Five Star Bancorp (FSBC) Q3 2024 earnings summary

Executive summary

• Net income for Q3 2024 was $10.9 million, up from $10.8 million in Q2 2024 and slightly down from $11.0 million in Q3 2023.

• Total assets reached $3.9 billion, with loans held for investment at $3.5 billion as of September 30, 2024.

• Opened a new full-service office in San Francisco, expanding Bay Area presence and growing deposits to $189.0 million and staff to 24.

• Continued organic growth with strong deposit inflows and expansion of core customer relationships, especially in non-wholesale and non-interest-bearing deposits.

• Recognized for performance, including Piper Sandler Sm-All Stars and high rankings in Bank Director Magazine.

Financial highlights

• Net interest income for Q3 2024 was $30.4 million, up 4.45% sequentially and 10.59% year-over-year; net interest margin was 3.37%.

• Return on average assets was 1.18%; return on average equity was 11.31%.

• Loans held for investment increased by $194.3 million (5.95%) from the prior quarter, with $129.4 million from consumer loan purchases.

• Deposits grew by $250.3 million (7.95%) quarter-over-quarter, reaching $3.4 billion, with non-interest-bearing deposits at $906.9 million (26.67% of total).

• Non-interest income was $1.4 million for Q3 2024, mainly due to lower gains on loan sales; non-interest expense increased to $13.8 million, primarily from higher salaries and technology costs.

Outlook and guidance

• Expect continued growth in non-interest-bearing deposits and mid-single-digit loan growth in Q4, with the BHG loan purchase program capped at $300 million.

• Margin expected to benefit in 2025 as brokered CDs reprice at lower rates following Fed moves.

• Management remains focused on disciplined expense management and Bay Area expansion.

• All capital ratios remain above well-capitalized regulatory thresholds.

• The company plans to maintain quarterly cash dividends, subject to board discretion.