Stellar Bancorp, Inc. Reports Fourth Quarter 2025 Results
HOUSTON--( BUSINESS WIRE)--Stellar Bancorp, Inc. (the “Company” or “Stellar”) (NYSE: STEL) today reported net income of $26.1 million, or diluted earnings per share of $0.51, for the fourth quarter of 2025 and net income of $102.9 million, or diluted earnings per share of $1.99, for the full year 2025.
Financial Highlights
Year 2025 Results
Net interest income for 2025 decreased $6.4 million, or 1.6%, to $401.6 million from $408.0 million for 2024. The net interest margin on a tax equivalent basis decreased to 4.20% for 2025 from 4.24% for 2024. The decrease in net interest income from the prior year was primarily due to the decrease in average interest-earning assets partially offset by the decrease in cost of interest-bearing liabilities. Net interest income for 2025 benefited from $19.3 million of income from PAA down from $33.0 million for 2024. Excluding PAA, net interest income (tax equivalent) for 2025 would have been $382.7 million (1) and the tax equivalent net interest margin would have been 3.99% (1) an increase from $375.3 million and 3.89% for the year 2024.
Noninterest income for 2025 was $21.8 million, a decrease of $1.3 million, or 5.4%, compared to $23.0 million for 2024. Noninterest income decreased in 2025 compared to 2024 primarily due to losses on sales and write-downs on foreclosed assets recorded during 2025.
Noninterest expense for 2025 decreased $3.5 million, or 1.2%, to $285.5 million compared to $289.0 million for 2024. The decrease in noninterest expense during 2025 compared to 2024 was primarily due to a $3.2 million decrease in professional fees, a $2.6 million decrease in amortization of intangibles and a $1.4 million decrease in regulatory assessments partially offset by a $3.5 million increase salaries and employee benefits.
The efficiency ratio was 62.28% (1) for 2025 compared to 61.53% (1) for 2024. Annualized returns on average assets, average equity and average tangible equity were 0.97%, 6.34% and 11.48% (1) for 2025, respectively, compared to 1.08%, 7.34% and 13.89% (1) for 2024, respectively.
(1)
Refer to the calculation of this non-GAAP financial measure on page 10 of this earnings release. The calculation of returns on average tangible equity and the efficiency ratio have been adjusted from prior period disclosures.
Fourth Quarter 2025 Results
Net interest income in the fourth quarter of 2025 increased $2.7 million, or 2.7%, to $103.4 million from $100.6 million for the third quarter of 2025. The net interest margin on a tax equivalent basis increased to 4.21% for the fourth quarter of 2025 from 4.20% for the third quarter of 2025. The increase in net interest income from the prior quarter was primarily due to the decrease in cost of average interest-bearing liabilities. Net interest income for the fourth quarter of 2025 benefited from $3.8 million of income from PAA compared to $4.8 million in the third quarter of 2025. Excluding PAA, net interest income (tax equivalent) for the fourth quarter of 2025 would have been $99.7 million (1) and the tax equivalent net interest margin would have been 4.06% (1) compared to net interest income of $95.9 million and tax equivalent net interest margin of 4.00% for the third quarter of 2025.
Noninterest income for the fourth quarter of 2025 was $5.5 million, an increase of $522 thousand, or 10.5%, compared to $5.0 million for the third quarter of 2025. Noninterest income increased in the fourth quarter of 2025 compared to the third quarter of 2025 primarily due to a death benefit on bank-owned life insurance received during the fourth quarter of 2025.
Noninterest expense for the fourth quarter of 2025 decreased $984 thousand, or 1.3%, to $72.2 million compared to $73.1 million for the third quarter of 2025. The decrease in noninterest expense during the fourth quarter of 2025 compared to the third quarter of 2025 was primarily due to a decrease in amortization of intangibles of $624 thousand and a decrease in regulatory assessments of $483 thousand.
The efficiency ratio was 61.64% (1) for the fourth quarter of 2025 compared to 63.69% (1) for the third quarter of 2025. Annualized returns on average assets, average equity and average tangible equity were 0.97%, 6.23% and 10.90% (1) for the fourth quarter of 2025, respectively, compared to 0.97%, 6.30% and 11.45% (1) for the third quarter of 2025, respectively.
Financial Condition
Total assets at December 31, 2025 were $10.81 billion, an increase of $178.5 million compared to $10.63 billion at September 30, 2025. The increase in total assets was largely due to an increase of $356.2 million in securities and a $132.7 million increase in loans, partially offset by a $303.9 million decrease in interest-bearing deposits at other financial institutions.
