SEC Filing | Five Star Bancorp

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fsbc-20231030

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of report (Date of earliest event reported): October 30, 2023

https://cdn.kscope.io/8b8a516397741c3bed0a9484c1bc8056-fsblogo.jpg

FIVE STAR BANCORP

(Exact Name of Registrant as Specified in Charter)

California

001-40379

75-3100966

(State or Other Jurisdiction

of Incorporation)

(Commission

File Number)

(I.R.S. Employer

Identification No.)

3100 Zinfandel Drive, Suite 100, Rancho Cordova, California, 95670

(Address of Principal Executive Offices, and Zip Code)

(916) 626-5000

Registrant’s Telephone Number, Including Area Code

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):


			☐			Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)


			☐			Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)


			☐			Pre-commencement communication pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))


			☐			Pre-commencement communication pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, no par value per share	FSBC	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). Emerging growth company ☑

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02 Results of Operations and Financial Condition

On October 30, 2023, Five Star Bancorp (the “Company”) issued a press release announcing its results of operations and financial condition for the quarter ended September 30, 2023. A copy of the press release is attached to this Current Report on Form 8-K as Exhibit 99.1 and is incorporated herein by reference.

This information (including Exhibit 99.1) is being furnished under Item 2.02 hereof and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, and such information shall not be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 7.01 Regulation FD Disclosure

The Company is conducting an earnings call on October 31, 2023 at 10:00 am PT/1:00 pm ET to discuss its third quarter 2023 financial results. A copy of the investor presentation to be used during the earnings call is attached to this Current Report on Form 8-K as Exhibit 99.2 and is incorporated herein by reference.

This information (including Exhibit 99.2) is being furnished under Item 7.01 hereof and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section, and such information shall not be deemed incorporated by reference into any filing under the Securities Act, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits


Number									Description
99.1									Press Release dated October 30 , 2023
99.2									Third Quarter 2023 Investor Presentation, dated October 31 , 2023
104									Cover Page Interactive Data File (embedded within the Inline XBRL)

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.




	FIVE STAR BANCORP

	By:	/s/ Heather C. Luck
		Name: Heather C. Luck
		Title: Senior Vice President and Chief Financial Officer

Date: October 30, 2023

Document


PRESS RELEASE			FOR IMMEDIATE RELEASE

Five Star Bancorp Announces Third Quarter 2023 Results

RANCHO CORDOVA, Calif. October 30, 2023 (GLOBE NEWSWIRE) – Five Star Bancorp (Nasdaq: FSBC) (the “Company” or “Five Star”), the holding company for Five Star Bank (the “Bank”), today reported net income of $11.0 million for the three months ended September 30, 2023, as compared to $12.7 million for the three months ended June 30, 2023 and $11.7 million for the three months ended September 30, 2022.

Third Quarter Highlights

Performance and operating highlights for the Company for the periods noted below included the following:


	Three months ended
(in thousands, except per share and share data)	September 30, 2023			June 30, 2023			September 30, 2022
Return on average assets (“ROAA”)	1.30		%	1.55		%	1.60		%
Return on average equity (“ROAE”)	16.09		%	19.29		%	19.35		%
Pre-tax income	$	15,795		$	17,169		$	16,534
Pre-tax, pre-provision income(1)	16,845			18,419			18,784
Net income	11,045			12,729			11,704
Basic earnings per common share	$	0.64		$	0.74		$	0.68
Diluted earnings per common share	0.64			0.74			0.68
Weighted average basic common shares outstanding	17,175,034			17,165,344			17,140,435
Weighted average diluted common shares outstanding	17,194,825			17,168,995			17,168,447
Shares outstanding at end of period	17,257,357			17,257,357			17,245,983

(1) See the section entitled “Non-GAAP Reconciliation (Unaudited)” for a reconciliation of this non-GAAP financial measure.

James E. Beckwith, President and Chief Executive Officer, commented on the financial results:

“Despite ongoing headwinds in the market, we maintained momentum as we continued to onboard new customers and enhance existing relationships. Pressures on deposit pricing exist, yet Five Star Bank’s total loans and deposits increased in the 3rd Quarter of 2023. We remain focused on the future and our long-term strategy. As such, we expanded our presence in the San Francisco Bay Area with the onboarding of a new team of seasoned professionals, and we declared another cash dividend to shareholders, exemplifying our commitment to shareholder value.

This Quarter, we were pleased to be listed among Piper Sandler’s Sm-All Stars for 2023 which recognizes outperformance in several metrics including growth, profitability, asset quality, and capital. We were also among the Sacramento Business Journal’s Best Places to Work. We believe these successes serve as the strongest testimony to our people, technology, operating efficiencies, conservative underwriting practices, exceptional credit quality, and prudent approach to portfolio management. While uncertainty exists relative to recessionary concerns and a turbulent geopolitical climate, we will remain vigilant and focused on disciplined business practices. We thank our employees for their outstanding commitment to ensuring Five Star Bank remains a safe, trusted, and steadfast banking partner.”

•The Company's reliance on brokered deposits and short-term FHLB borrowings decreased by $45.0 million, or 21.43%, during the three months ended September 30, 2023.

•The Company's new San Francisco Bay Area team increased to nine employees who generated $28.9 million of deposits during the third quarter ended September 30, 2023.

•Cash and cash equivalents were $323.5 million, representing 10.67% of total deposits at September 30, 2023, compared to 10.24% at June 30, 2023.

•Total deposits increased by $102.5 million, or 3.50%, during the three months ended September 30, 2023. Non-brokered deposits increased by $137.5 million, or 4.87%, over the same period.

•Consistent, disciplined management of expenses contributed to our efficiency ratio of 41.63% for the three months ended September 30, 2023.

•Net interest margin was 3.31% for the three months ended September 30, 2023, 3.45% for the three months ended June 30, 2023, and 3.86% for the three months ended September 30, 2022. The effective Federal Funds rate increased to 5.33% as of September 30, 2023, from 5.08% as of June 30, 2023 and 3.08% as of September 30, 2022.

•Other comprehensive loss was $3.0 million during the three months ended September 30, 2023. Unrealized losses, net of tax effect, on available-for-sale securities were $15.9 million as of September 30, 2023. Total held-to-maturity and available-for-sale securities represented 0.09% and 3.03% of total interest-earning assets, respectively, as of September 30, 2023.

•The Company's common equity Tier 1 capital ratio was 9.07% and 9.05% as of September 30, 2023 and June 30, 2023, respectively. The Bank continues to meet all requirements to be considered “well-capitalized” under applicable regulatory guidelines.

•Loan and deposit growth in the three months ended September 30, 2023 was as follows:


(in thousands)	September 30, 2023		June 30, 2023		$ Change		% Change
Loans held for investment	$	3,009,930	$	2,927,411	$	82,519	2.82	%
Non-interest-bearing deposits	833,434		832,641		793		0.10	%
Interest-bearing deposits	2,198,776		2,097,098		101,678		4.85	%

(in thousands)	September 30, 2023		September 30, 2022		$ Change		% Change
Loans held for investment	$	3,009,930	$	2,582,978	$	426,952	16.53	%


Non-interest-bearing deposits	833,434		1,019,063		(185,629)		(18.22)	%
Interest-bearing deposits	2,198,776		1,595,269		603,507		37.83	%

•The ratio of nonperforming loans to loans held for investment at period end increased to 0.07% at September 30, 2023, from 0.01% at June 30, 2023.

•The Company’s Board of Directors declared, and the Company subsequently paid, a cash dividend of $0.20 per share during the three months ended September 30, 2023. The Company's Board of Directors subsequently declared another cash dividend of $0.20 per share on October 19, 2023.

Summary Results

Three months ended September 30, 2023, as compared to three months ended June 30, 2023

The Company’s net income was $11.0 million for the three months ended September 30, 2023, compared to $12.7 million for the three months ended June 30, 2023. Net interest income decreased by $0.1 million as increases in interest expense more than offset increases in interest income, with increases in rates paid on interest-bearing liabilities as the leading driver. The provision for credit losses decreased by $0.2 million as loan originations in the three months ended September 30, 2023 were less than those for the three months ended June 30, 2023. Non-interest income decreased by $1.4 million, primarily due to a $1.3 million gain from distributions on investments in venture-backed funds during the three months ended June 30, 2023 that did not recur during the three months ended September 30, 2023. Non-interest expense increased by $36.0 thousand as the increase in salaries and employee benefits more than offset decreases in advertising, promotional, and other operating expenses.

Three months ended September 30, 2023, as compared to three months ended September 30, 2022

The Company’s net income was $11.0 million for the three months ended September 30, 2023, compared to $11.7 million for the three months ended September 30, 2022. Net interest income decreased by $47.0 thousand as increases in interest expense more than offset increases in interest income, with increases in rates paid on interest-bearing liabilities as the leading driver. The provision for credit losses decreased by $1.2 million as loan originations in the three months ended September 30, 2023 were less than those for the three months ended September 30, 2022. Non-interest income decreased by $49.0 thousand, primarily due to a decrease in gain on sale of loans recognized during the three months ended September 30, 2023, as compared to the three months ended September 30, 2022. Non-interest expense increased by $1.8 million with an increase in salaries and employee benefits as the leading driver. The Company had 15 more full-time employees at September 30, 2023 than at September 30, 2022, nine of whom support the Company's recent expansion into the San Francisco Bay Area.

