Earnings release
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Five Star Bancorp Announces Third Quarter 2026 Results October 26, 2026 10:30 PM EDT RANCHO CORDOVA, Calif., Oct. 26, 2026 (GLOBE NEWSWIRE) -- Five Star Bancorp (Nasdaq: FSBC) (“Five Star” or the “Company”), a holding company that operates through its wholly owned banking subsidiary, Five Star Bank (the “Bank”), today reported net income of $21.9 million for the three months ended September 30, 2026, as compared to $19.4 million for the three months ended June 30, 2026 and $16.3 million for the three months ended September 30, 2025. 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, 2026 June 30, 2026 September 30, 2025 Return on average assets (“ROAA”) 1.55% 1.49% 1.44% Return on average equity (“ROAE”) 15.04% 16.67% 15.35% Pre-tax income $ 29,529 $ 26,089 $ 22,234 Pre-tax, pre-provision income (1) $ 32,029 $ 28,339 $ 24,734 Net income $ 21,909 $ 19,399 $ 16,344 Basic earnings per common share $ 0.92 $ 0.91 $ 0.77 Diluted earnings per common share $ 0.92 $ 0.91 $ 0.77 Weighted average basic common shares outstanding 23,620,369 21,273,902 21,231,563 Weighted average diluted common shares outstanding 23,697,397 21,338,903 21,281,818 Shares outstanding at end of period 24,536,614 21,402,864 21,367,387 (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: “In the third quarter of 2026, Five Star raised approximately $130.0 million in net proceeds through an underwritten public offering of 3,133,750 shares of common stock, expanding our capacity for organic growth and strategic investment. We also strengthened our California presence with the opening of a new branch in Lodi, a new Calabasas administrative office, and four key hires in Palo Alto, bringing our high-tech, high-touch relationship-based banking experience to more clients. The third quarter of 2026 delivered steadfast results: net income rose to $21.9 million from $19.4 million in the second quarter of 2026, and net interest income increased $4.8 million, or 11%, to $50.9 million compared to the same period. Net interest margin improved six basis points to 3.69%, the efficiency ratio improved to 39.13% from 40.91% in the second quarter of 2026, and basic earnings per share reached $0.92, up $0.01 from the second quarter of 2026 and $0.15 from the third quarter of 2025. Total loans held for investment grew $184.5 million, or 4% (approximately 16% annualized), while non-wholesale deposits increased $75.1 million, or 2% (approximately 7% annualized) and wholesale deposits decreased $50.0 million, or 20% (approximately 80% annualized). We also declared a $0.25 per share cash dividend, $0.05 more than those declared in 2025, reinforcing our commitment to shareholder value. Five Star Bank’s success reflects the strength of our team and the value of authentic, relationship-based service. Our technology, operating discipline, conservative underwriting, strong credit quality, and prudent portfolio management position us to create lasting value for customers, employees, communities, and shareholders. We thank our employees for keeping Five Star Bank a safe, trusted, and steadfast banking partner as we enter the fourth quarter of 2026.” Financial highlights as of and during the three months ended September 30, 2026 included the following: The Company completed an underwritten public offering of 3,133,750 shares of common stock during the three months ended September 30, 2026, with net proceeds of approximately $130.0 million after deducting underwriting discounts and commissions of approximately $7.3 million, and offering expenses of approximately $0.6 million. The transaction strengthened the Company’s capital base and positioned it for continued organic balance sheet growth, with a common equity Tier 1 capital ratio of 12.52% as of September 30, 2026, as compared to 9.97% as of June 30, 2026. The Bank
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continues to meet all requirements to be considered “well-capitalized” under applicable regulatory guidelines. Basic earnings per share reached $0.92 for the three months ended September 30, 2026, an increase of $0.01 from the second quarter of 2026. Weighted average basic common shares outstanding for the three months ended September 30, 2026 increased by 2,346,467, or 11.03%, as compared to the second quarter of 2026 due to the underwritten public offering. As compared to the three months ended September 30, 2025, basic earnings per share increased $0.15, while weighted average basic common shares outstanding increased by 2,388,806, or 11.25%, as compared to the third quarter of 2025 due to the underwritten public offering. Total deposits increased by $25.1 million, or 0.52%, during the three months ended September 30, 2026, with growth in non-wholesale deposits exceeding declines in wholesale deposits. The Company defines wholesale deposits as brokered deposits and California Time Deposit Program deposits. During the three months ended September 30, 2026, non-wholesale deposits increased by $75.1 million, or 1.65%, and wholesale deposits decreased by $50.0 million, or 20.00%. The number of Business Development Officers increased from 45 at June 30, 2026 to 50 at September 30, 2026. Cash and cash equivalents were $679.5 million, representing 14.08% of total deposits at September 30, 2026, as compared to 14.27% at June 30, 2026. Consistent, disciplined management of expenses contributed to our efficiency ratio of 39.13% for the three months ended September 30, 2026, as compared to 40.91% for the three months ended June 30, 2026 and 40.13% for the three months ended September 30, 2025. Net interest margin for the three months ended September 30, 2026 expanded six basis points to 3.69% from 3.63% for the three months ended June 30, 2026, primarily reflecting growth in higher-yielding loans and an