Company: FSBC
Filing Date: 2025-05-08
Form Type: 10-Q
Source: 0001275168-25-000106
Chunk: 77

Company: FIVE STAR BANCORP
Filing Date: 2025-05-08
Form: 10-Q
Item: Part I, Item 1
Chunk 77
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 National Mortgage AssociationASUAccounting Standards UpdateGAAPGenerally Accepted Accounting Principles in the U.S.BancorpFive Star Bancorp and its subsidiaryGNMAGovernment National Mortgage AssociationBankFive Star BankGSEGovernment Sponsored EntityBasel IIIA capital framework and rules for U.S. banking organizationsIPOInitial Public OfferingBOLIBank-Owned Life InsuranceLMLoan modification made to borrower experiencing financial difficultyCECLCurrent Expected Credit LossNINet IncomeCMEChicago Mercantile ExchangeNIINet Interest IncomeCRECommercial Real EstateOCIOther Comprehensive IncomeC&ICommercial and IndustrialRSARestricted Stock AwardEPSEarnings per ShareROAAReturn on Average Assets, annualizedEVEEconomic Value of EquityROAEReturn on Average Equity, annualizedFASBFinancial Accounting Standards BoardROUARight-of-Use AssetFDICFederal Deposit Insurance CorporationSBAU.S. Small Business AdministrationFederal ReserveBoard of Governors of the Federal Reserve SystemSECSecurities and Exchange CommissionFFIECFederal Financial Institutions Examination CouncilSOFRSecured Overnight Financing Rate

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ITEM 3. Quantitative and Qualitative Disclosures About Market Risk

Market risk is the risk of loss from adverse changes in market prices and rates. As a financial institution, the Company experiences market risk arising primarily from interest rate risk inherent in lending and deposit-taking activities. Because the interest rates on the Company’s assets and liabilities do not necessarily change at the same speed or rate as market interest rates, sudden and/or substantial changes in interest rates may adversely impact our earnings. In particular, the Company’s financial results are sensitive to significant changes in the treasury yield curve, the Federal Funds rate, and the Wall Street Prime Index.

The Company’s total interest income was $57.1 million for the three months ended March 31, 2025 and $207.0 million for the year ended December 31, 2024. Our total interest expense was $23.1 million for the three months ended March 31, 2025 and $87.2 million for the year ended December 31, 2024. Overall, our net interest income was $34.0 million for the three months ended March 31, 2025 and $119.7 million for the year ended December 31, 2024.

Economic value of equity (“EVE”) measures our long-term earnings exposure from changes in market rates of interest. EVE is defined as the present value of assets minus the present value of liabilities at a point