Total loans at December 31, 2025 increased $132.7 million to $7.30 billion compared to $7.17 billion at September 30, 2025. At December 31, 2025, the remaining balance of the PAA on loans was $54.3 million.
Total deposits at December 31, 2025 increased $204.0 million to $9.02 billion compared to $8.82 billion at September 30, 2025 primarily due to increases in noninterest-bearing and interest-bearing demand deposits partially offset by a decrease in certificates and other time deposits.
Asset Quality
Nonperforming assets totaled $60.0 million, or 0.56% of total assets, at December 31, 2025, compared to $54.2 million, or 0.51% of total assets, at September 30, 2025 and $38.9 million, or 0.36% of total assets, at December 31, 2024. The allowance for credit losses on loans as a percentage of total loans was 1.15% at December 31, 2025 compared to 1.10% at September 30, 2025 and 1.09% at December 31, 2024.
The year ended December 31, 2025 included a provision for credit losses of $10.2 million compared to a reversal of provision for credit losses of $2.9 million for the year ended December 31, 2024. Net charge-offs for the year ended December 31, 2025 were $3.8 million, or 0.05% of average loans, compared to net charge-offs of $6.7 million, or 0.09% of average loans, for the year ended December 31, 2024.
The provision for credit losses was $5.1 million for the fourth quarter of 2025 compared to $305 thousand for the third quarter of 2025 primarily due to loan growth. Net charge-offs for the fourth quarter of 2025 were $71 thousand compared to net charge-offs of $3.3 million, or 0.18% (annualized) of average loans, for the third quarter of 2025.
GAAP Reconciliation of Non-GAAP Financial Measures
Stellar’s management uses certain non-GAAP financial measures to evaluate its performance. Please refer to the GAAP Reconciliation and Management’s Explanation of Non-GAAP Financial Measures on page 10 of this earnings release for a reconciliation of these non-GAAP financial measures.
Conference Call Cancelled
As a result of today’s announcement that the Company has entered into a merger agreement with Prosperity Bancshares, Inc., the Company has cancelled the previously announced conference call regarding the Company’s fourth quarter results, which was scheduled for Friday, January 30, 2026, at 8:00 a.m. Central Time (9:00 a.m. Eastern Time).
About Stellar Bancorp, Inc.
Stellar Bancorp, Inc. is a bank holding company headquartered in Houston, Texas. Stellar’s principal banking subsidiary, Stellar Bank, provides a diversified range of commercial banking services primarily to small- to medium-sized businesses and individual customers across Houston, Dallas, Beaumont and surrounding communities in Texas.
Forward-Looking Statements
Certain statements in this press release which are not historical in nature are intended to be, and are hereby identified as, “forward-looking statements” for purposes of the safe harbor provided by Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements include, but are not limited to, future financial performance and operating results, the Company’s plans, business and growth strategies, objectives, expectations and intentions, and other statements that are not historical facts, including statements related to the expected timing, completion and benefits of the proposed transaction with Prosperity Bancshares, Inc., projections of macroeconomic and industry trends, which are inherently unreliable due to the multiple factors that impact economic trends, and any such variations may be material. Forward-looking statements may be identified by terminology such as “may,” “will,” “should,” “could,” “scheduled,” “plans,” “intends,” “projects,” “anticipates,” “expects,” “believes,” “estimates,” “potential,” “would,” or “continue” or negatives of such terms or other comparable terminology.
All forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and other factors that may cause the actual results, performance or achievements of Stellar to differ materially from any results expressed or implied by such forward-looking statements. Such factors include, among others: changes in the interest rate environment, the value of Stellar’s assets and obligations and the availability of capital and liquidity; general competitive, economic, political and market conditions; and other factors that may affect future results of Stellar including changes in asset quality and credit risk; the inability to sustain revenue and earnings growth; changes in interest rates and capital markets; inflation; customer borrowing, repayment, investment and deposit practices; the impact, extent and timing of technological changes; capital management activities; disruptions to the economy and the U.S. banking system; risks associated with uninsured deposits and responsive measures by federal or state governments or banking regulators; legislative changes, executive orders, regulatory actions and reforms of the Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation and Texas Department of Banking.
Additional factors which could affect the Company’s future results can be found in the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, in each case filed with the SEC and available on the SEC’s website at www.sec.gov. We disclaim any obligation and do not intend to update or revise any forward-looking statements contained in this communication, which speak only as of the date hereof, whether as a result of new information, future events or otherwise, except as required by federal securities laws. As forward-looking statements involve significant risks and uncertainties, caution should be exercised against placing undue reliance on such statements.
