Stellar Bancorp, Inc. (the “Company” or “Stellar”) (NYSE: STEL)
today reported net income of $29.8 million, or diluted earnings per
share of $0.56, for the second quarter of 2024 compared to net
income of $26.1 million, or diluted earnings per share of $0.49,
for the first quarter of 2024.
“We are pleased to announce our second quarter 2024 results,”
said Robert R. Franklin, Jr., Stellar’s Chief Executive Officer.
“Our disciplined focus on capital, credit and liquidity gives us
strength and optionality as we move into the back half of the year.
Although many anticipate lower interest rates in September, we are
prepared if that does not come to pass,” said Mr. Franklin.
“Stellar Bank is well-positioned for either outcome.”
“In addition to building capital, we have reduced our commercial
real estate exposure and are pursuing a more balanced approach to
our lending through new additions to our team to help us build our
commercial and industrial portfolio. Our credit quality remains
steady as the economy in our markets remains solid. We operate in
some of, if not the best, markets in the country and they have
shown resilience throughout this tightening cycle,” Mr. Franklin
continued.
“Our focus on capital, credit and liquidity will not change. We
will continue to monitor effects of higher interest rates and the
contentious presidential election on our markets. We believe that
building and maintaining a strong balance sheet, positions us to
take advantage of opportunities that arise from this economic
cycle. Our focus remains on building long-term shareholder value as
we embark on the second half of 2024 and the future is bright,”
concluded Mr. Franklin.
Second Quarter 2024 Financial Highlights
- Solid Profitability: Second quarter 2024 net income of $29.8
million, or diluted earnings per share of $0.56, translated into an
annualized return on average assets of 1.13%, an annualized return
on average equity of 7.78% and an annualized return on average
tangible equity of 12.82%(1).
- Meaningful Regulatory Capital Build: Total risk-based capital
ratio increased to 15.34% at June 30, 2024 from 14.62% at March 31,
2024 and Tier 1 leverage ratio increased to 10.93% at June 30, 2024
from 10.55% at March 31, 2024.
- Strong Net Interest Margin: Tax equivalent net interest margin
was 4.24% for the second quarter of 2024 compared to 4.26% for the
first quarter of 2024. The tax equivalent net interest margin,
excluding purchase accounting accretion (“PAA”), was 3.82%(1) for
the second quarter of 2024 compared to 3.91%(1) for the first
quarter of 2024.
- Stable Credit Performance: Net charge-offs of $715 thousand, or
0.02%, for the year-to-date 2024.
________________________
(1)
Refer to page 10 of this earnings release
for the calculation of this non-GAAP financial measure.
Second Quarter 2024 Results
Net interest income in the second quarter of 2024 decreased $708
thousand, or 0.7%, to $101.4 million from $102.1 million for the
first quarter of 2024. The net interest margin on a tax equivalent
basis decreased 2 basis points to 4.24% for the second quarter of
2024 from 4.26% for the first quarter of 2024. The decrease in the
net interest margin from the prior quarter was primarily due to the
impact of increased interest rates on our cost of funding only
partially offset by increased income on interest earning assets.
Net interest income for the second quarter of 2024 benefited from
$10.1 million of income from purchase accounting adjustments
compared to $8.6 million in the first quarter of 2024. Excluding
purchase accounting adjustments, net interest income (tax
equivalent) for the second quarter 2024 would have been $91.4
million(1) and the tax equivalent net interest margin would have
been 3.82%(1).
Noninterest income for the second quarter of 2024 was $5.4
million, a decrease of $880 thousand, or 14.0%, compared to $6.3
million for the first quarter of 2024. Noninterest income decreased
in the second quarter of 2024 compared to the first quarter of 2024
primarily due to a decrease in gains on sales of assets in the
second quarter of 2024 compared to the first quarter of 2024.
Noninterest expense for the second quarter of 2024 decreased
$194 thousand, or 0.3%, to $71.2 million compared to $71.4 million
for the first quarter of 2024. The decrease in noninterest expense
in the second quarter of 2024 compared to the first quarter of 2024
was primarily due to a $2.3 million decrease in salaries and
employee benefits and a $1.0 million decrease in professional fees
partially offset by other expenses.
