Five Star Bancorp (FSBC): Business Model Canvas [Dec-2025 Updated]

You're looking to see how Five Star Bancorp actually makes its money and stays so well-capitalized, right? After two decades analyzing bank structures, I can tell you their model hinges on that high-touch, relationship-driven banking for Northern California SMBs, which is clearly working given their Q3 2025 Net Interest Income hit $39.3 million. They're not just growing; they're growing smartly, evidenced by non-wholesale deposits jumping 11.09% in that same quarter while maintaining a rock-solid Common Equity Tier 1 ratio of 10.77%. Honestly, achieving an efficiency ratio of just 40.13% while expanding their team of Business Development Officers to 40 by Q2 2025 shows disciplined execution. Dive into the full Business Model Canvas below to see exactly how their key activities and resources align with their value proposition of local speed and expertise.

Five Star Bancorp (FSBC) - Canvas Business Model: Key Partnerships

You're looking at the external relationships Five Star Bancorp (FSBC) relies on to execute its business model, especially as it expands its footprint into key markets like Walnut Creek. These partnerships are crucial for advocacy, compliance, and sourcing new business.

Local Chambers of Commerce and community organizations for regional advocacy are central to Five Star Bancorp's community stewardship approach. The CEO, James E. Beckwith, was honored by the Sacramento Metropolitan Chamber of Commerce on November 20, 2025, recognizing two decades of community investment and regional advancement. This local engagement is mirrored in new markets; for instance, Five Star Bank is a direct Member, Walnut Creek Chamber of Commerce. The bank's expansion into Walnut Creek is supported by the Walnut Creek Downtown Association (WCD), which represents over 650+ members and views Five Star Bank's commitment to small businesses as aligning with its advocacy efforts.

Five Star Bancorp also partners with cultural and non-profit entities to amplify its community impact. The bank is proud to support local arts, including specific programs with the Diablo Regional Arts Association in the Walnut Creek area. Furthermore, Five Star Bank sponsors events like the Buffalo Zoo's Zoomagination and the Seneca Park Zoo's Summer Experiences and Conservation Awareness Days.

The relationship with Regulatory bodies (FDIC, Federal Reserve) is foundational for operational legitimacy. Data from the FDIC for Five Star Bank (FDIC Cert #659) is current as of September 30, 2025. Maintaining strong capital levels is a key partnership requirement, as evidenced by the Common Equity Tier 1 capital ratio being 11.00% as of March 31, 2025, which met all requirements to be considered "well-capitalized." The macro-economic environment, influenced by the Federal Reserve, saw the effective federal funds rate decrease to 4.09% as of September 30, 2025.

Here's a quick look at some key metrics related to these external dependencies as of late 2025:

For Venture-backed funds for equity investment income generation, the relationship is primarily seen through major institutional shareholders, which informs capital stability and market perception. For example, in the second quarter of 2025, institutional investor activity showed specific movements:

• BLACKROCK, INC. removed 91,543 shares, representing a -6.7% change in their portfolio.
• ADAGE CAPITAL PARTNERS GP, L.L.C. added 60,584 shares, representing a +26.0% change in their portfolio.

Regarding Professional service firms for client referrals and business development, Five Star Bancorp's structure includes affiliates that likely feed into this channel. The bank's community report mentions affiliates such as Courier Capital, HNP Capital, and SDN Insurance Agency, LLC. While specific referral fee income is not itemized, the bank's focus on concierge banking and direct banker access in new offices, like the 4,128-square-foot Walnut Creek branch, is designed to foster these high-touch referral networks.

Finance: draft 13-week cash view by Friday.

Five Star Bancorp (FSBC) - Canvas Business Model: Key Activities

You're looking at the core engine of Five Star Bancorp (FSBC) as of late 2025. The activities here are all about deep, local, and specialized relationship building, which is how a community bank like Five Star Bank competes.