The following is a summary of the components of the Company’s operating results and performance ratios for the periods indicated:


	Three months ended
(in thousands, except per share data)	September 30, 2023			June 30, 2023			$ Change		% Change
Selected operating data:
Net interest income	$	27,476		$	27,578		$	(102)	(0.37)	%
Provision for credit losses	1,050			1,250			(200)		(16.00)	%
Non-interest income	1,384			2,820			(1,436)		(50.92)	%
Non-interest expense	12,015			11,979			36		0.30	%
Pre-tax income	15,795			17,169			(1,374)		(8.00)	%
Provision for income taxes	4,750			4,440			310		6.98	%
Net income	$	11,045		$	12,729		$	(1,684)	(13.23)	%
Earnings per common share:
Basic	$	0.64		$	0.74		$	(0.10)	(13.51)	%
Diluted	0.64			0.74			(0.10)		(13.51)	%
Performance and other financial ratios:
ROAA	1.30		%	1.55		%
ROAE	16.09		%	19.29		%
Net interest margin	3.31		%	3.45		%
Cost of funds	2.28		%	2.04		%
Efficiency ratio	41.63		%	39.41		%



	Three months ended
(in thousands, except per share data)	September 30, 2023			September 30, 2022			$ Change		% Change
Selected operating data:
Net interest income	$	27,476		$	27,523		$	(47)	(0.17)	%
Provision for credit losses	1,050			2,250			(1,200)		(53.33)	%
Non-interest income	1,384			1,433			(49)		(3.42)	%
Non-interest expense	12,015			10,172			1,843		18.12	%
Pre-tax income	15,795			16,534			(739)		(4.47)	%
Provision for income taxes	4,750			4,830			(80)		(1.66)	%
Net income	$	11,045		$	11,704		$	(659)	(5.63)	%
Earnings per common share:
Basic	$	0.64		$	0.68		$	(0.04)	(5.88)	%
Diluted	0.64			0.68			(0.04)		(5.88)	%
Performance and other financial ratios:
ROAA	1.30		%	1.60		%
ROAE	16.09		%	19.35		%
Net interest margin	3.31		%	3.86		%
Cost of funds	2.28		%	0.62		%
Efficiency ratio	41.63		%	35.13		%

Balance Sheet Summary


(in thousands)	September 30, 2023		December 31, 2022		$ Change		% Change
Selected financial condition data:
Total assets	$	3,505,040	$	3,227,159	$	277,881	8.61	%
Cash and cash equivalents	323,548		259,991		63,557		24.45	%
Total loans held for investment	3,009,930		2,791,326		218,604		7.83	%
Total investments	107,190		119,744		(12,554)		(10.48)	%
Total liabilities	3,231,016		2,974,334		256,682		8.63	%
Total deposits	3,032,210		2,782,004		250,206		8.99	%
Subordinated notes, net	73,713		73,606		107		0.15	%
Total shareholders’ equity	274,024		252,825		21,199		8.38	%

•Insured and collateralized deposits were approximately $2.0 billion, representing approximately 66.33% of total deposits as of September 30, 2023. Net uninsured deposits were approximately $1.0 billion as of September 30, 2023.

•Commercial and consumer deposit accounts constituted approximately 75% of total deposits. Deposit relationships of at least $5 million represented approximately 62% of total deposits and had an average age of approximately 8.68 years as of September 30, 2023.

•Cash and cash equivalents as of September 30, 2023 were $323.5 million, representing 10.67% of total deposits at September 30, 2023, compared to 10.24% as of June 30, 2023.

•In the first quarter of 2023, the Federal Reserve created the Bank Term Funding Program to provide depository institutions with additional funding, which allows any federally insured deposit institution to pledge its investment portfolio at par as collateral value. As of September 30, 2023, the Bank had neither used nor established borrowing capacity with the Bank Term Funding Program.

•Total liquidity (consisting of cash and cash equivalents and unused and immediately available borrowing capacity as set forth below) was approximately $859.7 million as of September 30, 2023.


	September 30, 2023						Available
(in thousands)	Line of Credit		Letters of Credit Issued		Borrowings
FHLB advances	$	1,053,625	$	671,500	$	90,000	$	292,125
Federal Reserve Discount Window	69,012		—		—		69,012
Correspondent bank lines of credit	175,000		—		—		175,000

Cash and cash equivalents	—		—		—		323,548
Total	$	1,297,637	$	671,500	$	90,000	$	859,685

The increase in total assets from December 31, 2022 to September 30, 2023 was primarily due to a $63.6 million increase in cash and cash equivalents and a $218.6 million increase in total loans held for investment. The increase in cash and cash equivalents primarily resulted from net cash provided from financing and operating activities of $230.7 million and $40.5 million, respectively, partially offset by net cash used in investing activities of $207.7 million. The $218.6 million increase in total loans held for investment between December 31, 2022 and September 30, 2023 was a result of $524.0 million in loan originations, partially offset by $305.4 million in loan payoffs and paydowns.

The increase in total liabilities from December 31, 2022 to September 30, 2023 was primarily attributable to an increase in deposits of $250.2 million, largely due to increases in money market, time deposits over $250 thousand, and interest-bearing demand deposits of $262.0 million, $132.8 million, and $55.0 million, respectively, partially offset by decreases in non-interest-bearing, other time deposits, and savings deposits of $135.3 million, $47.7 million, and $16.6 million, respectively.

The increase in total shareholders’ equity from December 31, 2022 to September 30, 2023 was primarily a result of net income recognized of $36.9 million, partially offset by $9.5 million in cash distributions paid during the period, a reduction to retained earnings of $4.5 million, net of tax effect, due to the adoption of Accounting Standards Update 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASC 326”), and an increase of $2.5 million in accumulated other comprehensive loss.

Net Interest Income and Net Interest Margin

The following is a summary of the components of net interest income for the periods indicated:


	Three months ended
(in thousands)	September 30, 2023			June 30, 2023			$ Change		% Change
Interest and fee income	$	45,098		$	42,793		$	2,305	5.39	%
Interest expense	17,622			15,215			2,407		15.82	%
Net interest income	$	27,476		$	27,578		$	(102)	(0.37)	%
Net interest margin	3.31		%	3.45		%

	Three months ended
(in thousands)	September 30, 2023			September 30, 2022			$ Change		% Change
Interest and fee income	$	45,098		$	31,646		$	13,452	42.51	%
Interest expense	17,622			4,123			13,499		327.41	%
Net interest income	$	27,476		$	27,523		$	(47)	(0.17)	%
Net interest margin	3.31		%	3.86		%

The following table shows the components of net interest income and net interest margin for the quarterly periods indicated:


	Three months ended
	September 30, 2023						June 30, 2023						September 30, 2022
(in thousands)	Average Balance		Interest Income/ Expense		Yield/ Rate		Average Balance		Interest Income/ Expense		Yield/ Rate		Average Balance		Interest Income/ Expense		Yield/ Rate
Assets
Interest-earning deposits with banks	$	198,751	$	2,584	5.16	%	$	179,894	$	2,218	4.95	%	$	210,179	$	1,145	2.16	%
Investment securities	112,154		653		2.31	%	116,107		646		2.23	%	126,733		615		1.93	%
Loans held for investment and sale	2,982,140		41,861		5.57	%	2,914,388		39,929		5.50	%	2,494,468		29,886		4.75	%
Total interest-earning assets	3,293,045		45,098		5.43	%	3,210,389		42,793		5.35	%	2,831,380		31,646		4.43	%
Interest receivable and other assets, net	77,757						75,416						78,112
Total assets	$	3,370,802					$	3,285,805					$	2,909,492

Liabilities and shareholders’ equity
Interest-bearing demand	$	296,230	$	972	1.30	%	$	290,404	$	825	1.14	%	$	213,926	$	115	0.21	%
Savings	134,920		880		2.59	%	139,522		758		2.18	%	103,142		65		0.25	%
Money market	1,328,290		9,536		2.85	%	1,283,353		8,136		2.54	%	1,015,698		1,780		0.69	%
Time	399,514		4,998		4.96	%	370,864		4,250		4.60	%	208,678		857		1.63	%
Subordinated debt and other borrowings	79,085		1,236		6.20	%	80,192		1,246		6.23	%	72,195		1,306		7.18	%
Total interest-bearing liabilities	2,238,039		17,622		3.12	%	2,164,335		15,215		2.82	%	1,613,639		4,123		1.01	%
Demand accounts	825,254						828,748						1,041,222
Interest payable and other liabilities	35,123						28,034						14,687
Shareholders’ equity	272,386						264,688						239,944
Total liabilities & shareholders’ equity	$	3,370,802					$	3,285,805					$	2,909,492

Net interest spread					2.31	%					2.53	%					3.42	%
Net interest income/margin			$	27,476	3.31	%			$	27,578	3.45	%			$	27,523	3.86	%

Net interest income during the three months ended September 30, 2023 decreased $0.1 million as compared to the three months ended June 30, 2023. In addition, net interest margin decreased 14 basis points compared to the prior quarter. The decrease in net interest income is primarily attributable to an additional $2.4 million in deposit interest expense due to increases in interest rates as compared to the prior quarter. The cost of interest-bearing deposits increased 32 basis points as compared to the prior quarter, while average balances increased 3.59%. In addition, the average balance of non-interest-bearing deposits decreased by $3.5 million quarter-over-quarter. The increase to interest expense was partially offset by an increase in total interest income of $2.3 million. Average loan yields increased 7 basis points as compared to the prior quarter, while average balances increased 2.32%.

