Michael Rizzo
About Michael Rizzo
Executive Vice President and Chief Banking Officer of Five Star Bancorp (Five Star Bank) since January 2025; previously Senior Vice President and Chief Banking Officer from January 2017 to January 2025. He joined the Bank in 2005, helped establish business banking, developed commercial real estate lending, and opened the de novo Rancho Cordova office in June 2006 . Education: B.S. in Business Administration (Finance) from California State University, Sacramento; graduate of Pacific Coast Banking School (University of Washington) . Age: 58 as of the 2024 proxy’s executive officer roster . Company performance context during recent tenure: 2024 net income $45.7M (vs. $47.7M in 2023), ROAA 1.23%, ROAE 12.72% ; Q1’25 net income $13.1M, ROAA 1.30%, ROAE 13.28% as the company continued Bay Area expansion and deposit growth .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Five Star Bank | SVP & Business Development Officer | 2005–2017 | Helped establish business banking practice; developed CRE loans; opened de novo Rancho Cordova office (June 2006) . |
| Five Star Bank | SVP & Chief Banking Officer | Jan 2017–Jan 2025 | Led Business Development Officers and Treasury Solutions; oversaw SBA division . |
| Five Star Bank | EVP & Chief Banking Officer | Jan 2025–present | Expanded leadership scope; continues to manage business development and treasury teams . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| American River Parkway Foundation | Director; Past Board President | Current | Community leadership and networking in Greater Sacramento . |
Fixed Compensation
| Metric (USD) | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|
| Base Salary | $256,495 | $300,000 | $311,969 | $349,440 |
| Stock Awards (Grant-date FV) | $146,966 | $14,706 | $14,716 | $131,820 |
| Non-Equity Incentive (Cash Bonus) | $72,222 | $90,411 | $127,427 | $68,721 |
| All Other Compensation | $29,056 | $23,396 | $21,715 | $20,410 |
| Total Compensation | $504,739 | $428,513 | $475,827 | $570,391 |
| Bonus Target Design | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|
| Target (% of salary); Max | 25% target; 37.5% max | 37.5% target; 50% max | 37.5% target; 50% max | 75% target; 100% max |
Perquisites detail (illustrative): auto expense $6,000 (2024 and 2023); 401(k) match $13,800 (2024), $11,439 (2023); small cell phone reimbursement; limited club dues .
Performance Compensation
| Award/Plan | Metric | Target/Thresholds | Payout Formula | Vesting |
|---|---|---|---|---|
| Annual Bonus Structure | Individual and corporate goals set by Compensation Committee; portion paid in stock | No fixed written plan; targets set annually | Cash plus stock awards; subject to clawback | Stock awards post-IPO generally vest ratably over three or five years; dividends paid on unvested stock . |
| 2025 Long-Term Incentive – PSUs | Relative three-year average ROAA vs. peer banks (S&P Global BMI – Western Region) | 60th percentile=50%, 70th=100%, 80th+=150% of target | $100,000 grant value (shares set at grant price) | Cliff vest on 3rd anniversary if employed and performance achieved . |
| 2025 Long-Term Incentive – RSUs | Service-based | N/A | $100,000 grant value (shares set at grant price) | Vest in equal annual installments over 5 years . |
| Equity Incentive Plan (2021 Plan) | Enables RSUs/RSAs/Options/Performance Awards | No options granted in 2024 | Awards subject to clawback | Standard terms; acceleration possible if awards not assumed in a change in control, subject to Committee determination . |
Outstanding unvested equity at 12/31/2024:
- RSU grants: 2,800 (5/7/2021; five-year equal installments starting one year post-grant), 172 (2/2/2023; one-third vested at grant, remainder vests over two years), 6,000 (2/7/2024; equal installments over five years starting one year post-grant). Market values at $30.09/share: $84,252; $5,175; $180,540 respectively .
- Aggregate unvested shares and value at 12/31/2024: 8,972 shares; $269,967 .
Vesting cadence (implications for supply/insider selling pressure):
- 5/7/2021 grant: 2,800 shares vest in five equal annual tranches beginning 5/7/2022 (560 shares/year) .
- 2/7/2024 grant: 6,000 shares vest in five equal annual tranches beginning 2/7/2025 (1,200 shares/year) .
- 2/2/2023 grant: vested one-third at grant; remaining vests over two annual installments; 172 unvested remained at 12/31/2024 .
