Company: FSBC
Filing Date: 2025-08-07
Form Type: 10-Q
Source: 0001628280-25-038796
Chunk: 81

Company: FIVE STAR BANCORP
Filing Date: 2025-08-07
Form: 10-Q
Item: Part I, Item 1
Chunk 81
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 environment.

During the six months ended June 30, 2025, we had cash outflows of $226.7 million in loan originations and advances, net of principal collected, and $1.4 million in loans originated for sale.

Additionally, in the ordinary course of business, we enter into commitments to extend credit, such as commitments to fund new loans and undisbursed construction funds. While these commitments represent contractual cash requirements, a portion of these commitments to extend credit may expire without being drawn upon. Therefore, the total commitment amounts do not necessarily represent future cash requirements. At June 30, 2025, off-balance sheet commitments totaled $455.4 million. We expect to fund these commitments to the extent utilized primarily through the repayment of existing loans, deposit growth, and liquid assets.

Deposits

Deposits are our primary source of funding for our business operations, and the cost of deposits has a significant impact on our net interest income and net interest margin.

Our deposits are primarily made up of money market, interest-bearing transaction, time, and non-interest-bearing demand deposits. Aside from commercial and business clients, a significant portion of our deposits are from municipalities and non-profit organizations. Cash flows from deposits are impacted by the timing and amount of customer deposits, changes in market rates, and collateral availability.

During the six months ended June 30, 2025, we had cash inflows of $336.6 million related to an increase in deposits.

During the twelve months following June 30, 2025, approximately $768.0 million of time deposits are expected to mature, which includes $366.4 million of brokered deposits. These deposits may or may not renew due to general competition. We expect the outflow will not be significant and can be replenished through our organic growth in deposits. We believe our emphasis on local deposits and our San Francisco Bay Area expansion provide a stable funding base.

At June 30, 2025, cash and cash equivalents represented 12.42% of total deposits.

58

Investment Securities

Our investment securities totaled $97.6 million at June 30, 2025. Mortgage-backed securities and obligations of states and political subdivisions comprised 50.44% and 37.50% of our investment portfolio, respectively. Cash proceeds from mortgage-backed securities result from payments of principal and interest by borrowers. Cash proceeds from obligations of states and political subdivisions occur when these securities are called or mature. Assuming the current prepayment speed and interest rate environment