increase in the yield on interest-earning assets, partially offset by higher deposit funding costs. On a year-over-year basis, net interest margin expanded 13 basis points from 3.56% for the three months ended September 30, 2025 to 3.69% for the three months ended September 30, 2026, supported by balance sheet growth and lower deposit funding costs following three Federal Reserve rate cuts that began in September 2025, partially offset by lower yields on interest-earning assets. The effective federal funds rate declined 21 basis points, from 4.09% as of September 30, 2025 to 3.88% as of September 30, 2026. Other comprehensive loss was $3.0 million during the three months ended September 30, 2026, as compared to other comprehensive income of $0.7 million for the three months ended June 30, 2026 and other comprehensive income of $2.1 million for the three months ended September 30, 2025. Unrealized losses, net of tax effect, on available-for-sale securities were $12.4 million as of September 30, 2026, as compared to $9.4 million as of June 30, 2026 and $9.9 million as of September 30, 2025. Total carrying value of held-to-maturity and available-for-sale securities represented 0.04% and 1.52% of total interest-earning assets, respectively, as of September 30, 2026. Loan and deposit growth as of the dates provided below was as follows: (in thousands) September 30, 2026 June 30, 2026 $ Change % Change Loans held for investment $ 4,704,215 $ 4,519,681 $ 184,534 4.08% Non-interest-bearing deposits 1,210,488 1,174,406 36,082 3.07% Interest-bearing deposits 3,614,040 3,624,977 (10,937) (0.30 )% (in thousands) September 30, 2026 September 30, 2025 $ Change % Change Loans held for investment $ 4,704,215 $ 3,887,259 $ 816,956 21.02% Non-interest-bearing deposits 1,210,488 1,059,082 151,406 14.30% Interest-bearing deposits 3,614,040 3,044,356 569,684 18.71% The ratio of nonperforming loans to loans held for investment at period end decreased from 0.30% at June 30, 2026 to 0.28% at September 30, 2026. The Company’s Board of Directors declared, and the Company subsequently paid, a cash dividend of $0.25 per share during the three months ended September 30, 2026. The Company’s Board of Directors declared an additional cash dividend of $0.25 per share on October 15, 2026, which the Company expects to pay on November 9, 2026 to shareholders of record as of November 2, 2026. Summary Results Three months ended September 30, 2026, as compared to three months ended June 30, 2026 The Company’s net income was $21.9 million for the three months ended September 30, 2026, as compared to $19.4 million for the three months ended June 30, 2026. Net interest income increased by $4.8 million during the three months ended September 30, 2026, as compared to the three months ended June 30, 2026, primarily reflecting growth in higher-yielding loans and an increase in the yield on interest-earning assets, partially offset by higher deposit funding costs. The provision for credit
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losses increased by $0.3 million during the three months ended September 30, 2026, as compared to the three months ended June 30, 2026, reflecting loan growth and changes resulting from the annual Current Expected Credit Loss (“CECL”) model refresh. Non-interest income decreased by $0.2 million during the three months ended September 30, 2026, as compared to the three months ended June 30, 2026, primarily due to an overall decline in earnings related to investments in venture-backed funds and lower loan referral income, partially offset by a special FHLB stock dividend. Non-interest expense increased by $1.0 million during the three months ended September 30, 2026, as compared to the three months ended June 30, 2026, primarily due to higher salaries and employee benefits from increased headcount and increased recruiter fees, partially offset by decreases in employee-related expenses, advertising and promotional expenses, and operational losses. Three months ended September 30, 2026, as compared to three months ended September 30, 2025 The Company’s net income was $21.9 million for the three months ended September 30, 2026, as compared to $16.3 million for the three months ended September 30, 2025. Net interest income increased by $11.6 million during the three months ended September 30, 2026, as compared to the three months ended September 30, 2025, primarily reflecting balance sheet growth and lower deposit funding costs following three Federal Reserve rate cuts that began in September 2025, partially offset by lower yields on interest-earning assets. The provision for credit losses remained constant, reflecting loan growth and changes resulting from the annual CECL model refresh, offset by a decrease in the provision for unfunded commitments. Non-interest income decreased by $0.3 million during the three months ended September 30, 2026, as compared to the three months ended September 30, 2025, primarily reflecting lower fees from swap referrals and an overall decline in earnings related to investments in venture-backed funds. Non-interest expense increased by $4.0 million during the three months ended September 30, 2026, as compared to the three months ended September 30, 2025, driven primarily by higher salaries and employee benefits from increased headcount, along with growth in other operating expenses reflecting continued organizational expansion. 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, 2026 June 30, 2026 $ Change % Change Selected operating data: Net interest income $ 50,926 $ 46,083 $ 4,843 10.51% Provision for credit losses 2,500 2,250 250 11.11% Non-interest income 1,694 1,872 (178) (9.51 )% Non-interest expense 20,591 19,616 975 4.97% Pre-tax income 29,529 26,089 3,440 13.19% Provision for income taxes 7,620 6,690 930 13.90% Net income $ 21,909 $ 19,399 $ 2,510 12.94% Earnings per common share: Basic $ 0.92 $ 0.91 $ 0.01 1.10% Diluted $ 0.92 $ 0.91 $ 0.01 1.10% Performance and other financial ratios: ROAA 1.55% 1.49% ROAE 15.04% 16.67% Net interest margin 3.69% 3.63% Total cost of funds(1) 2.25% 2.23% Efficiency ratio 39.13% 40.91% Three months ended (in thousands, except per share data) September 30, 2026 September 30, 2025 $ Change % Change Selected operating data: Net interest income $ 50,926 $ 39,348 $ 11,578 29.42% Provision for credit losses 2,500 2,500 — — % Non-interest income 1,694 1,966 (272) (13.84 )% Non-interest expense 20,591 16,580 4,011 24.19% Pre-tax income 29,529 22,234 7,295 32.81% Provision for income taxes 7,620 5,890 1,730 29.37% Net income $ 21,909 $ 16,344 $ 5,565 34.05% Earnings per common share: Basic $ 0.92 $ 0.77 $ 0.15 19.48%
