Oct 27, 2026 earnings call — Capital raise supports loan and deposit growth
Completed underwritten public offering providing approximately $130 million net proceeds and boosting common equity Tier 1 capital ratio to 12.52%.
Revenue $0.1B (est $0.1B) · EPS $0.92 (est $0.85)
Key quotes
"Loans held for investment grew by $184.5 million or approximately 16% on an annual basis, reaching $4.7 billion at September 30, 2026."
"During the quarter, Five Star Bancorp completed an underwritten public offering, providing approximately $130 million of net proceeds after deducting underwriting discounts, commissions and offering expenses."
"Non-wholesale deposit accounts constituted approximately 96% of total deposits at quarter end."
Analyst Q&A 4
margin in September and going forward
Q (Wood Lay · KBW): He asked how NIM trended in September after the rate hike and how to think about margins if rates rise. He also asked where new loan production yields were coming in and whether competition is compressing yields.
A: Management said margin rose slightly in September, about 6 or 7 basis points, and they ended the quarter on a strong note. They said they are comfortable with margins around 3.65% to 3.75% but expect funding costs to rise more slowly than assets reprice; many loans are repricing which helps match funding cost increases. Heather reported Q3 all-in production was 6.53% and BHG purchases came in at 6.15%.
"But the bottom line is -- and I still believe this to be true, is the growth in net interest income is really driven by balance sheet growth, Woody." — James Beckwith (CEO)
loan demand, payoffs, hiring, deposit funding
Q (David Feaster · Raymond James): He asked whether loan demand is weakening with rising rates and whether payoffs/paydowns are increasing. He also asked about hiring appetite and where deposit funding growth will come from.
A: Management said the loan pipeline is very strong though not at its peak, with some slowdown in acquisition real estate financing. They guided 10% to 12% loan growth in Q4 and said probably 10% to 12% for 2027. They said they are always looking for talent, see opportunity in Southern California, and expect to pay up for liquidity while being comfortable bringing on deposits with a "2 handle, blended, maybe high 2s."
"So we kind of like where we're positioned right now from a loan growth perspective, and we're guiding 10% to 12% in Q4 and probably 10% to 12% for 2027." — James Beckwith (CEO)
Southern California expansion and expenses
Q (Andrew Terrell · Stephens): He asked for early observations on the Southern California expansion, including credit types and growth outlook. He also asked whether the quarter's expenses are a clean run rate and thoughts for 2027 expense growth.
A: Management said Calabasas is generating a lot of C&I opportunities and owner-occupied CRE, while Newport Beach shows construction opportunities and C&I; they are aiming to reach $100 million in deposits in both markets. On expenses, Heather said the current level is a good run rate but Q4 has a few unique items, so add about $200,000 for Q4 2026; they target 1.45% to 1.50% of average assets for expenses and they came in at 1.46% this quarter.
"We're trying to reach a critical mass in both of those markets, trying to get to $100 million in deposits in both Newport and in Calabasas." — James Beckwith (CEO)
loan repricing, production yields, deposit cost
Q (Gary Tenner · D.A. Davidson): He asked how much loan yields will pick up from the loans repricing in Q4, asked for production yield excluding purchase loans, and asked the spot deposit cost on September 30.
A: Management said on a static basis they expect continued monthly creep in yields by a couple of basis points and noted manufactured home community loans booked in 2021 will reprice from low 4s to about 6.75% to 7.25%. Heather added there are about $135 million of 5-year loans repricing this quarter at a weighted average of 4.27% and about $694 million repricing next year at a weighted average of 5%. For production, the all-in weighted average was 6.53% with BHG purchases at 6.15% and true production likely about 6.60% to 6.70% (top MHCs at 6.83%); total deposit cost on September 30 was 2.17%.
"If you just look at the balance sheet on a static basis, we should see some continued creep on a monthly basis by a couple of basis points, I would think." — James Beckwith (CEO)