As compared to the three months ended September 30, 2022, net interest income decreased $47.0 thousand and net interest margin decreased 55 basis points. The decrease in net interest income is primarily attributable to an additional $13.6 million in deposit interest expense due to increases in interest rates and average balances as compared to the same quarter of the prior year. The cost of interest-bearing deposits increased 228 basis points as compared to the same quarter of the prior year, while average balances increased 40.06%. In addition, the average balance of non-interest-bearing deposits decreased by $216.0 million as compared to the same quarter of the prior year. The increase in deposit interest expense was partially offset by an increase in total interest income of $13.5 million, as compared to the same quarter of the prior year. Average loan yields increased 82 basis points as compared to the same quarter of the prior year, while average balances increased 19.55%.

Loans by Type

The following table provides loan balances, excluding deferred loan fees, by type as of September 30, 2023:


(in thousands)
Commercial Term Real Estate Non-Owner Occupied	$	1,115,896
Commercial Term Multifamily	991,360
Commercial Term Real Estate Owner Occupied	482,629
Commercial Construction Real Estate	95,352
Commercial Secured	88,589
SBA 7A Secured	49,177
Commercial Term Agricultural Real Estate	51,921
Others	137,271
Total loans, excluding deferred loan fees	$	3,012,195

Interest-bearing Deposits

The following table provide interest-bearing deposit balances by type as of September 30, 2023:


(in thousands)
Interest-bearing demand accounts	$	297,678
Money market accounts	1,335,545
Savings accounts	138,029
Time accounts	427,524
Total interest-bearing deposits	$	2,198,776

Asset Quality

Allowance for Credit Losses - Loans

Beginning January 1, 2023, the Company adopted ASC 326, which replaced the former “incurred loss” model for recognizing credit losses with an “expected loss” model referred to as the Current Expected Credit Loss (“CECL”) model. Utilizing CECL may have an impact on our allowance for credit losses going forward and result in a lack of comparability between 2022 and 2023 quarterly periods. Refer to information below on the provision for credit losses recorded during the nine months ended September 30, 2023.

At September 30, 2023, the Company’s allowance for credit losses was $34.0 million, as compared to $28.4 million at December 31, 2022. The $5.6 million increase in the allowance is due to a $5.3 million adjustment recorded in connection with the adoption of CECL and a $2.9 million provision for credit losses recorded during the nine

months ended September 30, 2023, partially offset by net charge-offs of $2.5 million, mainly attributable to commercial and industrial loans, during the same period.

The Company’s ratio of nonperforming loans to loans held for investment increased from 0.01% at December 31, 2022 to 0.07% at September 30, 2023. The provision for credit losses recorded during the nine months ended September 30, 2023 was primarily related to loan growth, loan type mix, and updates in the macroeconomic environment. Loans designated as substandard increased from $0.4 million to $2.0 million between December 31, 2022 and September 30, 2023. There were no loans with doubtful risk grades at September 30, 2023 or December 31, 2022.

A summary of the allowance for credit losses by loan class is as follows:


	September 30, 2023				December 31, 2022
(in thousands)	Amount		% of Total		Amount		% of Total
Real estate:
Commercial	$	27,901	82.00	%	$	19,216	67.69	%
Commercial land and development	198		0.58	%	54		0.19	%
Commercial construction	1,220		3.59	%	645		2.27	%
Residential construction	115		0.34	%	49		0.17	%
Residential	151		0.44	%	175		0.62	%
Farmland	393		1.15	%	644		2.27	%
	29,978		88.10	%	20,783		73.21	%
Commercial:
Secured	3,461		10.17	%	7,098		25.00	%
Unsecured	213		0.63	%	116		0.41	%
	3,674		10.80	%	7,214		25.41	%
Consumer and other	376		1.10	%	347		1.22	%
Unallocated	—		—	%	45		0.16	%
Total allowance for credit losses	$	34,028	100.00	%	$	28,389	100.00	%

The ratio of allowance for credit losses to loans held for investment was 1.13% at September 30, 2023, as compared to 1.02% at December 31, 2022.

Non-interest Income

The following table presents the key components of non-interest income for the periods indicated:


	Three months ended
(in thousands)	September 30, 2023		June 30, 2023		$ Change		% Change
Service charges on deposit accounts	$	158	$	135	$	23	17.04	%

Gain on sale of loans	396		641		(245)		(38.22)	%
Loan-related fees	355		389		(34)		(8.74)	%
FHLB stock dividends	274		189		85		44.97	%
Earnings on bank-owned life insurance	127		126		1		0.79	%
Other income	74		1,340		(1,266)		(94.48)	%
Total non-interest income	$	1,384	$	2,820	$	(1,436)	(50.92)	%

Gain on sale of loans. The decrease in gain on sale of loans primarily resulted from an overall decline in the volume of loans sold during the three months ended September 30, 2023, compared to the three months ended June 30, 2023. During the three months ended September 30, 2023, approximately $7.0 million of loans were sold with an effective yield of 5.63%, as compared to approximately $10.9 million of loans sold with an effective yield of 5.89% during the three months ended June 30, 2023.

FHLB stock dividends. The increase in FHLB stock dividends was primarily due to increased yields from dividends received of 7.75% for the three months ended September 30, 2023, as compared to 7.00% for the three months ended June 30, 2023.

Other income. The decrease in other income resulted primarily from a $1.3 million gain recorded for distributions received from venture-backed fund investments during the three months ended June 30, 2023, which did not recur during the three months ended September 30, 2023.

The following table presents the key components of non-interest income for the periods indicated:


	Three months ended
(in thousands)	September 30, 2023		September 30, 2022		$ Change		% Change
Service charges on deposit accounts	$	158	$	132	$	26	19.70	%

Gain on sale of loans	396		548		(152)		(27.74)	%
Loan-related fees	355		447		(92)		(20.58)	%
FHLB stock dividends	274		152		122		80.26	%
Earnings on bank-owned life insurance	127		102		25		24.51	%
Other income	74		52		22		42.31	%
Total non-interest income	$	1,384	$	1,433	$	(49)	(3.42)	%

Gain on sale of loans. The decrease in gain on sale of loans related primarily to an overall decline in the volume of loans sold during the three months ended September 30, 2023, as compared to the three months ended September 30, 2022. During the three months ended September 30, 2023, approximately $7.0 million of loans were sold with an effective yield of 5.63%, as compared to approximately $10.5 million of loans sold with an effective yield of 5.20% during the three months ended September 30, 2022.

Non-interest Expense

The following table presents the key components of non-interest expense for the periods indicated:


	Three months ended
(in thousands)	September 30, 2023		June 30, 2023		$ Change		% Change
Salaries and employee benefits	$	6,876	$	6,421	$	455	7.09	%
Occupancy and equipment	561		551		10		1.81	%
Data processing and software	1,020		1,013		7		0.69	%
Federal Deposit Insurance Corporation (“FDIC”) insurance	375		410		(35)		(8.54)	%
Professional services	700		586		114		19.45	%
Advertising and promotional	535		733		(198)		(27.01)	%
Loan-related expenses	345		324		21		6.48	%
Other operating expenses	1,603		1,941		(338)		(17.41)	%
Total non-interest expense	$	12,015	$	11,979	$	36	0.30	%

Salaries and employee benefits. The increase in salaries and employee benefits was primarily a result of: (i) a $0.6 million decline in loan origination costs related to lower production and (ii) a $0.2 million increase in salaries and benefits for new employees hired to support expansion into the San Francisco Bay Area. These increases were partially offset by a $0.3 million reduction in commissions related to lower loan production during the three months ended September 30, 2023, as compared to the three months ended June 30, 2023.

Professional services. The increase was related primarily to expenses incurred of $0.1 million for surveillance rating services performed for the Company's outstanding subordinated notes during the three months ended September 30, 2023.