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Diluted $ 0.92 $ 0.77 $ 0.15 19.48% Performance and other financial ratios: ROAA 1.55% 1.44% ROAE 15.04% 15.35% Net interest margin 3.69% 3.56% Total cost of funds(1) 2.25% 2.51% Efficiency ratio 39.13% 40.13% (1) Total cost of funds reflects the average cost of all funding sources, including both interest-bearing and non-interest-bearing deposits and borrowings. Balance Sheet Summary (in thousands) September 30, 2026 June 30, 2026 $ Change % Change Selected financial condition data: Total assets $ 5,559,618 $ 5,377,062 $ 182,556 3.40% Cash and cash equivalents 679,482 685,074 (5,592) (0.82 )% Total loans held for investment 4,704,215 4,519,681 184,534 4.08% Total investments 84,158 92,719 (8,561) (9.23 )% Total liabilities 4,942,407 4,903,291 39,116 0.80% Total deposits 4,824,528 4,799,383 25,145 0.52% Subordinated notes, net 74,150 74,114 36 0.05% Total shareholders’ equity 617,211 473,771 143,440 30.28% Insured and collateralized deposits were approximately $3.3 billion, representing 68.08% of total deposits as of September 30, 2026, as compared to 65.80% as of June 30, 2026. Net uninsured and uncollateralized deposits were approximately $1.5 billion as of September 30, 2026, decreasing from $1.6 billion at June 30, 2026. Non-wholesale deposit balances constituted 95.85% of total deposits as of September 30, 2026, as compared to 94.79% as of June 30, 2026. Deposit relationships of greater than $5 million represented 62.44% of total deposits as of September 30, 2026, as compared to 63.88% as of June 30, 2026, and had an average age of approximately 7.45 years as of September 30, 2026, as compared to 7.39 years as of June 30, 2026. Total deposits as of September 30, 2026 were $4.8 billion, an increase of $25.1 million, or 0.52%, from June 30, 2026, comprised of an increase in non-interest-bearing deposits, partially offset by a decrease in interest-bearing deposits. Cash and cash equivalents as of September 30, 2026 were $679.5 million, representing 14.08% of total deposits at September 30, 2026, as compared to 14.27% as of June 30, 2026. Total liquidity (consisting of cash and cash equivalents as well as unused and immediately available borrowing capacity as set forth below) was approximately $2.5 billion as of September 30, 2026, as compared to $2.3 billion at June 30, 2026. September 30, 2026 (in thousands) Line of Credit Letters of Credit Issued Borrowings Available Federal Home Loan Bank of San Francisco (“FHLB”) advances $ 1,714,154 $ 1,162,000 $ — $ 552,154 Federal Reserve Discount Window 1,110,142 — — 1,110,142 Correspondent bank lines of credit 185,000 — — 185,000 Cash and cash equivalents — — — 679,482 Total $ 3,009,296 $ 1,162,000 $ — $ 2,526,778 (in thousands) September 30, 2026 December 31, 2025 $ Change % Change Selected financial condition data: Total assets $ 5,559,618 $ 4,754,861 $ 804,757 16.92% Cash and cash equivalents 679,482 506,851 172,631 34.06% Total loans held for investment 4,704,215 4,074,929 629,286 15.44%
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Total investments 84,158 96,889 (12,731) (13.14 )% Total liabilities 4,942,407 4,309,029 633,378 14.70% Total deposits 4,824,528 4,201,084 623,444 14.84% Subordinated notes, net 74,150 74,041 109 0.15% Total shareholders’ equity 617,211 445,832 171,379 38.44% The increase in total assets from December 31, 2025 to September 30, 2026 was primarily comprised of a $629.3 million increase in total loans held for investment and a $172.6 million increase in cash and cash equivalents. The $629.3 million increase in total loans held for investment between December 31, 2025 and September 30, 2026 was a result of $1.6 billion in loan originations and advances, partially offset by $304.5 million and $633.2 million in loan payoffs and paydowns, respectively. The $629.3 million increase in total loans held for investment included $230.7 million in purchased loans within the consumer section of the loan portfolio. The $172.6 million increase in cash and cash equivalents primarily resulted from $130.0 million in net proceeds from the underwritten public offering (after deducting underwriting discounts and commissions of approximately $7.3 million, and offering expenses of approximately $0.6 million), $59.9 million in net income, and $623.4 million in deposit growth, partially offset by $629.3 million in cash outflows to fund growth in total loans held for investment. The increase in total liabilities from December 31, 2025 to September 30, 2026 was primarily due to an increase in deposits of $623.4 million. The increase in deposits was largely due to increases in money market, non-interest-bearing, and interest-bearing transaction deposits of $712.6 million, $126.0 million, and $71.5 million, respectively, partially offset by a $296.8 million decrease in time deposits, mainly attributable to a $265.0 million decline in wholesale deposits. The increase in total shareholders’ equity from December 31, 2025 to September 30, 2026 was primarily a result of $130.0 million of additional common stock outstanding and $59.9 million recognized as net income during the period, partially offset by $16.8 million in cash dividends paid during the period and a $3.2 million increase 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, 2026 June 30, 2026 $ Change % Change Interest and fee income $ 79,174 $ 72,327 $ 6,847 9.47% Interest expense 28,248 26,244 2,004 7.64% Net interest income $ 50,926 $ 46,083 $ 4,843 10.51% Net interest margin 3.69% 3.63% Three months ended (in thousands) September 30, 2026 September 30, 2025 $ Change % Change Interest and fee income $ 79,174 $ 64,845 $ 14,329 22.10% Interest expense 28,248 25,497 2,751 10.79% Net interest income $ 50,926 $ 39,348 $ 11,578 29.42% Net interest margin 3.69% 3.56% The following table shows the components of net interest income and net interest margin for the quarterly periods indicated: Three months ended September 30, 2026 June 30, 2026 September 30, 2025 (in thousands) Average Balance Interest Income/ Expense Yield/ Rate Average Balance Interest Income/ Expense Yield/ Rate Average Balance Interest Income/ Expense Yield/ Rate Assets Interest-earning deposits in banks $ 772,887 $ 7,286 3.74% $ 677,149 $ 6,253 3.70% $ 451,534 $ 5,009 4.40% Investment securities 90,174 496 2.18% 93,553 509 2.18% 96,806 579 2.38% Loans held for investment and sale 4,612,608 71,392 6.14% 4,328,304 65,565 6.08% 3,831,851 59,257 6.14%
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Total interest- earning assets 5,475,669 79,174 5.74% 5,099,006 72,327 5.69% 4,380,191 64,845 5.87% Interest receivable and other assets, net 120,299 123,354 110,118 Total assets $5,595,968 $5,222,360 $4,490,309 Liabilities and shareholders’ equity Interest-bearing transaction accounts $ 433,005 $ 1,782 1.63% $ 389,136 $ 1,297 1.34% $ 300,642 $ 1,194 1.58% Savings accounts 150,815 940 2.47% 143,818 844 2.35% 130,973 895 2.71% Money market accounts 2,829,499 21,729 3.05% 2,556,482 19,318 3.03% 1,874,089 15,348 3.25% Time accounts 282,857 2,636 3.70% 396,923 3,623 3.66% 639,434 6,899 4.28% Subordinated notes and other borrowings 74,127 1,161 6.22% 74,091 1,162 6.29% 73,981 1,161 6.23% Total interest- bearing liabilities 3,770,303 28,248 2.97% 3,560,450 26,244 2.96% 3,019,119 25,497 3.35% Demand accounts 1,212,088 1,163,991 1,016,560 Interest payable and other liabilities 35,691 31,140 32,210 Shareholders’ equity 577,886 466,779 422,420 Total liabilities & shareholders’ equity $5,595,968 $5,222,360 $4,490,309 Net interest spread 2.77% 2.73% 2.52% Net interest income/margin $ 50,926 3.69% $ 46,083 3.63% $ 39,348 3.56% Net interest income during the three months ended September 30, 2026 increased by $4.8 million, or 10.51%, to $50.9 million, as compared to $46.1 million during the three months ended June 30, 2026. Net interest margin totaled 3.69% for the three months ended September 30, 2026, an increase of six basis points compared to the prior quarter, primarily reflecting growth in higher- yielding loans and an increase in the yield on interest-earning assets, partially offset by higher deposit funding costs. The $4.8 million increase in net interest income is primarily attributable to a $376.7 million, or 7.39%, increase in average interest-earning assets. The average balance of loans increased $284.3 million, or 6.57%, and the average balance of interest-earning deposits in banks increased $95.7 million, or 14.14%. The average yield on interest-earning assets increased five basis points to 5.74%, including a six-basis-point increase in the average loan yield to 6.14%. The increase in interest income was partially offset by a $2.0 million increase in interest expense. The average balance of deposits increased $257.9 million, or 5.55%, combined with a three-basis-point increase in the average cost of deposits. The average balance of non-interest bearing deposits increased $48.1 million, or 4.13%, helping to partially offset the rise in deposit funding costs. As compared to the three months ended September 30, 2025, net interest income during the three months ended September 30, 2026 increased by $11.6 million, or 29.42%, to $50.9 million from $39.3 million. Net interest margin totaled 3.69% for the three months ended September 30, 2026, an increase of 13 basis points compared to the same quarter of the prior year. The increase primarily reflected balance sheet growth and lower deposit funding costs following three Federal Reserve rate cuts that began in September 2025, partially offset by lower yields on interest-earning assets. The increase in net interest income is primarily attributable to a $14.3 million increase in interest income, mainly due to a $780.8 million, or 20.38%, increase in the average balance of loans and a $321.4 million, or 71.17%, increase in the average balance of interest-earning deposits in banks. The benefit from higher average earning assets was partially offset by a 13-basis-point decrease in the yield on interest-earning assets to 5.74%. The average loan yield remained stable at 6.14%, as the effect of lower rates on repricing loans was offset by loan growth and changes in portfolio mix. This increase in interest income was partially offset by a $2.8 million increase in interest expense, stemming from a $946.6 million, or 23.89%, increase in the average balance of deposits during the three months ended September 30, 2026, moderated by a 25-basis-point decrease in the average cost of deposits compared to the same quarter of the prior year, reflecting deposit repricing following the three Federal Reserve rate cuts that began in September 2025 and an improved funding mix. Further supporting the decreasing average cost of deposits, the average balance of non-interest-bearing deposits increased by $195.5 million, or 19.23%, and brokered deposits decreased from $216.4 million to zero compared to the same period of the prior year. Loans by Type The following table provides loan balances, excluding deferred loan fees, by type as of the dates shown: (in thousands) September 30, June 30, 2026
