. The allowance for credit losses is maintained at a level to absorb expected credit losses over the contractual life, including consideration of prepayments. Determining the adequacy of the allowance is complex and requires judgments that are inherently subjective, as it requires estimates that are susceptible to revision as additional information becomes available. While the Company has determined an allowance for credit losses it considers appropriate, there can be no assurance that the allowance will be sufficient to absorb future losses. The Company’s process for determining expected lifetime credit losses entails a loan-level, model-based approach and considers a broad range of information, including historical loss experience, current conditions, and reasonable and supportable forecasts. Credit loss is estimated for all loans. Accordingly, the Company has stratified the full loan population into segments sharing similar characteristics to perform the evaluation of the credit loss collectively. The Company can also further stratify loans of similar types, risk attributes, and methods for credit risk monitoring. The Company has determined pools based primarily on regulatory reporting codes as the loans within each pool share similar risk characteristics and there is sufficient historical peer loss data from the Federal Financial Institutions Examination Council to provide statistically meaningful support in the models developed. The Company further stratified the C&I portfolio into traditional C&I loans and SBA loans, as the loans in these pools have different repayment structures and credit risk characteristics. The Company also stratified C&I loans and consumer loans that do not require reserves, as the Company has third party agreements in place to cover loan losses. The Company has identified the following pools subject to an estimate of credit loss: (1) 1-4 Family Construction; (2) Other Construction; (3) Farmland; (4) Revolving Secured by 1-4 Family; (5) Residential Secured by First Liens; (6) Residential Secured by Junior Liens; (7) Multifamily; (8) CRE Owner Occupied; (9) CRE Non-Owner Occupied; (10) Agriculture; (11) C&I; (12) C&I SBA; (13) Consumer; and (14) Municipal. The Company has determined, given its limited loss experience, that peer data and other external data to support loss history provides the best basis for its assessment of expected credit losses. The Company believes that the use of peer loss data from 2008 to 2019 presents loss histories that appropriately reflect a full economic cycle, reflects asset-specific risk characteristics at each pool level identified, and includes a historical look-back period that is objective and reflective of future expected credit losses. Loss data from 2020 to 2021 was excluded from the data set to exclude pandemic-related data in the models. The method for determining the estimate of lifetime credit losses includes, among other things, the following main components: (i) the use of Probability of Default (“PD”) and Loss Given Default (“LGD”) assumptions under a Discounted Cash Flow model; (ii) a multi-scenario macroeconomic forecast; (iii) an initial and reasonable and supportable forecast period of one year for all loan segments; and (iv) a reversion period of one year using a linear transition method to historical loss rates. Given the inherent limitations of a quantitative-only model, qualitative adjustments are included to factor in data points not captured from a quantitative analysis alone. Qualitative criteria that can be considered includes, among other things, the following: •Concentrations – the existence and effect of any concentrations of credit, and changes in the level of such concentrations; •Volume – changes in the nature and volume of the portfolio and in the terms of the loans; •Economic – changes in international, national, regional, and local economic and business conditions and developments that affect the collectibility of the portfolio, including the condition of various market segments; •Policy – changes in lending policies and procedures, including changes in underwriting standards and collection, charge-off, and recovery practices not considered elsewhere in estimating credit losses; •Quality – changes in the volume and severity of past due loans, the volume of non-accrual loans, and the volume and severity of adversely classified or graded loans; and •External – the effect of other external factors, such as competition and legal and regulatory requirements on the level of estimated credit losses in the Company’s loan portfolio. Management reviews current information on a quarterly basis to assess the forecasted future economic impact for purposes of evaluating the adequacy of the ACL. The forecasted direction and magnitude of change with respect to future economic conditions is then assessed against the estimate in the model. Any changes resulting from the quarterly assessment are recorded in “Provision for credit losses” in the unaudited consolidated statements of income. Individually Assessed Loans If an individual loan’s characteristics have deteriorated to below a range of the overall pool, the loan would be individually assessed. Individually assessed loans are measured for credit loss based on one of the following methods: (i) present value of future expected cash flows, discounted at the loan’s effective interest rate; (ii) amount by which carrying value of the loan exceeds the loan’s observable market price; or (iii) the fair value of the collateral, less estimated selling costs, if the loan is collateral dependent. The Company applies the practical expedient and defines collateral dependent loans as those where the borrower is experiencing financial difficulty and on which payment is expected to be provided substantially through the operation or sale of the collateral. TDRs and Other Loan Modifications In accordance with the adoption of ASC 326, which includes ASU No. 2022-02, Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures, accounting guidance for TDRs for creditors has been eliminated. New guidance with respect to recognition, measurement, and disclosures of loans for borrowers experiencing financial difficulties supersedes guidance on TDRs. As of June 30, 2023, the amount of loans modified for borrowers due to experiencing financial difficulties under criteria of principal forgiveness, interest rate reduction, other-than-insignificant payment delay, or term extension was immaterial.
Accrued Interest	Accrued Interest Accrued interest receivable is excluded from amortized cost of all financial instrument types and included in “Interest receivable and other assets” in the unaudited consolidated balance sheets. Accrued interest receivable is not subject to an estimate for credit loss, as the Company has a policy to charge off accrued interest deemed uncollectible in a timely manner. When a loan is placed on non-accrual status, which occurs within 90 days of a borrower becoming delinquent, interest previously accrued but not collected is reversed against current period income.
Available-for-sale (AFS) and Held-to-Maturity Debt Securities	Available-for-sale (“AFS”) Debt Securities Unrealized credit losses are recognized through an allowance for credit losses instead of an adjustment to amortized cost basis, eliminating the other-than-temporary impairment concept. For AFS debt securities in an unrealized loss position, the Company first assesses whether it intends to sell, or it is more likely than not that it will be required to sell, the security before recovery of amortized cost basis. If either criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through earnings. For AFS debt securities that do not meet the above conditions, the Company evaluates at the individual security level whether the decrease in fair value has resulted from credit factors or non-credit factors. If assessment determines that a credit loss exists, the present value of cash flows expected to be collected from the security is compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis of the security, then a credit loss would be recognized, limited to the amount by which the fair value is less than the amortized cost basis. All other changes in fair value of an AFS debt security are recognized in other comprehensive income, net of applicable taxes. Changes in the allowance for credit losses, if any, are recognized as a provision for (or reversal of) credit losses. As of June 30, 2023, the Company’s portfolio of AFS debt securities is comprised primarily of debt, mortgage-backed securities, and collateralized mortgage obligations issued by the U.S. government, its agencies, or government-sponsored enterprises, which are either explicitly or implicitly guaranteed by the U.S. government. The remainder of the portfolio is primarily comprised of obligations of state and political subdivisions, which are generally rated as high grade. The history of minimal credit losses from these issuers indicates that expectation of non-payment of the amortized cost basis is zero. As such, the Company determined that the unrealized loss positions in AFS securities were not due to credit losses, but instead related to changes in interest rates and general market conditions and therefore, no credit loss expense was recognized. Held-to-Maturity Debt Securities The Company’s process for determining the estimate of credit loss on held-to-maturity debt securities is substantially similar to what it is on loans, with segmenting not being applicable. As the amount of held-to-maturity debt securities that the Company carries is limited and given the determination that expected credit loss was immaterial, an immaterial amount was recognized in allowance for credit loss upon adoption and no credit loss expense was recorded for the three and six months ended June 30, 2023.
Loan Commitments	Loan Commitments Loan commitments not unconditionally cancellable are subject to an estimate of credit loss under the CECL model. The Company’s process for determining the estimate of credit loss on loan commitments is the same as it is on loans. Unfunded loan commitment reserves are included in “Interest payable and other liabilities” in the unaudited consolidated balance sheets.
Recently Issued Accounting Standards, Accounting Standards Adopted, and Accounting Standards Issued But Not Yet Adopted	Recently Issued Accounting Standards The following information reflects recent accounting standards that have been adopted or are pending adoption by the Company. The Company qualifies as an emerging growth company and, as such, has elected to use the extended transition period for complying with new or revised accounting standards and is not subject to the new or revised accounting standards applicable to public companies during the extended transition period. The accounting standards discussed below indicate effective dates for the Company as an emerging growth company using the extended transition period. Accounting Standards Adopted On January 1, 2023, the Company adopted ASC 326, which replaces the current “incurred loss” model for recognizing credit losses with an “expected loss” model referred to as the Current Expected Credit Loss (“CECL”) model. The CECL model applies to estimated credit losses on loans receivable, held-to-maturity debt securities, unfunded loan commitments, and certain other financial assets measured at amortized cost. Under ASC 326, available-for-sale debt securities are evaluated for impairment if fair value is less than amortized cost, with any estimated credit losses recorded through a credit loss expense and an allowance, rather than a write-down of the investment. Changes in fair value that are not credit-related will continue to be recorded in other comprehensive income. The Company adopted this standard using a modified retrospective approach through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance was effective for financial assets measured at amortized cost. For certain new disclosures required under ASC 326, such as credit quality indicators by year of origination, we have not restated comparative financial information before January 1, 2023 to conform under ASC 326. This adoption method is considered a change in accounting principle requiring additional disclosure of the nature and reason for the change, which is solely due to adoption of ASC 326. On January 1, 2023, the Company also adopted ASU No. 2022-02, Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures, which had no material impact. Accounting Standards Issued But Not Yet Adopted For the fiscal year beginning January 1, 2023, there have been no new accounting standards issued but not yet adopted that are expected to be material to the Company. There are also no accounting standards issued before January 1, 2023 yet to be adopted.
EPS	EPSBasic EPS is net income divided by the weighted average number of common shares outstanding during the period less average unvested restricted stock awards (“RSAs”). Diluted EPS includes the dilutive effect of additional potential common shares related to unvested RSAs using the treasury stock method. The Company has two forms of outstanding common stock: common stock and unvested RSAs. Holders of unvested RSAs receive non-forfeitable dividends at the same rate as common shareholders and they both share equally in undistributed earnings, and therefore the RSAs are considered participating securities. However, under the two-class method, the difference in EPS is not significant for these participating securities.

Commitments and Contingencies - Narrative (Details) $ in Thousands	Jun. 30, 2023 USD ($) deposit_relationship	Mar. 31, 2023 USD ($)	Jan. 01, 2023 USD ($)	Dec. 31, 2022 USD ($)	Jun. 30, 2022 USD ($)	Mar. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)
Other Commitments [Line Items]
Allowance for credit loss	$ 33,984	$ 34,172	$ 28,389	$ 28,389	$ 25,786	$ 23,904	$ 23,243
Real estate related loans (in percent)	92.44%			91.84%
Number of deposits \| deposit_relationship	86
Deposits over five million, total	$ 5,000
Deposits over five million, amount	$ 1,800,000
Percentage of deposits over five million deposits (in percent)	61.78%
Largest single deposit	$ 210,000
Percentage of largest single deposit to total deposits (in percent)	7.17%
Uninsured amount	$ 24,100			$ 16,200
Unfunded Loan Commitment
Other Commitments [Line Items]
Allowance for credit loss	$ 1,547	$ 1,217	$ 125	$ 125	$ 125	$ 102	$ 102