The efficiency ratio was 66.63% for the second quarter of 2024
compared to 66.18% for the first quarter of 2024. Annualized
returns on average assets, average equity and average tangible
equity were 1.13%, 7.78% and 12.82%(1) for the second quarter of
2024, respectively, compared to 0.98%, 6.88% and 11.47%(1),
respectively, for the first quarter of 2024.
Financial Condition
Total loans at June 30, 2024 decreased $194.2 million to $7.71
billion compared to $7.91 billion at March 31, 2024. At June 30,
2024, the remaining balance of the purchase accounting adjustments
on loans was $87.4 million.
Total deposits at June 30, 2024 decreased $69.4 million to $8.73
billion compared to $8.79 billion at March 31, 2024, due to
decreases in certificates and other time deposits,
noninterest-bearing deposits and interest-bearing demand deposits,
partially offset by increases in money market and savings deposits.
Shifts in the deposit mix were primarily driven by the current
interest rate environment and an intensely competitive market for
deposits. Estimated uninsured deposits totaled $4.79 billion and
estimated uninsured deposits net of collateralized deposits of
$1.01 billion were $3.78 billion, or 43.3%, of total deposits at
June 30, 2024.
Total assets at June 30, 2024 were $10.72 billion, a decrease of
$5.6 million, compared to $10.73 billion at March 31, 2024.
Asset Quality
Nonperforming assets totaled $53.4 million, or 0.50% of total
assets, at June 30, 2024, compared to $57.1 million, or 0.53% of
total assets, at March 31, 2024. The allowance for credit losses on
loans as a percentage of total loans was 1.23% at June 30, 2024 and
1.22% at March 31, 2024.
The second quarter of 2024 included a reversal of provision for
credit losses expenses of $1.9 million compared to a $4.1 million
provision for credit losses recorded during the first quarter of
2024. Net charge-offs for the second quarter of 2024 were $1
thousand, or 0.00% (annualized) of average loans, compared to net
charge-offs of $714 thousand, or 0.04% (annualized) of average
loans, for the first 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, July 26, 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/Q4I635860 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/232230638. 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.
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.
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.
Stellar Bancorp, Inc.
Financial Highlights
(Unaudited)
2024
2023
June 30
March 31
December 31
September 30
June 30
(Dollars in thousands)
ASSETS
Cash and due from banks
$
110,341
$
74,663
$
121,004
$
94,970
$
105,913
Interest-bearing deposits at
other financial institutions
379,909
325,079
278,233
207,302
198,176
Total cash and cash equivalents
490,250
399,742
399,237
302,272
304,089
Available for sale securities, at fair
value
1,630,971
1,523,100
1,395,680
1,414,952
1,478,222
Loans held for investment
7,713,897
7,908,111
7,925,133
8,004,528
8,068,718
Less: allowance for credit losses on
loans
(94,772
)
(96,285
)
(91,684
)
(93,575
)
(100,195
)
Loans, net
7,619,125
7,811,826
7,833,449
7,910,953
7,968,523
Accrued interest receivable
43,348
45,466
44,244
43,536
42,051
Premises and equipment, net
113,984
115,698
118,683
119,332
119,142
Federal Home Loan Bank stock
15,089
16,050
25,051
29,022
24,478
Bank-owned life insurance
106,262
105,671
105,084
104,699
104,148
Goodwill
497,318
497,318
497,318
497,318
497,260
Core deposit intangibles, net
104,315
110,513
116,712
122,944
129,805
Other assets
103,001
103,838
111,681
120,432
110,633
Total assets
$
10,723,663
$
10,729,222
$
10,647,139
$
10,665,460
$
10,778,351
LIABILITIES AND SHAREHOLDERS’ EQUITY
LIABILITIES:
Deposits:
Noninterest-bearing
$
3,308,441
$
3,323,149
$
3,546,815
$
3,656,288
$
3,713,536
Interest-bearing
Demand
1,564,405
1,576,261
1,659,999
1,397,492
1,437,509
Money market and savings
2,213,031
2,203,767
2,136,777
2,128,950
2,174,073
Certificates and other time
1,639,426
1,691,539
1,529,876
1,503,891
1,441,251
Total interest-bearing deposits
5,416,862
5,471,567
5,326,652
5,030,333
5,052,833
Total deposits
8,725,303
8,794,716
8,873,467
8,686,621
8,766,369
Accrued interest payable
12,327
12,227
11,288
7,612
4,555
Borrowed funds
240,000
215,000
50,000
323,981
369,963
Subordinated debt
109,964
109,864
109,765
109,665
109,566
Other liabilities
70,274
66,717
81,601
76,735
69,218
Total liabilities
9,157,868
9,198,524
9,126,121
9,204,614
9,319,671
SHAREHOLDERS’ EQUITY:
Common stock
536
536
533
533
533
Capital surplus
1,238,477
1,235,221
1,232,627
1,231,686
1,228,532
Retained earnings
447,948
425,130
405,945
385,600
361,619
Accumulated other comprehensive loss
(121,166
)
(130,189
)
(118,087
)
(156,973
)
(132,004
)
Total shareholders’ equity
1,565,795
1,530,698
1,521,018
1,460,846
1,458,680
TOTAL LIABILITIES AND SHAREHOLDERS’
EQUITY
$
10,723,663
$
10,729,222
$
10,647,139
$
10,665,460
$
10,778,351
Stellar Bancorp, Inc.
