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1. Company Snapshot

1.a. Company Description

Five Star Bancorp operates as the bank holding company for Five Star Bank that provides a range of banking products and services to small and medium-sized businesses, professionals, and individuals.The company accepts various deposits, such as money market, noninterest-bearing and interest checking accounts, savings accounts, and time deposits.Its loan products include commercial and residential real estate loans; commercial loans; commercial land loans; farmland loans; commercial and residential construction loans; and consumer and other loans.


The company also offers debit cards; and remote deposit capture, online and mobile banking, and direct deposit services.It operates through seven branch offices and two loan production offices in Northern California.Five Star Bancorp was founded in 1999 and is headquartered in Rancho Cordova, California.

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1.b. Last Insights on FSBC

Five Star Bancorp's recent performance was driven by strong Q3 earnings, with net income of $16.3 million, up from $10.9 million a year ago. The company's quarterly earnings of $0.77 per share beat the Zacks Consensus Estimate of $0.71 per share. A cash dividend of $0.20 per share was declared, to be paid on November 10, 2025. Additionally, the company has been expanding its presence, with a new location in Walnut Creek, California, offering concierge banking services. Zacks upgraded the stock to a Buy rating.

1.c. Company Highlights

2. Five Star Bancorp Beats Earnings Expectations with Strong Q3 Performance

Five Star Bancorp reported a net income of $16.3 million and earnings per share of $0.77 for the third quarter of 2025, surpassing analyst estimates of $0.71. The company's return on average assets was 1.44%, and return on average equity was 15.35%. Net interest margin expanded by 3 basis points to 3.56%, while the cost of total deposits declined by 2 basis points to 2.44%. The efficiency ratio was 40.13% for the quarter. Net interest income increased $2.8 million from the previous quarter, primarily due to a $4.3 million increase in interest income. The strong financial performance was driven by a 14% annualized growth in loans held for investment and a 21% annualized increase in total deposits.

Publication Date: Nov -30

📋 Highlights
  • Strong Profitability:: Net income of $16.3 million and EPS of $0.77, with ROA (1.44%) and ROE (15.35%) reflecting efficient capital use.
  • Margin Expansion:: Net interest margin rose 3 bps to 3.56%, driven by $2.8 million higher interest income, while deposit costs fell 2 bps to 2.44%.
  • Loan and Deposit Growth:: Loans grew 14% ($129.2M) and deposits expanded 21% ($208.8M) annually, with nonperforming loans at just 0.05% of total loans.
  • Efficiency and Cost Control:: Efficiency ratio of 40.13% and $900K noninterest expense increase highlight disciplined cost management amid growth.
  • Strategic Expansion:: Opened ninth office in Walnut Creek, CA, with $548.9M in deposits, targeting a 95% loan-to-deposit ratio and 1–2% Q4 deposit growth.

Loan and Deposit Growth

Loans held for investment grew by $129.2 million, driven by the company's strong loan pipeline, while total deposits increased by approximately $208.8 million. The company's presence in the San Francisco Bay Area continues to grow, with 36 employees and $548.9 million in deposits as of September 30, 2025. The company opened its ninth full-service office in Walnut Creek, California, further expanding its footprint.

Outlook and Guidance

The company expects continued growth in its loan portfolio and anticipates deposit growth of 1-2% in the fourth quarter. Management also expects to continue to optimize its funding base and pay down broker deposits. In terms of net interest margin outlook, the company expects potential expansion in the fourth quarter, driven by benefits from its balance sheet construction in a slight down rate environment. A 25 basis point cut is expected to have a $850,000 positive impact on net interest margin, although the full effect will take a quarter to materialize.

Valuation and Dividend Yield

With a Price-to-Tangible Book Value (P/TBV) ratio of approximately 1.7, the stock appears to be reasonably valued. The dividend yield of 2.32% is attractive, especially considering the company's history of paying consistent dividends. The company's guidance for net interest margin and its efforts to optimize its funding base are likely to support its financial performance going forward.

M&A Strategy and Competition

The company's M&A strategy is opportunistic, with a focus on organic growth. While they have a strong currency with their current stock price, they don't feel pressured to make acquisitions. The company faces increased competition in hiring and expansion, but believes its performance and reputation give it a competitive edge in attracting experienced bankers.

