Five Star Bancorp

opportunity for those provided with a dial-in number to ask questions. To ask a question, you may press star, then 1 on your telephone keypad. To withdraw your question, please press star, then 2. Before we get started, we would like to remind you that today's meeting will include some forward-looking statements within the meaning of applicable securities laws. These forward-looking statements relate to, among other things, current plans, expectations, events, and industry trends that may affect the company's future operating results and financial position. Such statements involve risks and uncertainties, and future activities and results may differ materially from these expectations. For more complete discussion of the risks and uncertainties that may cause actual results to differ materially from the company's forward-looking statements, please see the company's annual report on Form 10-K for the year ended December 31, 2024, and quarterly reports on Form 10-Q for the three months ended March 31, 2025, June 30, 2025, and September 30, 2025, and in particular, the information set forth in Item 1A, Risk Factors, in those reports. Please refer to slide two of the presentation, which includes disclaimers regarding forward-looking statements, industry data, unaudited financial data, and non-GAAP financial information included in this presentation. Reconciliations of non-GAAP financial measures to their most directly comparable GAAP measures are are included in the appendix to the presentation. The presentation will be referenced during this call but not followed exactly and is available for closer viewing on the company's website under the investor relations tab. Please note this event is being recorded. I would now like to turn the presentation over to James Beckwith, Five Star Bancorp President and CEO. Please go ahead.

Thank you for joining us to review Five Star Bancorp's financial results for the fourth quarter and year ended December 31, 2025. These results were released yesterday and are available on our website, 5starbank.com, under the Investor Relations section. Joining me today is Heather Luck, Executive Vice President and Chief Financial Officer. 2025 was another outstanding year of achievement, underpinned by exceptional growth across all of the markets we serve, and consistent, strong financial performance. During 2025, we expanded our footprint in the San Francisco Bay Area through the opening of our Walnut Creek office. We expanded our agribusiness vertical, and we also added 10 more seasoned business development professionals to facilitate ongoing organic growth. In 2025, Five Star Bank achieved year-over-year growth in total loans held for investments of 15%, total deposit growth of 18%, net income growth of 35%, and an increase in earnings per share of 28% to $2.90 a share. Financial highlights for the fourth quarter include $17.6 million in net income earnings per share of 83 cents, return on average assets of 1.50%, and return of average equity of 15.97%. Our net interest margin expanded 10 basis points to 3.66%, and our total cost of deposits declined by 21 basis points to 2.23%. Our efficiency ratio was 40.62% for the fourth quarter. Financial highlights for the year included a $61.6 million in net income, earnings per share of $2.90, return on average assets of 1.41%, and return on average equity of 14.74%. Our net interest margin expanded by 23 basis points to 3.55%, and our cost of total deposits declined 16 basis points to 2.40%. Our efficiency ratio was 41.03% for the year. In the fourth quarter, we saw continued balance sheet growth. Loans held for investment grew by $187.7 million, or 19% on an annualized basis, and total deposits increased by 97.6 million, or 10% on an annualized basis. Over the course of the year, we experienced outstanding balance sheet growth. Loans held for investment grew by 542.2 million, or 15%, and total deposits increased by 643.1 million, or 18%. We successfully reduced our balance of wholesale deposits by $95 million, or 17%, in 2025. And we grew our balance of non-wholesale deposits by $738.1 million, or 25%. Our asset quality continues to remain strong with non-performing loans representing only eight basis points of total loans held for investment. We continue to be well capitalized with all capital ratios well above regulatory thresholds for the quarter and year. Our strong financial performance and dedication to delivering shareholder value drove an increase to our cash dividend of $0.05 per share for a total dividend of $0.25 per share for the quarter. This is the first increase in the dividend since April 2023. The dividend is payable to the company's shareholders of record as of February 2, 2026, and is expected to be paid on February 9, 2026. Our total assets increased during the fourth quarter and full year by $113.1 million and $701.6 million, respectively. This growth was largely driven by loan growth within the commercial real estate portfolio, which increased by $161.4 million in the fourth quarter and $448.5 million in the year. Our loan pipeline remains strong. Our prudent underwriting standards, comprehensive loan monitoring, and focus on relationship-driven lending have contributed to maintaining the strong quality of our loans. As a result, we have a very low volume of non-performing loans, despite an increase of 1.0 million during the fourth quarter related to two separate faith-based real estate loans entering non-performing status. We recorded a provision of 2.8 million for credit losses during the fourth quarter, primarily related to loan growth. for the total provision of credit losses of $9.7 million for the year ended December 31, 2025. Growth in our total liabilities during the fourth quarter and full year was a result of growth in interest bearing and non-interest bearing deposits related to both new accounts and inflows from the existing customer base. Non-wholesale deposits increased $139.1 million during the quarter and $738.1 million during the year. Wholesale deposits decreased by $41.4 million during the quarter and $95 million during the year. Total non-interest bearing deposits accounted for 26% of total deposits. Approximately 61% of our deposit relationships total more than $5 million. These deposits have a long tenure with the bank. With an average of eight years, we believe our deposit portfolio to be a stable funding base for future growth. On that note, I will now hand it over to Heather to discuss the results of operations. Heather?

Thank you, James, and hello, everyone. Net interest income increased $2.7 million, or 7% from the previous quarter, primarily due to a $1.8 million increase in loan interest income driven by new loan production and a $1.1 million decrease in interest expense. The decline in interest expense is primarily related to a 21 basis point decline in the average cost of deposits quarter over quarter driven primarily by two rate cuts occurring in the three months ended December 31st, 2025. The average balance of deposits increased by 4% during the three months ended December 31st, 2025, but the substantial decrease in the costs associated with deposits led to a net reduction in total interest expense. Net interest income increased by $32.2 million, or 27% from 2024, primarily due to a $35.9 million increase in loan interest income driven by new loan production at higher rates, contributing to overall improvement in the average yield on loans. This is partially offset by a $10 million increase in deposit interest expense related to a 19% increase in the average balance of deposits during the year. The average cost of deposits was $2.40 for the year ended December 31, 2025, a decrease of 16 basis points compared to the prior year, which helped to moderate the increase in interest expense related to deposit growth. Non-interest income decreased to $1.4 million in the fourth quarter from $2 million in the previous quarter, primarily due to an overall decline in earnings related to equity investments and venture-backed funds during the three months ended December 31st, 2025, compared to the prior quarter. Non-interest income increased by $100,000 in 2025, primarily due to an increase from fees from swap referrals an income from credit card activity, an improvement in earnings related to equity investments and venture-backed funds, and an increase on earnings on bank-owned life insurance related to the purchase of additional policies. These gains were almost entirely offset by lower gain on sale of loans, which declined due to the strategic reduction in origination of loans held for sale during the year. For the three months ended December 31st, 2025, there was a $1.1 million increase in non-interest expense, and for the full year ending that date, the increase amounted to $10.5 million. The primary driver for higher non-interest expense was related to an increase in headcount, leading to elevated salaries and benefits. Provision for income taxes for the quarter ended December 31st, 2025 decreased by $500,000 or 9% as compared to the prior quarter due to a $900,000 benefit recorded during the fourth quarter related to the purchase of transferable tax credits. This is partially offset by an increase in pre-tax income recognized during the quarter and an adjustment related to the true up of amortization expense related to low income housing tax credits during the three months ended December 31st, 2025. The provision for income taxes increased by 3.1 million or 16% for the year ended December 31st, 2025 as compared to the prior year due to a 29% increase in pre-tax income recognized during the year. This is partially offset by a $900,000 benefit recorded during the quarter related to the purchase of tax credit. And now I will hand it back to James for closing remarks.