STEL
PRESS RELEASE
STELLAR BANCORP, INC. REPORTS
THIRD QUARTER 2024 RESULTS
HOUSTON, October 25, 2024 - Stellar Bancorp, Inc. (the "Company" or "Stellar") (NYSE: STEL) today reported net income of $33.9 million, or diluted earnings per share of $0.63, for the third quarter of 2024 compared to net income of $29.8 million, or diluted earnings per share of $0.56, for the second quarter of 2024.
"We are pleased to announce our third quarter 2024 financial results that reflect our work as we mark the second anniversary of our transformational merger completed on October 1, 2022," said Robert R. Franklin, Jr., Stellar's Chief Executive Officer. "Since the merger, we have focused on building the foundation of Stellar Bank. Those efforts include constructing the scalable infrastructure to support an institution with more than $10 billion of assets while we have built a strong capital base, significantly increased our liquidity position and maintained a disciplined focus on credit. We have also significantly reduced our exposure to commercial real estate and invested in assets to help us grow a more balanced loan portfolio through additional commercial and industrial lending experience and leadership."
"Stellar Bank is positioned for success as the economic and political environment becomes clearer. Although we can't predict timing of interest rate changes, we feel comfortable with our revenue outlook. The election cycle will soon be complete and some of the elevated stress and uncertainty around the process will abate," Mr. Franklin continued.
"Our markets remain resilient. We have positioned the Bank for quality growth and we look forward to furthering the Stellar brand in our markets," concluded Mr. Franklin.
Third Quarter 2024 Financial Highlights
Third Quarter 2024 Results
Net interest income in the third quarter of 2024 increased $97 thousand, or 0.1%, to $101.5 million from $101.4 million for the second quarter of 2024. The net interest margin on a tax equivalent basis decreased 5 basis points to 4.19% for the third quarter of 2024 from 4.24% for the second quarter of 2024. The decrease in the net interest margin from the prior quarter was primarily due to the impact of decreased interest rates on interest earning assets, partially offset by decreased rates on interest-bearing liabilities. Net interest income for the third quarter of 2024 benefited from $6.8 million of income from purchase accounting accretion compared to $10.1 million in the second quarter of
_____________________
1
2024. Excluding purchase accounting accretion, net interest income (tax equivalent) for the third quarter of 2024 would have been $94.8 million(1) and the tax equivalent net interest margin would have been 3.91%(1).
Noninterest income for the third quarter of 2024 was $6.3 million, an increase of $886 thousand, or 16.4%, compared to $5.4 million for the second quarter of 2024. Noninterest income increased in the third quarter of 2024 compared to the second quarter of 2024 primarily due to an increase in gains on sales of assets and Small Business Investment Company income recognized in the third quarter of 2024 compared to the second quarter of 2024.
Noninterest expense for the third quarter of 2024 decreased $150 thousand, or 0.2%, to $71.1 million compared to $71.2 million for the second quarter of 2024. The decrease in noninterest expense in the third quarter of 2024 compared to the second quarter of 2024 was primarily due to a $2.0 million decrease in other noninterest expense and a $520 thousand decrease in regulatory assessments, partially offset by a $2.1 million increase in salaries and employee benefits.
The efficiency ratio was 66.18% for the third quarter of 2024 compared to 66.63% for the second quarter of 2024. Annualized returns on average assets, average equity and average tangible equity were 1.27%, 8.49% and 13.63%(1) for the third quarter of 2024, respectively, compared to 1.13%, 7.78% and 12.82%(1), respectively, for the second quarter of 2024.
Financial Condition
Total assets at September 30, 2024 were $10.63 billion, a decrease of $93.9 million, compared to $10.72 billion at June 30, 2024.
Total loans at September 30, 2024 decreased $162.8 million to $7.55 billion compared to $7.71 billion at June 30, 2024. At September 30, 2024, the remaining balance of the purchase accounting accretion on loans was $81.4 million.
Total deposits at September 30, 2024 increased $17.3 million to $8.74 billion compared to $8.73 billion at June 30, 2024, due to increases in interest-bearing demand deposits and money market and savings deposits, partially offset by decreases in certificates and other time deposits and noninterest-bearing deposits. Shifts in the deposit mix were primarily driven by the current interest rate environment and an intensely competitive market for deposits.