3. NewsRoom

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Financial Contrast: Summit State Bank (NASDAQ:SSBI) & Five Star Bancorp (NASDAQ:FSBC)

Nov -30

Source: defenseworld.net

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Five Star Bank's CEO James Beckwith named Sacramentan of the Year

Nov -20

Source: globenewswire.com

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FIVE-STAR DEVELOPMENT INITIATES CHAPTER 11 TO PROTECT THE RITZ-CARLTON PARADISE VALLEY AND ADVANCE COMPLETION OF THE PALMERAIE PROJECT

Nov -04

Source: prnewswire.com

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Five Star Bancorp (FSBC) Q3 2025 Earnings Call Transcript

Oct -28

Source: seekingalpha.com

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Five Star Bancorp (FSBC) Q3 Earnings and Revenues Top Estimates

Oct -28

Source: zacks.com

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Five Star Bancorp Announces Third Quarter 2025 Results

Oct -27

Source: globenewswire.com

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Strength Seen in Five Star Bancorp (FSBC): Can Its 5.1% Jump Turn into More Strength?

Oct -22

Source: zacks.com

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Five Star Bancorp (FSBC) Earnings Expected to Grow: Should You Buy?

Oct -20

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (13.00%)

6. Segments

Banking and Related Activities

Expected Growth: 13%

Five Star Bancorp's 13% growth in Banking and Related Activities is driven by increasing demand for commercial loans, expansion into new markets, and strategic partnerships. Additionally, the bank's focus on digital transformation, improved customer experience, and cost savings initiatives have contributed to its growth. Strong asset quality, effective risk management, and a favorable interest rate environment have also supported the bank's growth momentum.

7. Detailed Products

Commercial Loans

Five Star Bancorp offers a range of commercial loans to support businesses of all sizes, including term loans, lines of credit, and construction loans.

Residential Mortgages

Five Star Bancorp offers a variety of residential mortgage options, including fixed-rate and adjustable-rate loans, to help individuals and families achieve homeownership.

Consumer Banking

Five Star Bancorp's consumer banking services include checking and savings accounts, credit cards, and personal loans, designed to meet the everyday financial needs of individuals and families.

Wealth Management

Five Star Bancorp's wealth management services offer investment and financial planning advice to help individuals and families achieve their long-term financial goals.

Treasury Management

Five Star Bancorp's treasury management services help businesses optimize their cash flow, manage risk, and improve financial efficiency.

8. Five Star Bancorp's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Five Star Bancorp is moderate, as customers have alternative banking options available.

Bargaining Power Of Customers

The bargaining power of customers is low, as Five Star Bancorp has a strong brand presence and customer loyalty.

Bargaining Power Of Suppliers

The bargaining power of suppliers is moderate, as Five Star Bancorp relies on a diverse range of suppliers for its operations.

Threat Of New Entrants

The threat of new entrants is high, as the banking industry is highly competitive and new fintech companies are emerging.

Intensity Of Rivalry

The intensity of rivalry is high, as Five Star Bancorp operates in a highly competitive banking industry with many established players.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 46.16%
Debt Cost 5.81%
Equity Weight 53.84%
Equity Cost 5.81%
WACC 5.81%
Leverage 85.73%

11. Quality Control: Five Star Bancorp passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Five Star Bank

A-Score: 6.3/10

Value: 5.9

Growth: 5.4

Quality: 7.8

Yield: 5.0

Momentum: 6.5

Volatility: 7.3

1-Year Total Return ->

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Stock-Card
First National

A-Score: 6.2/10

Value: 5.3

Growth: 3.1

Quality: 6.4

Yield: 6.0

Momentum: 7.5

Volatility: 8.7

1-Year Total Return ->

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Stock-Card
WaFed

A-Score: 6.0/10

Value: 5.9

Growth: 6.8

Quality: 5.6

Yield: 7.0

Momentum: 2.5

Volatility: 8.0

1-Year Total Return ->

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Stock-Card
Southern Missouri Bancorp

A-Score: 5.9/10

Value: 7.6

Growth: 6.7

Quality: 7.0

Yield: 4.0

Momentum: 3.0

Volatility: 7.0

1-Year Total Return ->

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Stock-Card
National Bankshares

A-Score: 5.6/10

Value: 5.5

Growth: 3.3

Quality: 5.0

Yield: 8.0

Momentum: 5.0

Volatility: 6.7

1-Year Total Return ->

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Stock-Card
Finward

A-Score: 5.1/10

Value: 5.2

Growth: 3.6

Quality: 3.8

Yield: 4.0

Momentum: 5.5

Volatility: 8.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

34.69$

Current Price

34.69$

Potential

-0.00%

Expected Cash-Flows