Equity Ownership & Alignment
| As of Date | Shares Beneficially Owned | Ownership % | Notes |
|---|---|---|---|
| March 22, 2024 | 30,381 | <1% | Based on 17,353,369 shares outstanding . |
| March 21, 2025 | 30,381 | <1% | Based on 21,329,235 shares outstanding . |
- Pledging/hedging: Executives are prohibited from hedging; pledging or margin accounts are prohibited absent board-approved exception .
- Rule 10b5-1 plans are permitted under policy; trades may also occur outside plans subject to insider trading policy .
- Equity Plan shares reserved: up to 1,700,000 shares; no evergreen .
Employment Terms
| Term | Details |
|---|---|
| Employment Agreement | No written employment arrangement for Rizzo as of 12/31/2024 . |
| Change-in-Control (CIC) Agreement (effective Nov 4, 2025) | If, within one year after a Qualifying CIC, he is terminated not for cause or resigns for good reason (double trigger), lump-sum severance equals 12 months base salary plus most recently paid annual cash bonus; payable within 70 days post-termination subject to release . |
| Equity on CIC Termination | If equity awards are continued/assumed and remain outstanding through termination, they become fully vested; time/service conditions deemed satisfied; performance awards vest at target unless award specifies otherwise . |
| 280G/4999 Treatment | “Best net” reduction to avoid excise tax if it yields greater after-tax benefit to executive . |
| Regulatory constraint | CIC payments subject to 12 C.F.R. § 359 restrictions (golden parachutes in banking) . |
| Clawback | Company adopted Compensation Clawback Policy on Oct 2, 2023; incentive comp subject to recoupment upon certain restatements . |
| Agreement Term | CIC agreement expires Dec 31, 2028 if no Qualifying CIC occurs . |
Performance & Track Record
| Metric | 2023 | 2024 | Commentary |
|---|---|---|---|
| Net Income | $47.7M | $45.7M | Slight decline amid higher deposit costs and growth investments; strong profitability maintained. |
| ROAA | 1.44% | 1.23% | Solid returns despite operating investments. |
| ROAE | 17.85% | 12.72% | Reflects capital base growth and margin dynamics. |
Additional operating highlights:
- Q4’24 vs Q3’24: Net income up to $13.3M; net interest income +10.2%; cost of funds down; efficiency ratio improved to 41.21% .
- Q1’25: Net income $13.1M; ROAA 1.30%; ROAE 13.28%; NIM 3.45%; deposits +$178.4M q/q; zero short-term borrowings .
- Bay Area expansion: 27 employees and $229.5M in deposits contributed from 6/5/2023 to 12/31/2024; 31 employees by 3/31/2025 .
- Non-interest expense increase in 2024 driven by expansion hiring; salaries/benefits +17.0% YoY .
Governance and controls:
- Compensation Committee (independent): Judson T. Riggs (Chair), Donna L. Lucas, Kevin F. Ramos .
- Section 16 compliance: Company reports executive officers and directors complied with Section 16(a) in 2024 .
Investment Implications
- Pay-for-performance alignment: 2025 introduction of PSUs tied to relative three-year ROAA adds a clear performance lever; service-based RSUs provide retention. The annual bonus mix (cash + equity) and five-year vesting on newer RSUs create steady alignment but also a predictable vesting cadence that can add episodic supply around anniversaries (e.g., 2/7 for 2024 RSUs) .
- Retention and CIC protection: No fixed-term employment contract (at-will), but a double-trigger CIC agreement (12 months salary + last cash bonus and equity acceleration) reduces flight risk in strategic events; subject to banking golden parachute rules and best-net 280G treatment .
- Ownership and trading pressure: Rizzo’s beneficial ownership is modest (<1%), but meaningful unvested RSUs (8,972 shares; ~$270K at 12/31/24) and anti-pledging/hedging policy mitigate misalignment risks; 10b5-1 plan availability facilitates orderly selling if adopted .
- Execution risk: Company results show resilient profitability and growth amid Bay Area expansion, with ROAA/ROAE remaining healthy; expense growth tied to scaling may pressure near-term operating leverage but is translating into deposit growth and stable-to-improving NIM in early 2025 .
Overall: Incentive design tilts more toward performance (PSUs) starting 2025 while maintaining retention via multi-year RSU vesting. CIC protections are balanced and bank-regulation-aware. Watch Form 4s around vest dates, progress on relative ROAA vs. the Western peer set, and expense discipline as Bay Area growth matures .