Company: FSBC
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0001628280-25-050090
Chunk: 112

Company: FIVE STAR BANCORP
Filing Date: 2025-11-06
Form: 10-Q
Item: Part I, Item 8
Chunk 112
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 resulting in a Level 2 classification.Subordinated 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.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 September 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 September 30, 2025 and December 31, 2024.Table 3.1: Securities Held-to-Maturity(in thousands)Amortized CostGross UnrealizedFair ValueGains(Losses)September 30, 2025Obligations of states and political subdivisions$2,190 $— $(194)$1,996 Total held-to-maturity$2,190 $— $(194)$1,996 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