Company: FSBC
Filing Date: 2025-08-07
Form Type: 10-Q
Source: 0001628280-25-038796
Chunk: 249

Company: FIVE STAR BANCORP
Filing Date: 2025-08-07
Form: 10-Q
Item: Part I, Item 2
Chunk 249
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 We have historically managed our sensitivity position within our established guidelines. With the intent of stabilizing or increasing net interest income, management typically deploys the Company’s excess liquidity and seeks to migrate certain earning assets into higher-yielding categories (from investment securities into loans, for example). However, in situations where deposit balances contract, management relies upon various borrowing facilities and/or the use of brokered deposits. The Company monitors the impact of interest rate risk on EVE by reviewing and managing assets and liabilities with varying interest rate risks, such as cash and time deposits. Assets and liabilities are subject to fluctuations at each measurement date based on the composition of the balance sheet at each measurement date. EVE results are compared to previous periods and established policies on a quarterly basis. 

As of June 30, 2025, the overnight federal funds rate (the rate used in the interest rate shock scenarios listed below) was 4.33%, remaining constant from December 31, 2024. The scenarios presented assume that interest rates change instantaneously (“shock”) and that there are no significant changes in the structure of the Company’s balance sheet over the twelve months being measured.

Table 30 summarizes the estimated effect on net interest income and EVE from changing interest rates as measured against a flat rate (no interest rate change) instantaneous parallel shock scenario over a twelve-month period utilizing an interest sensitivity (GAP) analysis based on the Company’s specific mix of interest-earning assets and interest-bearing liabilities as of June 30, 2025 and December 31, 2024. 

Table 30: Estimated Effect on Net Interest Income and EVE from Changing Interest RatesJune 30, 2025December 31, 2024Change in Interest RatesEstimated Change in NII(as % of NII)Estimated Change in EVE(as % of EVE)Estimated Change in NII(as % of NII)Estimated Change in EVE(as % of EVE)(in basis points)+300 (shock)(4.86)%(10.34)%(6.32)%(12.51)%+200 (shock)(3.34)%(7.22)%(4.09)%(8.70)%+100 (shock)(1.76)%(3.53)%(2.15)%(4.29)%+   0 (flat)— %— %— %— %-100 (shock)1.92 %3.02 %2.14 %3.93 %-200 (sh