Advertising and promotional. The decrease related primarily to an overall decline in sponsorships and donations made, as fewer events were sponsored and attended during the three months ended September 30, 2023, as compared to the three months ended June 30, 2023.

Other operating expenses. The decrease in other operating expenses was primarily due to an overall decline in travel, conference fees, and professional membership fees during the three months ended September 30, 2023, as compared to the three months ended June 30, 2023.

The following table presents the key components of non-interest expense for the periods indicated:


	Three months ended
(in thousands)	September 30, 2023		September 30, 2022		$ Change		% Change
Salaries and employee benefits	$	6,876	$	5,645	$	1,231	21.81	%
Occupancy and equipment	561		515		46		8.93	%
Data processing and software	1,020		797		223		27.98	%
FDIC insurance	375		195		180		92.31	%
Professional services	700		792		(92)		(11.62)	%
Advertising and promotional	535		512		23		4.49	%
Loan-related expenses	345		262		83		31.68	%
Other operating expenses	1,603		1,454		149		10.25	%
Total non-interest expense	$	12,015	$	10,172	$	1,843	18.12	%

Salaries and employee benefits. The increase in salaries and employee benefits was primarily a result of: (i) a $0.8 million increase in salaries, insurance, and benefits as a result of a 8.72% increase in headcount during the three months ended September 30, 2023, as compared to the three months ended September 30, 2022 and (ii) a $0.8 million decrease in loan origination costs due to lower loan production period-over-period. These increases were partially offset by $0.4 million of lower commission expenses due to lower loan production during the three months ended September 30, 2023, as compared to the three months ended September 30, 2022.

Data processing and software. The increase in data processing and software was primarily due to: (i) increased usage of our digital banking platform; (ii) higher transaction volumes related to the increased number of loan and deposit accounts; and (iii) an increased number of licenses required for new users on our loan origination and documentation system.

FDIC insurance. The increase related primarily to a final rule adopted by the FDIC to increase initial base deposit insurance assessment rates for insured depository institutions by two basis points, beginning with the first quarterly assessment period of 2023. FDIC insurance also increased for the three months ended September 30, 2023 compared to the three months ended September 30, 2022, due to a $320.8 million increase in the assessment base period-over-period.

Other operating expenses. The increase in other operating expenses was primarily due to a $0.1 million increase in IntraFi Network fees resulting from an overall increase in balances carried in the network. The remainder of the increase related to an overall increase in travel, conference fees, and professional membership fees during the three months September 30, 2023, as compared to the three months ended September 30, 2022.

Provision for Income Taxes

Three months ended September 30, 2023, as compared to three months ended June 30, 2023

Provision for income taxes increased by $0.4 million, or 6.98%, to $4.8 million for the three months ended September 30, 2023 from $4.4 million for the three months ended June 30, 2023. During the three months ended June 30, 2023, the Company recorded a $0.5 million state tax benefit relating to an overall reduction in the state tax blended rate for the Company since its inception as a C Corporation, which did not recur during the three months ended September 30, 2023. This increase was partially offset by lower pre-tax income quarter-over-quarter and a $0.2 million adjustment to the provision recorded during the three months ended September 30, 2023 to true-up the

year to date provision's effective tax rate. The effective tax rate was 30.07% and 25.86% for the three months ended September 30, 2023 and June 30, 2023, respectively.

Three months ended September 30, 2023, as compared to three months ended September 30, 2022

Provision for income taxes decreased by $0.1 million, or 1.66%, for the three months ended September 30, 2023 compared to the three months ended September 30, 2022, primarily driven by an overall decrease in pre-tax income and a lower state tax rate period-over-period. These declines were partially offset by a $0.2 million adjustment to the provision recorded during the three months ended September 30, 2023 to true-up the year to date provision's effective tax rate. The effective tax rate was 30.07% and 29.21% for the three months ended September 30, 2023 and September 30, 2022, respectively.

Webcast Details

Five Star Bancorp will host a live webcast for analysts and investors on Tuesday, October 31, 2023 at 1:00 p.m. ET (10:00 a.m. PT) to discuss its third quarter financial results. To view the live webcast, visit the “News & Events” section of the Company’s website under “Events” at https://investors.fivestarbank.com/news-events/events. The webcast will be archived on the Company’s website for a period of 90 days.

About Five Star Bancorp

Five Star is a bank holding company headquartered in Rancho Cordova, California. Five Star operates through its wholly owned banking subsidiary, Five Star Bank. The Bank has seven branches and one loan production office in Northern California.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent plans, estimates, objectives, goals, guidelines, expectations, intentions, projections, and statements of the Company’s beliefs concerning future events, business plans, objectives, expected operating results, and the assumptions upon which those statements are based. Forward-looking statements include without limitation, any statement that may predict, forecast, indicate, or imply future results, performance, or achievements, and are typically identified with words such as “may,” “could,” “should,” “will,” “would,” “believe,” “anticipate,” “estimate,” “expect,” “aim,” “intend,” “plan,” or words or phases of similar meaning. The Company cautions that the forward-looking statements are based largely on the Company’s expectations and are subject to a number of known and unknown risks and uncertainties that are subject to change based on factors which are, in many instances, beyond the Company’s control. Such forward-looking statements are based on various assumptions (some of which may be beyond the Company’s control) and are subject to risks and uncertainties, which change over time, and other factors, which could cause actual results to differ materially from those currently anticipated. New risks and uncertainties may emerge from time to time, and it is not possible for the Company to predict their occurrence or how they will affect the Company. If one or more of the factors affecting the Company’s forward-looking information and statements proves incorrect, then the Company’s actual results, performance, or achievements could differ materially from those expressed in, or implied by, forward-looking information and statements contained in this press release. Therefore, the Company cautions you not to place undue reliance on the Company’s forward-looking information and statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements are set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 and Quarterly Report on Form 10-Q for the quarter ended June 30, 2023, in each case under the section entitled “Risk Factors,” and other documents filed by the Company with the Securities and Exchange Commission from time to time.

The Company disclaims any duty to revise or update the forward-looking statements, whether written or oral, to reflect actual results or changes in the factors affecting the forward-looking statements, except as specifically required by law.

Condensed Financial Data (Unaudited)


	Three months ended
(in thousands, except per share and share data)	September 30, 2023		June 30, 2023		September 30, 2022
Revenue and Expense Data
Interest and fee income	$	45,098	$	42,793	$	31,646
Interest expense	17,622		15,215		4,123
Net interest income	27,476		27,578		27,523
Provision for credit losses	1,050		1,250		2,250
Net interest income after provision	26,426		26,328		25,273
Non-interest income:
Service charges on deposit accounts	158		135		132

Gain on sale of loans	396		641		548
Loan-related fees	355		389		447
FHLB stock dividends	274		189		152
Earnings on bank-owned life insurance	127		126		102
Other income	74		1,340		52
Total non-interest income	1,384		2,820		1,433
Non-interest expense:
Salaries and employee benefits	6,876		6,421		5,645
Occupancy and equipment	561		551		515
Data processing and software	1,020		1,013		797
FDIC insurance	375		410		195
Professional services	700		586		792
Advertising and promotional	535		733		512
Loan-related expenses	345		324		262
Other operating expenses	1,603		1,941		1,454
Total non-interest expense	12,015		11,979		10,172
Income before provision for income taxes	15,795		17,169		16,534
Provision for income taxes	4,750		4,440		4,830
Net income	$	11,045	$	12,729	$	11,704

Comprehensive Income
Net income	$	11,045	$	12,729	$	11,704
Net unrealized holding loss on securities available-for-sale during the period	(4,195)		(1,462)		(4,718)

Income tax benefit related to other comprehensive loss	(1,240)		(432)		(1,395)
Other comprehensive loss	(2,955)		(1,030)		(3,323)
Total comprehensive income	$	8,090	$	11,699	$	8,381


	Three months ended
(in thousands, except per share and share data)	September 30, 2023			June 30, 2023			September 30, 2022
Share and Per Share Data
Earnings per common share:
Basic	$	0.64		$	0.74		$	0.68
Diluted	0.64			0.74			0.68
Book value per share	15.88			15.60			13.87
Tangible book value per share(1)	15.88			15.60			13.87
Weighted average basic common shares outstanding	17,175,034			17,165,344			17,140,435
Weighted average diluted common shares outstanding	17,194,825			17,168,995			17,168,447
Shares outstanding at end of period	17,257,357			17,257,357			17,245,983

Credit Quality
Allowance for credit losses to period end nonperforming loans	1,699.35		%	11,839.25		%	6,483.87		%
Nonperforming loans to loans held for investment	0.07		%	0.01		%	0.02		%
Nonperforming assets to total assets	0.06		%	0.01		%	0.01		%
Nonperforming loans plus performing loan modifications to loans held for investment	0.07		%	0.01		%	0.02		%


Selected Financial Ratios
ROAA	1.30		%	1.55		%	1.60		%
ROAE	16.09		%	19.29		%	19.35		%
Net interest margin	3.31		%	3.45		%	3.86		%
Loan to deposit	99.57		%	100.21		%	99.22		%

(1) See the section entitled “Non-GAAP Reconciliation (Unaudited)” for a reconciliation of this non-GAAP financial measure.