Stellar Bancorp, Inc.
Financial Highlights
(Unaudited)
2025
2024
December 31
September 30
June 30
March 31
December 31
(Dollars in thousands)
ASSETS:
Cash and due from banks
$
94,331
$
99,407
$
136,060
$
130,932
$
419,967
Interest-bearing deposits at other financial institutions
325,122
629,042
442,044
429,643
491,249
Total cash and cash equivalents
419,453
728,449
578,104
560,575
911,216
Available for sale securities, at fair value
2,198,459
1,842,268
1,729,684
1,719,371
1,673,016
Loans held for investment
7,300,591
7,167,857
7,287,347
7,283,133
7,439,854
Less: allowance for credit losses on loans
(83,629
)
(78,924
)
(83,165
)
(83,746
)
(81,058
)
Loans, net
7,216,962
7,088,933
7,204,182
7,199,387
7,358,796
Accrued interest receivable
35,869
34,865
35,537
37,669
37,884
Premises and equipment, net
106,118
107,803
108,615
109,750
111,856
Federal Reserve Bank and Federal Home Loan Bank stock
45,532
45,437
47,099
20,902
8,209
Bank-owned life insurance
109,477
109,358
108,726
108,108
107,498
Goodwill
497,318
497,318
497,318
497,318
497,318
Core deposit intangibles, net
71,018
75,929
81,468
87,007
92,546
Other assets
106,388
97,753
102,277
94,800
107,451
Total assets
$
10,806,594
$
10,628,113
$
10,493,010
$
10,434,887
$
10,905,790
LIABILITIES AND SHAREHOLDERS’ EQUITY
LIABILITIES:
Deposits:
Noninterest-bearing
$
3,407,865
$
3,210,948
$
3,183,693
$
3,205,619
$
3,576,206
Interest-bearing
Demand
2,114,997
1,960,857
1,941,156
1,863,752
1,845,749
Money market and savings
2,469,845
2,489,169
2,393,767
2,248,616
2,253,193
Certificates and other time
1,028,759
1,156,489
1,154,998
1,244,726
1,453,236
Total interest-bearing deposits
5,613,601
5,606,515
5,489,921
5,357,094
5,552,178
Total deposits
9,021,466
8,817,463
8,673,614
8,562,713
9,128,384
Accrued interest payable
5,508
9,429
7,607
9,856
17,052
Borrowed funds
—
—
69,925
119,923
—
Subordinated debt
40,226
70,196
70,165
70,135
70,105
Other liabilities
70,740
77,887
67,865
61,428
82,389
Total liabilities
9,137,940
8,974,975
8,889,176
8,824,055
9,297,930
SHAREHOLDERS’ EQUITY:
Common stock
509
512
514
521
534
Capital surplus
1,174,894
1,182,781
1,185,048
1,202,628
1,240,050
Retained earnings
566,216
547,717
529,216
510,072
492,640
Accumulated other comprehensive loss
(72,965
)
(77,872
)
(110,944
)
(102,389
)
(125,364
)
Total shareholders’ equity
1,668,654
1,653,138
1,603,834
1,610,832
1,607,860
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
$
10,806,594
$
10,628,113
$
10,493,010
$
10,434,887
$
10,905,790
Stellar Bancorp, Inc.
