Five Star Bancorp's Capital Efficiency in the Banking Sector

• Five Star Bancorp (NASDAQ:FSBC) has a Return on Invested Capital (ROIC) of 10.71% and a Weighted Average Cost of Capital (WACC) of 16.35%, resulting in a ROIC to WACC ratio of 0.65.
• Guaranty Bancshares (NASDAQ:GNTY) showcases superior capital efficiency with a ROIC of 49.26% and a WACC of 15.82%, leading to a ROIC to WACC ratio of 3.11.

Five Star Bancorp (NASDAQ:FSBC) is a financial institution that provides a range of banking services. It operates primarily in the United States, offering products like loans, deposits, and other financial services. In the competitive banking sector, FSBC's performance is often compared with peers like First Northwest Bancorp, HomeTrust Bancshares, Guaranty Bancshares, and others.

In evaluating FSBC's financial efficiency, its Return on Invested Capital (ROIC) is 10.71%, while its Weighted Average Cost of Capital (WACC) is 16.35%. This results in a ROIC to WACC ratio of 0.65, indicating that FSBC's returns are not sufficient to cover its cost of capital. This is a critical metric for investors as it suggests that FSBC is not utilizing its capital as effectively as it could.

Comparatively, Guaranty Bancshares (NASDAQ:GNTY) demonstrates superior capital efficiency with a ROIC of 49.26% and a WACC of 15.82%, resulting in a ROIC to WACC ratio of 3.11. This high ratio indicates that GNTY is generating returns well above its cost of capital, making it a standout performer among its peers.

Overall, while FSBC has room for improvement in generating returns that exceed its cost of capital, Guaranty Bancshares sets a benchmark for capital efficiency in the sector. Investors may look to GNTY as a model for effective capital utilization.