(in thousands)	September 30, 2023			June 30, 2023			September 30, 2022
Balance Sheet Data
Cash and due from financial institutions	$	26,744		$	28,568		$	33,280
Interest-bearing deposits in banks	296,804			271,555			284,389
Time deposits in banks	6,971			7,343			10,216
Securities - available-for-sale, at fair value	104,086			110,794			114,041
Securities - held-to-maturity, at amortized cost	3,104			3,486			3,764
Loans held for sale	9,326			8,559			11,015
Loans held for investment	3,009,930			2,927,411			2,582,978
Allowance for credit losses - loans	(34,028)			(33,984)			(27,838)
Loans held for investment, net of allowance for credit losses	2,975,902			2,893,427			2,555,140
FHLB stock	15,000			15,000			10,890
Operating leases, right-of-use asset	4,799			5,032			4,227
Premises and equipment, net	1,564			1,599			1,694
Bank-owned life insurance	17,023			16,897			14,550
Interest receivable and other assets	43,717			40,441			31,364
Total assets	$	3,505,040		$	3,402,701		$	3,074,570

Non-interest-bearing deposits	$	833,434		$	832,641		$	1,019,063
Interest-bearing deposits	2,198,776			2,097,098			1,595,269
Total deposits	3,032,210			2,929,739			2,614,332
Subordinated notes, net	73,713			73,677			102,028
FHLB advances	90,000			100,000			105,000
Operating lease liability	5,043			5,275			4,492
Interest payable and other liabilities	30,050			24,870			9,460
Total liabilities	3,231,016			3,133,561			2,835,312

Common stock	220,266			220,021			219,286
Retained earnings	69,689			62,095			36,042
Accumulated other comprehensive loss, net	(15,931)			(12,976)			(16,070)
Total shareholders’ equity	274,024			269,140			239,258
Total liabilities and shareholders’ equity	$	3,505,040		$	3,402,701		$	3,074,570

Quarterly Average Balance Data
Average loans held for investment and sale	$	2,982,140		$	2,914,388		$	2,494,468
Average interest-earning assets	3,293,045			3,210,389			2,831,380
Average total assets	3,370,802			3,285,805			2,909,492
Average deposits	2,984,208			2,912,891			2,582,666
Average total equity	272,386			264,688			239,944

Capital Ratios
Total shareholders’ equity to total assets	7.82		%	7.91		%	7.78		%
Tangible shareholders’ equity to tangible assets(1)	7.82		%	7.91		%	7.78		%
Total capital (to risk-weighted assets)	12.37		%	12.43		%	13.94		%
Tier 1 capital (to risk-weighted assets)	9.07		%	9.05		%	9.21		%
Common equity Tier 1 capital (to risk-weighted assets)	9.07		%	9.05		%	9.21		%
Tier 1 leverage ratio	8.58		%	8.66		%	8.66		%

(1) See the section entitled “Non-GAAP Reconciliation (Unaudited)” for a reconciliation of this non-GAAP financial measure.

Non-GAAP Reconciliation (Unaudited)

The Company uses financial information in its analysis of the Company’s performance that is not in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The Company believes that these non-GAAP financial measures provide useful information to management and investors that is supplementary to the Company’s financial condition, results of operations, and cash flows computed in accordance with GAAP. However, the Company acknowledges that its non-GAAP financial measures have a number of limitations. As such, investors should not view these disclosures as a substitute for results determined in accordance with GAAP. Additionally, these non-GAAP measures are not necessarily comparable to non-GAAP financial measures that other banking companies use. Other banking companies may use names similar to those the Company uses for the non-GAAP financial measures the Company discloses, but may calculate them differently. Investors should understand how the Company and other companies each calculate their non-GAAP financial measures when making comparisons.

Tangible shareholders’ equity to tangible assets is defined as total equity less goodwill and other intangible assets, divided by total assets less goodwill and other intangible assets. The most directly comparable GAAP financial measure is total shareholders’ equity to total assets. We had no goodwill or other intangible assets at the end of any period indicated. As a result, tangible shareholders’ equity to tangible assets is the same as total shareholders’ equity to total assets at the end of each of the periods indicated.

Tangible book value per share is defined as total shareholders’ equity less goodwill and other intangible assets, divided by the outstanding number of common shares at the end of the period. The most directly comparable GAAP financial measure is book value per share. We had no goodwill or other intangible assets at the end of any period indicated. As a result, tangible book value per share is the same as book value per share at the end of each of the periods indicated.

Pre-tax, pre-provision income is defined as pre-tax income plus provision for credit losses. The most directly comparable GAAP financial measure is pre-tax income.

The following reconciliation table provides a more detailed analysis of this non-GAAP financial measure:


	Three months ended
(in thousands)	September 30, 2023		June 30, 2023		September 30, 2022
Pre-tax, pre-provision income
Pre-tax income	$	15,795	$	17,169	$	16,534
Add: provision for credit losses	1,050		1,250		2,250
Pre-tax, pre-provision income	$	16,845	$	18,419	$	18,784

Media Contact:
Heather C. Luck, Chief Financial Officer
Five Star Bancorp
(916) 626-5008
hluck@fivestarbank.com

Shelley R. Wetton, Chief Marketing Officer
Five Star Bancorp
(916) 284-7827
swetton@fivestarbank.com

investorpresentationq320

Investor Presentation Third Quarter 2023

Safe Harbor Statement and Disclaimer Forward-Looking Statements In this presentation, “we,” “our,” “us,” “Five Star" or “the Company” refers to Five Star Bancorp, a California corporation, and our consolidated subsidiaries, including Five Star Bank, a California state- chartered bank, unless the context indicates that we refer only to the parent company, Five Star Bancorp. This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent plans, estimates, objectives, goals, guidelines, expectations, intentions, projections and statements of the Company’s beliefs concerning future events, business plans, objectives, expected operating results and the assumptions upon which those statements are based. Forward-looking statements include without limitation, any statement that may predict, forecast, indicate or imply future results, performance or achievements, and are typically identified with words such as “may,” “could,” “should,” “will,” “would,” “believe,” “anticipate,” “estimate,” “expect,” “aim,” “intend,” “plan” or words or phases of similar meaning. The Company cautions that the forward-looking statements are based largely on the Company’s expectations and are subject to a number of known and unknown risks and uncertainties that are subject to change based on factors which are, in many instances, beyond the Company’s control. Such forward-looking statements are based on various assumptions (some of which may be beyond the Company’s control) and are subject to risks and uncertainties, which change over time, and other factors which could cause actual results to differ materially from those currently anticipated. New risks and uncertainties may emerge from time to time, and it is not possible for the Company to predict their occurrence or how they will affect the Company. If one or more of the factors affecting the Company’s forward-looking information and statements proves incorrect, then the Company’s actual results, performance or achievements could differ materially from those expressed in, or implied by, forward-looking information and statements contained in this press release. Therefore, the Company cautions you not to place undue reliance on the Company’s forward-looking information and statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements are set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 and Form 10-Q for the quarter ended June 30, 2023, in each case under the section entitled “Risk Factors,” and other documents filed by the Company with the Securities and Exchange Commission from time to time. The Company disclaims any duty to revise or update the forward-looking statements, whether written or oral, to reflect actual results or changes in the factors affecting the forward-looking statements, except as specifically required by law. Industry Information This presentation includes statistical and other industry and market data that we obtained from government reports and other third-party sources. Our internal data, estimates, and forecasts are based on information obtained from government reports, trade, and business organizations and other contacts in the markets in which we operate and our management’s understanding of industry conditions. Although we believe that this information (including the industry publications and third-party research, surveys, and studies) is accurate and reliable, we have not independently verified such information. In addition, estimates, forecasts, and assumptions are necessarily subject to a high degree of uncertainty and risk due to a variety of factors. Finally, forward-looking information obtained from these sources is subject to the same qualifications and the additional uncertainties regarding the other forward-looking statements in this presentation. Unaudited Financial Data Numbers contained in this presentation for the quarter ended September 30, 2023 and for other quarterly periods are unaudited. Additionally, all figures presented as year-to-date, except for periods that represent a full fiscal year ended December 31, represent unaudited results. As a result, subsequent information may cause a change in certain accounting estimates and other financial information, including the Company’s allowance for credit losses, fair values, and income taxes. Non-GAAP Financial Measures The Company uses financial information in its analysis of the Company’s performance that is not in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The Company believes that these non-GAAP financial measures provide useful information to management and investors that is supplementary to the Company’s financial condition, results of operations, and cash flows computed in accordance with GAAP. However, the Company acknowledges that its non-GAAP financial measures have a number of limitations. See the appendix to this presentation for a reconciliation of these non-GAAP measures to the most directly comparable GAAP financial measures. Third Quarter 2023 Investor Presentation | 2

Agenda Third Quarter 2023 Investor Presentation | 3 •Company Overview •Financial Highlights •Loans and Credit Quality •Deposit and Capital Overview •Financial Results

Company Overview Third Quarter 2023 Investor Presentation | 4

Company Overview Nasdaq: Headquarters: Asset Size: Loans Held for Investment: Deposits: Bank Branches: Third Quarter 2023 Investor Presentation | 5 FSBC Rancho Cordova, California $3.5 billion $3.0 billion $3.0 billion 7 Note: Balances are as of September 30, 2023. Five Star is a community business bank that was founded to serve the commercial real estate industry. Today, the markets we serve have expanded to meet customer demand and now include manufactured housing and storage, faith-based, government, nonprofits, and more.