During the third quarter 2024, the Company repurchased 108,984 shares at an average price per share of $26.10 under its share repurchase program.
Asset Quality
Nonperforming assets totaled $35.1 million, or 0.33% of total assets, at September 30, 2024, compared to $53.5 million, or 0.50% of total assets, at June 30, 2024. The allowance for credit losses on loans as a percentage of total loans was 1.12% at September 30, 2024 and 1.23% at June 30, 2024.
The third quarter of 2024 included a reversal of provision for credit losses of $6.0 million compared to a reversal of provision for credit losses of $1.9 million recorded during the second quarter of 2024. Net charge-offs for the third quarter of 2024 were $3.9 million, or 0.21% (annualized) of average loans, compared to net recoveries of $1 thousand, or 0.00% (annualized) of average loans, for the second quarter of 2024.
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
Stellar's management team will host a conference call and webcast on Friday, October 25, 2024 at 8:00 a.m. Central Time (9:00 a.m. Eastern Time) to discuss its results for the second quarter of 2024. Participants may register for the conference call at https://registrations.events/ direct/Q4I635867 to receive the dial-in numbers and unique PIN to access the call. If you need assistance in obtaining a dial-in number, please contact IR@stellar.bank. A simultaneous audio-only webcast may be accessed at https://events.q4inc.com/attendee/992487934. If you are unable to participate during the live webcast, the webcast will be accessible via the Investor Relations section of the Company's website at ir.stellar.bank.
2
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 the Houston, Dallas, Beaumont and surrounding communities in Texas.
Investor Relations
IR@stellar.bank
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, statements about the benefits of the Company's merger with Allegiance Bancshares, Inc. (the "Merger"), including 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 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: the risk that the cost savings and any revenue synergies from the Merger may not be fully realized or may take longer than anticipated to be realized; disruption to our business as a result of the Merger; the risk that the integration of operations will be materially delayed or will be more costly or difficult than we expected or that we are otherwise unable to successfully integrate our legacy businesses; the amount of the costs, fees, expenses and charges related to the Merger; reputational risk and the reaction of our customers, suppliers, employees or other business partners to the Merger; 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 caused by recent bank failures, risks associated with uninsured deposits and responsive measures by federal or state governments or banking regulators, including increases in the cost of our deposit insurance assessments and other actions of the Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation and Texas Department of Banking and legislative and regulatory actions and reforms.
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 https:// 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.
3
Stellar Bancorp, Inc.
Financial Highlights
(Unaudited)
2024
2023
September 30
June 30
March 31
December 31
September 30
(Dollars in thousands)
ASSETS
Cash and due from banks
$
103,735
$
110,341
$
74,663
$
121,004
$
94,970
Interest-bearing deposits at other financial institutions
412,482
379,909
325,079
278,233
207,302
Total cash and cash equivalents
516,217
490,250
399,742
399,237
302,272
Available for sale securities, at fair value
1,691,752
1,630,971
1,523,100
1,395,680
1,414,952
Loans held for investment
7,551,124
7,713,897
7,908,111
7,925,133
8,004,528
Less: allowance for credit losses on loans
(84,501)
(94,772)
(96,285)
(91,684)
(93,575)
Loans, net
7,466,623
7,619,125
7,811,826
7,833,449
7,910,953
Accrued interest receivable
39,473
43,348
45,466
44,244
43,536
Premises and equipment, net
113,742
113,984
115,698
118,683
119,332
Federal Home Loan Bank stock
20,123
15,089
16,050
25,051
29,022
Bank-owned life insurance
106,876
106,262
105,671
105,084
104,699
Goodwill
497,318
497,318
497,318
497,318
497,318
Core deposit intangibles, net
98,116
104,315
110,513
116,712
122,944
Other assets
79,537
103,001
103,838
111,681
120,432
Total assets
$
10,629,777
$
10,723,663
$
10,729,222
$
10,647,139
$
10,665,460
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES:
Deposits:
Noninterest-bearing
$
3,303,048
$
3,308,441
$
3,323,149
$
3,546,815
$
3,656,288
Interest-bearing
Demand
1,571,504
1,564,405
1,576,261
1,659,999
1,397,492
Money market and savings
2,280,651
2,213,031
2,203,767
2,136,777
2,128,950
Certificates and other time
1,587,398
1,639,426
1,691,539
1,529,876
1,503,891
Total interest-bearing deposits
5,439,553
5,416,862
5,471,567
5,326,652
5,030,333
Total deposits
8,742,601
8,725,303
8,794,716
8,873,467
8,686,621
Accrued interest payable
16,915
12,327
12,227
11,288
7,612
Borrowed funds
60,000
240,000
215,000
50,000
323,981
Subordinated debt
110,064
109,964
109,864
109,765
109,665
Other liabilities
74,074
70,274
66,717
81,601
76,735
Total liabilities
9,003,654
9,157,868
9,198,524
9,126,121
9,204,614
SHAREHOLDERS' EQUITY:
Common stock
535
536
536
533
533
Capital surplus
1,238,619
1,238,477
1,235,221
1,232,627
1,231,686
Retained earnings
474,905
447,948
425,130
405,945
385,600
Accumulated other comprehensive loss
(87,936)
(121,166)
(130,189)
(118,087)
(156,973)
Total shareholders' equity
1,626,123
1,565,795
1,530,698
1,521,018
1,460,846
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
$
10,629,777
$
10,723,663
$
10,729,222
$
10,647,139
$
10,665,460
4
Stellar Bancorp, Inc.
