Stellar Bancorp, Inc. Reports Fourth Quarter 2023 Results
- Stellar reported strong net income of $130.5 million for the year ended December 31, 2023.
- The company's total risk-based capital ratio increased to 14.02% at December 31, 2023, from 12.39% at December 31, 2022.
- Noninterest-bearing deposit balances remained a significant portion of their deposit funding base, ending the year at 40.0% of total deposits.
- The tax equivalent net interest margin was 4.40% for the fourth quarter of 2023, up from 4.37% in the third quarter of 2023.
- The efficiency ratio was 69.21% for the fourth quarter 2023 compared to 63.50% for the third quarter 2023, indicating an increase in noninterest expenses.
- Noninterest expense for the year ended December 31, 2023, increased $94.4 million, or 48.2%, to $290.5 million compared to $196.1 million for the year ended December 31, 2022, which is a significant increase.
Insights
Stellar Bancorp's reported net income of $27.3 million for Q4 2023 and $130.5 million for the full year, with diluted earnings per share of $0.51 and $2.45 respectively, indicates a robust financial performance in a challenging economic climate. The company's focus on capital, liquidity and credit quality, as highlighted by CEO Robert R. Franklin, Jr., has been a prudent strategy in the face of rising interest rates and bank failures. The reported increase in the total risk-based capital ratio to 14.02% and Tier 1 leverage ratio to 10.18% suggests a strengthened capital position, which is critical for absorbing potential losses and supporting growth.
The net interest margin (NIM) expansion, from 4.37% in Q3 to 4.40% in Q4 and a significant year-over-year increase to 4.51%, reflects effective asset-liability management, especially given the rate volatility in 2023. However, the reliance on purchase accounting adjustments (PAA) for NIM calculation could mask underlying performance issues. It's important to note that the efficiency ratio's uptick to 69.21% in Q4 from 63.50% in Q3 suggests rising costs, which could pressure margins if not managed alongside revenue growth.
The Merger of Equals with Allegiance Bancshares has evidently contributed to the scale of operations and financial results, though it complicates year-over-year comparisons. Investors should consider the one-time expenses and the impact of the merger when evaluating Stellar's operational efficiency and profitability moving forward.
Stellar Bancorp's strategic positioning, as discussed by the CEO, suggests an anticipation of a slower economy in 2024. The company's plan to optimize and reduce noninterest expenses is a proactive measure to maintain profitability in a potentially contracting economic environment. The emphasis on crossing the $10 billion asset threshold indicates regulatory and strategic considerations that are likely to influence the bank's operations and compliance costs.
The bank's advantageous funding profile, with noninterest-bearing deposits constituting 40% of the total deposit base, provides a cost advantage in terms of funding expenses. This is particularly relevant in a competitive banking market where deposit costs can significantly impact net interest income. The shift in deposit mix, driven by the current interest rate environment, requires continuous monitoring as it could affect the bank's liquidity and interest rate risk profile.
Asset quality remains a key factor, with nonperforming assets at 0.37% of total assets. This is relatively low, indicating effective risk management, but it will be important to monitor this closely given the economic headwinds anticipated in 2024.
The FDIC special insurance assessment expense of $2.4 million recorded by Stellar Bancorp is a direct consequence of regulatory costs associated with bank failures. This expense reflects the broader industry's risk environment and the regulatory framework in which banks operate. The assessment underscores the importance of maintaining strong capital and liquidity positions to meet regulatory requirements and absorb industry-wide shocks.
Additionally, the Merger of Equals accounting treatment as a reverse acquisition has significant legal and financial reporting implications. It is essential for investors to understand the complexity of such mergers and their impact on financial statements. The realignment of assets and liabilities at fair value can lead to significant changes in the balance sheet, affecting the comparability of financial results across periods.
“We are pleased to announce our full-year and fourth quarter results, capping a successful year despite industry challenges and economic uncertainty,” said Robert R. Franklin, Jr., Stellar’s Chief Executive Officer. “We maintained our focus on capital, liquidity, and credit to protect shareholder value in a year of rapidly rising interest rates and large bank failures, all while setting the foundation of a new organization following our combination in late 2022. Our staff has done a great job in combining two banks and we are poised to refine what we have built. The success of our team’s efforts during the year is reflected by our maintaining a solid net interest margin, a strong deposit base, our credit quality and ability to build capital,” he continued.