Executive Team Third Quarter 2023 Investor Presentation | 6 James Beckwith President and Chief Executive Officer Five Star since 2003 John Dalton Senior Vice President and Chief Credit Officer Five Star since 2011 Mike Lee Senior Vice President and Chief Regulatory Officer Five Star since 2005 Michael Rizzo Senior Vice President and Chief Banking Officer Five Star since 2005 Brett Wait Senior Vice President and Chief Information Officer Five Star since 2011 Lydia Ramirez Senior Vice President and Chief Operations and Chief DE&I Officer Five Star since 2017 Heather Luck Senior Vice President and Chief Financial Officer Five Star since 2018 Shelley Wetton Senior Vice President and Chief Marketing Officer Five Star since 2015

Financial Highlights Third Quarter 2023 Investor Presentation | 7

$565 $604 $811 $840 $973 $1,272 $1,480 $1,954 $2,557 $3,227 $3,505 $1,806 $2,535 $148 $22 Total Assets Excluding PPP Loans PPP Loans 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Q3 2023 Consistent and Organic Asset Growth Third Quarter 2023 Investor Presentation | 8 Note: Dollars are in millions. Balances are end of period. References to PPP are the Paycheck Protection Program. 1. CAGR is based upon balances as of September 30, 2023. 2. A reconciliation of this non-GAAP measure is set forth in the appendix. (2) CAGR (1) 5 years 10 years Total Assets 23.79 % 20.60 %

Financial Highlights Third Quarter 2023 Investor Presentation | 9 (dollars in thousands) For the three months ended 9/30/2023 6/30/2023 9/30/2022 Profitability Net income $ 11,045 $ 12,729 $ 11,704 Return on average assets ("ROAA") 1.30 % 1.55 % 1.60 % Return on average equity ("ROAE") 16.09 % 19.29 % 19.35 % Earnings per share (basic and diluted) $ 0.64 $ 0.74 $ 0.68 Net Interest Margin Net interest margin 3.31 % 3.45 % 3.86 % Average loan yield 5.57 % 5.50 % 4.75 % Average cost of interest-bearing deposits 3.01 % 2.69 % 0.73 % Average cost of total deposits 2.18 % 1.92 % 0.43 % Total cost of funds 2.28 % 2.04 % 0.62 % 9/30/2023 12/31/2022 Deposits and Securities Non-interest-bearing deposits $ 833,434 $ 968,749 Interest-bearing deposits 2,198,776 1,813,255 Total deposits 3,032,210 2,782,004 Total securities 107,190 119,744 Total securities to interest-earning assets 3.12 % 3.79 % Asset Quality Nonperforming loans to loans held for investment 0.07 % 0.01 % Allowance for credit losses to loans held for investment 1.13 % 1.02 % Note: Yields are based on average balance and annualized quarterly interest income. Costs are based on average balance and annualized quarterly interest expense.

Financial Highlights - September 30, 2023 Third Quarter 2023 Investor Presentation | 10 Growth • Continued balance sheet growth with increases in loans held for investment of $82.5 million and increases in deposits of $102.5 million since June 30, 2023. Funding • Non-interest-bearing deposits comprised 27.49% of total deposits, as compared to 28.42% of total deposits as of June 30, 2023. • Deposits comprised 93.85% of total liabilities, as compared to 93.50% of total liabilities as of June 30, 2023. Liquidity • Insured and collateralized deposits were approximately $2.0 billion, representing 66.33% of total deposits, compared to 67.34% as of June 30, 2023. • Cash and cash equivalents were $323.5 million, representing 10.67% of total deposits, compared to 10.24% as of June 30, 2023. Capital • All capital ratios were above well-capitalized regulatory thresholds. • On July 21, 2023 and October 20, 2023, the Company announced cash dividends of $0.20 per share for the three months ended June 30, 2023 and September 30, 2023, respectively.

Loans and Credit Quality Third Quarter 2023 Investor Presentation | 11

To ta l L oa ns (M ill io ns ) $960 $1,180 $1,355 $1,912 $2,079 $2,381 $2,583 $2,791 $2,870 $2,927 $3,010 $148 $22 $2 5.28% 5.45% 4.96% 4.82% 4.53% 4.48% 4.75% 5.12% 5.36% 5.50% 5.57% Non-PPP Loans PPP Loans Average Loan Yield Average Loan Yield Excluding PPP Loans 2018 2019 2020 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 $0 $250 $500 $750 $1,000 $1,250 $1,500 $1,750 $2,000 $2,250 $2,500 $2,750 $3,000 $3,250 Consistent Loan Growth Third Quarter 2023 Investor Presentation | 12 Note: Loan balances are end of period loans held for investment. Yields are based on average balance and annualized quarterly interest income. 1. CAGR is based upon balances as of September 30, 2023. 2. A reconciliation of this non-GAAP measure is set forth in the appendix. (2) CAGR (1) 5 years Total Loans 27.19 %

Loan Portfolio Composition Third Quarter 2023 Investor Presentation | 13 Commercial real estate, 86.3% Commercial land and development, 0.5% Commercial construction, 3.2% Residential construction, 0.5% Residential, 0.8% Farmland, 1.7% Secured, 5.2% Unsecured, 0.8% PPP, 0.0% Consumer and other, 1.0% Types of collateral securing commercial real estate ("CRE") loans Loan Balance ($000s) # of Loans % of CRE Manufactured home community $ 784,780 370 30.19 % RV Park 336,158 111 12.93 % Retail 271,271 88 10.44 % Multifamily 211,302 94 8.13 % Faith-based 178,020 97 6.85 % Industrial 173,036 127 6.66 % Mini storage 157,724 43 6.07 % Office 137,256 89 5.28 % All other types (1) 350,069 161 13.45 % Total $ 2,599,616 1,180 100.00 % Note: Balances are net book value as of September 30, 2023, before allowance for credit losses, before deferred loan fees, and exclude loans held for sale. 1. Types of collateral in “all other types” are those that individually make up less than 5% CRE concentration.

$785M $336M $271M $211M $178M $173M $158M $137M $350M $1,373M $579M $522M $426M $470M $416M $323M $301M $714M 62.37% 62.69% 57.08% 54.39% 46.84% 51.67% 56.33% 52.45% 57.11% Loan Balance Collateral Value Weighted Average Loan-to-Value Manufactured home community RV Park Retail Multifamily Faith-based Industrial Mini storage Office All other types $0M $250M $500M $750M $1,000M $1,250M $1,500M CRE Collateral Values Third Quarter 2023 Investor Presentation | 14 (1) Note: Balances are net book value as of September 30, 2023, before allowance for credit losses, before deferred loan fees, and exclude loans held for sale. 1. Types of collateral in “all other types” are those that individually make up less than 5% CRE concentration.

Loan Portfolio Diversification We focus primarily on commercial lending, with an emphasis on commercial real estate. We offer a variety of loans to small and medium-sized businesses, professionals, and individuals, including commercial real estate, commercial land and construction, and farmland loans. To a lesser extent, we also offer residential real estate, construction real estate, and consumer loans. Third Quarter 2023 Investor Presentation | 15Note: Balances are net book value as of September 30, 2023, before allowance for credit losses, before deferred loan fees, and exclude loans held for sale. Loans by Type Loans by Purpose Real Estate Loans by Geography CML Term CRE NOO, 37.0% CML Term Multifamily, 32.9% CML Term CRE OO, 16.0% CML Const CRE, 3.2% CML Secured, 2.9% SBA 7A Secured, 1.6% CML Term Ag RE, 1.7% Others, 4.7% CA, 57.5% TX, 6.6% AZ, 4.1% NV, 3.7% NC, 2.8% FL, 2.8% OR, 2.4% CO, 1.5% MO, 1.4% GA, 1.3% WI, 1.2% WA, 1.2% TN, 1.2% ID, 1.0% Other, 11.3% CRE Manufactured Home, 26.1% CRE Other, 14.1% CRE RV Park, 11.2% CRE Retail, 9.0% CRE Multifamily, 7.1% CRE Faith Based, 5.9% CRE Industrial, 5.7% CRE Mini Storage, 5.2% CRE Office, 4.6% Commercial Construction, 3.6% Commercial Other, 3.3% Commercial SBA 7A, 1.6% Commercial Term Loan, 1.3% Others, 1.3%