Relationship-based commercial loan origination and underwriting

The focus remains squarely on originating loans through strong, personal connections. This is the high-touch approach they champion. You see this commitment in their geographic expansion efforts, designed to deepen those local ties.

For instance, the opening of the ninth full-service office in Walnut Creek, California, in September 2025, was a direct move to serve local business owners and entrepreneurs with personalized, concierge-like banking services. This location is meant to strengthen roots in the East Bay and support continued client growth in the region.

The bank's overall loan growth expectation reflects this origination strategy. The company projected a 10-12% loan growth for the remainder of 2025, which they planned to fund primarily through deposit growth.

Core deposit gathering, especially non-wholesale deposits

Gathering stable, core deposits is the lifeblood, and Five Star Bancorp has been actively growing its non-wholesale base. This is the less volatile, relationship-driven funding source they prefer over relying on brokered funds.

Here's a look at the recent deposit trends, showing the shift toward core funding:

The emphasis on non-wholesale funding is clear; as of March 31, 2025, these core accounts made up 81.53% of total deposits. Also, total deposits from the San Francisco Bay Area specifically reached $548.9 million as of September 30, 2025, showing success in that newer geography.

Strategic expansion of the Food, Agribusiness & Diversified Industries vertical

This vertical is a key differentiator, and Five Star Bancorp made a significant move to scale it. In May 2025, they announced the expansion of the Food, Agribusiness & Diversified Industries vertical to serve clients nationwide.

This activity involves specialized support for several sub-sectors:

• Production agriculture
• Wholesale distribution and retail
• Manufacturing
• Food processing
• Food distribution services

The vertical is led by Cliff Cooper, a veteran with over 35 years of expertise in the food and agribusiness sector. This strategic focus is expected to drive a portion of the bank's projected loan growth for the rest of 2025.

Managing capital and liquidity

Prudent management of capital and liquidity is a non-negotiable activity for any bank, especially one focused on organic growth. Five Star Bancorp consistently maintained a strong capital position throughout 2025.

The key metric here is the Common Equity Tier 1 (CET1) ratio, which shows the bank's core capital relative to its risk-weighted assets. You can see the stability in the table below:

The bank confirmed it continues to meet all requirements to be considered "well-capitalized" under regulatory guidelines. Also, the company reported having no short-term borrowings at September 30, 2025, or June 30, 2025, indicating strong liquidity management.

Winding down wholesale SBA loan production and sales in 2025

While the prompt mentions SBA loan production, the concrete action Five Star Bancorp announced for winding down a specific business line in 2025 was related to its Banking-as-a-Service (BaaS) program. The parent company stated it was quitting this line of business fully in 2025 to concentrate resources on its core community banking franchise.

This strategic shift allows Five Star Bancorp to:

• Focus on retail banking, commercial banking, and wealth management.
• Address evolving regulatory expectations in the BaaS space.
• Reallocate talent and technology investments.

This move signals a deliberate choice to streamline activities away from non-core, potentially complex areas and double down on relationship-based lending and deposit gathering.

Five Star Bancorp (FSBC) - Canvas Business Model: Key Resources

You're looking at the core assets Five Star Bancorp (FSBC) is using to execute its strategy right now, late in 2025. These aren't just line items; they're the engine room.

Well-capitalized Status, Meeting All Regulatory Guidelines

Five Star Bancorp maintains a strong capital position. The Bank continues to meet all requirements to be considered "well-capitalized" under applicable regulatory guidelines. For instance, as of September 30, 2025, the common equity Tier 1 capital ratio stood at 10.77%.

Here are the capital metrics from recent quarters:

Growing Team of Business Development Officers

The human capital, particularly the sales force, is clearly scaling to support organic growth. You saw the team expand significantly in the second quarter of 2025. The Company hired five new Business Development Officers, increasing the total from 35 at March 31, 2025, to 40 at June 30, 2025.

This focus on relationship bankers is central to their model. Honestly, that growth in personnel is a direct input to the deposit numbers we see next.