Financial Highlights
(Unaudited)
Three Months Ended
Year Ended
2025
2024
2025
2024
December 31
September 30
June 30
March 31
December 31
December 31
December 31
(Dollars in thousands, except per share data)
INTEREST INCOME:
Loans, including fees
$
119,866
$
122,557
$
121,814
$
120,640
$
128,738
$
484,877
$
531,680
Securities:
Taxable
17,619
16,278
15,293
16,148
14,789
65,338
49,903
Tax-exempt
808
808
810
812
814
3,238
3,262
Deposits in other financial institutions
5,745
5,770
4,782
4,720
5,681
21,017
17,555
Total interest income
144,038
145,413
142,699
142,320
150,022
574,470
602,400
INTEREST EXPENSE:
Demand, money market and savings deposits
29,484
32,376
31,097
27,574
27,877
120,531
113,246
Certificates and other time deposits
10,370
10,920
11,459
13,527
16,830
46,276
68,745
Borrowed funds
6
56
407
517
235
986
4,549
Subordinated debt
795
1,417
1,401
1,444
2,123
5,057
7,868
Total interest expense
40,655
44,769
44,364
43,062
47,065
172,850
194,408
NET INTEREST INCOME
103,383
100,644
98,335
99,258
102,957
401,620
407,992
Provision for (reversal of) credit losses
5,131
305
1,090
3,632
942
10,158
(2,880
)
Net interest income after provision for credit losses
98,252
100,339
97,245
95,626
102,015
391,462
410,872
NONINTEREST INCOME:
Service charges on deposit accounts
1,592
1,545
1,561
1,584
1,590
6,282
6,430
(Loss) gain on sale/write-down of assets
(171
)
(491
)
(57
)
417
(112
)
(302
)
769
Bank-owned life insurance
1,026
632
618
610
622
2,886
2,414
Debit card and interchange income
583
572
566
520
570
2,241
2,191
Other
2,478
2,728
3,103
2,374
2,362
10,683
11,242
Total noninterest income
5,508
4,986
5,791
5,505
5,032
21,790
23,046
NONINTEREST EXPENSE:
Salaries and employee benefits
42,913
43,175
40,927
41,792
43,797
168,807
165,357
Net occupancy and equipment
4,776
4,518
4,399
3,926
4,401
17,619
17,864
Depreciation
2,056
2,015
1,992
1,995
1,984
8,058
7,807
Data processing and software amortization
5,796
5,882
5,620
5,682
5,551
22,980
21,652
Professional fees
1,587
1,601
1,287
1,786
3,428
6,261
9,424
Regulatory assessments and FDIC insurance
1,205
1,688
1,561
1,733
1,636
6,187
7,568
Amortization of intangibles
4,930
5,554
5,548
5,548
5,581
21,580
24,220
Communications
872
855
861
847
807
3,435
3,418
Advertising
1,333
1,425
1,167
782
1,593
4,707
4,127
Other
6,690
6,429
6,642
6,075
6,488
25,836
27,521
Total noninterest expense
72,158
73,142
70,004
70,166
75,266
285,470
288,958
INCOME BEFORE INCOME TAXES
31,602
32,183
33,032
30,965
31,781
127,782
144,960
Provision for income taxes
5,454
6,513
6,680
6,263
6,569
24,910
29,957
NET INCOME
$
26,148
$
25,670
$
26,352
$
24,702
$
25,212
$
102,872
$
115,003
EARNINGS PER SHARE
Basic
$
0.51
$
0.50
$
0.51
$
0.46
$
0.47
$
1.99
$
2.15
Diluted
$
0.51
$
0.50
$
0.51
$
0.46
$
0.47
$
1.99
$
2.15
Stellar Bancorp, Inc.
Financial Highlights
(Unaudited)
Three Months Ended
Year Ended
2025
2024
2025
2024
December 31
September 30
June 30
March 31
December 31
December 31
December 31
(Dollars and share amounts in thousands, except per share data)
Net income
$
26,148
$
25,670
$
26,352
$
24,702
$
25,212
$
102,872
$
115,003
Earnings per share, basic
$
0.51
$
0.50
$
0.51
$
0.46
$
0.47
$
1.99
$
2.15
Earnings per share, diluted
$
0.51
$
0.50
$
0.51
$
0.46
$
0.47
$
1.99
$
2.15
Dividends per share
$
0.15
$
0.14
$
0.14
$
0.14
$
0.14
$
0.57
$
0.53
Return on average assets (A)
0.97
%
0.97
%
1.01
%
0.94
%
0.94
%
0.97
%
1.08
%
Return on average equity (A)
6.23
%
6.30
