Five Star Bancorp (NASDAQ: FSBC) has closed its underwritten public offering of common stock, raising approximately $130.6 million in net proceeds after deducting underwriting discounts and commissions. The final figure reflects the full exercise by underwriters of their option to purchase an additional 408,750 shares, bringing the total shares sold to 3,133,750 at a price of $44.00 per share. This capital injection supports the Rancho Cordova-based holding company’s expansion plans for its wholly owned subsidiary, Five Star Bank, including branch growth and working capital needs.

The initial closing occurred on July 24, 2026, involving 2,725,000 shares. The subsequent closing on July 27, 2026, completed the sale of the optional shares. Keefe, Bruyette & Woods, A Stifel Company, served as the sole bookrunner, while Stephens Inc., D.A. Davidson & Co., Raymond James & Associates, Inc., and Brean Capital acted as co-managers. The offering was conducted pursuant to a registration statement on Form S-3 (File No. 333-263089), which the Securities and Exchange Commission declared effective on February 9, 2026.

Offering Structure and Proceeds

The full exercise of the over-allotment option increased the total capital raised significantly above the initial estimate. The company intends to use the net proceeds for general corporate purposes, specifically targeting investments in Five Star Bank to pursue growth opportunities and to bolster working capital. Five Star Bank currently operates ten branches in California, having opened a new location in Lodi in July 2026.

Strategic Implications

The successful completion of the offering provides Five Star Bancorp with substantial liquidity to fund its strategic initiatives without diluting existing shareholders beyond the anticipated range. The decision by underwriters to fully exercise their option signals strong market demand for the company’s equity at the $44.00 price point. This capital will be critical as Five Star Bank continues to expand its physical footprint in California, a competitive banking market where branch presence remains a key driver of customer acquisition and retention. The proceeds will also enhance the bank’s balance sheet, supporting lending activities and operational resilience.

Five Star reported net income of $19.4 million for the three months ended June 30, 2026, compared to $18.6 million for the three months ended March 31, 2026, and $14.5 million for the three months ended June 30, 2025. Earnings per share increased to $0.91, beating the analyst consensus estimate of $0.86 by 5.81%. This represents a 33.82% increase over earnings of $0.68 per share from the same period last year. The company reported quarterly sales of $47.955 million, beating the analyst consensus estimate of $47.300 million by 1.39%, a 25.13% increase over sales of $38.325 million in the same period last year.

James E. Beckwith, President and Chief Executive Officer, attributed the performance to demand for the company's services, noting that total loans held for investment increased by $306.3 million, or 7%, and total deposits increased by $330.0 million, or 7%. The company's Board of Directors declared a cash dividend of $0.25 per share during the quarter.

Financial Performance

Net interest income increased by $2.6 million during the three months ended June 30, 2026, compared to the prior quarter, primarily due to an increase in interest income driven by loan growth. The provision for credit losses decreased by $0.4 million, reflecting lower loss estimates driven by strong loan growth concentrated in pools with relatively lower loss rates.

Non-interest income increased by $0.2 million, primarily due to an overall improvement in earnings related to investments in venture-backed funds. Non-interest expense increased by $2.2 million, driven by higher advertising, promotional, data processing, and software expenses tied to continued organizational growth.

Balance Sheet Highlights

Total assets were $5.38 billion as of June 30, 2026, compared to $5.03 billion at March 31, 2026. Total deposits were $4.80 billion, an increase of $330.0 million, or 7.38%, from the prior quarter. The ratio of nonperforming loans to loans held for investment increased to 0.30% at June 30, 2026, from 0.07% at March 31, 2026, due to one Community Reinvestment Act loan placed on non-accrual status.

The company's common equity Tier 1 capital ratio was 9.98% as of June 30, 2026, and it continues to meet all requirements to be considered "well-capitalized" under applicable regulatory guidelines.