Physical Branch Network in Northern California

Five Star Bancorp has been deliberately expanding its physical footprint in Northern California to capture Bay Area business. The Bank had eight branches in Northern California as of Q2 2025. The network grew with the opening of the ninth full-service office in Walnut Creek, California, on September 29, 2025.

The new Walnut Creek branch spans 4,128-square-foot. This expansion is already showing results, with total deposits from the San Francisco Bay Area reaching $548.9 million as of September 30, 2025.

• New Walnut Creek office opened: September 29, 2025.
• Size of new Walnut Creek branch: 4,128 square feet.
• Total branches as of late 2025: Nine.
• Bay Area deposits as of September 30, 2025: $548.9 million.

Strong Core Deposit Base

The quality and growth of deposits are a key resource, showing the success of their relationship-based approach. Total deposits reached $4.1 billion as of September 30, 2025. The growth in core funding is what really stands out.

During the third quarter of 2025, non-wholesale deposits-the core base-increased by $359.0 million, which is an 11.09% jump over the quarter. When you annualize that Q3 growth, it's a massive 44.34%. This shift means non-wholesale deposit accounts made up 87.66% of total deposits by September 30, 2025.

Check out the deposit composition change:

Proprietary Technology Platform for High-Tech, High-Touch Service

Five Star Bancorp relies on its technology stack to deliver what management calls high-tech and high-touch concierge business banking services. The CEO noted that the technology stack, alongside operating efficiencies and conservative underwriting, contributes to their success.

Finance: draft the 13-week cash view by Friday.

Five Star Bancorp (FSBC) - Canvas Business Model: Value Propositions

You're looking at what makes Five Star Bancorp a distinct choice for businesses, especially those in specialized sectors. The value propositions here aren't just marketing fluff; they are backed by concrete operational focus and solid financial footing as of late 2025.

Concierge-like, relationship-driven business banking services

Five Star Bancorp emphasizes a customer experience where personal connection drives the service. They focus on building client trust, which they see as critical, especially within the agricultural community. This isn't just talk; one customer noted that after their banker moved to Five Star Bank, the bank stepped in to be flexible, agreeing to expand their credit line and work with them on financial covenants that made sense for their specific business. That smooth transition for operating accounts was described as refreshing in a difficult lending environment.

The commitment to this model is evident in their stated philosophy:

• No substitute for in-person conversations and connectivity.
• Services built on trust, partnership, and shared values.
• Customizing services to meet unique client needs and goals.

Regional and industry expertise, especially in Food and Agribusiness

Five Star Bancorp has made a strategic move to formalize and expand its specialized knowledge. In May 2025, they expanded their focus by launching the nationwide Food, Agribusiness & Diversified Industries vertical. This unit is led by Cliff Cooper, who brings over 35 years of banking expertise in this specific sector. This depth of knowledge means they understand the cyclical nature of food and agriculture and actively help clients navigate commodities and economic cycles.

The value proposition here is tailored support across the food supply chain:

This specialized focus is a key differentiator, moving beyond general commercial banking.

High-touch service combined with high-tech digital capabilities

The bank positions itself as blending the personal touch with modern banking tools. While the relationship aspect is paramount, they support it with necessary technology. You can expect standard digital offerings that help manage day-to-day banking efficiently.

Digital capabilities offered include:

• Online banking access.
• Mobile banking functionality.
• Remote deposit capture services.
• Direct deposit services.

This combination allows for efficiency in routine tasks while reserving high-touch interactions for complex needs.

Speed to serve and local decision-making authority

While the search results don't provide a specific time metric for loan approval speed, the emphasis on a community bank feel and local decision-making implies a value proposition centered on agility compared to larger, more centralized institutions. The ability to work directly with decision-makers, as evidenced by the client testimonial regarding credit line expansion, suggests faster, more flexible responses.