Financial Highlights
(Unaudited)
Three Months Ended
Nine Months Ended
2024
2023
2024
2023
September 30
June 30
March 31
December 31
September 30
September 30
September 30
INTEREST INCOME:
Loans, including fees
$
132,372
$
135,885
$
134,685
$
139,114
$
138,948
$
402,942
$
398,608
Securities:
Taxable
13,898
11,923
9,293
9,622
9,493
35,114
28,872
Tax-exempt
814
816
818
418
437
2,448
2,135
Deposits in other financial institutions
4,692
3,555
3,627
3,021
2,391
11,874
9,027
Total interest income
151,776
152,179
148,423
152,175
151,269
452,378
438,642
INTEREST EXPENSE:
Demand, money market and savings
deposits
29,440
28,399
27,530
25,033
23,557
85,369
62,302
Certificates and other time deposits
18,073
18,758
15,084
15,075
13,282
51,915
26,211
Borrowed funds
840
1,700
1,774
4,154
5,801
4,314
13,653
Subordinated debt
1,916
1,912
1,917
1,983
1,908
5,745
5,647
Total interest expense
50,269
50,769
46,305
46,245
44,548
147,343
107,813
NET INTEREST INCOME
101,507
101,410
102,118
105,930
106,721
305,035
330,829
(Reversal of) provision for credit losses
(5,985)
(1,935)
4,098
1,047
2,315
(3,822)
7,896
Net interest income after provision for
credit losses
107,492
103,345
98,020
104,883
104,406
308,857
322,933
NONINTEREST INCOME:
Service charges on deposit accounts
1,594
1,648
1,598
1,520
1,620
4,840
4,544
Gain (loss) on sale of assets
432
(64)
513
198
-
881
192
Bank-owned life insurance
614
591
587
573
551
1,792
1,605
Debit card and ATM income
551
543
527
542
935
1,621
4,454
Other
3,111
2,698
3,071
4,053
1,589
8,880
6,881
Total noninterest income
6,302
5,416
6,296
6,886
4,695
18,014
17,676
NONINTEREST EXPENSE:
Salaries and employee benefits
41,123
39,061
41,376
40,464
39,495
121,560
116,570
Net occupancy and equipment
4,570
4,503
4,390
4,572
4,455
13,463
12,360
Depreciation
1,911
1,948
1,964
1,955
1,952
5,823
5,629
Data processing and software
amortization
5,706
5,501
4,894
5,000
4,798
16,101
14,526
Professional fees
1,714
1,620
2,662
3,867
997
5,996
4,088
Regulatory assessments and FDIC
insurance
1,779
2,299
1,854
5,169
1,814
5,932
5,863
Amortization of intangibles
6,212
6,215
6,212
6,247
6,876
18,639
20,636
Communications
827
847
937
743
663
2,611
2,053
Advertising
878
891
765
1,004
877
2,534
2,623
Acquisition and merger-related expenses
-
-
-
3,072
3,421
-
12,483
Other
6,346
8,331
6,356
5,848
5,400
21,033
15,722
Total noninterest expense
71,066
71,216
71,410
77,941
70,748
213,692
212,553
INCOME BEFORE INCOME TAXES
42,728
37,545
32,906
33,828
38,353
113,179
128,056
Provision for income taxes
8,837
7,792
6,759
6,562
7,445
23,388
24,825
NET INCOME
$
33,891
$
29,753
$
26,147
$
27,266
$
30,908
$
89,791
$
103,231
EARNINGS PER SHARE
Basic
$
0.63
$
0.56
$
0.49
$
0.51
$
0.58
$
1.68
$
1.94
Diluted
$
0.63
$
0.56
$
0.49
$
0.51
$
0.58
$
1.68
$
1.94
5
Stellar Bancorp, Inc.