Loans and Allowance for Credit Losses - Age Analysis of Past Due Loans by Class (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Financing Receivable, Past Due [Line Items]
Total	$ 2,927,411	$ 2,791,326
30-59 Days
Financing Receivable, Past Due [Line Items]
Total	109	194
60-89 Days
Financing Receivable, Past Due [Line Items]
Total	0	175
Greater Than 90 Days
Financing Receivable, Past Due [Line Items]
Total	176	0
Total Past Due
Financing Receivable, Past Due [Line Items]
Total	285	369
Current
Financing Receivable, Past Due [Line Items]
Total	2,927,126	2,790,957
Commercial
Financing Receivable, Past Due [Line Items]
Total	2,510,063	2,392,053
Commercial \| 30-59 Days
Financing Receivable, Past Due [Line Items]
Total	0	0
Commercial \| 60-89 Days
Financing Receivable, Past Due [Line Items]
Total	0	0
Commercial \| Greater Than 90 Days
Financing Receivable, Past Due [Line Items]
Total	0	0
Commercial \| Total Past Due
Financing Receivable, Past Due [Line Items]
Total	0	0
Commercial \| Current
Financing Receivable, Past Due [Line Items]
Total	2,510,063	2,392,053
Commercial land and development
Financing Receivable, Past Due [Line Items]
Total	15,159	7,447
Commercial land and development \| 30-59 Days
Financing Receivable, Past Due [Line Items]
Total	0	0
Commercial land and development \| 60-89 Days
Financing Receivable, Past Due [Line Items]
Total	0	0
Commercial land and development \| Greater Than 90 Days
Financing Receivable, Past Due [Line Items]
Total	0	0
Commercial land and development \| Total Past Due
Financing Receivable, Past Due [Line Items]
Total	0	0
Commercial land and development \| Current
Financing Receivable, Past Due [Line Items]
Total	15,159	7,447
Commercial construction
Financing Receivable, Past Due [Line Items]
Total	100,056	88,314
Commercial construction \| 30-59 Days
Financing Receivable, Past Due [Line Items]
Total	0	0
Commercial construction \| 60-89 Days
Financing Receivable, Past Due [Line Items]
Total	0	0
Commercial construction \| Greater Than 90 Days
Financing Receivable, Past Due [Line Items]
Total	0	0
Commercial construction \| Total Past Due
Financing Receivable, Past Due [Line Items]
Total	0	0
Commercial construction \| Current
Financing Receivable, Past Due [Line Items]
Total	100,056	88,314
Residential construction
Financing Receivable, Past Due [Line Items]
Total	13,889	6,693
Residential construction \| 30-59 Days
Financing Receivable, Past Due [Line Items]
Total	0	0
Residential construction \| 60-89 Days
Financing Receivable, Past Due [Line Items]
Total	0	0
Residential construction \| Greater Than 90 Days
Financing Receivable, Past Due [Line Items]
Total	0	0
Residential construction \| Total Past Due
Financing Receivable, Past Due [Line Items]
Total	0	0
Residential construction \| Current
Financing Receivable, Past Due [Line Items]
Total	13,889	6,693
Residential
Financing Receivable, Past Due [Line Items]
Total	22,531	24,263
Residential \| 30-59 Days
Financing Receivable, Past Due [Line Items]
Total	0	0
Residential \| 60-89 Days
Financing Receivable, Past Due [Line Items]
Total	0	175
Residential \| Greater Than 90 Days
Financing Receivable, Past Due [Line Items]
Total	176	0
Residential \| Total Past Due
Financing Receivable, Past Due [Line Items]
Total	176	175
Residential \| Current
Financing Receivable, Past Due [Line Items]
Total	22,355	24,088
Farmland
Financing Receivable, Past Due [Line Items]
Total	51,321	52,446
Farmland \| 30-59 Days
Financing Receivable, Past Due [Line Items]
Total	0	0
Farmland \| 60-89 Days
Financing Receivable, Past Due [Line Items]
Total	0	0
Farmland \| Greater Than 90 Days
Financing Receivable, Past Due [Line Items]
Total	0	0
Farmland \| Total Past Due
Financing Receivable, Past Due [Line Items]
Total	0	0
Farmland \| Current
Financing Receivable, Past Due [Line Items]
Total	51,321	52,446
Secured
Financing Receivable, Past Due [Line Items]
Total	159,390	165,609
Secured \| 30-59 Days
Financing Receivable, Past Due [Line Items]
Total	0	0
Secured \| 60-89 Days
Financing Receivable, Past Due [Line Items]
Total	0	0
Secured \| Greater Than 90 Days
Financing Receivable, Past Due [Line Items]
Total	0	0
Secured \| Total Past Due
Financing Receivable, Past Due [Line Items]
Total	0	0
Secured \| Current
Financing Receivable, Past Due [Line Items]
Total	159,390	165,609
Unsecured
Financing Receivable, Past Due [Line Items]
Total	23,208	25,488
Unsecured \| 30-59 Days
Financing Receivable, Past Due [Line Items]
Total	0	0
Unsecured \| 60-89 Days
Financing Receivable, Past Due [Line Items]
Total	0	0
Unsecured \| Greater Than 90 Days
Financing Receivable, Past Due [Line Items]
Total	0	0
Unsecured \| Total Past Due
Financing Receivable, Past Due [Line Items]
Total	0	0
Unsecured \| Current
Financing Receivable, Past Due [Line Items]
Total	23,208	25,488
Consumer and other
Financing Receivable, Past Due [Line Items]
Total	31,794	29,013
Consumer and other \| 30-59 Days
Financing Receivable, Past Due [Line Items]
Total	109	194
Consumer and other \| 60-89 Days
Financing Receivable, Past Due [Line Items]
Total	0	0
Consumer and other \| Greater Than 90 Days
Financing Receivable, Past Due [Line Items]
Total	0	0
Consumer and other \| Total Past Due
Financing Receivable, Past Due [Line Items]
Total	109	194
Consumer and other \| Current
Financing Receivable, Past Due [Line Items]
Total	$ 31,685	$ 28,819

Interest-Bearing Deposits (Tables)

6 Months Ended

Jun. 30, 2023

Interest-bearing Deposits

Schedule of Interest-Bearing Deposits.

Interest-bearing deposits consisted of the following as of June 30, 2023 and December 31, 2022:


(in thousands)	June 30, 2023		December 31, 2022
Interest-bearing transaction accounts	$	208,085	$	240,131
Savings accounts	132,797		154,581
Money market accounts	1,377,250		1,073,532
Time accounts, more than $250	246,123		198,159
Other time accounts	131,777		144,355
Total interest-bearing deposits	$	2,096,032	$	1,810,758

Time Deposit Maturities

As of June 30, 2023, scheduled maturities of time deposits for the next five years were as follows:


(in thousands)
2023	$	299,516
2024	55,928
2025	21,125
2026	1,331
2027	—
Total time deposits	$	377,900

Schedule of Composition of Network Deposits

The composition of network deposits as of June 30, 2023 and December 31, 2022 was as follows:


(in thousands)	June 30, 2023		December 31, 2022
CDARS	$	15,486	$	13,248
ICS	568,426		272,719
Total network deposits	$	583,912	$	285,967

Interest Expense Recognized on Interest-Bearing Deposits

Interest expense recognized on interest-bearing deposits for periods ended June 30, 2023 and 2022 consisted of the following:


	Three months ended				Six months ended
(in thousands)	June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022
Interest-bearing transaction accounts	$	825	$	66	$	1,258	$	136
Savings accounts	758		38		1,303		63
Money market accounts	8,136		679		13,572		1,045
Time accounts, $250 or more	2,634		226		4,597		286
Other time accounts	1,616		12		2,617		36
Total interest expense on interest-bearing deposits	$	13,969	$	1,021	$	23,347	$	1,566

Loans and Allowance for Credit Losses

6 Months Ended

Jun. 30, 2023

Receivables [Abstract]

Loans and Allowance for Credit Losses

The Company’s loan portfolio is its largest class of earning assets and typically provides higher yields than other types of earning assets. Associated with the higher yields is an inherent amount of credit risk which the Company attempts to mitigate through strong underwriting practices. The following table presents the balance of each major product type within the Company’s portfolio as of the dates indicated.


(in thousands)	June 30, 2023		December 31, 2022
Real estate:
Commercial	$	2,512,741	$	2,394,674
Commercial land and development	15,199		7,477
Commercial construction	100,514		88,669
Residential construction	13,913		6,693
Residential	22,501		24,230
Farmland	51,349		52,478
Commercial:
Secured	158,959		165,186
Unsecured	23,190		25,431

Consumer and other	31,455		28,628
Subtotal	2,929,821		2,793,466
Less: Net deferred loan fees	2,410		2,140
Less: Allowance for credit losses	33,984		28,389
Loans held for investment, net of allowance for credit losses	$	2,893,427	$	2,762,937

Underwriting

Commercial loans: Commercial loans are underwritten after evaluating and understanding the borrower’s ability to operate profitably and prudently expand its business. Underwriting standards are designed to promote relationship banking rather than transactional banking. Once it is determined that the borrower’s management possesses sound ethics and solid business acumen, the Company’s management examines current and projected cash flows to determine the ability of the borrower to repay its obligations as agreed. Commercial loans are primarily made based on the identified cash flows of the borrower and secondarily, on the underlying collateral provided by the borrower. The cash flows of borrowers, however, may not be as expected, and the collateral securing these loans may fluctuate in value. Most commercial loans are secured by the assets being financed or other business assets such as accounts receivable or inventory and may incorporate a personal guarantee; however, some short-term loans may be made on an unsecured basis. In the case of loans secured by accounts receivable, the availability of funds for the repayment of these loans may be substantially dependent on the ability of the borrower to collect amounts due from its customers.

Real estate loans: Real estate loans are subject to underwriting standards and processes similar to commercial loans. These loans are viewed primarily as cash flow loans and secondarily, as loans secured by real estate. Commercial real estate lending typically involves higher loan principal amounts, and the repayment of these loans is generally largely dependent on the successful operation of the property securing the loan or the business conducted on the property securing the loan. Commercial real estate loans may be more adversely affected than other loans by conditions in the real estate market or in the general economy. The properties securing the Company’s commercial real estate portfolio are diverse in terms of type. This diversity helps reduce the Company’s exposure to adverse economic events that affect any single market or industry. Management monitors and evaluates commercial real estate loans based on collateral, geography, and risk grade criteria.

Construction loans: With respect to construction loans that the Company may originate from time to time, the Company generally requires the borrower to have had an existing relationship with the Company and have a proven record of success. Construction loans are underwritten utilizing feasibility studies, independent appraisal reviews, sensitivity analysis of absorption and lease rates, and financial analysis of the developers and property owners. Construction loans are generally based upon estimates of costs and value associated with the completed project. These estimates may be inaccurate. Construction loans often involve the disbursement of substantial funds with repayment substantially dependent

on the ultimate success of the project. Sources of repayment for these types of loans may be pre-committed permanent loans from approved long-term lenders, sales of developed property, or an interim loan commitment from the Company until permanent financing is obtained. These loans are closely monitored using on-site inspections and are generally considered to have higher risks than other real estate loans due to their ultimate repayment being sensitive to interest rate changes, governmental regulation of real property, general economic conditions, and the availability of long-term financing.

Residential real estate loans: Residential real estate loans are underwritten based upon the borrower’s income, credit history, and collateral. To monitor and manage residential loan risk, policies and procedures are developed and modified, as needed. This activity, coupled with relatively small loan amounts that are spread across many individual borrowers, minimizes risk. Underwriting standards for home loans are heavily influenced by statutory requirements, which include, but are not limited to, a maximum loan-to-value percentage, collection remedies, the number of such loans a borrower can have at one time, and documentation requirements.

Farmland loans: Farmland loans are generally made to producers and processors of crops and livestock. Repayment is primarily from the sale of an agricultural product or service. Farmland loans are secured by real property and are susceptible to changes in market demand for specific commodities. This may be exacerbated by, among other things, industry changes, changes in the individual financial capacity of the business owner, general economic conditions, and changes in business cycles, as well as adverse weather conditions.

Consumer loans: The Company purchased consumer loans underwritten utilizing credit scoring analysis to supplement the underwriting process. To monitor and manage consumer loan risk, policies and procedures are developed and modified, as needed. This activity, coupled with relatively small loan amounts that are spread across many individual borrowers, minimizes risk. Underwriting standards for home equity loans are heavily influenced by statutory requirements, which include, but are not limited to, a maximum loan-to-value percentage, collection remedies, the number of such loans a borrower can have at one time, and documentation requirements.

Credit Quality Indicators

The Company has established a loan risk rating system to measure and monitor the quality of the loan portfolio. All loans are assigned a risk rating from the inception of the loan until the loan is paid off. The primary loan grades are as follows:

Loans rated pass: These are loans to borrowers with satisfactory financial support, repayment capacity, and credit strength. Borrowers in this category demonstrate fundamentally sound financial positions, repayment capacity, credit history, and management expertise. Loans in this category must have an identifiable and stable source of repayment and meet the Company’s policy regarding debt service coverage ratios. These borrowers are capable of sustaining normal economic, market, or operational setbacks without significant financial impacts. Financial ratios and trends are acceptable. Negative external industry factors are generally not present. The loan may be secured, unsecured, or supported by non-real estate collateral for which the value is more difficult to determine and/or marketability is more uncertain.

Loans rated watch: These are loans which have deficient loan quality and potentially significant issues, but losses do not appear to be imminent, and the issues are expected to be temporary in nature. The significant issues are typically: (i) a history of losses or events that threaten the borrower’s viability; (ii) a property with significant depreciation and/or marketability concerns; or (iii) poor or deteriorating credit, occasional late payments, and/or limited reserves but the loan is generally kept current. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or in the Company’s credit position at some future date.

Loans rated substandard: These are loans which are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged (if any). Loans so classified exhibit a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. Loans are characterized by the distinct possibility that the Company may sustain some loss if the deficiencies are not corrected.

Loans rated doubtful: These are loans for which the collection or liquidation of the entire debt is highly questionable or improbable. Typically, the possibility of loss is extremely high. The losses on these loans are deferred until all pending factors have been addressed.