Stable, well-capitalized banking partner for businesses

For a business partner, stability is non-negotiable. Five Star Bancorp demonstrates a strong capital position as of the third quarter of 2025. They maintain a disciplined approach to expense management, which contributes to operational efficiency. Here's the quick math on their capital strength and efficiency as of September 30, 2025:

Furthermore, they had zero short-term borrowings as of September 30, 2025, signaling reliance on core funding sources. Their net interest margin stood at 3.56% for the third quarter of 2025. What this estimate hides is the specific composition of their loan portfolio, but the low nonperforming loan ratio suggests asset quality is well-managed. Finance: draft 13-week cash view by Friday.

Five Star Bancorp (FSBC) - Canvas Business Model: Customer Relationships

You're focused on building a bank where clients feel they have a direct line to the people making decisions. This is the core of the Five Star Bancorp approach, emphasizing dedicated, personalized relationship management, which you can think of as a concierge model for commercial and high-net-worth clients.

The commitment to this high-touch service is evident in staffing decisions. For instance, in the second quarter of 2025, Five Star Bancorp added five new Business Development Officers, growing that team from 35 at March 31, 2025, to 40 by June 30, 2025. This hiring pace supports the strategy of providing direct access to senior bank management and decision-makers, a key differentiator when competing against larger institutions.

The focus is clearly long-term, which you see reflected in the stickiness of their core client base. The average age of large deposit relationships shows this persistence. As of March 31, 2025, the average age of deposit relationships greater than $5 million was approximately 8.80 years. By September 30, 2025, this figure was approximately 7.98 years for relationships over $5 million, against total deposits of $4.1 billion. This suggests a deeply embedded, long-standing client base that values the continuity of service.

The emphasis on relationship depth is also supported by the composition of their funding base, which is overwhelmingly non-wholesale, meaning it is less prone to flighty brokered sources.

Community stewardship and active engagement are woven into the fabric of the customer relationship strategy. Five Star Bancorp believes in giving its time, talent, and dollars to support professional, educational, and nonprofit organizations across the communities it serves. This involves active engagement with local leaders and constituents to support economic development in all neighborhoods.

The bank operationalizes this commitment through several channels:

• Providing essential funding through a community grant program for local non-profits.
• Sponsoring arts, cultural, and educational events that enrich neighborhoods.
• Encouraging associates to dedicate time and talents through volunteer efforts, including an annual Work of Heart week.
• Focusing on building real and lasting connections with individuals, families, and businesses.

Furthermore, the decision to fully exit the Banking-as-a-Service program in 2025 allows the bank to concentrate resources on its core community banking franchise, which includes commercial banking and wealth management, reinforcing the commitment to its primary, relationship-driven customer segments.

Five Star Bancorp (FSBC) - Canvas Business Model: Channels

You're looking at how Five Star Bancorp gets its value proposition to its customer segments. It's a mix of the traditional, high-touch approach and modern digital access, which makes sense for a community-focused business bank.

Full-service branch network in Northern California (e.g., Sacramento, Bay Area)

Five Star Bank operates through a physical footprint concentrated in Northern California. As of late 2025, the wholly-owned subsidiary, Five Star Bank, has a total of 9 branches in Northern California. This network supports the bank's relationship-based model across key markets like Sacramento and the expanding Bay Area.

New full-service office in Walnut Creek, opened in Q3 2025

The physical expansion continued with the opening of a new full-service office in Walnut Creek. This location officially opened on September 29, 2025. The branch is approximately 4,128 square feet and is situated at The Plaza at Walnut Creek, 1333 North California Boulevard, Suite 510. This move followed the opening of the San Francisco office in September 2024.

The physical presence is supported by the bank's overall performance, which saw a net income of $16.3 million for the three months ended September 30, 2025. The return on average assets (ROAA) for that same quarter was 1.44%.

