Company: FSBC
Filing Date: 2025-08-07
Form Type: 10-Q
Source: 0001628280-25-038796
Chunk: 178

Company: FIVE STAR BANCORP
Filing Date: 2025-08-07
Form: 10-Q
Item: Part I, Item 8
Chunk 178
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payment RightMaturity DateSubordinated notesAugust 2022$75,000August 17, 2027September 1, 2032Fixed at 6.00% through September 1, 2027, then three-month Term SOFR plus 329.0 basis points (7.50% as of June 30, 2025) through maturity

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Shareholders’ Equity

Shareholders’ equity totaled $416.7 million at June 30, 2025 and $396.6 million at December 31, 2024. The increase was primarily a result of net income recognized of $27.6 million and a $0.4 million increase in accumulated other comprehensive income, partially offset by $8.5 million in cash dividends paid during the six months ended June 30, 2025.

Liquidity and Capital Resources

Liquidity Management

We manage liquidity based upon factors that include the level of diversification of our funding sources, the composition of our deposit types, the availability of unused funding sources, our off-balance sheet obligations, the amount of cash and liquid securities we hold, and the availability of assets to be readily converted into cash without undue loss. As the primary federal regulator of the Bank, the FDIC evaluates our liquidity on a stand-alone basis pursuant to applicable guidance and policies.

Liquidity refers to our capacity to meet our cash obligations at a reasonable cost. Our cash obligations require us to have cash flow that is adequate to fund loan growth and maintain on-balance sheet liquidity while meeting present and future obligations of deposit withdrawals, borrowing maturities, and other contractual cash obligations. In managing our cash flows, management regularly confronts situations that can give rise to increased liquidity risk. These include funding mismatches, market constraints in accessing sources of funds, and the ability to convert assets into cash. Changes in economic conditions or exposure to borrower credit quality, capital markets, and operational, legal, or reputational risks could also affect the Bank’s liquidity risk profile and are considered in the assessment of liquidity management.

The Company is a corporation separate and apart from the Bank and, therefore, must provide for its own liquidity, including liquidity required to meet its debt service requirements on its subordinated notes. The Company’s main source of cash flow is dividends declared and paid to it by the Bank. There are statutory and regulatory limitations that affect the ability of the Bank to pay dividends to the Company, including various legal and regulatory provisions that limit the amount of dividends the