Financial Highlights
(Unaudited)
Three Months Ended
Six Months Ended
2024
2023
2024
2023
June 30
March 31
December 31
September 30
June 30
June 30
June 30
(Dollars in thousands, except
per share data)
INTEREST INCOME:
Loans, including fees
$
135,885
$
134,685
$
139,114
$
138,948
$
133,931
$
270,570
$
259,660
Securities:
Taxable
11,923
9,293
9,622
9,493
9,726
21,216
19,379
Tax-exempt
816
818
418
437
436
1,634
1,698
Deposits in other financial
institutions
3,555
3,627
3,021
2,391
2,865
7,182
6,636
Total interest income
152,179
148,423
152,175
151,269
146,958
300,602
287,373
INTEREST EXPENSE:
Demand, money market and savings
deposits
28,399
27,530
25,033
23,557
20,708
55,929
38,745
Certificates and other time deposits
18,758
15,084
15,075
13,282
9,622
33,842
12,929
Borrowed funds
1,700
1,774
4,154
5,801
6,535
3,474
7,852
Subordinated debt
1,912
1,917
1,983
1,908
1,812
3,829
3,739
Total interest expense
50,769
46,305
46,245
44,548
38,677
97,074
63,265
NET INTEREST INCOME
101,410
102,118
105,930
106,721
108,281
203,528
224,108
(Reversal of) provision for credit
losses
(1,935
)
4,098
1,047
2,315
1,915
2,163
5,581
Net interest income after provision for
credit losses
103,345
98,020
104,883
104,406
106,366
201,365
218,527
NONINTEREST INCOME:
Service charges on deposit accounts
1,648
1,598
1,520
1,620
1,575
3,246
2,924
(Loss) gain on sale of assets
(64
)
513
198
—
(6
)
449
192
Bank-owned life insurance
591
587
573
551
532
1,178
1,054
Debit card and ATM income
543
527
542
935
1,821
1,070
3,519
Other
2,698
3,071
4,053
1,589
1,561
5,769
5,292
Total noninterest income
5,416
6,296
6,886
4,695
5,483
11,712
12,981
NONINTEREST EXPENSE:
Salaries and employee benefits
39,061
41,376
40,464
39,495
37,300
80,437
77,075
Net occupancy and equipment
4,503
4,390
4,572
4,455
3,817
8,893
7,905
Depreciation
1,948
1,964
1,955
1,952
1,841
3,912
3,677
Data processing and software
amortization
5,501
4,894
5,000
4,798
4,674
10,395
9,728
Professional fees
1,620
2,662
3,867
997
1,564
4,282
3,091
Regulatory assessments and FDIC
insurance
2,299
1,854
5,169
1,814
2,755
4,153
4,049
Amortization of intangibles
6,215
6,212
6,247
6,876
6,881
12,427
13,760
Communications
847
937
743
663
689
1,784
1,390
Advertising
891
765
1,004
877
907
1,656
1,746
Acquisition and merger-related
expenses
—
—
3,072
3,421
2,897
—
9,062
Other
8,331
6,356
5,848
5,400
5,882
14,687
10,322
Total noninterest expense
71,216
71,410
77,941
70,748
69,207
142,626
141,805
INCOME BEFORE INCOME TAXES
37,545
32,906
33,828
38,353
42,642
70,451
89,703
Provision for income taxes
7,792
6,759
6,562
7,445
7,467
14,551
17,380
NET INCOME
$
29,753
$
26,147
$
27,266
$
30,908
$
35,175
$
55,900
$
72,323
EARNINGS PER SHARE
Basic
$
0.56
$
0.49
$
0.51
$