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2026 Real estate: Commercial $ 3,678,924 $ 3,597,173 Commercial land and development 2,487 2,507 Commercial construction 122,561 124,053 Residential construction 25,569 21,809 Residential 41,530 41,874 Farmland 57,027 59,900 Commercial: Secured 313,600 258,736 Unsecured 39,164 41,263 Consumer and other 425,531 374,614 Net deferred loan fees (2,178) (2,248) Total loans held for investment $ 4,704,215 $ 4,519,681 Interest-bearing Deposits The following table provides interest-bearing deposit balances by type as of the dates shown: (in thousands) September 30, 2026 June 30, 2026 Interest-bearing transaction accounts $ 415,688 $ 500,256 Savings accounts 149,296 147,435 Money market accounts 2,791,209 2,669,295 Time accounts 257,847 307,991 Total interest-bearing deposits $ 3,614,040 $ 3,624,977 Asset Quality Allowance for Credit Losses At September 30, 2026, the Company’s allowance for credit losses was $49.4 million, as compared to $44.4 million at December 31, 2025. The $5.0 million increase in the allowance is due to a $7.3 million provision for credit losses (excluding a $0.2 million provision for unfunded commitments) recorded during the nine months ended September 30, 2026, partially offset by net charge-offs of $2.3 million, primarily attributable to commercial and industrial loans, during the same period. A summary of the allowance for credit losses by loan class is as follows: September 30, 2026 December 31, 2025 (in thousands) Amount % of Total Amount % of Total Real estate: Commercial $ 28,540 57.79% $ 25,219 56.77% Commercial land and development 92 0.19% 56 0.13% Commercial construction 4,526 9.16% 4,050 9.12% Residential construction 806 1.63% 213 0.48% Residential 461 0.93% 362 0.82% Farmland 432 0.87% 467 1.05% 34,857 70.57% 30,367 68.37% Commercial: Secured 10,630 21.52% 11,204 25.23% Unsecured 502 1.02% 482 1.09% 11,132 22.54% 11,686 26.32% Consumer and other 3,401 6.89% 2,356 5.31% Total allowance for credit losses $ 49,390 100.00% $ 44,409 100.00% The ratio of allowance for credit losses to loans held for investment was 1.05% at September 30, 2026, as compared to 1.09% at December 31, 2025. Risk Grades
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The Company’s nonperforming loans increased from $3.1 million to $13.3 million between December 31, 2025 and September 30, 2026, increasing the ratio of nonperforming loans to loans held for investment from 0.08% at December 31, 2025 to 0.28% at September 30, 2026. This increase was due to one Community Reinvestment Act-related credit that was originally downgraded during 2025 and placed on non-accrual status during the three months ended June 30, 2026. The balance of the loan was $11.4 million as of September 30, 2026, and it remains well secured by collateral with an appraised value that meaningfully exceeds its carrying amount. This was partially offset by improvements across the remainder of the nonperforming loan portfolio. The following table presents the Company’s loan portfolio by risk grade as of the dates shown: (in thousands) September 30, 2026 December 31, 2025 $ Change % of Loan Portfolio Outstanding as of September 30, 2026(1) Pass $ 4,490,670 $ 3,915,263 $ 575,407 95.41% Watch 147,152 101,895 45,257 3.13% Special Mention 48,500 37,530 10,970 1.03% Substandard 20,071 22,331 (2,260) 0.43% Doubtful — — — — % Total loan portfolio outstanding(1) $ 4,706,393 $ 4,077,019 $ 629,374 100.00% (1) Loan portfolio outstanding is total balance of loans outstanding at period end, before deferred loan fees and allowance for credit losses. 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, 2026 June 30, 2026 $ Change % Change Service charges on deposit accounts $ 148 $ 122 $ 26 21.31% Loan-related fees 472 679 (207) (30.49 )% FHLB stock dividends 424 191 233 121.99% Earnings on bank-owned life insurance 270 265 5 1.89% Other income 380 615 (235) (38.21 )% Total non-interest income $ 1,694 $ 1,872 $ (178) (9.51 )% Loan-related fees. The decrease resulted primarily from a decrease of $0.1 million in loan referral income during the three months ended September 30, 2026, as compared to the three months ended June 30, 2026. FHLB stock dividends . The increase related primarily to a $0.2 million special cash dividend from the FHLB during the three months ended September 30, 2026 that did not occur during the three months ended June 30, 2026. Other income. The decrease related primarily to an overall decline in earnings related to investments in venture-backed funds during the three months ended September 30, 2026, as compared to the three months ended June 30, 2026. The following table presents the key components of non-interest income for the periods indicated: Three months ended (in thousands) September 30, 2026 September 30, 2025 $ Change % Change Service charges on deposit accounts $ 148 $ 185 $ (37) (20.00 )% Loan-related fees 472 683 (211) (30.89 )% FHLB stock dividends 424 329 95 28.88% Earnings on bank-owned life insurance 270 209 61 29.19% Other income 380 560 (180) (32.14 )% Total non-interest income $ 1,694 $ 1,966 $ (272) (13.84 )% Loan-related fees. The decrease resulted primarily from a decrease of $0.1 million in fees from swap referrals during the three