	Amortized Cost Basis by Origination Year
(in thousands)	2023		2022		2021		2020		2019		Prior		Revolving Loans		Revolving Converted to Term		Total
Real estate:
Commercial
Pass	$	162,378	$	978,642	$	716,945	$	242,777	$	130,176	$	258,336	$	3,656	$	—	$	2,492,910
Watch	—		2,490		—		7,013		587		5,671		1,392		—		17,153
Substandard	—		—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—		—
Total	162,378		981,132		716,945		249,790		130,763		264,007		5,048		—		2,510,063
Commercial land and development
Pass	8,577		4,152		1,300		186		—		944		—		—		15,159
Watch	—		—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—		—
Total	8,577		4,152		1,300		186		—		944		—		—		15,159
Commercial construction
Pass	2,066		35,919		45,644		10,530		—		—		—		—		94,159
Watch	—		—		—		—		—		5,897		—		—		5,897
Substandard	—		—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—		—
Total	2,066		35,919		45,644		10,530		—		5,897		—		—		100,056
Residential construction
Pass	—		7,033		6,856		—		—		—		—		—		13,889
Watch	—		—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—		—
Total	—		7,033		6,856		—		—		—		—		—		13,889
Residential
Pass	917		4,022		6,341		2,316		1,193		6,255		1,311		—		22,355
Watch	—		—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		176		—		—		176
Doubtful	—		—		—		—		—		—		—		—		—
Total	917		4,022		6,341		2,316		1,193		6,431		1,311		—		22,531
Farmland
Pass	228		8,111		12,889		8,049		12,674		9,366		4		—		51,321
Watch	—		—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—		—
Total	228		8,111		12,889		8,049		12,674		9,366		4		—		51,321
Commercial:
Secured
Pass	11,838		47,918		20,765		14,073		11,456		12,622		39,469		100		158,241
Watch	—		—		8		93		77		858		—		—		1,036
Substandard	—		—		—		—		53		60		—		—		113
Doubtful	—		—		—		—		—		—		—		—		—
Total	11,838		47,918		20,773		14,166		11,586		13,540		39,469		100		159,390


	Amortized Cost Basis by Origination Year
(in thousands)	2023		2022		2021		2020		2019		Prior		Revolving Loans		Revolving Converted to Term		Total
Commercial:
Unsecured
Pass	1,718		3,816		5,101		6,381		2,572		39		3,581		—		23,208
Watch	—		—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—		—
Total	1,718		3,816		5,101		6,381		2,572		39		3,581		—		23,208
Consumer and other
Pass	7,646		13,893		9,887		—		—		346		—		—		31,772
Watch	—		—		—		—		—		—		—		—		—
Substandard	—		22		—		—		—		—		—		—		22
Doubtful	—		—		—		—		—		—		—		—		—
Total	7,646		13,915		9,887		—		—		346		—		—		31,794
Total
Pass	195,368		1,103,506		825,728		284,312		158,071		287,908		48,021		100		2,903,014
Watch	—		2,490		8		7,106		664		12,426		1,392		—		24,086
Substandard	—		22		—		—		53		236		—		—		311
Doubtful	—		—		—		—		—		—		—		—		—
Total	$	195,368	$	1,106,018	$	825,736	$	291,418	$	158,788	$	300,570	$	49,413	$	100	$	2,927,411

Management regularly reviews the Company’s loans for accuracy of risk grades whenever new information is received. Borrowers are generally required to submit financial information at regular intervals. Typically, commercial borrowers with lines of credit are required to submit financial information with reporting intervals ranging from monthly to annually depending on credit size, risk, and complexity. In addition, investor commercial real estate borrowers with loans exceeding a certain dollar threshold are usually required to submit rent rolls or property income statements annually. Management monitors construction loans monthly and reviews consumer loans based on delinquency. Management also reviews loans graded “watch” or worse, regardless of loan type, no less than quarterly.

The age analysis of past due loans by class as of June 30, 2023 consisted of the following:


(in thousands)	Past Due
	30-59 Days		60-89 Days		Greater Than 90 Days		Total Past Due		Current		Total Loans Receivable
Real estate:
Commercial	$	—	$	—	$	—	$	—	$	2,510,063	$	2,510,063
Commercial land and development	—		—		—		—		15,159		15,159
Commercial construction	—		—		—		—		100,056		100,056
Residential construction	—		—		—		—		13,889		13,889
Residential	—		—		176		176		22,355		22,531
Farmland	—		—		—		—		51,321		51,321
Commercial:
Secured	—		—		—		—		159,390		159,390
Unsecured	—		—		—		—		23,208		23,208

Consumer and other	109		—		—		109		31,685		31,794
Total	$	109	$	—	$	176	$	285	$	2,927,126	$	2,927,411

There were no loans greater than 90 days past due and still accruing as of June 30, 2023.

The age analysis of past due loans by class as of December 31, 2022 consisted of the following:


(in thousands)	Past Due						Total Past Due		Current		Total Loans Receivable
	30-59 Days		60-89 Days		Greater Than 90 Days
Real estate:
Commercial	$	—	$	—	$	—	$	—	$	2,392,053	$	2,392,053
Commercial land and development	—		—		—		—		7,447		7,447
Commercial construction	—		—		—		—		88,314		88,314
Residential construction	—		—		—		—		6,693		6,693
Residential	—		175		—		175		24,088		24,263
Farmland	—		—		—		—		52,446		52,446
Commercial:
Secured	—		—		—		—		165,609		165,609
Unsecured	—		—		—		—		25,488		25,488

Consumer and other	194		—		—		194		28,819		29,013
Total	$	194	$	175	$	—	$	369	$	2,790,957	$	2,791,326

There were no loans greater than 90 days past due and still accruing as of December 31, 2022.

One collateral dependent loan was in process of foreclosure at June 30, 2023: a commercial term loan secured by a single family residence with an unpaid principal balance of $175.0 thousand and no related allowance.

Non-accrual loans, segregated by class, were as follows as of June 30, 2023 and December 31, 2022:


(in thousands)	June 30, 2023		December 31, 2022
Real estate:
Commercial	$	—	$	106
Residential	175		175
Commercial:
Secured	112		123

Total non-accrual loans	$	287	$	404

No interest income was recognized on non-accrual loans in the three and six months ended June 30, 2023 or June 30, 2022. Non-accrual real estate loans did not have an allowance for credit losses as of June 30, 2023. Interest income can be recognized on non-accrual loans in cases where resolution occurs through a sale or full payment is received on the non-accrual loan.

The amount of foregone interest income related to non-accrual loans was $26.1 thousand and $35.3 thousand for the three and six months ended June 30, 2023, respectively, compared to $6.9 thousand and $25.1 thousand for the three and six months ended June 30, 2022, respectively.

Allowance for Credit Losses

The following table discloses activity in the allowance for credit losses for the three months ended June 30, 2023.


(in thousands)	Beginning Balance		Charge-offs		Recoveries		Provision (Benefit)		Ending Balance
Real estate:
Commercial	$	27,119	$	—	$	—	$	434	$	27,553
Commercial land and development	226		—		—		(42)		184
Commercial construction	1,438		—		—		(226)		1,212
Residential construction	175		—		—		42		217
Residential	181		—		—		(29)		152
Farmland	219		—		—		17		236
Commercial:
Secured	4,258		(1,124)		47		570		3,751
Unsecured	152		—		—		57		209

Consumer and other	404		(137)		106		97		470

Total	$	34,172	$	(1,261)	$	153	$	920	$	33,984

The following table discloses activity in the allowance for credit losses for the three months ended June 30, 2022.


(in thousands)	Beginning Balance		Charge-offs		Recoveries		Provision (Benefit)		Ending Balance
Real estate:
Commercial	$	13,868	$	—	$	—	$	2,753	$	16,621
Commercial land and development	66		—		—		2		68
Commercial construction	430		—		—		78		508
Residential construction	40		—		—		11		51
Residential	208		—		—		(20)		188
Farmland	611		—		—		5		616
Commercial:
Secured	7,039		(273)		40		(522)		6,284
Unsecured	246		—		—		19		265
PPP	—		(21)		—		21		—
Consumer and other	1,088		(259)		145		(437)		537
Unallocated	308		—		—		340		648
Total	$	23,904	$	(553)	$	185	$	2,250	$	25,786

The following table discloses activity in the allowance for credit losses for the six months ended June 30, 2023.


(in thousands)	Beginning Balance		Effect of Adoption of ASC 326		Charge-offs		Recoveries		Provision (Benefit)		Ending Balance
Real estate:
Commercial	$	19,216	$	7,606	$	—	$	—	$	731	$	27,553
Commercial land and development	54		74		—		—		56		184
Commercial construction	645		882		—		—		(315)		1,212
Residential construction	49		81		—		—		87		217
Residential	175		3		—		—		(26)		152
Farmland	644		(396)		—		—		(12)		236
Commercial:
Secured	7,098		(3,060)		(1,611)		139		1,185		3,751
Unsecured	116		37		—		—		56		209

Consumer and other	347		80		(522)		507		58		470
Unallocated	45		(45)		—		—		—		—
Total	$	28,389	$	5,262	$	(2,133)	$	646	$	1,820	$	33,984

The following table discloses activity in the allowance for credit losses for the six months ended June 30, 2022.


(in thousands)	Beginning Balance		Charge-offs		Recoveries		Provision (Benefit)		Ending Balance
Real estate:
Commercial	$	12,869	$	—	$	—	$	3,752	$	16,621
Commercial land and development	50		—		—		18		68
Commercial construction	371		—		—		137		508
Residential construction	50		—		—		1		51
Residential	192		—		—		(4)		188
Farmland	645		—		—		(29)		616
Commercial:
Secured	6,859		(582)		85		(78)		6,284
Unsecured	207		—		—		58		265
PPP	—		(21)		—		21		—
Consumer and other	889		(326)		187		(213)		537
Unallocated	1,111		—		—		(463)		648
Total	$	23,243	$	(929)	$	272	$	3,200	$	25,786

Unfunded Loan Commitment Reserves

Unfunded loan commitment reserves are included in “Interest payable and other liabilities” in the unaudited consolidated balance sheets. Provisions for unfunded loan commitments are included in “Provision for credit losses” in the unaudited consolidated statements of income. Prior to adoption of ASC 326, provisions for unfunded loan commitments were included in “Other operating expenses” in the unaudited consolidated statements of income.


	Three months ended				Six months ended
(in thousands)	June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022
Balance at beginning of period	$	1,217	$	102	$	125	$	102
Effect of adoption of ASC 326	—		—		1,092		—
Provision	330		23		330		23


Balance at end of period	$	1,547	$	125	$	1,547	$	125

Pledged Loans

The Company’s FHLB line of credit is secured under terms of a collateral agreement by a pledge of certain qualifying loans with unpaid principal balances of $1.7 billion and $1.6 billion at June 30, 2023 and December 31, 2022, respectively. In addition, the Company pledges eligible tenants in common loans, which totaled $42.0 million and $41.9 million at June 30, 2023 and December 31, 2022, respectively, to secure its borrowing capacity with the Federal Reserve Bank of San Francisco. See Note 6, Long Term Debt and Other Borrowings, for further discussion of these borrowings.

CONSOLIDATED STATEMENTS OF INCOME (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Interest and fee income:
Loans, including fees	$ 39,929	$ 24,879	$ 77,423	$ 46,991
Taxable securities	463	423	929	813
Nontaxable securities	183	179	367	356
Interest-bearing deposits in other banks	2,218	518	4,385	710
Total interest and fee income	42,793	25,999	83,104	48,870
Interest expense:
Deposits	13,969	1,021	23,347	1,566
FHLB advances	84	5	708	5
Subordinated debt	1,162	444	2,323	887
Total interest expense	15,215	1,470	26,378	2,458
Net interest income	27,578	24,529	56,726	46,412
Provision for credit losses	1,250	2,250	2,150	3,200
Net interest income after provision for credit losses	26,328	22,279	54,576	43,212
Non-interest income:
Service charges on deposit accounts	135	130	252	238
Net gain on sale of securities available-for-sale	0	0	0	5
Gain on sale of loans	641	831	1,239	1,749
Loan-related fees	389	757	697	1,353
FHLB stock dividends	189	99	382	201
Earnings on BOLI	126	101	228	191
Other	1,340	41	1,393	386
Total non-interest income	2,820	1,959	4,191	4,123
Non-interest expense:
Salaries and employee benefits	6,421	5,553	13,039	11,228
Occupancy and equipment	551	513	1,074	1,033
Data processing and software	1,013	739	1,885	1,455
FDIC insurance	410	245	812	410
Professional services	586	568	1,217	1,122
Advertising and promotional	733	484	1,151	828
Loan-related expenses	324	389	579	667
Other operating expenses	1,941	1,714	3,340	3,037
Total non-interest expense	11,979	10,205	23,097	19,780
Income before provision for income taxes	17,169	14,033	35,670	27,555
Provision for income taxes	4,440	4,080	9,780	7,740
Net income	$ 12,729	$ 9,953	$ 25,890	$ 19,815
Basic earnings per common share (in USD per share)	$ 0.74	$ 0.58	$ 1.51	$ 1.15
Diluted earnings per common share (in USD per share)	$ 0.74	$ 0.58	$ 1.51	$ 1.15