%
6.62
%
6.21
%
6.21
%
6.34
%
7.34
%
Return on average tangible equity (A)(B)(D)
10.90
%
11.45
%
12.16
%
11.48
%
11.53
%
11.48
%
13.89
%
Net interest margin (tax equivalent) (A)(C)
4.21
%
4.20
%
4.18
%
4.20
%
4.25
%
4.20
%
4.24
%
Net interest margin (tax equivalent) excluding PAA (A)(B)(C)
4.06
%
4.00
%
3.95
%
3.97
%
3.94
%
3.99
%
3.89
%
Efficiency ratio (B)(E)
61.64
%
63.69
%
61.87
%
61.93
%
64.46
%
62.28
%
61.53
%
Capital Ratios
Stellar Bancorp, Inc. (Consolidated)
Equity to assets
15.44
%
15.55
%
15.28
%
15.44
%
14.74
%
15.44
%
14.74
%
Tangible equity to tangible assets (B)(E)
10.75
%
10.74
%
10.34
%
10.42
%
9.87
%
10.75
%
9.87
%
Estimated Total capital ratio (to risk-weighted assets)
15.73
%
16.33
%
15.98
%
15.97
%
16.00
%
15.73
%
16.00
%
Estimated Common equity Tier 1 capital (to risk weighted assets)
14.18
%
14.43
%
14.06
%
14.05
%
14.14
%
14.18
%
14.14
%
Estimated Tier 1 capital (to risk-weighted assets)
14.31
%
14.55
%
14.18
%
14.17
%
14.26
%
14.31
%
14.26
%
Estimated Tier 1 leverage (to average tangible assets)
11.52
%
11.60
%
11.44
%
11.20
%
11.31
%
11.52
%
11.31
%
Stellar Bank
Estimated Total capital ratio (to risk-weighted assets)
15.03
%
15.45
%
15.39
%
15.40
%
15.28
%
15.03
%
15.28
%
Estimated Common equity Tier 1 capital (to risk-weighted assets)
13.83
%
14.27
%
14.18
%
14.20
%
14.13
%
13.83
%
14.13
%
Estimated Tier 1 capital (to risk-weighted assets)
13.83
%
14.27
%
14.18
%
14.20
%
14.13
%
13.83
%
14.13
%
Estimated Tier 1 leverage (to average tangible assets)
11.14
%
11.37
%
11.44
%
11.22
%
11.21
%
11.14
%
11.21
%
Other Data
Weighted average shares:
Basic
51,083
51,283
51,529
53,146
53,422
51,753
53,469
Diluted
51,167
51,356
51,569
53,197
53,471
51,805
53,510
Period end shares outstanding
50,902
51,228
51,398
52,141
53,429
50,902
53,429
Book value per share
$
32.78
$
32.27
$
31.20
$
30.89
$
30.09
$
32.78
$
30.09
Tangible book value per share (B)
$
21.62
$
21.08
$
19.94
$
19.69
$
19.05
$
21.62
$
19.05
Employees - full-time equivalents
1,075
1,065
1,062
1,054
1,037
1,075
1,037
(A)
Interim periods annualized.
(B)
Refer to the calculation of these non-GAAP financial measures on page 10 of this Earnings Release.
Net interest margin represents net interest income divided by average interest-earning assets.
(D)
The calculation of return on average tangible equity has been adjusted from prior period disclosures and all periods presented above have been recalculated and disclosed under the same calculation.
The calculation of the efficiency ratio represents total noninterest expense less amortization of core deposits, divided by the sum of net interest income and noninterest income, excluding net gains and losses on the sale/write-down of assets. This calculation has been adjusted from prior period disclosures and all periods presented above have been recalculated and disclosed under the same calculation.
Stellar Bancorp, Inc.
Financial Highlights
(Unaudited)
Three Months Ended
December 31, 2025
September 30, 2025
December 31, 2024
Average Balance
Interest Earned/
Interest Paid
Average Yield/Rate
Average Balance
Interest Earned/
Interest Paid
Average Yield/Rate
Average Balance
Interest Earned/
Interest Paid
Average Yield/Rate
(Dollars in thousands)
Assets
Interest-earning assets:
Loans
$
7,198,899
$
119,866
6.61
%
$
7,228,778
$
122,557
6.73
%
$
7,477,332
$
128,738
6.85
%
Securities
1,976,112
18,427
3.70
%
1,790,897
17,086
3.79
%
1,702,111
15,603
3.65
%
