Five Star Bancorp(FSBC) - 2021 Q3 - Quarterly Report

Financial Performance - Net income for the three months ended September 30, 2021, was $11,026 thousand, compared to $9,337 thousand for the same period in 2020, reflecting a year-over-year increase of 18.1%[17] - Net income for the nine months ended September 30, 2021, was $31,132,000, an increase of 17.8% compared to $26,466,000 for the same period in 2020[28] - For the three months ended September 30, 2021, the net income before provision for income taxes was $13,296 thousand, compared to $9,678 thousand for the same period in 2020, representing a year-over-year increase of approximately 37%[41] - The actual/pro forma net income for the nine months ended September 30, 2021, was $26,494 thousand, up from $19,325 thousand in 2020, indicating a growth of about 37%[41] Asset Growth - Total assets increased to $2,434,493 thousand as of September 30, 2021, up from $1,953,765 thousand at December 31, 2020, representing a growth of approximately 24.6%[14] - Total assets at September 30, 2021, were $226,638,000, up from $133,775,000 at December 31, 2020, reflecting a significant growth in the company's asset base[28] - Cash and cash equivalents increased to $530,832 thousand as of September 30, 2021, from $290,493 thousand at December 31, 2020, a growth of 82.7%[14] - Loans held for investment rose to $1,682,868,000, up from $1,480,970,000, indicating a growth of approximately 13.6%[58] Deposit Growth - Total deposits reached $2,168,394 thousand as of September 30, 2021, compared to $1,784,001 thousand at December 31, 2020, indicating an increase of 21.5%[14] - The net change in deposits was $384,393,000 for the nine months ended September 30, 2021, compared to $579,835,000 in 2020, indicating a robust deposit growth[28] - As of September 30, 2021, total interest-bearing deposits increased to $1,272.9 million from $1,088.3 million as of December 31, 2020, representing a growth of 16.9%[106] Shareholder Returns - The company declared cash dividends of $0.15 per share for the three months ended September 30, 2021, totaling $2,584 thousand[21] - Cash dividends paid increased to $49,359,000 for the nine months ended September 30, 2021, compared to $18,890,000 for the same period in 2020, indicating a higher return to shareholders[28] - The Company declared a dividend of $0.15 per common share on July 6, 2021, totaling $2.6 million[119] Loan Quality and Provisions - The provision for loan losses was $200 thousand for the nine months ended September 30, 2021, significantly lower than $6,000 thousand in the same period of 2020, indicating improved asset quality[17] - The provision for loan losses for the three months ended September 30, 2021, was $1,587,000, compared to a provision of $549,000 for the same period in 2020, indicating an increase of 188% year-over-year[101] - The allowance for loan losses was $21,848,000 as of September 30, 2021, slightly down from $22,189,000 as of December 31, 2020, showing a decrease of 1.5%[76] Taxation - The effective tax rate for the nine months ended September 30, 2021, was 23.25%, excluding a discrete deferred tax adjustment of $4.6 million[41] - The effective tax rate for the nine months ended September 30, 2021, was 23.25%, compared to 29.56% for the same period in 2020[117] - The provision for income taxes for the three months ended September 30, 2021, was $2.27 million, compared to $0.34 million for the same period in 2020[118] Securities and Investments - The fair value of available-for-sale securities as of September 30, 2021, was $153,821 thousand, compared to $114,949 thousand as of December 31, 2020, reflecting an increase of approximately 34%[52] - The company invests in a diverse portfolio including U.S. government agencies, mortgage-backed securities, and corporate bonds, reflecting a strategic approach to investment securities[65] - The company recorded derivatives at fair value based on observable Level 2 market inputs, with a total of $108 thousand for interest rate swaps as of September 30, 2021[52] Related Party Transactions - The company expects to continue banking transactions with related parties under normal terms and conditions[105] - The company maintains that related party transactions do not present significant risks of collectability[105] - Related party loans to insiders and affiliates amounted to $9.6 million at September 30, 2021, an increase from $1.6 million at December 31, 2020[105] Other Financial Metrics - The company raised $111,243,000 through a stock offering in 2021, contributing to its capital position[28] - The company had total financing availability of $523.3 million as of September 30, 2021, compared to $519.3 million as of December 31, 2020[112] - Letters of credit issued totaled $319.5 million as of September 30, 2021, an increase from $293.5 million as of December 31, 2020[113]