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months ended September 30, 2026, as compared to the three months ended September 30, 2025, combined with $0.1 million in rate lock fees and good faith deposits that were forfeited during the three months ended September 30, 2025 and did not reoccur during the three months ended September 30, 2026. Other income. The decrease related primarily to an overall decline in earnings related to investments in venture-backed funds during the three months ended September 30, 2026, as compared to the three months ended September 30, 2025. Non-interest Expense The following table presents the key components of non-interest expense for the periods indicated: Three months ended (in thousands) September 30, 2026 June 30, 2026 $ Change % Change Salaries and employee benefits $ 12,338 $ 11,421 $ 917 8.03% Occupancy and equipment 935 873 62 7.10% Data processing and software 1,742 1,709 33 1.93% Federal Deposit Insurance Corporation (“FDIC”) insurance 670 585 85 14.53% Professional services 1,330 952 378 39.71% Advertising and promotional 798 959 (161) (16.79 )% Loan-related expenses 319 304 15 4.93% Other operating expenses 2,459 2,813 (354) (12.58 )% Total non-interest expense $ 20,591 $ 19,616 $ 975 4.97% Salaries and employee benefits. The increase related primarily to: (i) a $0.5 million increase in salaries, benefits, and bonus expense, mainly related to a 4.05% increase in headcount between June 30, 2026 and September 30, 2026; and (ii) a $0.5 million decrease in deferred loan origination costs due to lower loan originations period-over period. This increase was partially offset by a $0.1 million decrease in commissions primarily due to lower loan originations period-over-period. Professional services. The increase related primarily to: (i) a $0.2 million increase in recruiter fees associated with strategic hiring initiatives; and (ii) a $0.1 million increase in legal fees period-over-period related to legal fees incurred in the ordinary course of business. Advertising and promotional. The decrease related primarily to lower period-over-period expenses in support of the Bank’s business development activities, including a $0.1 million decrease related to donations, sponsorships, and advertising expenses and a $0.1 million decrease related to business development expenses. Other operating expenses. The decrease related primarily to: (i) a $0.4 million decrease in employee-related expenses such as travel, conferences, and training; and (ii) a $0.1 million decrease in operational losses, partially offset by a $0.1 million increase in reciprocal deposit network fees resulting from an overall increase in balances carried in the network. The following table presents the key components of non-interest expense for the periods indicated: Three months ended (in thousands) September 30, 2026 September 30, 2025 $ Change % Change Salaries and employee benefits $ 12,338 $ 9,716 $ 2,622 26.99% Occupancy and equipment 935 700 235 33.57% Data processing and software 1,742 1,559 183 11.74% FDIC insurance 670 500 170 34.00% Professional services 1,330 932 398 42.70% Advertising and promotional 798 803 (5) (0.62 )% Loan-related expenses 319 317 2 0.63% Other operating expenses 2,459 2,053 406 19.78% Total non-interest expense $ 20,591 $ 16,580 $ 4,011 24.19% Salaries and employee benefits. The increase related primarily to: (i) a $2.5 million increase in salaries, benefits, and bonus expense, mainly related to a 16.29% increase in headcount between September 30, 2025 and September 30, 2026; and (ii) a $0.5 million increase in commissions primarily due to higher loan originations period-over-period. This increase was partially offset by a $0.4 million increase in deferred loan origination costs due to higher loan originations period-over-period. Occupancy and equipment. The increase was primarily driven by expenses associated with the Lodi branch office and the
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Calabasas non-depository office, both opened subsequent to the three months ended September 30, 2025. Additional increases stemmed from the Walnut Creek branch office and the Newport Beach non-depository office, which were only open for a portion of the three months ended September 30, 2025, as compared to the full three months ended September 30, 2026, and the San Francisco branch office, where an expansion project completed in the fourth quarter of 2025 resulted in elevated ongoing expenses. Data processing and software. The increase was primarily due to: (i) increased usage of our digital banking platform; (ii) higher transaction volumes related to the increased number of loan and deposit accounts; (iii) an increased number of licenses required for new users on our loan origination and documentation system; and (iv) the implementation of enhanced commercial real estate lending analytics and risk assessment software. FDIC insurance . FDIC insurance expenses is calculated based on the FDIC assessment base, which generally reflects average consolidated total assets less average tangible equity. The increase in FDIC insurance expense was primarily due to a $960.4 million increase in the assessment base period-over-period. Professional services. The increase related primarily to: (i) a $0.2 million increase in recruiter fees associated with strategic hiring initiatives; and (ii) a $0.1 million increase in legal fees period-over-period related to legal fees incurred in the ordinary course of business. Other operating expenses. The increase related primarily to: (i) a $0.1 million increase in bank charges; (ii) a $0.1 million increase in reciprocal deposit network fees resulting from an overall increase in balances carried in the network; (iii) a $0.1 million increase in armored car and courier services; and (iv) a $0.1 million increase in employee-related expenses such as travel. This increase was partially offset by a $0.1 million decrease in operational losses. Provision for Income Taxes Three months ended September 30, 2026, as compared to three months ended June 30, 2026 Provision for income taxes increased by $0.9 million, or 13.90%, for the three months ended September 30, 2026, as compared to the three months ended June 30, 2026, which