Deposits in other financial institutions
578,480
5,745
3.94
%
505,342
5,770
4.53
%
473,719
5,681
4.77
%
Total interest-earning assets
9,753,491
$
144,038
5.86
%
9,525,017
$
145,413
6.06
%
9,653,162
$
150,022
6.18
%
Allowance for credit losses on loans
(78,995
)
(82,983
)
(84,423
)
Noninterest-earning assets
1,070,537
1,076,831
1,080,436
Total assets
$
10,745,033
$
10,518,865
$
10,649,175
Liabilities and Shareholders' Equity
Interest-bearing liabilities:
Interest-bearing demand deposits
$
2,008,416
$
13,281
2.62
%
$
1,935,203
$
14,356
2.94
%
$
1,623,867
$
11,341
2.78
%
Money market and savings deposits
2,546,538
16,203
2.52
%
2,475,306
18,020
2.89
%
2,312,711
16,536
2.84
%
Certificates and other time deposits
1,127,248
10,370
3.65
%
1,162,461
10,920
3.73
%
1,538,785
16,830
4.35
%
Borrowed funds
327
6
7.28
%
3,156
56
7.04
%
15,979
235
5.85
%
Subordinated debt
40,211
795
7.84
%
70,181
1,417
8.01
%
101,394
2,123
8.33
%
Total interest-bearing liabilities
5,722,740
$
40,655
2.82
%
5,646,307
$
44,769
3.15
%
5,592,736
$
47,065
3.35
%
Noninterest-bearing liabilities:
Noninterest-bearing demand deposits
3,269,053
3,172,054
3,342,636
Other liabilities
88,715
82,993
99,041
Total liabilities
9,080,492
8,901,354
9,034,413
Shareholders’ equity
1,664,541
1,617,511
1,614,762
Total liabilities and shareholders’ equity
$
10,745,033
$
10,518,865
$
10,649,175
Net interest rate spread
3.04
%
2.91
%
2.83
%
Net interest income and margin
$
103,383
4.21
%
$
100,644
4.19
%
$
102,957
4.24
%
Net interest income and margin (tax equivalent)
$
103,487
4.21
%
$
100,739
4.20
%
$
103,039
4.25
%
Cost of funds
1.79
%
2.01
%
2.10
%
Cost of deposits
1.77
%
1.96
%
2.02
%
Stellar Bancorp, Inc.
Financial Highlights
(Unaudited)
Year Ended December 31,
2025
2024
Average Balance
Interest Earned/
Interest Paid
Average Yield/Rate
Average Balance
Interest Earned/
Interest Paid
Average Yield/Rate
(Dollars in thousands)
Assets
Interest-earning assets:
Loans
$
7,263,152
$
484,877
6.68
%
$
7,712,122
$
531,680
6.89
%
Securities
1,828,752
68,576
3.75
%
1,593,073
53,165
3.34
%
Deposits in other financial institutions
488,213
21,017
4.30
%
334,654
17,555
5.25
%
Total interest-earning assets
9,580,117
$
574,470
6.00
%
9,639,849
$
602,400
6.25
%
Allowance for credit losses on loans
(81,708
)
(91,770
)
Noninterest-earning assets
1,086,711
1,098,396
Total assets
$
10,585,120
$
10,646,475
Liabilities and Shareholders' Equity
Interest-bearing liabilities:
Interest-bearing demand deposits
$
1,952,032
$
54,429
2.79
%
$
1,618,212
$
48,290
2.98
%
Money market and savings deposits
2,407,951
66,102
2.75
%
2,236,678
64,956
2.90
%
Certificates and other time deposits
1,196,586
46,276
3.87
%
1,574,598
68,745
4.37
%
Borrowed funds
20,791
986
4.74
%
77,662
4,549
5.86
%
Subordinated debt
62,605
5,057
8.08
%
107,768
7,868
7.30
%
Total interest-bearing liabilities
5,639,965
$
172,850
3.06
%
5,614,918
$
194,408
3.46
%
Noninterest-bearing liabilities:
Noninterest-bearing demand deposits
3,236,602
3,369,931
Other liabilities
85,472
94,165
Total liabilities
8,962,039
9,079,014
Shareholders' equity
1,623,081
1,567,461
Total liabilities and shareholders' equity
$
10,585,120
$
10,646,475
Net interest rate spread
2.94
%
2.79
%
Net interest income and margin
$
401,620
4.19
%
$
407,992
4.23
%
Net interest income and margin (tax equivalent)
$
402,005
4.20
%
$
408,305
4.24
%
Cost of funds
1.95
%
2.16
%
Cost of deposits
1.90
%
2.07
%
Stellar Bancorp, Inc.