Loans and Allowance for Credit Losses - Non-accrual Loans Segregated by Class (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Financing Receivable, Past Due [Line Items]
Total non-accrual loans	$ 287	$ 404
Commercial
Financing Receivable, Past Due [Line Items]
Total non-accrual loans	0	106
Residential
Financing Receivable, Past Due [Line Items]
Total non-accrual loans	175	175
Secured
Financing Receivable, Past Due [Line Items]
Total non-accrual loans	$ 112	$ 123

Shareholders’ Equity (Tables)

6 Months Ended

Jun. 30, 2023

Equity [Abstract]

Schedule of Earnings Per Share


	Three months ended				Six months ended
(in thousands, except share count and earnings per common share)	June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022
Net income	$	12,729	$	9,953	$	25,890	$	19,815

Basic weighted average common shares outstanding	17,165,344		17,125,715		17,157,801		17,114,169
Add: Dilutive effects of assumed vesting of restricted stock	3,651		23,734		24,067		42,872
Total dilutive weighted average common shares outstanding	17,168,995		17,149,449		17,181,868		17,157,041
Earnings per common share:
Basic EPS	$	0.74	$	0.58	$	1.51	$	1.15
Diluted EPS	$	0.74	$	0.58	$	1.51	$	1.15

Nonvested Restricted Stock Shares

The following table summarizes activity related to restricted shares for the periods indicated:


	For the three months ended June 30,						For the six months ended June 30,
	2023			2022			2023			2022
	Shares	Weighted Average Grant Date Fair Value		Shares	Weighted Average Grant Date Fair Value		Shares	Weighted Average Grant Date Fair Value		Shares	Weighted Average Grant Date Fair Value
Beginning of the period balance	108,363	$	21.43	138,856	$	20.95	96,826	$	20.34	127,751	$	19.95
Shares granted	—	—		1,438	25.02		16,978	28.52		23,639	28.29
Shares vested	(24,492)	20.00		(30,816)	21.25		(29,933)	20.78		(41,062)	22.15
Shares forfeited	(1,547)	26.95		(1,654)	23.79		(1,547)	26.95		(2,504)	22.50
End of the period balance	82,324	$	21.75	107,824	$	20.88	82,324	$	21.75	107,824	$	20.88

Interest Bearing Deposits - Composition of Network Deposits (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Interest Bearing Deposits [Line Items]
Total network deposits	$ 583,912	$ 285,967
CDARS
Interest Bearing Deposits [Line Items]
Total network deposits	15,486	13,248
ICS
Interest Bearing Deposits [Line Items]
Total network deposits	$ 568,426	$ 272,719

Loans and Allowance for Credit Losses - Balance of Each Major Product Type (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Mar. 31, 2023	Jan. 01, 2023	Dec. 31, 2022	Jun. 30, 2022	Mar. 31, 2022	Dec. 31, 2021
Financing Receivable, Past Due [Line Items]
Subtotal	$ 2,929,821			$ 2,793,466
Less: Net deferred loan fees	2,410			2,140
Less: Allowance for credit losses	33,984	$ 34,172	$ 28,389	28,389	$ 25,786	$ 23,904	$ 23,243
Loans held for investment, net of allowance for credit losses	2,893,427			2,762,937
Commercial
Financing Receivable, Past Due [Line Items]
Subtotal	2,512,741			2,394,674
Less: Allowance for credit losses	27,553	27,119		19,216	16,621	13,868	12,869
Commercial land and development
Financing Receivable, Past Due [Line Items]
Subtotal	15,199			7,477
Less: Allowance for credit losses	184	226		54	68	66	50
Commercial construction
Financing Receivable, Past Due [Line Items]
Subtotal	100,514			88,669
Less: Allowance for credit losses	1,212	1,438		645	508	430	371
Residential construction
Financing Receivable, Past Due [Line Items]
Subtotal	13,913			6,693
Less: Allowance for credit losses	217	175		49	51	40	50
Residential
Financing Receivable, Past Due [Line Items]
Subtotal	22,501			24,230
Less: Allowance for credit losses	152	181		175	188	208	192
Farmland
Financing Receivable, Past Due [Line Items]
Subtotal	51,349			52,478
Less: Allowance for credit losses	236	219		644	616	611	645
Secured
Financing Receivable, Past Due [Line Items]
Subtotal	158,959			165,186
Less: Allowance for credit losses	3,751	4,258		7,098	6,284	7,039	6,859
Unsecured
Financing Receivable, Past Due [Line Items]
Subtotal	23,190			25,431
Less: Allowance for credit losses	209	152		116	265	246	207
Consumer and other
Financing Receivable, Past Due [Line Items]
Subtotal	31,455			28,628
Less: Allowance for credit losses	$ 470	$ 404		$ 347	$ 537	$ 1,088	$ 889

Loans and Allowance for Credit Losses - Credit Quality Indicators Related to the Company’s Loans by Class (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Financing Receivable, Past Due [Line Items]
2023	$ 195,368
2022	1,106,018
2021	825,736
2020	291,418
2019	158,788
Prior	300,570
Revolving Loans	49,413
Revolving Converted to Term	100
Total	2,927,411	$ 2,791,326
Pass
Financing Receivable, Past Due [Line Items]
2023	195,368
2022	1,103,506
2021	825,728
2020	284,312
2019	158,071
Prior	287,908
Revolving Loans	48,021
Revolving Converted to Term	100
Total	2,903,014
Watch
Financing Receivable, Past Due [Line Items]
2023	0
2022	2,490
2021	8
2020	7,106
2019	664
Prior	12,426
Revolving Loans	1,392
Revolving Converted to Term	0
Total	24,086
Substandard
Financing Receivable, Past Due [Line Items]
2023	0
2022	22
2021	0
2020	0
2019	53
Prior	236
Revolving Loans	0
Revolving Converted to Term	0
Total	311
Doubtful
Financing Receivable, Past Due [Line Items]
2023	0
2022	0
2021	0
2020	0
2019	0
Prior	0
Revolving Loans	0
Revolving Converted to Term	0
Total	0
Real Estate, Commercial
Financing Receivable, Past Due [Line Items]
2023	162,378
2022	981,132
2021	716,945
2020	249,790
2019	130,763
Prior	264,007
Revolving Loans	5,048
Revolving Converted to Term	0
Total	2,510,063	2,392,053
Real Estate, Commercial \| Pass
Financing Receivable, Past Due [Line Items]
2023	162,378
2022	978,642
2021	716,945
2020	242,777
2019	130,176
Prior	258,336
Revolving Loans	3,656
Revolving Converted to Term	0
Total	2,492,910
Real Estate, Commercial \| Watch
Financing Receivable, Past Due [Line Items]
2023	0
2022	2,490
2021	0
2020	7,013
2019	587
Prior	5,671
Revolving Loans	1,392
Revolving Converted to Term	0
Total	17,153
Real Estate, Commercial \| Substandard
Financing Receivable, Past Due [Line Items]
2023	0
2022	0
2021	0
2020	0
2019	0
Prior	0
Revolving Loans	0
Revolving Converted to Term	0
Total	0
Real Estate, Commercial \| Doubtful
Financing Receivable, Past Due [Line Items]
2023	0
2022	0
2021	0
2020	0
2019	0
Prior	0
Revolving Loans	0
Revolving Converted to Term	0
Total	0
Real estate , Commercial land and development
Financing Receivable, Past Due [Line Items]
2023	8,577
2022	4,152
2021	1,300
2020	186
2019	0
Prior	944
Revolving Loans	0
Revolving Converted to Term	0
Total	15,159	7,447
Real estate , Commercial land and development \| Pass
Financing Receivable, Past Due [Line Items]
2023	8,577
2022	4,152
2021	1,300
2020	186
2019	0
Prior	944
Revolving Loans	0
Revolving Converted to Term	0
Total	15,159
Real estate , Commercial land and development \| Watch
Financing Receivable, Past Due [Line Items]
2023	0
2022	0
2021	0
2020	0
2019	0
Prior	0
Revolving Loans	0
Revolving Converted to Term	0
Total	0
Real estate , Commercial land and development \| Substandard
Financing Receivable, Past Due [Line Items]
2023	0
2022	0
2021	0
2020	0
2019	0
Prior	0
Revolving Loans	0
Revolving Converted to Term	0
Total	0
Real estate , Commercial land and development \| Doubtful
Financing Receivable, Past Due [Line Items]
2023	0
2022	0
2021	0
2020	0
2019	0
Prior	0
Revolving Loans	0
Revolving Converted to Term	0
Total	0
Real estate, Commercial construction
Financing Receivable, Past Due [Line Items]
2023	2,066
2022	35,919
2021	45,644
2020	10,530
2019	0
Prior	5,897
Revolving Loans	0
Revolving Converted to Term	0
Total	100,056	88,314
Real estate, Commercial construction \| Pass
Financing Receivable, Past Due [Line Items]
2023	2,066
2022	35,919
2021	45,644
2020	10,530
2019	0
Prior	0
Revolving Loans	0
Revolving Converted to Term	0
Total	94,159
Real estate, Commercial construction \| Watch
Financing Receivable, Past Due [Line Items]
2023	0
2022	0
2021	0
2020	0
2019	0
Prior	5,897
Revolving Loans	0
Revolving Converted to Term	0
Total	5,897
Real estate, Commercial construction \| Substandard
Financing Receivable, Past Due [Line Items]
2023	0
2022	0
2021	0
2020	0
2019	0
Prior	0
Revolving Loans	0
Revolving Converted to Term	0
Total	0
Real estate, Commercial construction \| Doubtful
Financing Receivable, Past Due [Line Items]
2023	0
2022	0
2021	0
2020	0
2019	0
Prior	0
Revolving Loans	0
Revolving Converted to Term	0
Total	0
Real estate, Residential construction
Financing Receivable, Past Due [Line Items]
2023	0
2022	7,033
2021	6,856
2020	0
2019	0
Prior	0
Revolving Loans	0
Revolving Converted to Term	0
Total	13,889	6,693
Real estate, Residential construction \| Pass
Financing Receivable, Past Due [Line Items]
2023	0
2022	7,033
2021	6,856
2020	0
2019	0
Prior	0
Revolving Loans	0
Revolving Converted to Term	0
Total	13,889
Real estate, Residential construction \| Watch
Financing Receivable, Past Due [Line Items]
2023	0
2022	0
2021	0
2020	0
2019	0
Prior	0
Revolving Loans	0
Revolving Converted to Term	0
Total	0
Real estate, Residential construction \| Substandard
Financing Receivable, Past Due [Line Items]
2023	0
2022	0
2021	0
2020	0
2019	0
Prior	0
Revolving Loans	0
Revolving Converted to Term	0
Total	0
Real estate, Residential construction \| Doubtful
Financing Receivable, Past Due [Line Items]
2023	0
2022	0
2021	0
2020	0
2019	0
Prior	0
Revolving Loans	0
Revolving Converted to Term	0
Total	0
Real estate, Residential
Financing Receivable, Past Due [Line Items]
2023	917
2022	4,022
2021	6,341
2020	2,316
2019	1,193
Prior	6,431
Revolving Loans	1,311
Revolving Converted to Term	0
Total	22,531	24,263
Real estate, Residential \| Pass
Financing Receivable, Past Due [Line Items]
2023	917
2022	4,022
2021	6,341
2020	2,316
2019	1,193
Prior	6,255
Revolving Loans	1,311
Revolving Converted to Term	0
Total	22,355
Real estate, Residential \| Watch
Financing Receivable, Past Due [Line Items]
2023	0
2022	0
2021	0
2020	0
2019	0
Prior	0
Revolving Loans	0
Revolving Converted to Term	0
Total	0
Real estate, Residential \| Substandard
Financing Receivable, Past Due [Line Items]
2023	0
2022	0
2021	0
2020	0
2019	0
Prior	176
Revolving Loans	0
Revolving Converted to Term	0
Total	176
Real estate, Residential \| Doubtful
Financing Receivable, Past Due [Line Items]
2023	0
2022	0
2021	0
2020	0
2019	0
Prior	0
Revolving Loans	0
Revolving Converted to Term	0
Total	0
Real estate, farmland
Financing Receivable, Past Due [Line Items]
2023	228
2022	8,111
2021	12,889
2020	8,049
2019	12,674
Prior	9,366
Revolving Loans	4
Revolving Converted to Term	0
Total	51,321	52,446
Real estate, farmland \| Pass
Financing Receivable, Past Due [Line Items]
2023	228
2022	8,111
2021	12,889
2020	8,049
2019	12,674
Prior	9,366
Revolving Loans	4
Revolving Converted to Term	0
Total	51,321
Real estate, farmland \| Watch
Financing Receivable, Past Due [Line Items]
2023	0
2022	0
2021	0
2020	0
2019	0
Prior	0
Revolving Loans	0
Revolving Converted to Term	0
Total	0
Real estate, farmland \| Substandard
Financing Receivable, Past Due [Line Items]
2023	0
2022	0
2021	0
2020	0
2019	0
Prior	0
Revolving Loans	0
Revolving Converted to Term	0
Total	0
Real estate, farmland \| Doubtful
Financing Receivable, Past Due [Line Items]
2023	0
2022	0
2021	0
2020	0
2019	0
Prior	0
Revolving Loans	0
Revolving Converted to Term	0
Total	0
Commercial, Secured
Financing Receivable, Past Due [Line Items]
2023	11,838
2022	47,918
2021	20,773
2020	14,166
2019	11,586
Prior	13,540
Revolving Loans	39,469
Revolving Converted to Term	100
Total	159,390	165,609
Commercial, Secured \| Pass
Financing Receivable, Past Due [Line Items]
2023	11,838
2022	47,918
2021	20,765
2020	14,073
2019	11,456
Prior	12,622
Revolving Loans	39,469
Revolving Converted to Term	100
Total	158,241
Commercial, Secured \| Watch
Financing Receivable, Past Due [Line Items]
2023	0
2022	0
2021	8
2020	93
2019	77
Prior	858
Revolving Loans	0
Revolving Converted to Term	0
Total	1,036
Commercial, Secured \| Substandard
Financing Receivable, Past Due [Line Items]
2023	0
2022	0
2021	0
2020	0
2019	53
Prior	60
Revolving Loans	0
Revolving Converted to Term	0
Total	113
Commercial, Secured \| Doubtful
Financing Receivable, Past Due [Line Items]
2023	0
2022	0
2021	0
2020	0
2019	0
Prior	0
Revolving Loans	0
Revolving Converted to Term	0
Total	0
Commercial, Unsecured
Financing Receivable, Past Due [Line Items]
2023	1,718
2022	3,816
2021	5,101
2020	6,381
2019	2,572
Prior	39
Revolving Loans	3,581
Revolving Converted to Term	0
Total	23,208	25,488
Commercial, Unsecured \| Pass
Financing Receivable, Past Due [Line Items]
2023	1,718
2022	3,816
2021	5,101
2020	6,381
2019	2,572
Prior	39
Revolving Loans	3,581
Revolving Converted to Term	0
Total	23,208
Commercial, Unsecured \| Watch
Financing Receivable, Past Due [Line Items]
2023	0
2022	0
2021	0
2020	0
2019	0
Prior	0
Revolving Loans	0
Revolving Converted to Term	0
Total	0
Commercial, Unsecured \| Substandard
Financing Receivable, Past Due [Line Items]
2023	0
2022	0
2021	0
2020	0
2019	0
Prior	0
Revolving Loans	0
Revolving Converted to Term	0
Total	0
Commercial, Unsecured \| Doubtful
Financing Receivable, Past Due [Line Items]
2023	0
2022	0
2021	0
2020	0
2019	0
Prior	0
Revolving Loans	0
Revolving Converted to Term	0
Total	0
Consumer and other
Financing Receivable, Past Due [Line Items]
2023	7,646
2022	13,915
2021	9,887
2020	0
2019	0
Prior	346
Revolving Loans	0
Revolving Converted to Term	0
Total	31,794	$ 29,013
Consumer and other \| Pass
Financing Receivable, Past Due [Line Items]
2023	7,646
2022	13,893
2021	9,887
2020	0
2019	0
Prior	346
Revolving Loans	0
Revolving Converted to Term	0
Total	31,772
Consumer and other \| Watch
Financing Receivable, Past Due [Line Items]
2023	0
2022	0
2021	0
2020	0
2019	0
Prior	0
Revolving Loans	0
Revolving Converted to Term	0
Total	0
Consumer and other \| Substandard
Financing Receivable, Past Due [Line Items]
2023	0
2022	22
2021	0
2020	0
2019	0
Prior	0
Revolving Loans	0
Revolving Converted to Term	0
Total	22
Consumer and other \| Doubtful
Financing Receivable, Past Due [Line Items]
2023	0
2022	0
2021	0
2020	0
2019	0
Prior	0
Revolving Loans	0
Revolving Converted to Term	0
Total	$ 0