0.58
$
0.66
$
1.05
$
1.36
Diluted
$
0.56
$
0.49
$
0.51
$
0.58
$
0.66
$
1.04
$
1.36
Three Months Ended
Six Months Ended
2024
2023
2024
2023
June 30
March 31
December 31
September 30
June 30
June 30
June 30
(Dollars and share amounts in
thousands, except per share data)
Net income
$
29,753
$
26,147
$
27,266
$
30,908
$
35,175
$
55,900
$
72,323
Earnings per share, basic
$
0.56
$
0.49
$
0.51
$
0.58
$
0.66
$
1.05
$
1.36
Earnings per share, diluted
$
0.56
$
0.49
$
0.51
$
0.58
$
0.66
$
1.04
$
1.36
Dividends per share
$
0.13
$
0.13
$
0.13
$
0.13
$
0.13
$
0.26
$
0.26
Return on average assets(A)
1.13
%
0.98
%
1.02
%
1.14
%
1.31
%
1.06
%
1.35
%
Return on average equity(A)
7.78
%
6.88
%
7.33
%
8.34
%
9.67
%
7.33
%
10.14
%
Return on average tangible
equity(A)(B)
12.82
%
11.47
%
12.61
%
14.47
%
17.05
%
12.15
%
18.14
%
Net interest margin (tax
equivalent)(A)(C)
4.24
%
4.26
%
4.40
%
4.37
%
4.49
%
4.25
%
4.64
%
Net interest margin (tax equivalent)
excluding PAA(A)(B)(C)
3.82
%
3.91
%
3.91
%
3.87
%
3.97
%
3.86
%
4.18
%
Efficiency ratio(D)
66.63
%
66.18
%
69.21
%
63.50
%
60.83
%
66.40
%
59.86
%
Capital Ratios
Stellar Bancorp, Inc. (Consolidated)
Equity to assets
14.60
%
14.27
%
14.29
%
13.70
%
13.53
%
14.60
%
13.53
%
Tangible equity to tangible assets(B)
9.53
%
9.12
%
9.04
%
8.37
%
8.19
%
9.53
%
8.19
%
Estimated Total capital ratio (to
risk-weighted assets)
15.34
%
14.62
%
14.02
%
13.61
%
13.21
%
15.34
%
13.21
%
Estimated Common equity Tier 1 capital (to
risk weighted assets)
12.98
%
12.29
%
11.77
%
11.30
%
10.83
%
12.98
%
10.83
%
Estimated Tier 1 capital (to risk-weighted
assets)
13.10
%
12.41
%
11.89
%
11.41
%
10.94
%
13.10
%
10.94
%
Estimated Tier 1 leverage (to average
tangible assets)
10.93
%
10.55
%
10.18
%
9.82
%
9.51
%
10.93
%
9.51
%
Stellar Bank
Estimated Total capital ratio (to
risk-weighted assets)
14.65
%
14.13
%
13.65
%
13.32
%
12.98
%
14.65
%
12.98
%
Estimated Common equity Tier 1 capital (to
risk-weighted assets)
13.12
%
12.61
%
12.20
%
11.80
%
11.38
%
13.12
%
11.38
%
Estimated Tier 1 capital (to risk-weighted
assets)
13.12
%
12.61
%
12.20
%
11.80
%
11.38
%
13.12
%
11.38
%
Estimated Tier 1 leverage (to average
tangible assets)
10.94
%
10.72
%
10.44
%
10.15
%
9.89
%
10.94
%
9.89
%
Other Data
Weighted average shares:
Basic
53,572
53,343
53,282
53,313
53,297
53,457
53,160
Diluted
53,608
53,406
53,350
53,380
53,375
53,506
53,261
Period end shares outstanding
53,564
53,551
53,291
53,322
53,303
53,564
53,303
Book value per share
$
29.23
$
28.58
$
28.54
$
27.40
$
27.37
$
29.23
$
27.37
Tangible book value per share(B)
$
18.00
$
17.23
$
17.02
$
15.76
$
15.60
$
18.00
$
15.60
Employees - full-time equivalents
1,045
1,007
998
1,008
1,004
1,045
1,004
(A)
Interim periods annualized.