Financial Highlights
(Unaudited)
Three Months Ended
Nine Months Ended
2024
2023
2024
2023
September 30
June 30
March 31
December 31
September 30
September 30
September 30
(Dollars and share amounts in thousands, except per share data)
Net income
$
33,891
$
29,753
$
26,147
$
27,266
$
30,908
$
89,791
$
103,231
Earnings per share, basic
$
0.63
$
0.56
$
0.49
$
0.51
$
0.58
$
1.68
$
1.94
Earnings per share, diluted
$
0.63
$
0.56
$
0.49
$
0.51
$
0.58
$
1.68
$
1.94
Dividends per share
$
0.13
$
0.13
$
0.13
$
0.13
$
0.13
$
0.39
$
0.39
Return on average assets(A)
1.27 %
1.13 %
0.98 %
1.02 %
1.14 %
1.13 %
1.28 %
Return on average equity(A)
8.49 %
7.78 %
6.88 %
7.33 %
8.34 %
7.73 %
9.52 %
Return on average tangible equity(A)(B)
13.63 %
12.82 %
11.47 %
12.61 %
14.47 %
12.67 %
16.86 %
Net interest margin (tax equivalent)(A)(C)
4.19 %
4.24 %
4.26 %
4.40 %
4.37 %
4.23 %
4.55 %
Net interest margin (tax equivalent)
excluding PAA(A)(B)(C)
3.91 %
3.82 %
3.91 %
3.91 %
3.87 %
3.88 %
4.07 %
Efficiency ratio(D)
66.18 %
66.63 %
66.18 %
69.21 %
63.50 %
66.33 %
61.02 %
Capital Ratios
Stellar Bancorp, Inc. (Consolidated)
Equity to assets
15.30 %
14.60 %
14.27 %
14.29 %
13.70 %
15.30 %
13.70 %
Tangible equity to tangible assets(B)
10.27 %
9.53 %
9.12 %
9.04 %
8.37 %
10.27 %
8.37 %
Estimated Total capital ratio (to risk-
weighted assets)
15.91 %
15.34 %
14.62 %
14.02 %
13.61 %
15.91 %
13.61 %
Estimated Common equity Tier 1
capital (to risk weighted assets)
13.62 %
12.98 %
12.29 %
11.77 %
11.30 %
13.62 %
11.30 %
Estimated Tier 1 capital (to risk-
weighted assets)
13.74 %
13.10 %
12.41 %
11.89 %
11.41 %
13.74 %
11.41 %
Estimated Tier 1 leverage (to average
tangible assets)
11.25 %
10.93 %
10.55 %
10.18 %
9.82 %
11.25 %
9.82 %
Stellar Bank
Estimated Total capital ratio (to risk-
weighted assets)
15.07 %
14.65 %
14.13 %
13.65 %
13.32 %
15.07 %
13.32 %
Estimated Common equity Tier 1
capital (to risk-weighted assets)
13.63 %
13.12 %
12.61 %
12.20 %
11.80 %
13.63 %
11.80 %
Estimated Tier 1 capital (to risk-
weighted assets)
13.63 %
13.12 %
12.61 %
12.20 %
11.80 %
13.63 %
11.80 %
Estimated Tier 1 leverage (to average
tangible assets)
11.16 %
10.94 %
10.72 %
10.44 %
10.15 %
11.16 %
10.15 %
Other Data
Weighted average shares:
Basic
53,541
53,572
53,343
53,282
53,313
53,485
53,211
Diluted
53,580
53,608
53,406
53,350
53,380
53,531
53,300
Period end shares outstanding
53,446
53,564
53,551
53,291
53,322
53,446
53,322
Book value per share
$
30.43
$
29.23
$
28.58
$
28.54
$
27.40
$
30.43
$
27.40
Tangible book value per share(B)
$
19.28
$
18.00
$
17.23
$
17.02
$
15.76
$
19.28
$
15.76
Employees - full-time equivalents
1,040
1,045
1,007
998
1,008
1,040
1,008
6
Stellar Bancorp, Inc.