Financial Highlights
(Unaudited)
Three Months Ended
2025
2024
December 31
September 30
June 30
March 31
December 31
(Dollars in thousands)
Loan Portfolio:
Commercial and industrial
$
1,476,559
$
1,332,795
$
1,346,744
$
1,362,266
$
1,362,260
Real estate:
Commercial real estate (including multi-family residential)
3,766,294
3,733,293
3,840,981
3,854,607
3,868,218
Commercial real estate construction and land development
720,779
753,381
762,911
721,488
845,494
1-4 family residential (including home equity)
1,136,227
1,142,614
1,126,523
1,125,837
1,115,484
Residential construction
124,653
121,197
137,855
141,283
157,977
Consumer and other
76,079
84,577
72,333
77,652
90,421
Total loans held for investment
$
7,300,591
$
7,167,857
$
7,287,347
$
7,283,133
$
7,439,854
Deposits:
Noninterest-bearing
$
3,407,865
$
3,210,948
$
3,183,693
$
3,205,619
$
3,576,206
Interest-bearing
Demand
2,114,997
1,960,857
1,941,156
1,863,752
1,845,749
Money market and savings
2,469,845
2,489,169
2,393,767
2,248,616
2,253,193
Certificates and other time
1,028,759
1,156,489
1,154,998
1,244,726
1,453,236
Total interest-bearing deposits
5,613,601
5,606,515
5,489,921
5,357,094
5,552,178
Total deposits
$
9,021,466
$
8,817,463
$
8,673,614
$
8,562,713
$
9,128,384
Asset Quality:
Nonaccrual loans
$
52,548
$
46,250
$
50,505
$
54,518
$
37,212
Accruing loans 90 or more days past due
—
—
—
—
—
Total nonperforming loans
52,548
46,250
50,505
54,518
37,212
Foreclosed assets
7,492
7,939
7,652
5,154
1,734
Total nonperforming assets
$
60,040
$
54,189
$
58,157
$
59,672
$
38,946
Net charge-offs
$
71
$
3,323
$
206
$
163
$
2,016
Nonaccrual loans:
Commercial and industrial
$
7,616
$
5,594
$
13,395
$
11,471
$
8,500
Real estate:
Commercial real estate (including multi-family residential)
29,271
25,156
23,359
26,383
16,459
Commercial real estate construction and land development
1,838
2,899
3,412
2,027
3,061
1-4 family residential (including home equity)
13,333
12,083
9,965
14,550
9,056
Residential construction
448
457
176
—
—
Consumer and other
42
61
198
87
136
Total nonaccrual loans
$
52,548
$
46,250
$
50,505
$
54,518
$
37,212
Asset Quality Ratios:
Nonperforming assets to total assets
0.56
%
0.51
%
0.55
%
0.57
%
0.36
%
Nonperforming loans to total loans
0.72
%
0.65
%
0.69
%
0.75
%
0.50
%
Allowance for credit losses on loans to nonperforming loans
159.15
%
170.65
%
164.67
%
153.61
%
217.83
%
Allowance for credit losses on loans to total loans
1.15
%
1.10
%
1.14
%
1.15
%
1.09
%
Net charge-offs to average loans (annualized)
0.00
%
0.18
%
0.01
%
0.01
%
0.11
%
Stellar Bancorp, Inc.
GAAP Reconciliation and Management’s Explanation of Non-GAAP Financial Measures
(Unaudited)
Stellar’s management uses certain non-GAAP (generally accepted accounting principles) financial measures to evaluate its performance. Stellar believes that these non-GAAP financial measures provide meaningful supplemental information regarding its performance and that management and investors benefit from referring to these non-GAAP financial measures in assessing Stellar’s performance and when planning, forecasting, analyzing and comparing past, present and future periods. Specifically, Stellar reviews pre-tax, pre-provision income, pre-tax pre-provision ROAA, tangible book value per share, return on average tangible equity, tangible equity to tangible assets and net interest margin (tax equivalent) excluding PAA for internal planning and forecasting purposes. Stellar has included in this earnings release information relating to these non-GAAP financial measures for the applicable periods presented. These non-GAAP measures should not be considered in isolation or as a substitute for the most directly comparable or other financial measures calculated in accordance with GAAP. Moreover, the manner in which Stellar calculates the non-GAAP financial measures may differ from that of other companies reporting measures with similar names.