(B)
Refer to the calculation of these non-GAAP financial measures
and a reconciliation to their most directly comparable GAAP
financial measures on page 10 of this Earnings Release.
(C)
Net interest margin represents net interest income divided by
average interest-earning assets.
(D)
Represents total noninterest expense divided by the sum of net
interest income plus noninterest income, excluding net gains and
losses on the sale of loans, securities and assets. Additionally,
taxes and provision for credit losses are not part of this
calculation.
Stellar Bancorp, Inc.
Financial Highlights
(Unaudited)
Three Months Ended
June 30, 2024
March 31, 2024
June 30, 2023
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
$
7,808,320
$
135,885
7.00
%
$
7,938,824
$
134,685
6.82
%
$
7,980,856
$
133,931
6.73
%
Securities
1,549,638
12,739
3.31
%
1,441,814
10,111
2.82
%
1,502,949
10,162
2.71
%
Deposits in other financial
institutions
258,916
3,555
5.52
%
264,906
3,627
5.51
%
209,722
2,865
5.48
%
Total interest-earning assets
9,616,874
$
152,179
6.36
%
9,645,544
$
148,423
6.19
%
9,693,527
$
146,958
6.08
%
Allowance for credit losses on loans
(96,306
)
(91,612
)
(96,414
)
Noninterest-earning assets
1,103,297
1,132,857
1,143,025
Total assets
$
10,623,865
$
10,686,789
$
10,740,138
Liabilities and Shareholders'
Equity
Interest-Bearing Liabilities:
Interest-bearing demand deposits
$
1,545,096
$
12,213
3.18
%
$
1,697,211
$
12,278
2.91
%
$
1,387,604
$
9,343
2.70
%
Money market and savings deposits
2,227,393
16,186
2.92
%
2,150,805
15,252
2.85
%
2,220,827
11,365
2.05
%
Certificates and other time deposits
1,694,536
18,758
4.45
%
1,444,048
15,084
4.20
%
1,225,834
9,622
3.15
%
Borrowed funds
112,187
1,700
6.09
%
134,400
1,774
5.31
%
479,896
6,535
5.46
%
Subordinated debt
109,910
1,912
7.00
%
109,808
1,917
7.02
%
109,499
1,812
6.64
%
Total interest-bearing liabilities
5,689,122
$
50,769
3.59
%
5,536,272
$
46,305
3.36
%
5,423,660
$
38,677
2.86
%
Noninterest-Bearing Liabilities:
Noninterest-bearing demand deposits
3,308,633
3,525,758
3,779,594
Other liabilities
87,986
96,461
78,411
Total liabilities
9,085,741
9,158,491
9,281,665
Shareholders’ equity
1,538,124
1,528,298
1,458,473
Total liabilities and shareholders’
equity
$
10,623,865
$
10,686,789
$
10,740,138
Net interest rate spread
2.77
%
2.83
%
3.22
%
Net interest income and margin
$
101,410
4.24
%
$
102,118
4.26
%
$
108,281
4.48
%
Net interest income and net interest
margin (tax equivalent)
$
101,482
4.24
%
$
102,207
4.26
%
$
108,509
4.49
%
Cost of funds
2.27
%
2.06
%
1.69
%
Cost of deposits
2.16
%
1.94
%
1.41
%
Stellar Bancorp, Inc.