“While we expect a somewhat slower economy in 2024, our focus will be on continuing to optimize and reduce our noninterest expenses as we manage the organization’s needs and requirements from crossing the
“We operate in some of the best banking markets in the country and we look forward to the possibility of additional clarity around the direction of interest rates and a more reasonably priced market for deposits and funding in the new year. Thank you to our shareholders for their support and we look forward to continuing to build shareholder value in 2024,” concluded Mr. Franklin.
2023 Financial Highlights
-
Strong Earnings: Stellar recorded 2023 net income of
$130.5 million $2.45 1.21% , return on average equity of8.96% and return on average tangible equity of15.75% (1).
-
Meaningful Regulatory Capital Build: Total risk-based capital ratio increased to
14.02% at December 31, 2023 from12.39% at December 31, 2022 and Tier 1 leverage ratio increased to10.18% at December 31, 2023 from8.55% at December 31, 2022.
-
Book Value Growth: During 2023, book value per share increased to
$28.54 $26.12 $3.00 21.4% , from$14.02 $17.02
-
Advantageous Funding Profile: Noninterest-bearing deposit balances remained a significant portion of our deposit funding base, ending the year at
40.0% of total deposits.
Fourth Quarter 2023 Financial Highlights
-
Strong Net Interest Margin: Tax equivalent net interest margin was
4.40% for fourth quarter of 2023 up from4.37% in the third quarter of 2023. The tax equivalent net interest margin, excluding purchase accounting accretion (“PAA”), was3.91% (1) for the fourth quarter of 2023 up from3.87% (1) for the third quarter of 2023.
-
Solid Profitability: Fourth quarter 2023 net income of
$27.3 million $0.51 1.02% , an annualized return on average equity of7.33% and an annualized return on average tangible equity of12.61% (1).
_____________________
(1) Refer to page 10 of this earnings release for the calculation of this non-GAAP financial measure.
Merger of Equals
The merger of equals (the “Merger”) between Allegiance Bancshares, Inc. (“Allegiance”) and CBTX, Inc. (“CBTX”), which became effective on October 1, 2022, was accounted for as a reverse acquisition using the acquisition method of accounting, with CBTX treated as the legal acquirer and Allegiance treated as the accounting acquirer for financial reporting purposes. Therefore, the historical financial statements of the Company prior to the Merger reflect the historical financial statement balances of Allegiance. In addition, the assets and liabilities of CBTX as of the date of the Merger were recorded at estimated fair value and added to those of Allegiance. The Merger had a significant impact on all aspects of the Company's financial statements and, as a result, financial results after the Merger are not comparable to financial results prior to the Merger. Results of operations for 2023 and the fourth quarter 2022 reflect the combined operations following the Merger. The full year 2022 results of operations reflect the combined operations for the fourth quarter 2022 and the stand-alone Allegiance results for all periods prior to October 1, 2022.
Fourth Quarter 2023 Results
Net interest income in the fourth quarter 2023 decreased
Noninterest income for the fourth quarter 2023 was
Noninterest expense for the fourth quarter 2023 increased
The efficiency ratio was
Year Ended December 31, 2023 Results
Net interest income for the year ended December 31, 2023 increased
Noninterest income for the year ended December 31, 2023 was
Noninterest expense for the year ended December 31, 2023 increased