Loan Rollforward Third Quarter 2023 Investor Presentation | 16Note: Dollars are in millions. Beginning and ending balances are as of period end, before allowance for credit losses, including deferred loan fees, and exclude loans held for sale. Q4 2022 Q1 2023 Q2 2023 Q3 2023 Beginning Balance $ 2,583 $ 2,791 $ 2,870 $ 2,927 Originations 295 135 254 135 Payoffs and Paydowns (87) (56) (197) (52) Ending Balance $ 2,791 $ 2,870 $ 2,927 $ 3,010

Asset Quality Our primary objective is to maintain a high level of asset quality in our loan portfolio. Therefore, we: – Place emphasis on our commercial portfolio, where we reevaluate risk assessments as a result of reviewing commercial property operating statements and borrower financials – Monitor payment performance, delinquencies, and tax and property insurance compliance – Design our practices to facilitate the early detection and remediation of problems within our loan portfolio – Employ the use of an outside, independent consulting firm to evaluate our underwriting and risk assessment process Third Quarter 2023 Investor Presentation | 17 Nonperforming Loan Trend Allowance for Credit Losses and Net Charge-off Trend Note: References to loans HFI are loans held for investment, which are the equivalent of total loans outstanding at each period end. References to average loans HFI are average loans held for investment during the period. $2.1M $0.8M $0.5M $0.6M $0.4M $0.4M $0.3M $2.0M 0.22% 0.07% 0.03% 0.03% 0.01% 0.01% 0.01% 0.07% Nonperforming Loans Nonperforming Loans to Loans HFI 2018 2019 2020 2021 2022 Q1 2023 Q2 2023 Q3 2023 1.21% 1.26% 1.48% 1.20% 1.02% 1.19% 1.16% 1.13% 0.23% 0.21% 0.12% 0.04% 0.07% 0.01% 0.04% 0.03% Allowance for Credit Losses to Loans HFI Net Charge-offs to Average Loans HFI 2018 2019 2020 2021 2022 Q1 2023 Q2 2023 Q3 2023

Allocation of Allowance for Credit Losses Third Quarter 2023 Investor Presentation | 18 (dollars in thousands) December 31, 2022 March 31, 2023 June 30, 2023 September 30, 2023 Allowance for Credit Losses Amount % of Total Amount % of Total Amount % of Total Amount % of Total Real estate: Commercial $ 19,216 67.69 % $ 27,119 79.37 % $ 27,553 81.08 % $ 27,901 82.00 % Commercial land & development 54 0.19 % 226 0.66 % 184 0.54 % 198 0.58 % Commercial construction 645 2.27 % 1,438 4.21 % 1,212 3.57 % 1,220 3.59 % Residential construction 49 0.17 % 175 0.51 % 217 0.64 % 115 0.34 % Residential 175 0.62 % 181 0.53 % 152 0.45 % 151 0.44 % Farmland 644 2.27 % 219 0.64 % 236 0.69 % 393 1.15 % Total real estate loans 20,783 73.21 % 29,358 85.92 % 29,554 86.97 % 29,978 88.10 % Commercial: Secured 7,098 25.00 % 4,258 12.46 % 3,751 11.04 % 3,461 10.17 % Unsecured 116 0.41 % 152 0.44 % 209 0.61 % 213 0.63 % Total commercial loans 7,214 25.41 % 4,410 12.90 % 3,960 11.65 % 3,674 10.80 % Consumer and other 347 1.22 % 404 1.18 % 470 1.38 % 376 1.10 % Unallocated 45 0.16 % — — % — — % — — % Total allowance for credit losses $ 28,389 100.00 % $ 34,172 100.00 % $ 33,984 100.00 % $ 34,028 100.00 %

Risk Grade Migration Third Quarter 2023 Investor Presentation | 19 Classified Loans (Loans Rated Substandard or Doubtful) (dollars in thousands) 2021 2022 Q1 2023 Q2 2023 Q3 2023 Real estate: Commercial $ 9,256 $ 106 $ 102 $ — $ 1,923 Commercial land & development — — — — — Commercial construction — — — — — Residential construction — — — — — Residential 178 175 175 175 — Farmland — — — — — Commercial: Secured 1,180 123 118 112 79 Unsecured — — — — — Consumer and other — 26 23 22 21 Total $ 10,614 $ 430 $ 418 $ 309 $ 2,023 % o f L oa n Po rt fo lio O ut st an di ng , b y Ri sk G ra de 99.00% 99.20% 99.15% 99.17% 98.82% 0.45% 0.78% 0.84% 0.82% 1.11% 0.55% 0.02% 0.01% 0.01% 0.07% Pass Watch Substandard Doubtful 2021 2022 Q1 2023 Q2 2023 Q3 2023 Note: Loan portfolio outstanding is the total balance of loans outstanding at period end, before deferred loan fees, before allowance for credit losses, and exclude loans held for sale.

Deposit and Capital Overview Third Quarter 2023 Investor Presentation | 20

Government, 22.70% Other, 17.01% Commercial Real Estate and Construction, 13.53% Small to Medium Sized Business, 11.38% Professional Service Practices, 9.57% Manufactured Home Communities, 7.04% Non-profits, 6.73% Healthcare and Practice, 6.40% Faith-based, 2.08% Venture Banking, 2.01% Agriculture and Ag Tech, 1.13% SBA and Wholesale Partners, 0.42% Deposit Composition 8.68 Years Average Age of Relationships > $5 million Note: Balances are as of September 30, 2023 and include time and wholesale deposits. 1. Types of accounts in “Other” are individuals, trusts, estates, and market verticals that individually make up less than 0.4% of all deposits. 2. Local Agency Depositors includes State of California. $266,000 Average Deposit Account Balance Relationships > $5 million, 61.64% Relationships ≤ $5 million, 38.36% Total Deposits by Relationship Size Local Agency BreakoutTotal Deposits by Market Vertical Local Agency Depositors, 25.01% All Other Depositors, 74.99% Third Quarter 2023 Investor Presentation | 21 (2) (1)

Diversified Funding Third Quarter 2023 Investor Presentation | 22 Total Deposits(1) = $3.0 billion 93.8% of Total Liabilities Liability Mix 1. Balance as of September 30, 2023. 2. Loan balance in loan to deposit ratio is total loans held for investment and sale at period end. Loan(2) to Deposit Ratio Non-Interest-Bearing Deposits to Total Deposits 83.2% 90.5% 84.5% 85.1% 100.7% 98.7% 100.2% 99.6% 2018 2019 2020 2021 2022 Q1 2023 Q2 2023 Q3 2023 29.0% 29.6% 39.4% 39.4% 34.8% 28.6% 28.4% 27.5% 2018 2019 2020 2021 2022 Q1 2023 Q2 2023 Q3 2023 Money Market, 41.3% Non-Interest-Bearing Demand, 25.8% Time Deposits, 13.2% Interest-Bearing Demand, 9.2% Borrowings & Subordinated Debt, 5.1% Savings, 4.3% Other Liabilities, 1.1%

$1.2B $1.3B $1.8B $2.3B $2.8B $2.9B $2.9B $3.0B $601M $708M $889M $1,001M $1,228M $1,419M $1,423M $1,474M$337M $388M $703M $902M $969M $836M $833M $833M $124M $119M $147M $279M $243M $294M $297M $298M $100M $97M $46M $104M $343M $373M $378M $428M Money Market & Savings Non-Interest-Bearing Demand Interest-Bearing Demand Time Deposits 2018 2019 2020 2021 2022 Q1 2023 Q2 2023 Q3 2023 Strong Deposit Growth Third Quarter 2023 Investor Presentation | 23 Note: Balances are end of period. Cost of total deposits is based on total average balance of interest-bearing and non-interest-bearing deposits and annualized quarterly deposit interest expense. 1. CAGR is based upon balances as of September 30, 2023. Cost of Total Deposits 0.55% 0.81% 0.44% 0.11% 0.43% 1.35% 1.92% 2.18% CAGR (1) 5 years Total Deposits 22.39 %

Capital Ratios Third Quarter 2023 Investor Presentation | 24 Tier 1 Leverage Ratio Tier 1 Capital to RWA Total Capital to RWA Common Equity Tier 1 to RWA Note: References to RWA are risk-weighted assets. 6.81% 7.51% 6.58% 9.47% 8.60% 8.58% 2018 2019 2020 2021 2022 Q3 2023 7.48% 8.21% 8.98% 11.44% 8.99% 9.07% 2018 2019 2020 2021 2022 Q3 2023 7.48% 8.21% 8.98% 11.44% 8.99% 9.07% 2018 2019 2020 2021 2022 Q3 2023 10.79% 11.52% 12.18% 13.98% 12.46% 12.37% 2018 2019 2020 2021 2022 Q3 2023

