Company: FSBC
Filing Date: 2025-08-07
Form Type: 10-Q
Source: 0001628280-25-038796
Chunk: 13

Company: FIVE STAR BANCORP
Filing Date: 2025-08-07
Form: 10-Q
Item: Part I, Item 1
Chunk 13
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ordinated notes: The fair value is estimated by discounting the future cash flow using the current three-month CME Term SOFR. The Company’s subordinated notes are not registered securities and were issued through private placements, resulting in a Level 3 classification. The notes are recorded at carrying value.Other borrowings: The carrying amount is estimated to be fair value.

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Note 3: Investment Securities

The Company’s investment securities portfolio includes obligations of states and political subdivisions, securities issued by U.S. federal government agencies, such as the SBA, and securities issued by U.S. GSEs, such as the FNMA, the FHLMC, and the FHLB. The Company also invests in residential and commercial mortgage-backed securities, collateralized mortgage obligations issued or guaranteed by GSEs, and corporate bonds, as reflected in Tables 3.1 and 3.2.A summary of the amortized cost and fair value related to securities held-to-maturity as of June 30, 2025 and December 31, 2024 is presented in Table 3.1. Securities held-to-maturity, at amortized cost, had a $20.0 thousand allowance for credit losses as of June 30, 2025 and December 31, 2024.Table 3.1: Securities Held-to-Maturity(in thousands)Amortized CostGross UnrealizedFair ValueGains(Losses)June 30, 2025Obligations of states and political subdivisions$2,585 $— $(315)$2,270 Total held-to-maturity$2,585 $— $(315)$2,270 December 31, 2024Obligations of states and political subdivisions$2,720 $— $(367)$2,353 Total held-to-maturity$2,720 $— $(367)$2,353 For securities issued by states and political subdivisions, for purposes of evaluating whether to recognize credit loss expense, management considers: (i) issuer and/or guarantor credit ratings; (ii) historical probability of default and loss given default rates for given bond ratings and remaining maturity; (iii) whether issuers continue to make timely principal and interest payments under the contractual terms of the securities; (iv) internal credit review of the financial information; and (v) whether or not such securities have credit enhancements such as guarantees, contain a defeasance clause, or are pre-refunded by the