The efficiency ratio was
Financial Condition
Total loans at December 31, 2023 decreased
Total deposits at December 31, 2023 increased
Total assets at December 31, 2023 were
Asset Quality
Nonperforming assets totaled
The provision for credit losses for the fourth quarter 2023 was
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, January 26, 2024 at 8:00 a.m. Central Time (9:00 a.m. Eastern Time) to discuss its fourth quarter 2023 results. Participants may register for the conference call at https://conferencingportals.com/event/FdklYbaS 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/844946085. 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
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 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
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) |
|||||||||||||||||||
|
2023 |
|
2022 |
||||||||||||||||
|
December 31 |
|
September 30 |
|
June 30 |
|
March 31 |
|
December 31 |
||||||||||
|
(Dollars in thousands) |
||||||||||||||||||
ASSETS |
|
|
|
|
|
|
|
|
|
||||||||||
Cash and due from banks |
$ |
121,004 |
|
|
$ |
94,970 |
|
|
$ |
105,913 |
|
|
$ |
99,231 |
|
|
$ |
67,063 |
|
Interest-bearing deposits at other financial institutions |
|
278,233 |
|
|
|
207,302 |
|
|
|
198,176 |
|
|
|
164,102 |
|
|
|
304,642 |
|
Total cash and cash equivalents |
|
399,237 |
|
|
|
302,272 |
|
|
|
304,089 |
|
|
|
263,333 |
|
|
|
371,705 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Available for sale securities, at fair value |
|
1,395,680 |
|
|
|
1,414,952 |
|
|
|
1,478,222 |
|
|
|
1,519,175 |
|
|
|
1,807,586 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Loans held for investment |
|
7,925,133 |
|
|
|
8,004,528 |
|
|
|
8,068,718 |
|
|
|
7,886,044 |
|
|
|
7,754,751 |
|
Less: allowance for credit losses on loans |
|
(91,684 |
) |
|
|
(93,575 |
) |
|
|
(100,195 |
) |
|
|
(96,188 |
) |
|
|
(93,180 |
) |
Loans, net |
|
7,833,449 |
|
|
|
7,910,953 |
|
|
|
7,968,523 |
|
|
|
7,789,856 |
|
|
|
7,661,571 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Accrued interest receivable |
|
44,244 |
|
|
|
43,536 |
|
|
|
42,051 |
|
|
|
42,405 |
|
|
|
44,743 |
|
Premises and equipment, net |
|
118,683 |
|
|
|
119,332 |
|
|
|
119,142 |
|
|
|
124,723 |
|
|
|
126,803 |
|
Federal Home Loan Bank stock |
|
25,051 |
|
|
|
29,022 |
|
|
|
24,478 |
|
|
|
19,676 |
|
|
|
15,058 |
|
Bank-owned life insurance |
|
105,084 |
|
|
|
104,699 |
|
|
|
104,148 |
|
|
|
103,616 |
|
|
|
103,094 |
|
Goodwill |
|
497,318 |
|
|
|
497,318 |
|
|
|
497,260 |
|
|
|
497,260 |
|
|
|
497,260 |
|
Core deposit intangibles, net |
|
116,712 |
|
|
|
122,944 |
|
|
|
129,805 |
|
|
|
136,665 |
|
|
|
143,525 |
|
Other assets |
|
111,681 |
|
|
|
120,432 |
|
|
|
110,633 |
|
|
|
108,009 |
|
|
|
129,092 |
|
Total assets |
$ |
10,647,139 |
|
|
$ |
10,665,460 |
|
|
$ |
10,778,351 |
|
|
$ |
10,604,718 |
|
|
$ |
10,900,437 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
LIABILITIES: |
|
|
|
|
|
|
|
|
|
||||||||||
Deposits: |
|
|
|
|
|
|
|
|
|
||||||||||
Noninterest-bearing |
$ |
3,546,815 |
|
|
$ |
3,656,288 |
|
|
$ |
3,713,536 |
|
|
$ |
3,877,859 |
|
|
$ |
4,230,169 |
|
Interest-bearing |
|
|
|
|
|
|
|
|
|
||||||||||
Demand |
|
1,659,999 |
|
|
|
1,397,492 |
|
|
|
1,437,509 |
|
|
|
1,394,244 |
|
|
|
1,591,828 |
|
Money market and savings |
|
2,136,777 |
|
|
|
2,128,950 |
|
|
|
2,174,073 |
|
|
|
2,401,840 |
|
|
|
2,575,923 |
|
Certificates and other time |
|
1,529,876 |
|
|
|
1,503,891 |
|
|
|
1,441,251 |
|
|
|
1,064,932 |
|
|
|
869,712 |
|
Total interest-bearing deposits |
|
5,326,652 |
|
|
|
5,030,333 |
|
|
|