was primarily due to an increase in taxable income. The effective tax rates were 25.81% and 25.64% for the three months ended September 30, 2026 and June 30, 2026, respectively. Three months ended September 30, 2026, as compared to three months ended September 30, 2025 Provision for income taxes increased by $1.7 million, or 29.37%, for the three months ended September 30, 2026, as compared to the three months ended September 30, 2025. This increase was primarily driven by an increase in taxable income, partially offset by a $0.2 million benefit recorded during the three months ended September 30, 2026 related to the purchase of transferable tax credits that did not occur during the three months ended September 30, 2025. The effective tax rates were 25.81% and 26.49% for the three months ended September 30, 2026 and September 30, 2025, respectively. Webcast Details Five Star Bancorp will host a live webcast for analysts and investors on Tuesday, October 27, 2026 at 1:00 PM ET (10:00 AM 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 ten branches in 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 phrases of similar meaning. The Company cautions that the forward-looking statements are based largely on the Company’s expectations and are subject to a number of known and unknown risks and uncertainties that are subject to change based on factors which are, in many instances, beyond the Company’s control. Such forward-looking statements are based on various assumptions (some of which may be beyond the Company’s control) and are subject to risks and uncertainties, which change over time, and other factors, which could cause actual results to differ materially from those currently anticipated. New risks and uncertainties may emerge from time to time, and it is not possible for the Company to predict their occurrence or how they will affect the Company. If one or more of the factors affecting the Company’s forward-looking information and statements proves incorrect, then the Company’s actual results, performance, or achievements could differ materially from those expressed in, or implied by, forward- looking information and statements contained in this press release. Therefore, the Company cautions you not to place undue
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reliance on the Company’s forward-looking information and statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements are set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 and Quarterly Reports on Form 10-Q for the three months ended March 31, 2026 and June 30, 2026, in each case under the section entitled “Risk Factors,” and other documents filed by the Company with the Securities and Exchange Commission from time to time. The Company disclaims any duty to revise or update the forward-looking statements, whether written or oral, to reflect actual results or changes in the factors affecting the forward-looking statements, except as specifically required by law. Condensed Financial Data (Unaudited) Three months ended (in thousands, except per share and share data) September 30, 2026 June 30, 2026 September 30, 2025 Revenue and Expense Data Interest and fee income $ 79,174 $ 72,327 $ 64,845 Interest expense 28,248 26,244 25,497 Net interest income 50,926 46,083 39,348 Provision for credit losses 2,500 2,250 2,500 Net interest income after provision 48,426 43,833 36,848 Non-interest income: Service charges on deposit accounts 148 122 185 Loan-related fees 472 679 683 FHLB stock dividends 424 191 329 Earnings on bank-owned life insurance 270 265 209 Other income 380 615 560 Total non-interest income 1,694 1,872 1,966 Non-interest expense: Salaries and employee benefits 12,338 11,421 9,716 Occupancy and equipment 935 873 700 Data processing and software 1,742 1,709 1,559 FDIC insurance 670 585 500 Professional services 1,330 952 932 Advertising and promotional 798 959 803 Loan-related expenses 319 304 317 Other operating expenses 2,459 2,813 2,053 Total non-interest expense 20,591 19,616 16,580 Income before provision for income taxes 29,529 26,089 22,234 Provision for income taxes 7,620 6,690 5,890 Net income $ 21,909 $ 19,399 $ 16,344 Comprehensive Income Net income $ 21,909 $ 19,399 $ 16,344 Net unrealized holding (loss) gain on securities available-for-sale during the period (4,023) 946 2,843 Less: Income tax (benefit) expense related to other comprehensive (loss) income (1,046) 246 763 Other comprehensive (loss) income (2,977) 700 2,080 Total comprehensive income $ 18,932 $ 20,099 $ 18,424 Share and Per Share Data Earnings per common share: Basic $ 0.92 $ 0.91 $ 0.77 Diluted $ 0.92 $ 0.91 $ 0.77 Book value per share $ 25.15 $ 22.14 $ 20.19 Tangible book value per share (1) $ 25.15 $ 22.14 $ 20.19 Weighted average basic common shares outstanding 23,620,369 21,273,902 21,231,563 Weighted average diluted common shares outstanding 23,697,397 21,338,903 21,281,818
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Shares outstanding at end of period 24,536,614 21,402,864 21,367,387 Selected Financial Ratios ROAA 1.55% 1.49% 1.44% ROAE 15.04% 16.67% 15.35% Net interest margin 3.69% 3.63% 3.56% Loan to deposit (2) 97.51% 94.17% 94.73% (1) See the section entitled “Non-GAAP Reconciliation (Unaudited)” for a reconciliation of this non-GAAP financial measure. (2) Loan balance in loan to deposit ratio is total loans held for investment at period end. Deposit balance in loan to deposit ratio is total deposits at period end. (in thousands) September 30, 2026 June 30, 2026 September 30, 2025 Balance Sheet Data Cash and due from financial institutions $ 46,297 $ 45,966 $ 44,147 Interest-bearing deposits in banks 633,185 639,108 536,300 Time deposits in banks — — 100 Securities - available-for-sale, at fair value 82,228 90,584 95,635 Securities - held-to-maturity, at amortized cost 1,930 2,135 