Financial Results Third Quarter 2023 Investor Presentation | 25

Earnings Track Record Third Quarter 2023 Investor Presentation | 26 $14.5M $16.3M $18.8M $20.0M $19.4M $18.4M $16.8M $13.5M $14.0M $16.5M $18.8M $18.5M $17.2M $15.8M Pre-tax, pre-provision income Pre-tax income Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 $0.0M $2.5M $5.0M $7.5M $10.0M $12.5M $15.0M $17.5M $20.0M $22.5M 1. A reconciliation of this non-GAAP measure is set forth in the appendix. (1)

Operating Metrics Third Quarter 2023 Investor Presentation | 27 Efficiency RatioNet Interest Margin 3.93% 3.98% 3.68% 3.64% 3.75% 3.50% 2018 2019 2020 2021 2022 2023 YTD 42.27% 38.63% 37.92% 42.46% 36.90% 39.11% 2018 2019 2020 2021 2022 2023 YTD Note: All 2023 figures are through September 30, 2023. Total Income Before Taxes $23.4M $30.4M $37.3M $47.1M $62.9M $51.5M 2018 2019 2020 2021 2022 2023 YTD

Non-interest Income and Expense Comparison Third Quarter 2023 Investor Presentation | 28 (dollars in thousands) For the three months ended 9/30/2023 6/30/2023 9/30/2022 Non-interest Income Service charges on deposit accounts $ 158 $ 135 $ 132 Gain on sale of loans 396 641 548 Loan-related fees 355 389 447 FHLB stock dividends 274 189 152 Earnings on bank-owned life insurance 127 126 102 Other income 74 1,340 52 Total non-interest income $ 1,384 $ 2,820 $ 1,433 Non-interest Expense Salaries and employee benefits $ 6,876 $ 6,421 $ 5,645 Occupancy and equipment 561 551 515 Data processing and software 1,020 1,013 797 Federal Deposit Insurance Corporation insurance 375 410 195 Professional services 700 586 792 Advertising and promotional 535 733 512 Loan-related expenses 345 324 262 Other operating expenses 1,603 1,941 1,454 Total non-interest expense $ 12,015 $ 11,979 $ 10,172

Shareholder Returns Third Quarter 2023 Investor Presentation | 29 ROAA ROAE EPS (basic and diluted) Value per Share (book and tangible book(1)) Note: All 2023 figures are through September 30, 2023. 1. A reconciliation of this non-GAAP measure is set forth in the appendix. 1.99% 2.15% 1.95% 1.86% 1.57% 1.50% 2018 2019 2020 2021 2022 2023 YTD 29.28% 31.40% 31.16% 22.49% 18.80% 18.70% 2018 2019 2020 2021 2022 2023 YTD $3.08 $3.40 $3.57 $2.83 $2.61 $2.15 2018 2019 2020 2021 2022 2023 YTD $10.88 $11.25 $12.16 $13.65 $14.66 $15.88 2018 2019 2020 2021 2022 2023

Five Star Bank proudly supports women in business and those serving our region’s most vulnerable. Our customers advocate for communities, drive collaboration, and foster responsive, community-based programs that promote healthy relationships while supporting survivors of sexual assault, domestic violence, and human trafficking. Our clients are change- agents who inspire, motivate, and uplift those who need us most. Ashlie Bryant, Co-Founder and CEO, 3Strands Global Foundation Beth Hassett, CEO and Executive Director, WEAVE Staci Anderson, President and CEO, PRO Youth and Families Five Star Bank customer Capital College & Career Academy ("CCCA") provides real-world learning opportunities, ensuring students graduate with the skills and certifications needed to become change-makers in their communities. Together, we can make a difference in the lives of the next generation of leaders in the Sacramento region. Anamanu Fotofili, Student, CCCA Kevin Dobson, Founder and Executive Director, CCCA Dylan Newman, Student, CCCA Five Star Bank supports our customer, Street Soccer USA ("SSUSA") and their mission to fight poverty and strengthen communities through soccer. SSUSA serves youth and special needs populations including families experiencing homelessness, adults recovering from addiction/ substance abuse, and mental health diagnoses. SSUSA is the official partner of the Homeless World Cup and Street Child World Cup. We share their mission to fight poverty and strengthen others as they encourage positive changes in their players' lives. Sienna Jackson, Homeless World Cup 2023 Sacramento, California – Team USA Lisa Wrightsman, Managing Director, SSUSA and Homeless World Cup 2010 Rio De Janeiro, Brazil – Team USA Angela Draws, Homeless World Cup 2014 Santiago, Chile – Team USA We strive to become the top business bank in all markets we serve through exceptional service, deep connectivity, and customer empathy. We are dedicated to serving real estate, agricultural, faith-based, and small to medium-sized enterprises. We aim to consistently deliver value that meets or exceeds the expectations of our shareholders, customers, employees, business partners, and community.

Appendix: Non-GAAP Reconciliation (Unaudited) The Company uses financial information in its analysis of the Company's performance that is not in conformity with GAAP. The Company believes that these non-GAAP financial measures provide useful information to management and investors that is supplementary to the Company's financial condition, results of operations, and cash flows computed in accordance with GAAP. However, the Company acknowledges that its non-GAAP financial measures have a number of limitations. As such, investors should not view these disclosures as a substitute for results determined in accordance with GAAP. Additionally, these non-GAAP measures are not necessarily comparable to non-GAAP financial measures that other banking companies use. Other banking companies may use names similar to those the Company uses for the non-GAAP financial measures the Company discloses but may calculate them differently. Investors should understand how the Company and other companies each calculate their non- GAAP financial measures when making comparisons. Average loan yield, excluding PPP loans, is defined as the daily average loan yield, excluding PPP loans, and includes both performing and nonperforming loans. The most directly comparable GAAP financial measure is average loan yield. Total assets, excluding PPP loans, is defined as total assets less PPP loans. The most directly comparable GAAP financial measure is total assets. Pre-tax, pre-provision income is defined as net income plus provision for income taxes and provision for credit losses. The most directly comparable GAAP financial measure is pre-tax net income. Tangible book value per share is defined as total shareholders’ equity less goodwill and other intangible assets, divided by the outstanding number of common shares at the end of the period. The most directly comparable GAAP financial measure is book value per share. We had no goodwill or other intangible assets at the end of any period indicated. As a result, tangible book value per share is the same as book value per share at the end of each of the periods indicated. Third Quarter 2023 Investor Presentation | 31 (dollars in thousands) For the year ended For the three months ended Average loan yield, excluding PPP loans 12/31/2020 12/31/2021 3/31/2022 6/30/2022 9/30/2022 12/31/2022 3/31/2023 6/30/2023 9/30/2023 Interest and fee income on loans $ 71,405 $ 78,894 $ 22,112 $ 24,879 $ 29,886 $ 34,918 $ 37,494 $ 39,929 $ 41,861 Less: interest and fee income on PPP loans 6,535 7,417 610 25 — — — — — Interest and fee income on loans, excluding PPP loans 64,870 71,477 21,502 24,854 29,886 34,918 37,494 39,929 41,861 Annualized interest and fee income on loans, excluding PPP loans (numerator) 64,870 71,477 87,200 99,689 118,569 138,533 152,059 160,155 166,079 Average loans held for investment and sale 1,439,380 1,637,280 1,977,509 2,227,215 2,494,468 2,703,865 2,836,070 2,914,388 2,982,140 Less: average PPP loans 165,414 116,652 8,886 427 — — — — — Average loans held for investment and sale, excluding PPP loans (denominator) 1,273,966 1,520,628 1,968,623 2,226,788 2,494,468 2,703,865 2,836,070 2,914,388 2,982,140 Average loan yield, excluding PPP loans 5.09 % 4.70 % 4.43 % 4.48 % 4.75 % 5.12 % 5.36 % 5.50 % 5.57 %

Appendix: Non-GAAP Reconciliation (Unaudited) Third Quarter 2023 Investor Presentation | 32 (dollars in millions) Total assets, excluding PPP loans 12/31/2020 12/31/2021 12/31/2022 9/30/2023 Total assets $ 1,954 $ 2,557 $ 3,227 $ 3,505 Less: PPP loans 148 22 — — Total assets, excluding PPP loans $ 1,806 $ 2,535 $ 3,227 $ 3,505 (dollars in millions) Three months ended Pre-tax, pre-provision income 3/31/2022 6/30/2022 9/30/2022 12/31/2022 3/31/2023 6/30/2023 9/30/2023 Net income $ 9,862 $ 9,953 $ 11,704 $ 13,282 $ 13,161 $ 12,729 $ 11,045 Add: provision for income taxes 3,660 4,080 4,830 5,487 5,340 4,440 4,750 Add: provision for credit losses 950 2,250 2,250 1,250 900 1,250 1,050 Pre-tax, pre-provision income $ 14,472 $ 16,283 $ 18,784 $ 20,019 $ 19,401 $ 18,419 $ 16,845