Company: FSBC
Filing Date: 2025-05-08
Form Type: 10-Q
Source: 0001275168-25-000106
Chunk: 48

Company: FIVE STAR BANCORP
Filing Date: 2025-05-08
Form: 10-Q
Item: Part I, Item 1
Chunk 48
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-interest Expense

Non-interest expense includes salaries and employee benefits, occupancy and equipment, data processing and software, FDIC insurance, professional services, advertising and promotional, loan-related expenses, and other operating expenses. In evaluating our level of non-interest expense, we closely monitor the Company’s efficiency ratio, which is calculated as non-interest expense divided by the sum of net interest income and non-interest income. We constantly seek to identify ways to streamline our business and operate more efficiently in order to reduce our non-interest expense over time as a percentage of our revenue, while continuing to achieve growth in total loans and assets.

Over the past several years, we have invested significant resources in personnel, technology, and infrastructure. As we execute initiatives based on growth, we expect non-interest expense to grow. Non-interest expense has increased throughout the periods presented below; however, we expect our efficiency ratio will improve going forward due, in part, to our past investment in infrastructure.

Table 6 details the components of non-interest expense for the periods indicated.

Table 6: Non-interest ExpenseFor the three months ended(dollars in thousands)March 31, 2025March 31, 2024$ Change% ChangeSalaries and employee benefits$9,134 $7,577 $1,557 20.55 %Occupancy and equipment637 626 11 1.76 %Data processing and software1,457 1,157 300 25.93 %FDIC insurance455 400 55 13.75 %Professional services913 707 206 29.14 %Advertising and promotional522 460 62 13.48 %Loan-related expenses319 297 22 7.41 %Other operating expenses1,608 1,492 116 7.77 %Total non-interest expense$15,045 $12,716 $2,329 18.32 %

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Salaries and employee benefits. The increase related primarily to: (i) a $1.6 million increase in salaries, benefits, and bonus expense, mainly related to a 13.19% increase in headcount between March 31, 2024 and March 31, 2025; and (ii) a $0.1 million increase in commissions paid. This increase was partially offset by a $0.2 million increase in loan origination costs due to a greater number of loan originations, net of purchased consumer loans, period-over-period