Investment Securities - Amortized Cost and Fair Value of Securities Held-to-maturity (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Marketable Securities [Line Items]
Amortized Cost	$ 3,486	$ 3,756
Gross unrealized gains	0	0
Gross unrealized losses	(278)	(324)
Fair Value	3,208	3,432
Obligations of states and political subdivisions
Marketable Securities [Line Items]
Amortized Cost	3,486	3,756
Gross unrealized gains	0	0
Gross unrealized losses	(278)	(324)
Fair Value	$ 3,208	$ 3,432

Basis of Presentation and Summary of Significant Accounting Policies - ASC 326 Adoption (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Mar. 31, 2023	Jan. 01, 2023	Dec. 31, 2022	Jun. 30, 2022	Mar. 31, 2022	Dec. 31, 2021
ASSETS
Allowance for Credit Losses	$ (33,984)	$ (34,172)	$ (28,389)	$ (28,389)	$ (25,786)	$ (23,904)	$ (23,243)
Deferred Tax Asset (Interest receivable and other assets)			12,273
Liabilities:
Allowance for Credit Losses	(33,984)	(34,172)	(28,389)	(28,389)	(25,786)	(23,904)	(23,243)
Shareholders’ Equity:
Retained earnings	62,095		(46,736)	46,736
Unfunded Loan Commitment
ASSETS
Allowance for Credit Losses	(1,547)	(1,217)	(125)	(125)	(125)	(102)	(102)
Liabilities:
Allowance for Credit Losses	$ (1,547)	(1,217)	(125)	(125)	$ (125)	(102)	(102)
Cumulative Effect, Period of Adoption, Adjustment
ASSETS
Allowance for Credit Losses			(5,282)	(5,262)
Deferred Tax Asset (Interest receivable and other assets)			1,883
Liabilities:
Allowance for Credit Losses			(5,282)	(5,262)
Shareholders’ Equity:
Retained earnings			4,491
Cumulative Effect, Period of Adoption, Adjustment \| Unfunded Loan Commitment
ASSETS
Allowance for Credit Losses		0	(1,092)	(1,092)		0	0
Liabilities:
Allowance for Credit Losses		$ 0	(1,092)	$ (1,092)		$ 0	$ 0
Cumulative Effect, Period of Adoption, Adjusted Balance
ASSETS
Allowance for Credit Losses			(33,671)
Deferred Tax Asset (Interest receivable and other assets)			14,156
Liabilities:
Allowance for Credit Losses			(33,671)
Shareholders’ Equity:
Retained earnings			(42,245)
Cumulative Effect, Period of Adoption, Adjusted Balance \| Unfunded Loan Commitment
ASSETS
Allowance for Credit Losses			(1,217)
Liabilities:
Allowance for Credit Losses			$ (1,217)

- Definition

Amount of allowance for credit loss on financing receivable. Excludes allowance for financing receivable covered under loss sharing agreement.

+ References + Details

- Definition

Amount of accumulated undistributed earnings (deficit).

+ References + Details

Investment Securities - Pledged Investment Securities (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Marketable Securities [Line Items]
Securities available-for-sale, at fair value	$ 110,794	$ 115,988
Federal Funds Purchased
Marketable Securities [Line Items]
Securities available-for-sale, at fair value	52,215	0
Deposits and Federal Funds Purchased
Marketable Securities [Line Items]
Securities available-for-sale, at fair value	109,903	40,465
CALIFORNIA \| Deposits
Marketable Securities [Line Items]
Securities available-for-sale, at fair value	$ 57,688	$ 40,465

CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
ASSETS
Cash and due from financial institutions	$ 28,568	$ 32,561
Interest-bearing deposits in banks	271,555	227,430
Cash and cash equivalents	300,123	259,991
Time deposits in banks	7,343	9,849
Securities available-for-sale, at fair value	110,794	115,988
Securities held-to-maturity, at amortized cost (fair value of $3,208 and $3,432 at June 30, 2023 and December 31, 2022, respectively)	3,486	3,756
Loans held for sale	8,559	9,416
Loans held for investment	2,927,411	2,791,326
Allowance for credit losses - loans	(33,984)	(28,389)
Loans held for investment, net of allowance for credit losses	2,893,427	2,762,937
FHLB stock	15,000	10,890
Operating leases, right-of-use asset, net	5,032	3,981
Premises and equipment, net	1,599	1,605
Bank-owned life insurance	16,897	14,669
Interest receivable and other assets	40,441	34,077
Total assets	3,402,701	3,227,159
Deposits:
Non-interest-bearing	833,707	971,246
Interest-bearing	2,096,032	1,810,758
Total deposits	2,929,739	2,782,004
FHLB advances	100,000	100,000
Subordinated debt, net	73,677	73,606
Operating lease liability	5,275	4,243
Interest payable and other liabilities	24,870	14,481
Total liabilities	3,133,561	2,974,334
Commitments and contingencies (Note 8)
Shareholders’ equity
Preferred stock, no par value; 10,000,000 shares authorized; zero issued and outstanding at June 30, 2023 and December 31, 2022	0	0
Common stock, no par value; 100,000,000 shares authorized; 17,257,357 shares issued and outstanding at June 30, 2023; 17,241,926 shares issued and outstanding at December 31, 2022	220,021	219,543
Retained earnings	62,095	46,736
Accumulated other comprehensive loss, net	(12,976)	(13,454)
Total shareholders’ equity	269,140	252,825
Total liabilities and shareholders’ equity	$ 3,402,701	$ 3,227,159

Interest-Bearing Deposits

6 Months Ended

Jun. 30, 2023

Interest-bearing Deposits

Interest-Bearing Deposits

Interest-bearing deposits consisted of the following as of June 30, 2023 and December 31, 2022:


(in thousands)	June 30, 2023		December 31, 2022
Interest-bearing transaction accounts	$	208,085	$	240,131
Savings accounts	132,797		154,581
Money market accounts	1,377,250		1,073,532
Time accounts, more than $250	246,123		198,159
Other time accounts	131,777		144,355
Total interest-bearing deposits	$	2,096,032	$	1,810,758

Time deposits totaled $377.9 million and $342.5 million as of June 30, 2023 and December 31, 2022, respectively. As of June 30, 2023, scheduled maturities of time deposits for the next five years were as follows:


(in thousands)
2023	$	299,516
2024	55,928
2025	21,125
2026	1,331
2027	—
Total time deposits	$	377,900

Total deposits include deposits offered through the IntraFi Network (formerly Promontory Interfinancial Network) that are comprised of Certificate of Deposit Account Registry Service® (“CDARS”) balances included in time deposits and Insured Cash Sweep® (“ICS”) balances included in money market and interest checking deposits. Through this network, the Company offers customers access to FDIC-insured deposit products in aggregate amounts exceeding current insurance limits. When funds are deposited through CDARS and ICS on behalf of a customer, the Company has the option of receiving matching deposits through the network’s reciprocal deposit program or placing deposits “one-way,” for which the Company receives no matching deposits. The Company considers the reciprocal deposits to be in-market deposits, as distinguished from traditional out-of-market brokered deposits. There were no one-way deposits at June 30, 2023 and December 31, 2022. The composition of network deposits as of June 30, 2023 and December 31, 2022 was as follows:


(in thousands)	June 30, 2023		December 31, 2022
CDARS	$	15,486	$	13,248
ICS	568,426		272,719
Total network deposits	$	583,912	$	285,967

Interest expense recognized on interest-bearing deposits for periods ended June 30, 2023 and 2022 consisted of the following:


	Three months ended				Six months ended
(in thousands)	June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022
Interest-bearing transaction accounts	$	825	$	66	$	1,258	$	136
Savings accounts	758		38		1,303		63
Money market accounts	8,136		679		13,572		1,045
Time accounts, $250 or more	2,634		226		4,597		286
Other time accounts	1,616		12		2,617		36
Total interest expense on interest-bearing deposits	$	13,969	$	1,021	$	23,347	$	1,566

Shareholders' Equity - Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Equity [Abstract]
Net income	$ 12,729	$ 9,953	$ 25,890	$ 19,815
Basic weighted average common shares outstanding (in shares)	17,165,344	17,125,715	17,157,801	17,114,169
Add: Dilutive effects of assumed vesting of restricted stock (in shares)	3,651	23,734	24,067	42,872
Total dilutive common shares outstanding (in shares)	17,168,995	17,149,449	17,181,868	17,157,041
Earnings per common share:
Basic EPS (in USD per share)	$ 0.74	$ 0.58	$ 1.51	$ 1.15
Diluted EPS (in USD per share)	$ 0.74	$ 0.58	$ 1.51	$ 1.15

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

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The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.

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The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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+ Details

Fair Value of Assets and Liabilities (Tables)

6 Months Ended

Jun. 30, 2023

Fair Value Disclosures [Abstract]

Summary of Fair Value of Assets and Liabilities Measured on Recurring Basis

The following table summarizes the Company’s assets and liabilities that were required to be recorded at fair value on a recurring basis.


