Company: FSBC
Filing Date: 2025-08-07
Form Type: 10-Q
Source: 0001628280-25-038796
Chunk: 90

Company: FIVE STAR BANCORP
Filing Date: 2025-08-07
Form: 10-Q
Item: Part I, Item 1
Chunk 90
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 for U.S. banking organizationsGSEGovernment Sponsored EntityBOLIBank-Owned Life InsuranceIPOInitial Public OfferingCECLCurrent Expected Credit LossLMLoan modification made to borrower experiencing financial difficultyCFPBConsumer Financial Protection BureauNIINet Interest IncomeCMEChicago Mercantile ExchangeOCIOther Comprehensive IncomeCRECommercial Real EstateRSARestricted Stock AwardC&ICommercial and IndustrialROAAReturn on Average Assets, annualizedEPSEarnings per ShareROAEReturn on Average Equity, annualizedEVEEconomic Value of EquityROUARight-of-Use AssetFASBFinancial Accounting Standards BoardSBAU.S. Small Business AdministrationFDICFederal Deposit Insurance CorporationSECSecurities and Exchange CommissionFederal ReserveBoard of Governors of the Federal Reserve SystemSOFRSecured 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 $60.6 million for the three months ended June 30, 2025 and $207.0 million for the year ended December 31, 2024. Our total interest expense was $24.1 million for the three months ended June 30, 2025 and $87.2 million for the year ended December 31, 2024. Overall, our net interest income was $36.5 million for the three months ended June 30, 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 in time for a given set of market rate assumptions. An increase in EVE due to a specified rate change indicates an improvement in the long-term earnings capacity of the balance sheet, assuming that the rate change remains in effect over the life of the current balance sheet. As of