Three Months Ended
Year Ended
2025
2024
2025
2024
December 31
September 30
June 30
March 31
December 31
December 31
December 31
(Dollars and share amounts in thousands, except per share data)
Net income
$
26,148
$
25,670
$
26,352
$
24,702
$
25,212
$
102,872
$
115,003
Add: Provision for (reversal of) credit losses
5,131
305
1,090
3,632
942
10,158
(2,880
)
Add: Provision for income taxes
5,454
6,513
6,680
6,263
6,569
24,910
29,957
Pre-tax, pre-provision income
$
36,733
$
32,488
$
34,122
$
34,597
$
32,723
$
137,940
$
142,080
Total average assets
$
10,745,033
$
10,518,865
$
10,464,157
$
10,611,691
$
10,649,175
$
10,585,120
$
10,646,475
Pre-tax, pre-provision return on average assets (A)
1.36
%
1.23
%
1.31
%
1.32
%
1.22
%
1.30
%
1.33
%
Total shareholders’ equity
$
1,668,654
$
1,653,138
$
1,603,834
$
1,610,832
$
1,607,860
$
1,668,654
$
1,607,860
Less: Goodwill and core deposit intangibles, net
568,336
573,247
578,786
584,325
589,864
568,336
589,864
Tangible shareholders’ equity
$
1,100,318
$
1,079,891
$
1,025,048
$
1,026,507
$
1,017,996
$
1,100,318
$
1,017,996
Shares outstanding at end of period
50,902
51,228
51,398
52,141
53,429
50,902
53,429
Tangible book value per share
$
21.62
$
21.08
$
19.94
$
19.69
$
19.05
$
21.62
$
19.05
Average shareholders’ equity
$
1,664,541
$
1,617,511
$
1,595,540
$
1,614,242
$
1,614,762
$
1,623,081
$
1,567,461
Less: Average goodwill and core deposit intangibles, net
570,721
575,836
581,438
586,895
592,471
578,670
601,768
Average tangible shareholders’ equity
$
1,093,820
$
1,041,675
$
1,014,102
$
1,027,347
$
1,022,291
$
1,044,411
$
965,693
Net income
$
26,148
$
25,670
$
26,352
$
24,702
$
25,212
$
102,872
$
115,003
Add: Core deposit intangibles amortization, net of tax
3,895
4,388
4,383
4,383
4,409
17,048
19,134
Adjusted net income
$
30,043
$
30,058
$
30,735
$
29,085
$
29,621
$
119,920
$
134,137
Return on average tangible equity (A)(B)
10.90
%
11.45
%
12.16
%
11.48
%
11.53
%
11.48
%
13.89
%
Total assets
$
10,806,594
$
10,628,113
$
10,493,010
$
10,434,887
$
10,905,790
$
10,806,594
$
10,905,790
Less: Goodwill and core deposit intangibles, net
568,336
573,247
578,786
584,325
589,864
568,336
589,864
Tangible assets
$
10,238,258
$
10,054,866
$
9,914,224
$
9,850,562
$
10,315,926
$
10,238,258
$
10,315,926
Tangible equity to tangible assets
10.75
%
10.74
%
10.34
%
10.42
%
9.87
%
10.75
%
9.87
%
Net interest income (tax equivalent)
$
103,487
$
100,739
$
98,427
$
99,353
$
103,039
$
402,005
$
408,305
Less: Purchase accounting accretion
3,781
4,800
5,344
5,397
7,555
19,322
32,999
Adjusted net interest income (tax equivalent)
$
99,706
$
95,939
$
93,083
$
93,956
$
95,484
$
382,683
$
375,306
Average earning assets
$
9,753,491
$
9,525,017
$
9,448,589
$
9,592,205
$
9,653,162
$
9,580,117
$
9,639,849
Net interest margin (tax equivalent) excluding PAA (A)
4.06
%
4.00
%
3.95
%
3.97
%
3.94
%
3.99
%
3.89
%
Noninterest expense
$
72,158
$
73,142
$
70,004
$
70,166
$
75,266
$
285,470
$
288,958
Less: Core deposit intangibles amortization
4,930
5,554
5,548
5,548
5,581
21,580
24,220
Adjusted noninterest expense
$
67,228
$
67,588
$
64,456
$
64,618
$
69,685
$
263,890
$
264,738
Net interest income
103,383
100,644
98,335
99,258
102,957
401,620
407,992
Noninterest income
5,508
4,986
5,791
5,505
5,032
21,790
23,046
Less: (Loss) gain on sale of assets
(171
)
(491
)
(57
)
417
(112
)
(302
)
769
Adjusted noninterest income
5,679
5,477
5,848
5,088
5,144
22,092
22,277
Net interest income plus adjusted noninterest income
$
109,062
$
106,121
$
104,183
$
104,346
$
108,101
$
423,712
$
430,269
Efficiency ratio (C)
61.64
%
63.69
%
61.87
%
61.93
%
64.46
%
62.28
%
61.53
%
(A)
Interim periods annualized.
(B)
The calculation of return on average tangible equity has been adjusted from prior period disclosures and all periods presented above have been recalculated and disclosed under the same calculation.
The calculation of the efficiency ratio has been adjusted from prior period disclosures and all periods presented above have been recalculated and disclosed under the same calculation.