(in thousands)	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Measurement Categories: Changes in Fair Value Recorded In
June 30, 2023
Assets:
Securities available-for-sale:
U.S. government agencies, mortgage-backed securities, obligations of states and political subdivisions, collateralized mortgage obligations, and corporate bonds	$	110,794	$	—	$	110,794	$	—	OCI
Derivatives – interest rate swap	8		—		8		—		NI
Liabilities:
Derivatives – interest rate swap	8		—		8		—		NI

December 31, 2022
Assets:
Securities available-for-sale:
U.S. government agencies, mortgage-backed securities, obligations of states and political subdivisions, collateralized mortgage obligations, and corporate bonds	$	115,988	$	—	$	115,988	$	—	OCI
Derivatives – interest rate swap	16		—		16		—		NI
Liabilities:
Derivatives – interest rate swap	16		—		16		—		NI

Summary of Fair Value Estimates for Financial Instruments by Balance Sheet Grouping


	June 30, 2023					December 31, 2022
(in thousands)	Carrying Amounts		Fair Value		Fair Value Hierarchy	Carrying Amounts		Fair Value		Fair Value Hierarchy
Financial assets:
Cash and cash equivalents	$	300,123	$	300,123	Level 1	$	259,991	$	259,991	Level 1
Time deposits in banks	7,343		7,343		Level 1	9,849		9,849		Level 1
Securities available-for-sale	110,794		110,794		Level 2	115,988		115,988		Level 2
Securities held-to-maturity	3,486		3,208		Level 3	3,756		3,432		Level 3
Loans held for sale	8,559		9,460		Level 2	9,416		9,785		Level 2
Loans held for investment, net of allowance for credit losses	2,893,427		2,715,210		Level 3	2,762,937		2,570,176		Level 3
FHLB stock and other investments	21,693		N/A		N/A	16,570		N/A		N/A
Interest rate swap	8		8		Level 2	16		16		Level 2
Financial liabilities:
Interest rate swap	8		8		Level 2	16		16		Level 2
FHLB advances	100,000		100,000		Level 2	100,000		100,000		Level 2
Subordinated notes	73,677		72,178		Level 3	73,606		72,273		Level 3

Interest-Bearing Deposits - Narrative (Details) - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Interest-bearing Deposits
Interest-bearing domestic deposit, time deposits	$ 377,900,000	$ 342,500,000
One-way deposits	$ 0	$ 0

Fair Value of Assets and Liabilities - Fair Value of Assets and Liabilities Measured on Recurring Basis (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available-for-sale, at fair value	$ 110,794	$ 115,988
Assets: \| Fair Value, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available-for-sale, at fair value	110,794	115,988
Assets: \| Fair Value, Recurring \| Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available-for-sale, at fair value	0	0
Assets: \| Fair Value, Recurring \| Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available-for-sale, at fair value	110,794	115,988
Assets: \| Fair Value, Recurring \| Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available-for-sale, at fair value	0	0
Assets: \| Derivatives – interest rate swap \| Fair Value, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivatives – interest rate swap	8	16
Assets: \| Derivatives – interest rate swap \| Fair Value, Recurring \| Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivatives – interest rate swap	0	0
Assets: \| Derivatives – interest rate swap \| Fair Value, Recurring \| Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivatives – interest rate swap	8	16
Assets: \| Derivatives – interest rate swap \| Fair Value, Recurring \| Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivatives – interest rate swap	0	0
Liabilities: \| Derivatives – interest rate swap \| Fair Value, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivatives – interest rate swap	8	16
Liabilities: \| Derivatives – interest rate swap \| Fair Value, Recurring \| Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivatives – interest rate swap	0	0
Liabilities: \| Derivatives – interest rate swap \| Fair Value, Recurring \| Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivatives – interest rate swap	8	16
Liabilities: \| Derivatives – interest rate swap \| Fair Value, Recurring \| Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivatives – interest rate swap	$ 0	$ 0

Loans and Allowance for Credit Losses - Unfunded Loan Commitment Reserve (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning Balance	$ 34,172	$ 23,904	$ 28,389	$ 23,243
Ending Balance	33,984	25,786	33,984	25,786
Cumulative Effect, Period of Adoption, Adjustment
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning Balance			5,262
Unfunded Loan Commitment
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning Balance	1,217	102	125	102
Provision	330	23	330	23
Ending Balance	1,547	125	1,547	125
Unfunded Loan Commitment \| Cumulative Effect, Period of Adoption, Adjustment
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning Balance	$ 0	$ 0	$ 1,092	$ 0

- Definition

Amount of allowance for credit loss on financing receivable. Excludes allowance for financing receivable covered under loss sharing agreement.

+ References + Details

Shareholders’ Equity

6 Months Ended

Jun. 30, 2023

Equity [Abstract]

Shareholders' Equity

Shareholders’ Equity

(a) EPS

Basic EPS is net income divided by the weighted average number of common shares outstanding during the period less average unvested restricted stock awards (“RSAs”). Diluted EPS includes the dilutive effect of additional potential common shares related to unvested RSAs using the treasury stock method. The Company has two forms of outstanding common stock: common stock and unvested RSAs. Holders of unvested RSAs receive non-forfeitable dividends at the same rate as common shareholders and they both share equally in undistributed earnings, and therefore the RSAs are considered participating securities. However, under the two-class method, the difference in EPS is not significant for these participating securities.


	Three months ended				Six months ended
(in thousands, except share count and earnings per common share)	June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022
Net income	$	12,729	$	9,953	$	25,890	$	19,815

Basic weighted average common shares outstanding	17,165,344		17,125,715		17,157,801		17,114,169
Add: Dilutive effects of assumed vesting of restricted stock	3,651		23,734		24,067		42,872
Total dilutive weighted average common shares outstanding	17,168,995		17,149,449		17,181,868		17,157,041
Earnings per common share:
Basic EPS	$	0.74	$	0.58	$	1.51	$	1.15
Diluted EPS	$	0.74	$	0.58	$	1.51	$	1.15

The Company did not have any anti-dilutive shares at June 30, 2023 or June 30, 2022.

(b) Dividends

On April 20, 2023, the board of directors declared a $0.20 per common share dividend, totaling $3.5 million.

The Company’s stock-based compensation consists of RSAs granted under its historical stock-based incentive arrangement (the “Historical Incentive Plan”) and RSAs issued under the Five Star Bancorp 2021 Equity Incentive Plan (the “Equity Incentive Plan”). The Historical Incentive Plan consisted of RSAs for certain executive officers of the Company. The arrangement provided that these executive officers would receive shares of restricted common stock of the Company that vested over three years, with the number of shares granted based upon achieving certain performance objectives. These objectives included, but were not limited to, net income adjusted for the provision for credit losses, deposit growth, efficiency ratio, net interest margin, and asset quality. Compensation expense for RSAs granted under the Historical

Incentive Plan is recognized over the service period, which is equal to the vesting period of the shares based on the fair value of the shares at issue date.

In connection with its IPO in May 2021, the Company granted RSAs under the Equity Incentive Plan to certain employees, officers, executives, and non-employee directors. Shares granted to non-employee directors vested immediately upon grant, while shares granted to certain employees, officers, and executives vest ratably over three, five, or seven years (as defined in the respective agreements). Since the completion of the IPO, the Company has granted RSAs under the Equity Incentive Plan to executives and directors, which vest annually over three years and over one year, respectively. All RSAs were granted at the fair value of common stock at the time of the award. The RSAs are considered fixed awards, as the number of shares and fair value are known at the date of grant and the fair value at the grant date is amortized over the service period.

Non-cash stock compensation expense recognized for the three months ended June 30, 2023 and 2022 was $0.2 million and $0.3 million, respectively. Non-cash stock compensation expense recognized for the six months ended June 30, 2023 and 2022 was $0.5 million and $0.6 million, respectively.

At June 30, 2023 and 2022, there were 82,324 and 107,824 unvested restricted shares, respectively. As of June 30, 2023, there was approximately $1.6 million of unrecognized compensation expense related to the 82,324 unvested restricted shares. The holders of unvested RSAs are entitled to dividends at the same per-share ratio as holders of common stock. Tax benefits for dividends paid on unvested RSAs are recorded as tax benefits in the consolidated statements of income with a corresponding decrease to current taxes payable. Such tax benefits are expected to be recognized over the weighted average term remaining on the unvested restricted shares of 2.92 years as of June 30, 2023. The impact of tax benefits for dividends paid on unvested restricted stock on the Company’s unaudited consolidated statements of income for the three and six months ended June 30, 2023 and 2022 was immaterial.

The following table summarizes activity related to restricted shares for the periods indicated:


	For the three months ended June 30,						For the six months ended June 30,
	2023			2022			2023			2022
	Shares	Weighted Average Grant Date Fair Value		Shares	Weighted Average Grant Date Fair Value		Shares	Weighted Average Grant Date Fair Value		Shares	Weighted Average Grant Date Fair Value
Beginning of the period balance	108,363	$	21.43	138,856	$	20.95	96,826	$	20.34	127,751	$	19.95
Shares granted	—	—		1,438	25.02		16,978	28.52		23,639	28.29
Shares vested	(24,492)	20.00		(30,816)	21.25		(29,933)	20.78		(41,062)	22.15
Shares forfeited	(1,547)	26.95		(1,654)	23.79		(1,547)	26.95		(2,504)	22.50
End of the period balance	82,324	$	21.75	107,824	$	20.88	82,324	$	21.75	107,824	$	20.88

- Definition

The entire disclosure for equity.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-13

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-13

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 14
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-14

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 235
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-Section 50
-Paragraph 2
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481062/946-235-50-2

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
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-Name Accounting Standards Codification
-Section 50
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-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481062/946-235-50-2

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
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-Publisher FASB
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 815
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-Section 50
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+ Details

Interest Bearing Deposits - Interest-Bearing Deposits (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2023	Dec. 31, 2022
Interest-bearing Deposits
Interest-bearing transaction accounts	$ 208,085	$ 240,131
Savings accounts	132,797	154,581
Money market accounts	1,377,250	1,073,532
Time accounts, more than $250	246,123	198,159
Other time accounts	131,777	144,355
Total interest-bearing deposits	2,096,032	$ 1,810,758
Time deposits minimum	$ 250

Investment Securities - Narrative (Details) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023 USD ($) security	Jun. 30, 2022 USD ($)	Jun. 30, 2023 USD ($) security $ / shares	Jun. 30, 2022 USD ($)	Apr. 27, 2023	Dec. 31, 2022 USD ($) security
Marketable Securities [Line Items]
Number of securities in unrealized loss positions	153		153			152
Number of investment securities in a continuous loss position for twelve months or more	148		148
Investment securities in a loss position for less than twelve months	5		5
Held-to-maturity securities in a continuous loss position for twelve months or less	1		1
FHLB stock price (in USD per share) \| $ / shares			$ 100
FHLB Stock \| $	$ 15,000		$ 15,000			$ 10,890
Investment interest rate					7.00%
FHLB stock dividends \| $	189	$ 99	382	$ 201
Investment in Federal Home Loan Bank Stock
Marketable Securities [Line Items]
FHLB stock dividends \| $	$ 200	$ 100	$ 400	$ 200

Basis of Presentation and Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation and Summary of Significant Accounting Policies

(a) Organization

Five Star Bank (the “Bank”) was chartered on October 26, 1999 and began operations on December 20, 1999. Five Star Bancorp (“Bancorp” or the “Company”) was incorporated on September 16, 2002 and subsequently obtained approval from the Federal Reserve to be a bank holding company in connection with its acquisition of the Bank. The Company became the sole shareholder of the Bank on June 2, 2003 in a statutory merger, pursuant to which each outstanding share of the Bank’s common stock was exchanged for one share of common stock of the Company.

The Company, through the Bank, provides financial services to customers who are predominately small and middle-market businesses, professionals, and individuals residing in the Northern California region. The Company’s primary loan products are commercial real estate loans, land development loans, construction loans, and operating lines of credit, and its primary deposit products are checking accounts, savings accounts, money market accounts, and term certificate accounts. The Bank currently has seven branch offices in Roseville, Natomas, Rancho Cordova, Redding, Elk Grove, Chico, and Yuba City, and one loan production office in Sacramento.

(b) Basis of Financial Statement Presentation and Consolidation

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) as contained within the Financial Accounting Standards Board’s (“FASB”) ASC and the rules and regulations of the SEC, including the instructions to Regulation S-X. These interim unaudited consolidated financial statements reflect all adjustments (consisting solely of normal recurring adjustments and accruals) which, in the opinion of management, are necessary for a fair presentation of financial position, results of operations and comprehensive income, changes in shareholders’ equity, and cash flows for the interim periods presented. These unaudited consolidated financial statements have been prepared on a basis consistent with, and should be read in conjunction with, the audited consolidated financial statements as of and for the year ended December 31, 2022, and the notes thereto, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 (the “2022 Annual Report on Form 10-K”), which was filed with the SEC on February 24, 2023.

The unaudited consolidated financial statements include Five Star Bancorp and its wholly owned subsidiary, Five Star Bank. All significant intercompany transactions and balances are eliminated in consolidation.