Business Development Officers (BDOs) for direct sales and relationship building

Direct sales and relationship building are channeled through dedicated personnel. The number of Business Development Officers remained steady at 40 from June 30, 2025, to September 30, 2025. These officers are key to driving organic growth, especially in the Bay Area, where the team grew from 34 to 36 employees, generating deposit balances of $548.9 million as of September 30, 2025.

Here's a snapshot of the relationship-focused team and deposit base:

Digital banking platforms for commercial and retail clients

While physical offices are important, digital channels handle routine transactions. The bank's deposit mix shows a reliance on core, non-wholesale funding sources. Non-wholesale deposit accounts were 83.14% of total deposits on June 30, 2025. The bank's digital platforms support these clients, even as the industry sees high digital adoption; for instance, 77 percent of Americans prefer managing accounts via mobile app or computer.

Investor Relations website for shareholder communication

Shareholder communication is channeled through the Investor Relations website. This platform hosts key financial updates, such as the announcement for the Third Quarter 2025 Results Webcast, which was scheduled for October 28, 2025. The site provides access to filings like the Form 10-Q for the quarter ended September 30, 2025.

The communication channels also include news releases, such as the one announcing the CEO was named Sacramentan of the Year on November 20, 2025.

The primary digital access point for investors is listed as https://investors.fivestarbank.com/news-events/events.

The bank's structure for these channels includes:

• 9 physical offices in California.
• 2 non-depository offices.
• Webcasts archived for 90 days.
• Third Quarter Cash Dividend declared at $0.20 per share.

Five Star Bancorp (FSBC) - Canvas Business Model: Customer Segments

You're looking at the core client base for Five Star Bancorp as of late 2025, driven by their organic growth strategy and expansion into the San Francisco Bay Area. The focus is clearly on relationship banking, evidenced by the high percentage of core deposits.

Small to medium-sized businesses (SMBs) in Northern California remain central, with Five Star Bank actively growing its physical presence to serve this market. The expansion into the San Francisco Bay Area is a key indicator of this segment focus. As of September 30, 2025, total deposits from the San Francisco Bay Area reached $548.9 million. This followed earlier growth, as the bank reported 31 San Francisco Bay Area employees as of March 31, 2025, when SF Bay Area operations held $379.8 million in total deposits.

For the more established or larger clients, Five Star Bancorp caters to those with significant banking needs. You can see this in the concentration of large relationships:

• Deposit relationships exceeding $5 million represented 60.14% of total deposits as of September 30, 2025.
• Total deposits for Five Star Bancorp stood at $4.1 billion at the end of the third quarter of 2025.
• The bank emphasizes core, relationship-based funding, with non-wholesale deposits making up 87.66% of total deposits on September 30, 2025.

The following table breaks down key deposit metrics that reflect the size and nature of the customer relationships Five Star Bancorp cultivates:

Regarding Entrepreneurs and professional service firms (e.g., financial, engineering, healthcare), the loan portfolio composition offers a clue. Net charge-offs for the first six months of 2025 were primarily attributable to commercial and industrial loans, suggesting this is a core lending focus within their business segment. The bank continues to grow its loan book, with total loans held for investment increasing by $129.2 million, or 3.44%, during the third quarter of 2025.

Data specifically quantifying the customer segments for Non-profit organizations and local community entities and Clients in the Food, Agribusiness & Diversified Industries vertical nationwide was not explicitly detailed in the latest public filings reviewed. However, the overall strategy points to a community bank model where local entities are served through the strong, growing non-wholesale deposit base.

The segment of High-net-worth individuals requiring personalized banking is strongly supported by the high percentage of large deposit relationships, as noted above. Furthermore, the bank's efficiency ratio improved to 40.13% in Q3 2025, suggesting disciplined operations that can support the personalized service required by this segment.

Finance: draft 13-week cash view by Friday.

Five Star Bancorp (FSBC) - Canvas Business Model: Cost Structure

You're looking at the core expenses driving Five Star Bancorp's operations as of late 2025. The cost structure reflects growth in both the balance sheet and the physical footprint, managed through tight operational control.

