Company: FSBC
Filing Date: 2025-08-07
Form Type: 10-Q
Source: 0001628280-25-038796
Chunk: 117

Company: FIVE STAR BANCORP
Filing Date: 2025-08-07
Form: 10-Q
Item: Part I, Item 8
Chunk 117
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. government and have strong credit profiles. The Company therefore expects to receive all contractual interest payments on time and believes the risk of credit losses on these securities is remote.

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The Company’s investment in obligations of states and political subdivisions is deemed credit worthy after management’s comprehensive analysis of the issuers’ latest financial information, credit ratings by major credit agencies, and/or credit enhancements.Non-Marketable SecuritiesFHLB capital stock: As a member of the FHLB, the Company is required to maintain a minimum investment in FHLB capital stock determined by the board of directors of the FHLB. The minimum investment requirements can increase in the event the Company increases its total asset size or borrowings with the FHLB. Shares cannot be purchased or sold except between the FHLB and its members at the $100 per share par value. The Company held $15.0 million of FHLB stock at both June 30, 2025 and December 31, 2024. The carrying amounts of these investments are reasonable estimates of fair value because the securities are restricted to member banks and do not have a readily determinable market value. Based on management’s analysis of the FHLB’s financial condition and certain qualitative factors, management determined that the FHLB stock was not impaired at June 30, 2025 or December 31, 2024.Equity investments: The Company is a limited partner in certain venture-backed capital funds. The Company held $14.5 million and $10.8 million of equity investments at June 30, 2025 and December 31, 2024, respectively. The carrying amounts of these investments are reasonable estimates of fair value because the investments reflect the Company's share of earnings and losses of each fund.

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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)June 30, 2025December 31, 2024Real estate:Commercial$3,066,627 $2,857,173 Commercial land and development1,422 3,849 Commercial construction112,399 111,318 Res