Financial Highlights
(Unaudited)
Assets
Interest-Earning Assets: Loans
Securities
Deposits in other financial institutions Total interest-earning assets Allowance for credit losses on loans
Noninterest-earning assets Total assets
Liabilities and Shareholders' Equity
Interest-Bearing Liabilities: Interest-bearing demand deposits Money market and savings deposits Certificates and other time deposits Borrowed funds
Subordinated debt
Total interest-bearing liabilities
Noninterest-Bearing Liabilities: Noninterest-bearing demand deposits Other liabilities
Total liabilities Shareholders' equity
Total liabilities and shareholders' equity
Net interest rate spread
Net interest income and margin
Net interest income and net interest margin (tax equivalent)
Cost of funds
Cost of deposits
Three Months Ended
September 30, 2024
June 30, 2024
September 30, 2023
Interest
Interest
Interest
Average
Earned/
Average
Average
Earned/
Average
Average
Earned/
Average
Interest
Interest
Interest
Balance
Paid
Yield/Rate
Balance
Paid
Yield/Rate
Balance
Paid
Yield/Rate
(Dollars in thousands)
$ 7,627,522
$
132,372
6.90 %
$ 7,808,320
$
135,885
7.00 %
$ 8,043,706
$
138,948
6.85 %
1,676,614
14,712
3.49 %
1,549,638
12,739
3.31 %
1,471,916
9,930
2.68 %
339,493
4,692
5.50 %
258,916
3,555
5.52 %
181,931
2,391
5.21 %
9,643,629
$
151,776
6.26 %
9,616,874
$
152,179
6.36 %
9,697,553
$
151,269
6.19 %
(94,785)
(96,306)
(99,892)
1,077,422
1,103,297
1,143,634
$10,626,266
$10,623,865
$10,741,295
$ 1,606,736
$
12,458
3.08 %
$ 1,545,096
$
12,213
3.18 %
$ 1,400,508
$
10,415
2.95 %
2,254,767
16,982
3.00 %
2,227,393
16,186
2.92 %
2,166,610
13,142
2.41 %
1,620,908
18,073
4.44 %
1,694,536
18,758
4.45 %
1,400,367
13,282
3.76 %
49,077
840
6.81 %
112,187
1,700
6.09 %
411,212
5,801
5.60 %
110,007
1,916
6.93 %
109,910
1,912
7.00 %
109,608
1,908
6.91 %
5,641,495
$
50,269
3.54 %
5,689,122
$
50,769
3.59 %
5,488,305
$
44,548
3.22 %
3,303,726
3,308,633
3,695,592
93,127
87,986
86,389
9,038,348
9,085,741
9,270,286
1,587,918
1,538,124
1,471,009
$10,626,266
$10,623,865
$10,741,295
2.72 %
2.77 %
2.97 %
$
101,507
4.19 %
$
101,410
4.24 %
$
106,721
4.37 %
$
101,578
4.19 %
$
101,482
4.24 %
$
106,919
4.37 %
2.24 %
2.27 %
1.92 %
2.15 %
2.16 %
1.69 %
7
Assets
Interest-Earning Assets: Loans
Securities
Deposits in other financial institutions Total interest-earning assets Allowance for credit losses on loans
Noninterest-earning assets Total assets
Liabilities and Shareholders' Equity
Interest-Bearing Liabilities: Interest-bearing demand deposits Money market and savings deposits Certificates and other time deposits Borrowed funds
Subordinated debt
Total interest-bearing liabilities
Noninterest-Bearing Liabilities: Noninterest-bearing demand deposits Other liabilities
Total liabilities Shareholders' equity
Total liabilities and shareholders' equity
Net interest rate spread
Net interest income and margin
Net interest income and net interest margin (tax equivalent)
Cost of funds
Cost of deposits
Stellar Bancorp, Inc.