Financial Highlights
(Unaudited)
Six Months Ended June
30,
2024
2023
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
$
7,873,572
$
270,570
6.91
%
$
7,914,303
$
259,660
6.62
%
Securities
1,495,726
22,850
3.07
%
1,553,200
21,077
2.74
%
Deposits in other financial
institutions
261,911
7,182
5.52
%
286,823
6,636
4.67
%
Total interest-earning assets
9,631,209
$
300,602
6.28
%
9,754,326
$
287,373
5.94
%
Allowance for credit losses on loans
(93,959
)
(94,881
)
Noninterest-earning assets
1,118,077
1,151,497
Total assets
$
10,655,327
$
10,810,942
Liabilities and Shareholders'
Equity
Interest-Bearing Liabilities:
Interest-bearing demand deposits
$
1,621,154
$
24,491
3.04
%
$
1,518,213
$
17,725
2.35
%
Money market and savings deposits
2,189,099
31,438
2.89
%
2,355,112
21,020
1.80
%
Certificates and other time deposits
1,569,292
33,842
4.34
%
1,044,721
12,929
2.50
%
Borrowed funds
123,293
3,474
5.67
%
293,578
7,852
5.39
%
Subordinated debt
109,859
3,829
7.01
%
109,458
3,739
6.89
%
Total interest-bearing liabilities
5,612,697
$
97,074
3.48
%
5,321,082
$
63,265
2.40
%
Noninterest-Bearing Liabilities:
Noninterest-bearing demand deposits
3,417,196
3,971,862
Other liabilities
92,223
79,609
Total liabilities
9,122,116
9,372,553
Shareholders’ equity
1,533,211
1,438,389
Total liabilities and shareholders'
equity
$
10,655,327
$
10,810,942
Net interest rate spread
2.80
%
3.54
%
Net interest income and margin
$
203,528
4.25
%
$
224,108
4.63
%
Net interest income and net interest
margin (tax equivalent)
$
203,688
4.25
%
$
224,628
4.64
%
Cost of funds
2.16
%
1.37
%
Cost of deposits
2.05
%
1.17
%
Stellar Bancorp, Inc.
Financial Highlights
(Unaudited)
Three Months Ended
2024
2023
June 30
March 31
December 31
September 30
June 30
(Dollars in thousands)
Period-end Loan Portfolio:
Commercial and industrial
$
1,392,435
$
1,451,462
$
1,409,002
$
1,474,600
$
1,512,476
Paycheck Protection Program (PPP)
3,629
4,293
5,100
5,968
8,027
Real estate:
Commercial real estate (including
multi-family residential)
4,029,671
4,049,885
4,071,807
4,076,606
4,038,487
Commercial real estate construction and
land development
922,805
1,039,443
1,060,406
1,078,265
1,136,124
1-4 family residential (including home
equity)
1,098,681
1,049,316
1,047,174
1,024,945
1,009,439
Residential construction
200,134
252,573
267,357
289,553
311,208
Consumer and other
66,542
61,139
64,287
54,591
52,957
Total loans held for investment
$
7,713,897
$
7,908,111
$
7,925,133
$
8,004,528
$
8,068,718
Deposits:
Noninterest-bearing
$
3,308,441
$
3,323,149
$
3,546,815
$
3,656,288
$
3,713,536
Interest-bearing
Demand
1,564,405
1,576,261
1,659,999
1,397,492
1,437,509
Money market and savings
2,213,031
2,203,767
2,136,777
2,128,950
2,174,073
Certificates and other time
1,639,426
1,691,539
1,529,876
1,503,891
1,441,251
Total interest-bearing deposits
5,416,862
5,471,567
5,326,652
5,030,333
5,052,833
Total deposits
$
8,725,303
$
8,794,716
$
8,873,467
$
8,686,621
$
8,766,369
Asset Quality:
Nonaccrual loans
$
50,906
$
57,129
$
39,191
$
38,291
$
43,349
Accruing loans 90 or more days past
due
—
—
—
—
—
Total nonperforming loans
50,906
57,129
39,191
38,291
43,349
Other real estate
2,548
—
—
—
—
Total nonperforming assets
$
53,454
$
57,129
$
39,191
$
38,291
$
43,349
Net (recoveries) charge-offs
$
(1
)
$
714
$
2,577
$
8,116
$
236
Nonaccrual loans:
Commercial and industrial
$
18,451
$
15,465
$
5,048
$
14,991
$
22,968
Real estate:
Commercial real estate (including
multi-family residential)
18,094
21,268
16,699
13,563
8,221
Commercial real estate construction and
land development
1,641
8,406
5,043
170
388
1-4 family residential (including home
equity)
12,454
10,368
8,874
8,442
10,880
Residential construction
155
1,410
3,288
635
665
Consumer and other
111
212
239
490
227
Total nonaccrual loans
$
50,906
$
57,129