Interest Expense on Deposits saw an increase, directly tied to the growth in the funding base. For the three months ended September 30, 2025, total deposits increased by $208.8 million, or 5.36%, compared to the linked quarter, which naturally drove up the associated interest expense.

Personnel costs are a key component. Salaries and Employee Benefits increased by $0.9 million sequentially for the three months ended September 30, 2025, compared to the three months ended June 30, 2025. This rise is explicitly attributed to increased headcount supporting the bank's organic growth strategy.

The expansion effort is visible in Occupancy and Equipment Expenses. Five Star Bancorp opened its ninth full-service office in Walnut Creek, California, during the third quarter of 2025, catering to demand in the San Francisco Bay Area. This physical network expansion contributes to these fixed and semi-fixed costs.

Credit quality management is reflected in the Provision for Credit Losses. For the three months ended September 30, 2025, the provision was set at $2.5 million, the same amount recorded for the preceding quarter ended June 30, 2025.

The bank maintains a very lean operational structure. This is clearly demonstrated by the low operating cost base, reflected by an efficiency ratio of 40.13% for the three months ended September 30, 2025. That's a sequential improvement from 41.03% in the second quarter of 2025.

Here are the key cost-related metrics for the third quarter of 2025:

The cost management focus is evident in the efficiency ratio, but you have to watch the underlying drivers:

• Deposit growth driving higher Interest Expense.
• Headcount additions increasing Salaries and Employee Benefits by $0.9 million sequentially.
• Expansion costs associated with the ninth branch opening.
• Provision for Credit Losses holding steady at $2.5 million.

The cost of funds rate was 2.51% during the third quarter, a decrease of two basis points from the prior quarter.

Finance: draft 13-week cash view by Friday.

Five Star Bancorp (FSBC) - Canvas Business Model: Revenue Streams

You're looking at the core ways Five Star Bancorp brings in money as of late 2025. It's a classic bank model, but their recent growth story is what stands out.

The biggest piece, by far, is Net Interest Income (NII), which comes from the spread between what they earn on assets like loans and securities and what they pay on liabilities like deposits. For the three months ended September 30, 2025, Five Star Bancorp reported NII of $39.35 million. This was an increase of $2.8 million compared to the three months ended June 30, 2025.

That NII growth is directly tied to the engine of the business: lending. Interest Income saw a boost primarily due to loan growth and an improved average yield on loans. Loans held for investment grew by 12.33% year-over-year as of September 30, 2025, reaching $3,887,259 thousand (or $3.89 billion). To keep things efficient, the net interest margin for Q3 2025 was 3.56%.

Here's a quick look at how the core revenue components stacked up for the third quarter of 2025:

Beyond the core lending business, Five Star Bancorp generates Non-interest income. For the three months ended September 30, 2025, this stream increased by $0.2 million compared to the previous quarter. This uptick was mainly driven by an increase in swap referral fees. Service charges are another component of this revenue bucket, though the specific dollar amount for Q3 2025 wasn't explicitly broken out separately from the total non-interest income change.

The revenue streams also include shareholder distributions, which is a direct return of capital to the owners. Five Star Bancorp's Board of Directors declared a cash dividend of $0.20 per share during the three months ended September 30, 2025, which was expected to be paid on November 10, 2025. This $0.20 per share amount appears to be the regular quarterly declaration.

You asked about earnings from investments in venture-backed funds. Honestly, the latest financial reports for Five Star Bancorp through Q3 2025 highlight NII, loan growth, and swap referral fees, but they don't detail specific earnings from venture-backed funds as a distinct line item in the provided summaries.

Here are the key drivers for the non-interest income segment:

• Swap referral fees saw an increase in Q3 2025.
• Service charges contribute to non-interest income.
• Specific earnings from venture-backed funds are not explicitly detailed in the Q3 2025 summary data.

Finance: draft 13-week cash view by Friday.