The results of operations for the three and six months ended June 30, 2023 are not necessarily indicative of the results of operations that may be expected for any other interim period or for the year ending December 31, 2023.

The Company’s accounting and reporting policies conform to GAAP and to general practices within the banking industry.

Certain amounts reported in previous consolidated financial statements have been reclassified to conform to current period presentation. These reclassifications did not affect previously reported amounts of net income, total assets, or total shareholders’ equity.

While the Company’s chief decision-makers monitor the revenue streams of the various products and services, operations are managed, and financial performance is evaluated, on a Company-wide basis. Discrete financial information is not available other than on a Company-wide basis. Accordingly, all of the financial service operations are considered by management to be aggregated in one reportable operating segment.

(d) Emerging Growth Company

The Company qualifies as an emerging growth company as defined in the Jumpstart Our Business Startups Act of 2012, and, as such, may take advantage of specified reduced reporting requirements and deferred accounting standards adoption dates, and is relieved of other significant requirements that are otherwise generally applicable to other public companies. The Company will remain an Emerging Growth Company for five years after its IPO date, unless one of the following

occurs: (i) total annual gross revenues are $1.235 billion or more; (ii) the Company issues more than $1 billion in non-convertible debt; or (iii) the Company becomes a large accelerated filer with a public float of more than $0.7 billion.

(e) Significant Accounting Policies

The Company’s significant accounting policies are included in Note 1, Basis of Presentation on the 2022 Annual Report on Form 10-K. There have been no changes to these significant accounting policies during the first six months of 2023 other than adoption of ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments and all subsequent amendments that modified ASU 2016-13 (collectively, “ASC 326”) as discussed below in this Note, which impacted the following policies:

Allowance for Credit Losses (“ACL”)

The ACL is a valuation account that offsets the amortized cost basis of loans receivable and certain other financial assets, including unfunded loan commitments and held-to-maturity debt securities. Under ASC 326, amortized cost basis is the basis on which the ACL is determined. Amortized cost basis on loans receivable is principal outstanding, net of any purchase premiums and discounts, and net of any deferred loan fees and costs.

Credit losses are charged off when management believes that the collectability of at least some portion of outstanding principal is unlikely. These charge-offs are recorded as a reversal to, thereby reducing, the allowance for credit losses. Subsequent recoveries of previously charged-off amounts, if any, are recorded as a provision to, thereby increasing, the allowance for credit losses. The allowance for credit losses is maintained at a level to absorb expected credit losses over the contractual life, including consideration of prepayments. Determining the adequacy of the allowance is complex and requires judgments that are inherently subjective, as it requires estimates that are susceptible to revision as additional information becomes available. While the Company has determined an allowance for credit losses it considers appropriate, there can be no assurance that the allowance will be sufficient to absorb future losses.

The Company’s process for determining expected lifetime credit losses entails a loan-level, model-based approach and considers a broad range of information, including historical loss experience, current conditions, and reasonable and supportable forecasts. Credit loss is estimated for all loans. Accordingly, the Company has stratified the full loan population into segments sharing similar characteristics to perform the evaluation of the credit loss collectively. The Company can also further stratify loans of similar types, risk attributes, and methods for credit risk monitoring.

The Company has determined pools based primarily on regulatory reporting codes as the loans within each pool share similar risk characteristics and there is sufficient historical peer loss data from the Federal Financial Institutions Examination Council to provide statistically meaningful support in the models developed. The Company further stratified the C&I portfolio into traditional C&I loans and SBA loans, as the loans in these pools have different repayment structures and credit risk characteristics. The Company also stratified C&I loans and consumer loans that do not require reserves, as the Company has third party agreements in place to cover loan losses. The Company has identified the following pools subject to an estimate of credit loss: (1) 1-4 Family Construction; (2) Other Construction; (3) Farmland; (4) Revolving Secured by 1-4 Family; (5) Residential Secured by First Liens; (6) Residential Secured by Junior Liens; (7) Multifamily; (8) CRE Owner Occupied; (9) CRE Non-Owner Occupied; (10) Agriculture; (11) C&I; (12) C&I SBA; (13) Consumer; and (14) Municipal.

The Company has determined, given its limited loss experience, that peer data and other external data to support loss history provides the best basis for its assessment of expected credit losses. The Company believes that the use of peer loss data from 2008 to 2019 presents loss histories that appropriately reflect a full economic cycle, reflects asset-specific risk characteristics at each pool level identified, and includes a historical look-back period that is objective and reflective of future expected credit losses. Loss data from 2020 to 2021 was excluded from the data set to exclude pandemic-related data in the models.

The method for determining the estimate of lifetime credit losses includes, among other things, the following main components: (i) the use of Probability of Default (“PD”) and Loss Given Default (“LGD”) assumptions under a Discounted Cash Flow model; (ii) a multi-scenario macroeconomic forecast; (iii) an initial and reasonable and supportable forecast period of one year for all loan segments; and (iv) a reversion period of one year using a linear transition method to historical loss rates.

Given the inherent limitations of a quantitative-only model, qualitative adjustments are included to factor in data points not captured from a quantitative analysis alone.

Qualitative criteria that can be considered includes, among other things, the following:

•Concentrations – the existence and effect of any concentrations of credit, and changes in the level of such concentrations;

•Volume – changes in the nature and volume of the portfolio and in the terms of the loans;

•Economic – changes in international, national, regional, and local economic and business conditions and developments that affect the collectibility of the portfolio, including the condition of various market segments;

•Policy – changes in lending policies and procedures, including changes in underwriting standards and collection, charge-off, and recovery practices not considered elsewhere in estimating credit losses;

•Quality – changes in the volume and severity of past due loans, the volume of non-accrual loans, and the volume and severity of adversely classified or graded loans; and

•External – the effect of other external factors, such as competition and legal and regulatory requirements on the level of estimated credit losses in the Company’s loan portfolio.

Management reviews current information on a quarterly basis to assess the forecasted future economic impact for purposes of evaluating the adequacy of the ACL. The forecasted direction and magnitude of change with respect to future economic conditions is then assessed against the estimate in the model. Any changes resulting from the quarterly assessment are recorded in “Provision for credit losses” in the unaudited consolidated statements of income.

Accrued Interest

Accrued interest receivable is excluded from amortized cost of all financial instrument types and included in “Interest receivable and other assets” in the unaudited consolidated balance sheets. Accrued interest receivable is not subject to an estimate for credit loss, as the Company has a policy to charge off accrued interest deemed uncollectible in a timely manner. When a loan is placed on non-accrual status, which occurs within 90 days of a borrower becoming delinquent, interest previously accrued but not collected is reversed against current period income.

Individually Assessed Loans

If an individual loan’s characteristics have deteriorated to below a range of the overall pool, the loan would be individually assessed. Individually assessed loans are measured for credit loss based on one of the following methods: (i) present value of future expected cash flows, discounted at the loan’s effective interest rate; (ii) amount by which carrying value of the loan exceeds the loan’s observable market price; or (iii) the fair value of the collateral, less estimated selling costs, if the loan is collateral dependent. The Company applies the practical expedient and defines collateral dependent loans as those where the borrower is experiencing financial difficulty and on which payment is expected to be provided substantially through the operation or sale of the collateral.

Available-for-sale (“AFS”) Debt Securities

Unrealized credit losses are recognized through an allowance for credit losses instead of an adjustment to amortized cost basis, eliminating the other-than-temporary impairment concept. For AFS debt securities in an unrealized loss position, the Company first assesses whether it intends to sell, or it is more likely than not that it will be required to sell, the security before recovery of amortized cost basis. If either criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through earnings. For AFS debt securities that do not meet the above conditions, the Company evaluates at the individual security level whether the decrease in fair value has resulted from credit factors or non-credit factors. If assessment determines that a credit loss exists, the present value of cash flows expected to be collected from the security is compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis of the security, then a credit loss would be recognized, limited to the amount by which the fair value is less than the amortized cost basis. All other changes in fair value of an AFS debt security are recognized in other comprehensive income, net of applicable taxes. Changes in the allowance for credit losses, if any, are recognized as a provision for (or reversal of) credit losses. As of June 30, 2023, the Company’s portfolio of AFS debt securities is comprised primarily of debt, mortgage-backed securities, and collateralized mortgage obligations issued by the U.S. government, its agencies, or government-sponsored enterprises, which are either explicitly or implicitly guaranteed by the U.S. government. The remainder of the portfolio is primarily comprised of

obligations of state and political subdivisions, which are generally rated as high grade. The history of minimal credit losses from these issuers indicates that expectation of non-payment of the amortized cost basis is zero. As such, the Company determined that the unrealized loss positions in AFS securities were not due to credit losses, but instead related to changes in interest rates and general market conditions and therefore, no credit loss expense was recognized.

Loan Commitments

Loan commitments not unconditionally cancellable are subject to an estimate of credit loss under the CECL model. The Company’s process for determining the estimate of credit loss on loan commitments is the same as it is on loans. Unfunded loan commitment reserves are included in “Interest payable and other liabilities” in the unaudited consolidated balance sheets.

Held-to-Maturity Debt Securities

The Company’s process for determining the estimate of credit loss on held-to-maturity debt securities is substantially similar to what it is on loans, with segmenting not being applicable. As the amount of held-to-maturity debt securities that the Company carries is limited and given the determination that expected credit loss was immaterial, an immaterial amount was recognized in allowance for credit loss upon adoption and no credit loss expense was recorded for the three and six months ended June 30, 2023.

TDRs and Other Loan Modifications

In accordance with the adoption of ASC 326, which includes ASU No. 2022-02, Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures, accounting guidance for TDRs for creditors has been eliminated. New guidance with respect to recognition, measurement, and disclosures of loans for borrowers experiencing financial difficulties supersedes guidance on TDRs. As of June 30, 2023, the amount of loans modified for borrowers due to experiencing financial difficulties under criteria of principal forgiveness, interest rate reduction, other-than-insignificant payment delay, or term extension was immaterial.

(f) Recently Issued Accounting Standards

The following information reflects recent accounting standards that have been adopted or are pending adoption by the Company. The Company qualifies as an emerging growth company and, as such, has elected to use the extended transition period for complying with new or revised accounting standards and is not subject to the new or revised accounting standards applicable to public companies during the extended transition period. The accounting standards discussed below indicate effective dates for the Company as an emerging growth company using the extended transition period.

Accounting Standards Adopted

On January 1, 2023, the Company adopted ASC 326, which replaces the current “incurred loss” model for recognizing credit losses with an “expected loss” model referred to as the Current Expected Credit Loss (“CECL”) model. The CECL model applies to estimated credit losses on loans receivable, held-to-maturity debt securities, unfunded loan commitments, and certain other financial assets measured at amortized cost. Under ASC 326, available-for-sale debt securities are evaluated for impairment if fair value is less than amortized cost, with any estimated credit losses recorded through a credit loss expense and an allowance, rather than a write-down of the investment. Changes in fair value that are not credit-related will continue to be recorded in other comprehensive income. The Company adopted this standard using a modified retrospective approach through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance was effective for financial assets measured at amortized cost. For certain new disclosures required under ASC 326, such as credit quality indicators by year of origination, we have not restated comparative financial information before January 1, 2023 to conform under ASC 326. This adoption method is considered a change in accounting principle requiring additional disclosure of the nature and reason for the change, which is solely due to adoption of ASC 326. On January 1, 2023, the Company also adopted ASU No. 2022-02, Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures, which had no material impact.

The following table reflects the cumulative-effect adjustments the Company recorded on January 1, 2023 for the adoption of ASC 326.


	January 1, 2023
(in thousands)	Pre-ASC 326 Adoption		Impact of ASC 326 Adoption		Post-ASC 326 Adoption
Assets:
Allowance for Credit Losses	$	(28,389)	$	(5,282)	$	(33,671)
Deferred Tax Asset (Interest receivable and other assets)	12,273		1,883		14,156

Liabilities:
Reserve for Unfunded Commitments (Interest payable and other liabilities)	(125)		(1,092)		(1,217)

Shareholders’ Equity:
Retained Earnings	(46,736)		4,491		(42,245)

Accounting Standards Issued But Not Yet Adopted

For the fiscal year beginning January 1, 2023, there have been no new accounting standards issued but not yet adopted that are expected to be material to the Company. There are also no accounting standards issued before January 1, 2023 yet to be adopted.

Investment Securities (Tables)

6 Months Ended

Jun. 30, 2023

Investments, Debt and Equity Securities [Abstract]

Summary of Debt Securities Held-to-maturity

A summary of the amortized cost and fair value related to securities held-to-maturity as of June 30, 2023 and December 31, 2022 is presented below.


(in thousands)	Amortized Cost		Gross Unrealized				Fair Value
			Gains		(Losses)
June 30, 2023
Obligations of states and political subdivisions	$	3,486	$	—	$	(278)	$	3,208
Total held-to-maturity	$	3,486	$	—	$	(278)	$	3,208
December 31, 2022
Obligations of states and political subdivisions	$	3,756	$	—	$	(324)	$	3,432
Total held-to-maturity	$	3,756	$	—	$	(324)	$	3,432

Summary of Debt Securities Available-for-sale

A summary of the amortized cost and fair value related to securities available-for-sale as of June 30, 2023 and December 31, 2022 is presented below.


