Company: FSBC
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0001628280-25-050090
Chunk: 18

Company: FIVE STAR BANCORP
Filing Date: 2025-11-06
Form: 10-Q
Item: Part I, Item 1
Chunk 18
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 December 31, 2024, respectively, included in “Interest receivable and other assets” in the unaudited consolidated balance sheets.

17

Note 4: Loans and Allowance for Credit Losses

The Company’s loan portfolio is its largest class of earning assets and typically provides higher yields than other types of earning assets. Associated with the higher yields is an inherent amount of credit risk which the Company attempts to mitigate through strong underwriting practices. Table 4.1 presents the balance of each major product type within the Company’s portfolio as of the dates indicated.Table 4.1: Loans Outstanding(in thousands)September 30, 2025December 31, 2024Real estate:Commercial$3,144,303 $2,857,173 Commercial land and development934 3,849 Commercial construction136,988 111,318 Residential construction5,976 4,561 Residential35,739 32,774 Farmland57,572 47,241 Commercial:Secured191,170 170,548 Unsecured38,658 27,558 Consumer and other278,209 279,584 Subtotal3,889,549 3,534,606 Net deferred loan fees(2,290)(1,920)Loans held for investment3,887,259 3,532,686 Allowance for credit losses(42,061)(37,791)Loans held for investment, net of allowance for credit losses$3,845,198 $3,494,895 UnderwritingReal estate loans: Real estate loans are subject to underwriting standards and processes similar to those for commercial loans. These loans are viewed primarily as cash flow loans and secondarily as loans secured by real estate. Commercial real estate lending typically involves higher loan principal amounts, and the repayment of these loans is generally largely dependent on the successful operation of the property securing the loan or the business conducted on the property securing the loan. Commercial real estate loans may be more adversely affected than other loans by conditions in the real estate market or in the general economy. The properties securing the Company’s commercial real estate portfolio are diverse in terms of type. This diversity helps reduce the Company’s exposure to adverse economic events that affect any single market or industry. Management monitors and evaluates commercial real estate loans based on collateral, geography, and risk grade criteria.Construction loans: With respect to construction loans that the Company may originate from time to time, the Company