$
39,191
$
38,291
$
43,349
Asset Quality Ratios:
Nonperforming assets to total assets
0.50
%
0.53
%
0.37
%
0.36
%
0.40
%
Nonperforming loans to total loans
0.66
%
0.72
%
0.49
%
0.48
%
0.54
%
Allowance for credit losses on loans to
nonperforming loans
186.17
%
168.54
%
233.94
%
244.38
%
231.14
%
Allowance for credit losses on loans to
total loans
1.23
%
1.22
%
1.16
%
1.17
%
1.24
%
Net charge-offs to average loans
(annualized)
0.00
%
0.04
%
0.13
%
0.40
%
0.01
%
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
Six Months Ended
2024
2023
2024
2023
June 30
March 31
December 31
September 30
June 30
June 30
June 30
(Dollars and share amounts in
thousands, except per share data)
Net income
$
29,753
$
26,147
$
27,266
$
30,908
$
35,175
$
55,900
$
72,323
Add: Provision for credit losses
(1,935
)
4,098
1,047
2,315
1,915
2,163
5,581
Add: Provision for income taxes
7,792
6,759
6,562
7,445
7,467
14,551
17,380
Pre-tax, pre-provision income
$
35,610
$
37,004
$
34,875
$
40,668
$
44,557
$
72,614
$
95,284
Total average assets
$
10,623,865
$
10,686,789
$
10,626,373
$
10,741,295
$
10,740,138
$
10,655,327
$
10,810,942
Pre-tax, pre-provision return on
average assets(B)
1.35
%
1.39
%
1.30
%
1.50
%
1.66
%
1.37
%
1.78
%
Total shareholders’ equity
$
1,565,795
$
1,530,698
$
1,521,018
$
1,460,846
$
1,458,680
$
1,565,795
$
1,458,680
Less: Goodwill and core deposit
intangibles, net
601,633
607,831
614,030
620,262
627,065
601,633
627,065
Tangible shareholders’ equity
$
964,162
$
922,867
$
906,988
$
840,584
$
831,615
$
964,162
$
831,615
Shares outstanding at end of period
53,564
53,551
53,291
53,322
53,303
53,564
53,303
Tangible book value per share
$
18.00
$
17.23
$
17.02
$
15.76
$
15.60
$
18.00
$
15.60
Average shareholders’ equity
$
1,538,124
$
1,528,298
$
1,475,377
$
1,471,009
$
1,458,473
$
1,533,211
$
1,438,389
Less: Average goodwill and core deposit
intangibles, net
604,722
611,149
617,236
623,864
630,854
607,935
634,462
Average tangible shareholders’ equity
$
933,402
$
917,149
$
858,141
$
847,145
$
827,619
$
925,276
$
803,927
Return on average tangible
equity(B)
12.82
%
11.47
%
12.61
%
14.47
%
17.05
%
12.15
%
18.14
%
Total assets
$
10,723,663
$
10,729,222
$
10,647,139
$
10,665,460
$
10,778,351
$
10,723,663
$
10,778,351
Less: Goodwill and core deposit
intangibles, net
601,633
607,831
614,030
620,262
627,065
601,633
627,065
Tangible assets
$
10,122,030
$
10,121,391
$
10,033,109
$
10,045,198
$
10,151,286
$
10,122,030
$
10,151,286
Tangible equity to tangible
assets
9.53
%
9.12
%
9.04
%
8.37
%
8.19
%
9.53
%
8.19
%
Net interest income (tax equivalent)
$
101,482
$
102,207
$
106,121
$
106,919
$
108,509
$
203,688
$
224,628
Less: Purchase accounting accretion
10,098
8,551
11,726
12,400
12,572
18,649
22,676
Adjusted net interest income (tax
equivalent)
$
91,384
$
93,656
$
94,395
$
94,519
$
95,937
$
185,039
$
201,952
Average earning assets
$
9,616,874
$
9,645,544
$
9,576,927
$
9,697,553
$
9,693,527
$
9,631,209
$
9,754,326
Net interest margin (tax equivalent)
excluding PAA
3.82
%
3.91
%
3.91
%
3.87
%
3.97
%
3.86
%
4.18
%
(A)
Represents total noninterest expense,
excluding acquisition and merger-related expenses, core deposit
intangibles amortization and write-downs on assets moved to held
for sale, divided by the sum of net interest income, excluding
purchase accounting adjustments plus noninterest income, excluding
gains and losses on the sale of assets. Additionally, taxes and
provision for credit losses are not part of this calculation.
(B)
Interim periods annualized.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240726333029/en/
Investor Relations IR@stellar.bank
Stellar Bancorp (NYSE:STEL)
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Stellar Bancorp (NYSE:STEL)
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From Jan 2024 to Jan 2025