Financial Highlights
(Unaudited)
Nine Months Ended September 30,
2024
2023
Interest
Interest
Average
Earned/
Average
Average
Earned/
Average
Interest
Interest
Balance
Paid
Yield/Rate
Balance
Paid
Yield/Rate
(Dollars in thousands)
$
7,790,957
$
402,942
6.91 %
$
7,957,911
$
398,608
6.70 %
1,556,462
37,562
3.22 %
1,525,808
31,007
2.72 %
287,960
11,874
5.51 %
251,475
9,027
4.80 %
9,635,379
$
452,378
6.27 %
9,735,194
$
438,642
6.02 %
(94,236)
(96,570)
1,104,426
1,148,847
$
10,645,569
$
10,787,471
$
1,616,313
$
36,949
3.05 %
$
1,478,547
$
28,141
2.54 %
2,211,148
48,420
2.93 %
2,291,588
34,161
1.99 %
1,586,623
51,915
4.37 %
1,164,572
26,211
3.01 %
98,374
4,314
5.86 %
333,220
13,653
5.48 %
109,909
5,745
6.98 %
109,508
5,647
6.89 %
5,622,367
$
147,343
3.50 %
5,377,435
$
107,813
2.68 %
3,379,096
3,878,760
92,527
81,894
9,093,990
9,338,089
1,551,579
1,449,382
$
10,645,569
$
10,787,471
2.77 %
3.34 %
$
305,035
4.23 %
$
330,829
4.54 %
$
305,266
4.23 %
$
331,549
4.55 %
2.19 %
1.56 %
2.09 %
1.34 %
8
Stellar Bancorp, Inc.
Financial Highlights
(Unaudited)
Three Months Ended
2024
2023
September 30
June 30
March 31
December 31
September 30
(Dollars in thousands)
Period-end Loan Portfolio:
Commercial and industrial
$
1,347,876
$
1,392,435
$
1,451,462
$
1,409,002
$
1,474,600
Paycheck Protection Program (PPP)
2,877
3,629
4,293
5,100
5,968
Real estate:
Commercial real estate (including multi-family residential)
3,976,296
4,029,671
4,049,885
4,071,807
4,076,606
Commercial real estate construction and land development
890,316
922,805
1,039,443
1,060,406
1,078,265
1-4 family residential (including home equity)
1,112,235
1,098,681
1,049,316
1,047,174
1,024,945
Residential construction
161,494
200,134
252,573
267,357
289,553
Consumer and other
60,030
66,542
61,139
64,287
54,591
Total loans held for investment
$
7,551,124
$
7,713,897
$
7,908,111
$
7,925,133
$
8,004,528
Deposits:
Noninterest-bearing
$
3,303,048
$
3,308,441
$
3,323,149
$
3,546,815
$
3,656,288
Interest-bearing
Demand
1,571,504
1,564,405
1,576,261
1,659,999
1,397,492
Money market and savings
2,280,651
2,213,031
2,203,767
2,136,777
2,128,950
Certificates and other time
1,587,398
1,639,426
1,691,539
1,529,876
1,503,891
Total interest-bearing deposits
5,439,553
5,416,862
5,471,567
5,326,652
5,030,333
Total deposits
$
8,742,601
$
8,725,303
$
8,794,716
$
8,873,467
$
8,686,621
Asset Quality:
Nonaccrual loans
$
32,140
$
50,906
$
57,129
$
39,191
$
38,291
Accruing loans 90 or more days past due
-
-
-
-
-
Total nonperforming loans
32,140
50,906
57,129
39,191
38,291
Other real estate
2,984
2,548
-
-
-
Total nonperforming assets
$
35,124
$
53,454
$
57,129
$
39,191
$
38,291
Net charge-offs (recoveries)
$
3,933
$
(1)
$
714
$
2,577
$
8,116
Nonaccrual loans:
Commercial and industrial
$
9,718
$
18,451
$
15,465
$
5,048
$
14,991
Real estate:
Commercial real estate (including multi-family residential)
10,695
18,094
21,268
16,699
13,563
Commercial real estate construction and land development
4,183
1,641
8,406
5,043
170
1-4 family residential (including home equity)
7,259
12,454
10,368
8,874
8,442
Residential construction
121
155
1,410
3,288
635
Consumer and other
164
111
212
239
490
Total nonaccrual loans
$
32,140
$
50,906
$
57,129
$
39,191
$
38,291
Asset Quality Ratios:
Nonperforming assets to total assets
0.33 %
0.50 %
0.53 %
0.37 %
0.36 %
Nonperforming loans to total loans
0.43 %
0.66 %
0.72 %
0.49 %
0.48 %
Allowance for credit losses on loans to nonperforming loans
262.92 %
186.17 %
168.54 %
233.94 %
244.38 %
Allowance for credit losses on loans to total loans
1.12 %
1.23 %
1.22 %
1.16 %
1.17 %
Net charge-offs to average loans (annualized)
0.21 %
0.00 %
0.04 %
0.13 %
0.40 %
9
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-taxpre-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
Nine Months Ended
2024
2023
2024
2023
September 30
June 30
March 31
December 31
September 30
September 30
September 30
(Dollars and share amounts in thousands, except per share data)
Net income
$
33,891
$
29,753
$
26,147
$
27,266
$
30,908
$
89,791
$
103,231
Add: Provision for credit losses
(5,985)
(1,935)
4,098
1,047
2,315
(3,822)
7,896
Add: Provision for income taxes
8,837
7,792
6,759
6,562
7,445
23,388
24,825
Pre-tax,pre-provision income
$
36,743
$
35,610
$
37,004
$
34,875
$
40,668
$
109,357
$
135,952
Total average assets
$
10,626,266
$
10,623,865
$
10,686,789
$
10,626,373
$
10,741,295
$
10,645,569
$
10,787,471
Pre-tax,pre-provision return on
1.38 %
1.35 %
1.39 %
1.30 %
1.50 %
1.37 %
1.68 %
average assets(B)
Total shareholders' equity
$
1,626,123
$
1,565,795
$
1,530,698
$
1,521,018
$
1,460,846
$
1,626,123
$
1,460,846
Less: Goodwill and core deposit
intangibles, net
595,434
601,633
607,831
614,030
620,262
595,434
620,262
Tangible shareholders' equity
$
1,030,689
$
964,162
$
922,867
$
906,988
$
840,584
$
1,030,689
$
840,584
Shares outstanding at end of period
53,446
53,564
53,551
53,291
53,322
53,446
53,322
Tangible book value per share
$
19.28
$
18.00
$
17.23
$
17.02
$
15.76
$
19.28
$
15.76
Average shareholders' equity
$
1,587,918
$
1,538,124
$
1,528,298
$
1,475,377
$
1,471,009
$
1,551,579
$
1,449,382
Less: Average goodwill and core
deposit intangibles, net
598,866
604,722
611,149
617,236
623,864
604,890
630,890
Average tangible shareholders'
equity
$
989,052
$
933,402
$
917,149
$
858,141
$
847,145
$
946,689
$
818,492
Return on average tangible
equity(B)
13.63 %
12.82 %
11.47 %
12.61 %
14.47 %
12.67 %
16.86 %
Total assets
$
10,629,777
$
10,723,663
$
10,729,222
$
10,647,139
$
10,665,460
$
10,629,777
$
10,665,460
Less: Goodwill and core deposit
intangibles, net
595,434
601,633
607,831
614,030
620,262
595,434
620,262
Tangible assets
$
10,034,343
$
10,122,030
$
10,121,391
$
10,033,109
$
10,045,198
$
10,034,343
$
10,045,198
Tangible equity to tangible assets
10.27 %
9.53 %
9.12 %
9.04 %
8.37 %
10.27 %
8.37 %
Net interest income (tax equivalent)
$
101,578
$
101,482
$
102,207
$
106,121
$
106,919
$
305,266
$
331,549
Less: Purchase accounting accretion
6,795
10,098
8,551
11,726
12,400
25,444
35,076
Adjusted net interest income (tax
equivalent)
$
94,783
$
91,384
$
93,656
$
94,395
$
94,519
$
279,822
$
296,473
Average earning assets
$
9,643,629
$
9,616,874
$
9,645,544
$
9,576,927
$
9,697,553
$
9,635,379
$
9,735,194
Net interest margin (tax
equivalent) excluding PAA
3.91 %
3.82 %
3.91 %
3.91 %
3.87 %
3.88 %
4.07 %
10
Disclaimer
Stellar Bancorp Inc. published this content on October 31, 2024, and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on October 31, 2024 at 17:25:35.099.