2,190 Loans held for investment 4,704,215 4,519,681 3,887,259 Allowance for credit losses (49,390) (47,335) (42,061) Loans held for investment, net of allowance for credit losses 4,654,825 4,472,346 3,845,198 FHLB stock 15,000 15,000 15,000 Operating leases, right-of-use asset 10,661 10,138 9,751 Premises and equipment, net 2,687 2,333 1,656 Bank-owned life insurance 29,029 28,759 23,676 Interest receivable and other assets 83,776 70,693 68,117 Total assets $ 5,559,618 $ 5,377,062 $ 4,641,770 Non-interest-bearing deposits $ 1,210,488 $ 1,174,406 $ 1,059,082 Interest-bearing deposits 3,614,040 3,624,977 3,044,356 Total deposits 4,824,528 4,799,383 4,103,438 Subordinated notes, net 74,150 74,114 74,004 Operating lease liability 11,926 11,262 10,431 Interest payable and other liabilities 31,803 18,532 22,589 Total liabilities 4,942,407 4,903,291 4,210,462 Common stock 435,511 304,868 303,571 Retained earnings 194,092 178,318 137,615 Accumulated other comprehensive loss, net of taxes (12,392) (9,415) (9,878) Total shareholders’ equity 617,211 473,771 431,308 Total liabilities and shareholders’ equity $ 5,559,618 $ 5,377,062 $ 4,641,770 Quarterly Average Balance Data Average loans held for investment and sale $ 4,612,608 $ 4,328,304 $ 3,831,851 Average interest-earning assets 5,475,669 5,099,006 4,380,191 Average total assets 5,595,968 5,222,360 4,490,309 Average deposits 4,908,264 4,650,350 3,961,698 Average total equity 577,886 466,779 422,420 Credit Quality Allowance for credit losses to nonperforming loans 371.49% 354.57% 1,975.62% Nonperforming loans to loans held for investment 0.28% 0.30% 0.05% Nonperforming assets to total assets 0.24% 0.25% 0.05%
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Nonperforming loans plus performing loan modifications to loans held for investment 0.28% 0.30% 0.05% Capital Ratios Total shareholders’ equity to total assets 11.10% 8.81% 9.29% Tangible shareholders’ equity to tangible assets(1) 11.10% 8.81% 9.29% Total capital (to risk-weighted assets) 15.00% 12.50% 13.59% Tier 1 capital (to risk-weighted assets) 12.52% 9.97% 10.77% Common equity Tier 1 capital (to risk-weighted assets) 12.52% 9.97% 10.77% Tier 1 leverage ratio 11.21% 9.21% 9.78% (1) See the section entitled “Non-GAAP Reconciliation (Unaudited)” for a reconciliation of this non-GAAP financial measure. Non-GAAP Reconciliation (Unaudited) The Company uses financial information in its analysis of the Company’s performance that is not in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The Company believes that these non-GAAP financial measures provide useful information to management and investors that is supplementary to the Company’s financial condition, results of operations, and cash flows computed in accordance with GAAP. However, the Company acknowledges that its non-GAAP financial measures have a number of limitations. As such, investors should not view these disclosures as a substitute for results determined in accordance with GAAP. Additionally, these non-GAAP measures are not necessarily comparable to non-GAAP financial measures that other banking companies use. Other banking companies may use names similar to those the Company uses for the non-GAAP financial measures the Company discloses, but may calculate them differently. Investors should understand how the Company and other companies each calculate their non-GAAP financial measures when making comparisons. Tangible shareholders’ equity to tangible assets is defined as total equity less goodwill and other intangible assets, divided by total assets less goodwill and other intangible assets. The most directly comparable GAAP financial measure is total shareholders’ equity to total assets. Management believes that tangible shareholders’ equity to tangible assets is a useful financial measure because it enables management, investors, and others to assess the Company’s financial health based on tangible capital. We had no goodwill or other intangible assets at the end of any period indicated. As a result, tangible shareholders’ equity to tangible assets is the same as total shareholders’ equity to total assets at the end of each of the periods indicated. Tangible book value per share is defined as total shareholders’ equity less goodwill and other intangible assets, divided by the outstanding number of common shares at the end of the period. The most directly comparable GAAP financial measure is book value per share. Management believes that tangible book value per share is a useful financial measure because it enables management, investors, and others to assess the Company’s value and use of equity. We had no goodwill or other intangible assets at the end of any period indicated. As a result, tangible book value per share is the same as book value per share at the end of each of the periods indicated. Pre-tax, pre-provision income is defined as pre-tax income plus provision for credit losses. The most directly comparable GAAP financial measure is pre-tax income. Management believes that pre-tax, pre-provision income is a useful financial measure because it enables management, investors, and others to assess the Company’s ability to generate operating profit and capital. The following reconciliation table provides a more detailed analysis of this non-GAAP financial measure: Three months ended (in thousands) September 30, 2026 June 30, 2026 September 30, 2025 Pre-tax, pre-provision income Pre-tax income $ 29,529 $ 26,089 $ 22,234 Add: provision for credit losses 2,500 2,250 2,500 Pre-tax, pre-provision income $ 32,029 $ 28,339 $ 24,734 Investor Contact: Heather C. Luck, Chief Financial Officer Five Star Bancorp (916) 626-5008 hluck@fivestarbank.com Media Contact: Shelley R. Wetton, Chief Marketing Officer Five Star Bancorp (916) 284-7827
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swetton@fivestarbank.com