(in thousands)	Amortized Cost		Gross Unrealized				Fair Value
			Gains		(Losses)
June 30, 2023
U.S. government agencies	$	12,239	$	95	$	(197)	$	12,137
Mortgage-backed securities	70,117		—		(12,038)		58,079
Obligations of states and political subdivisions	44,458		4		(5,983)		38,479
Collateralized mortgage obligations	401		—		(42)		359
Corporate bonds	2,000		—		(260)		1,740
Total available-for-sale	$	129,215	$	99	$	(18,520)	$	110,794
December 31, 2022
U.S. government agencies	$	14,317	$	81	$	(225)	$	14,173
Mortgage-backed securities	73,111		1		(11,841)		61,271
Obligations of states and political subdivisions	45,223		21		(6,818)		38,426
Collateralized mortgage obligations	436		—		(41)		395
Corporate bonds	2,000		—		(277)		1,723
Total available-for-sale	$	135,087	$	103	$	(19,202)	$	115,988

Summary of Investment Debt Securities by Contractual Maturity


(in thousands)	June 30, 2023								December 31, 2022
	Held-to-Maturity				Available-for-Sale				Held-to-Maturity				Available-for-Sale
	Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value
Within one year	$	326	$	300	$	—	$	—	$	417	$	381	$	501	$	501
After one but within five years	950		874		—		—		1,015		927		—		—
After five years through ten years	1,375		1,266		5,801		5,204		1,470		1,343		5,320		4,761
After ten years	835		768		38,657		33,275		854		781		39,402		33,164

Investment securities not due at a single maturity date:
U.S. government agencies	—		—		12,239		12,137		—		—		14,317		14,173
Mortgage-backed securities	—		—		70,117		58,079		—		—		73,111		61,271
Collateralized mortgage obligations	—		—		401		359		—		—		436		395
Corporate bonds	—		—		2,000		1,740		—		—		2,000		1,723
Total	$	3,486	$	3,208	$	129,215	$	110,794	$	3,756	$	3,432	$	135,087	$	115,988

Schedule of Realized Gain (Loss)

Sales of investment securities and gross gains and losses are shown in the following table:


(in thousands)	For the three months ended				For the six months ended
	June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022
Available-for-sale:
Sales proceeds	$	—	$	—	$	—	$	1,623
Gross realized gains	—		—		—		5

Schedule of Pledged Investment Securities

Pledged investment securities are shown in the following table:


(in thousands)	June 30, 2023		December 31, 2022
Pledged to:
The State of California, securing deposits of public funds and borrowings	$	57,688	$	40,465
The Federal Reserve Discount Window, increasing borrowing capacity	52,215		—
Total pledged investment securities	$	109,903	$	40,465

Schedule of Unrealized Losses and Fair Value of Available-for-sale Securities


	Less than 12 months				12 months or more				Total securities in a loss position
(in thousands)	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
June 30, 2023
U.S. government agencies	$	2,404	$	(26)	$	8,158	$	(171)	$	10,562	$	(197)
Mortgage-backed securities	391		(6)		57,686		(12,032)		58,077		(12,038)
Obligations of states and political subdivisions	—		—		36,952		(5,983)		36,952		(5,983)
Collateralized mortgage obligations	—		—		359		(42)		359		(42)
Corporate bonds	—		—		1,740		(260)		1,740		(260)
	$	2,795	$	(32)	$	104,895	$	(18,488)	$	107,690	$	(18,520)

December 31, 2022
U.S. government agencies	$	3,090	$	(125)	$	8,392	$	(100)	$	11,482	$	(225)
Mortgage-backed securities	4,360		(470)		56,908		(11,371)		61,268		(11,841)
Obligations of states and political subdivisions	24,707		(4,097)		11,670		(2,721)		36,377		(6,818)
Collateralized mortgage obligations	395		(41)		—		—		395		(41)
Corporate bonds	—		—		1,723		(277)		1,723		(277)
	$	32,552	$	(4,733)	$	78,693	$	(14,469)	$	111,245	$	(19,202)

- Definition

Tabular disclosure of investment in debt security measured at fair value with change in fair value recognized in other comprehensive income (available-for-sale).

+ References

Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 9
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-9

Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-3

Reference 3: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-2

Reference 4: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-2

Reference 5: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
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+ Details

- Definition

Tabular disclosure of information about investment in debt security measured at amortized cost (held-to-maturity).

+ References

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+ Details

Investment Securities - Available-for-sale Securities in a Continuous Unrealized Loss Position (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Marketable Securities [Line Items]
Less than twelve continuous months, fair value	$ 2,795	$ 32,552
Less than twelve continuous months, unrealized loss	(32)	(4,733)
Twelve continuous months or longer, fair value	104,895	78,693
Twelve continuous months or longer, unrealized loss	(18,488)	(14,469)
Total securities in a loss position, fair value	107,690	111,245
Total securities in a loss position, unrealized loss	(18,520)	(19,202)
U.S. government agencies
Marketable Securities [Line Items]
Less than twelve continuous months, fair value	2,404	3,090
Less than twelve continuous months, unrealized loss	(26)	(125)
Twelve continuous months or longer, fair value	8,158	8,392
Twelve continuous months or longer, unrealized loss	(171)	(100)
Total securities in a loss position, fair value	10,562	11,482
Total securities in a loss position, unrealized loss	(197)	(225)
Mortgage-backed securities
Marketable Securities [Line Items]
Less than twelve continuous months, fair value	391	4,360
Less than twelve continuous months, unrealized loss	(6)	(470)
Twelve continuous months or longer, fair value	57,686	56,908
Twelve continuous months or longer, unrealized loss	(12,032)	(11,371)
Total securities in a loss position, fair value	58,077	61,268
Total securities in a loss position, unrealized loss	(12,038)	(11,841)
Obligations of states and political subdivisions
Marketable Securities [Line Items]
Less than twelve continuous months, fair value	0	24,707
Less than twelve continuous months, unrealized loss	0	(4,097)
Twelve continuous months or longer, fair value	36,952	11,670
Twelve continuous months or longer, unrealized loss	(5,983)	(2,721)
Total securities in a loss position, fair value	36,952	36,377
Total securities in a loss position, unrealized loss	(5,983)	(6,818)
Collateralized mortgage obligations
Marketable Securities [Line Items]
Less than twelve continuous months, fair value	0	395
Less than twelve continuous months, unrealized loss	0	(41)
Twelve continuous months or longer, fair value	359	0
Twelve continuous months or longer, unrealized loss	(42)	0
Total securities in a loss position, fair value	359	395
Total securities in a loss position, unrealized loss	(42)	(41)
Corporate bonds
Marketable Securities [Line Items]
Less than twelve continuous months, fair value	0	0
Less than twelve continuous months, unrealized loss	0	0
Twelve continuous months or longer, fair value	1,740	1,723
Twelve continuous months or longer, unrealized loss	(260)	(277)
Total securities in a loss position, fair value	1,740	1,723
Total securities in a loss position, unrealized loss	$ (260)	$ (277)

Basis of Presentation and Summary of Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Cumulative Effect Adjustment for Adoption of ASC 326

The following table reflects the cumulative-effect adjustments the Company recorded on January 1, 2023 for the adoption of ASC 326.


	January 1, 2023
(in thousands)	Pre-ASC 326 Adoption		Impact of ASC 326 Adoption		Post-ASC 326 Adoption
Assets:
Allowance for Credit Losses	$	(28,389)	$	(5,282)	$	(33,671)
Deferred Tax Asset (Interest receivable and other assets)	12,273		1,883		14,156

Liabilities:
Reserve for Unfunded Commitments (Interest payable and other liabilities)	(125)		(1,092)		(1,217)

Shareholders’ Equity:
Retained Earnings	(46,736)		4,491		(42,245)

Basis of Presentation and Summary of Significant Accounting Policies - Narrative (Details)	6 Months Ended
	Jun. 30, 2023 office segment	Jun. 02, 2003 shares
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Bank common stock exchanged for company common stock (in shares) \| shares		1
Number of branch offices	7
Number of loan production offices	1
Number of reportable segments \| segment	1

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Income Statement [Abstract]
Net income	$ 12,729	$ 9,953	$ 25,890	$ 19,815
Unrealized (loss) gain on securities:
Net unrealized holding (loss) gain on securities available-for-sale during the period	(1,462)	(7,849)	679	(17,287)
Reclassification adjustment for net realized gains included in net income	0	0	0	(5)
Income tax (benefit) expense related to items of other comprehensive income	(432)	(2,320)	201	(5,111)
Other comprehensive (loss) income	(1,030)	(5,529)	478	(12,181)
Total comprehensive income	$ 11,699	$ 4,424	$ 26,368	$ 7,634

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

+ Details

Label	Element	Value
Accounting Standards Update [Extensible Enumeration]	us-gaap_AccountingStandardsUpdateExtensibleList	Accounting Standards Update 2016-02 [Member]

- Definition

Indicates amendment to accounting standards.

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+ Details

Commitments and Contingencies (Tables)

6 Months Ended

Jun. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

Schedule of Other Commitments

The contractual

amounts of unfunded loan commitments and standby letters of credit not reflected in the unaudited consolidated balance sheets were as follows:


(in thousands)	June 30, 2023		December 31, 2022
Commercial lines of credit	$	169,726	$	147,021
Undisbursed construction loans	155,408		80,726
Undisbursed commercial real estate loans	85,703		79,121
Agricultural lines of credit	28,121		10,399
Undisbursed residential real estate loans	8,455		8,945
Undisbursed agricultural real estate loans	1,246		1,068
Other	1,657		1,868
Total commitments and standby letters of credit	$	450,316	$	329,148

Cover - shares	6 Months Ended
Cover - shares	Jun. 30, 2023	Aug. 04, 2023
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2023
Document Transition Report	false
Entity File Number	001-40379
Entity Registrant Name	FIVE STAR BANCORP
Entity Incorporation, State or Country Code	CA
Entity Tax Identification Number	75-3100966
Entity Address, Address Line One	3100 Zinfandel Drive
Entity Address, Address Line Two	Suite 100
Entity Address, City or Town	Rancho Cordova
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	95670
City Area Code	(916)
Local Phone Number	626-5000
Title of 12(b) Security	Common stock, no par value per share
Trading Symbol	FSBC
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		17,257,357
Entity Central Index Key	0001275168
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q2
Amendment Flag	false

CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Securities held-to-maturity	$ 3,208	$ 3,432
Preferred stock (in USD per share)	$ 0	$ 0
Preferred stock, shares authorized (in shares)	10,000,000	10,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common Stock (in USD per share)	$ 0	$ 0
Common stock, shares authorized (in shares)	100,000,000	100,000,000
Common stock, shares issued (in shares)	17,257,357
Common stock, shares outstanding (in shares)	17,257,357

Investment Securities - Sales of Investment Securities (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Investments, Debt and Equity Securities [Abstract]
Sales proceeds	$ 0	$ 0	$ 0	$ 1,623
Gross realized gains	$ 0	$ 0	$ 0	$ 5

Interest Bearing Deposits - Interest Expense Recognized on Interest-bearing Deposits (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Interest-bearing Deposits
Interest-bearing transaction accounts	$ 825	$ 66	$ 1,258	$ 136
Savings accounts	758	38	1,303	63
Money market accounts	8,136	679	13,572	1,045
Time deposits minimum			250
Time accounts, $250 or more	2,634	226	4,597	286
Other time accounts	1,616	12	2,617	36
Total interest expense on interest-bearing deposits	$ 13,969	$ 1,021	$ 23,347	$ 1,566

Commitments and Contingencies - Unfunded Loan Commitments and Standby Letters of Credit (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Total commitments and standby letters of credit	$ 450,316	$ 329,148
Commercial lines of credit
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Total commitments and standby letters of credit	169,726	147,021
Undisbursed construction loans
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Total commitments and standby letters of credit	155,408	80,726
Undisbursed commercial real estate loans
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Total commitments and standby letters of credit	85,703	79,121
Agricultural lines of credit
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Total commitments and standby letters of credit	28,121	10,399
Undisbursed residential real estate loans
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Total commitments and standby letters of credit	8,455	8,945
Undisbursed agricultural real estate loans
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Total commitments and standby letters of credit	1,246	1,068
Other
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Total commitments and standby letters of credit	$ 1,657	$ 1,868

Subsequent Events	6 Months Ended
Subsequent Events	Jun. 30, 2023
Subsequent Events [Abstract]
Subsequent Events	Subsequent EventsOn July 20, 2023, the Board of Directors of the Company authorized a cash dividend of $0.20 per common share, payable on August 14, 2023 to shareholders of record on August 7, 2023.