5,052,833 |
|
|
|
4,861,016 |
|
|
|
5,037,463 |
|
Total deposits |
|
8,873,467 |
|
|
|
8,686,621 |
|
|
|
8,766,369 |
|
|
|
8,738,875 |
|
|
|
9,267,632 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Accrued interest payable |
|
11,288 |
|
|
|
7,612 |
|
|
|
4,555 |
|
|
|
3,875 |
|
|
|
2,098 |
|
Borrowed funds |
|
50,000 |
|
|
|
323,981 |
|
|
|
369,963 |
|
|
|
238,944 |
|
|
|
63,925 |
|
Subordinated debt |
|
109,765 |
|
|
|
109,665 |
|
|
|
109,566 |
|
|
|
109,420 |
|
|
|
109,367 |
|
Other liabilities |
|
81,601 |
|
|
|
76,735 |
|
|
|
69,218 |
|
|
|
67,388 |
|
|
|
74,239 |
|
Total liabilities |
|
9,126,121 |
|
|
|
9,204,614 |
|
|
|
9,319,671 |
|
|
|
9,158,502 |
|
|
|
9,517,261 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
SHAREHOLDERS’ EQUITY: |
|
|
|
|
|
|
|
|
|
||||||||||
Common stock |
|
533 |
|
|
|
533 |
|
|
|
533 |
|
|
|
533 |
|
|
|
530 |
|
Capital surplus |
|
1,232,627 |
|
|
|
1,231,686 |
|
|
|
1,228,532 |
|
|
|
1,225,596 |
|
|
|
1,222,761 |
|
Retained earnings |
|
405,945 |
|
|
|
385,600 |
|
|
|
361,619 |
|
|
|
333,368 |
|
|
|
303,146 |
|
Accumulated other comprehensive loss |
|
(118,087 |
) |
|
|
(156,973 |
) |
|
|
(132,004 |
) |
|
|
(113,281 |
) |
|
|
(143,261 |
) |
Total shareholders’ equity |
|
1,521,018 |
|
|
|
1,460,846 |
|
|
|
1,458,680 |
|
|
|
1,446,216 |
|
|
|
1,383,176 |
|
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY |
$ |
10,647,139 |
|
|
$ |
10,665,460 |
|
|
$ |
10,778,351 |
|
|
$ |
10,604,718 |
|
|
$ |
10,900,437 |
|
Stellar Bancorp, Inc. Financial Highlights (Unaudited) |
||||||||||||||||||||||
|
Three Months Ended |
|
Years Ended |
|||||||||||||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|||||||||||||||
|
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 |
$ |
139,114 |
|
$ |
138,948 |
|
$ |
133,931 |
|
|
$ |
125,729 |
|
$ |
116,145 |
|
|
$ |
537,722 |
|
$ |
280,375 |
Securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Taxable |
|
9,622 |
|
|
9,493 |
|
|
9,726 |
|
|
|
9,653 |
|
|
9,834 |
|
|
|
38,494 |
|
|
27,128 |
Tax-exempt |
|
418 |
|
|
437 |
|
|
436 |
|
|
|
1,262 |
|
|
3,057 |
|
|
|
2,553 |
|
|
10,733 |
Deposits in other financial institutions |
|
3,021 |
|
|
2,391 |
|
|
2,865 |
|
|
|
3,771 |
|
|
2,933 |
|
|
|
12,048 |
|
|
4,758 |
Total interest income |
|
152,175 |
|
|
151,269 |
|
|
146,958 |
|
|
|
140,415 |
|
|
131,969 |
|
|
|
590,817 |
|
|
322,994 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
INTEREST EXPENSE: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Demand, money market and savings deposits |
|
25,033 |
|
|
23,557 |
|
|
20,708 |
|
|
|
18,037 |
|
|
12,406 |
|
|
|
87,335 |
|
|
19,139 |
Certificates and other time deposits |
|
15,075 |
|
|
13,282 |
|
|
9,622 |
|
|
|
3,307 |
|
|
2,083 |
|
|
|
41,286 |
|
|
7,825 |
Borrowed funds |
|
4,154 |
|
|
5,801 |
|
|
6,535 |
|
|
|
1,317 |
|
|
417 |
|
|
|
17,807 |
|
|
1,216 |
Subordinated debt |
|
1,983 |
|
|
1,908 |
|
|
1,812 |
|
|
|
1,927 |
|
|
1,449 |
|
|
|
7,630 |
|
|
5,856 |
Total interest expense |
|
46,245 |
|
|
44,548 |
|
|
38,677 |
|
|
|
24,588 |
|
|
16,355 |
|
|
|
154,058 |
|
|
34,036 |
NET INTEREST INCOME |
|
105,930 |
|
|
106,721 |
|
|
108,281 |
|
|
|
115,827 |
|
|
115,614 |
|
|
|
436,759 |
|
|
288,958 |
Provision for credit losses |
|
1,047 |
|
|
2,315 |
|
|
1,915 |
|
|
|
3,666 |
|
|
44,793 |
|
|
|
8,943 |
|
|
50,712 |
Net interest income after provision for credit losses |
|
104,883 |
|
|
104,406 |
|
|
106,366 |
|
|
|
112,161 |
|
|
70,821 |
|
|
|
427,816 |
|
|
238,246 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
NONINTEREST INCOME: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Nonsufficient funds and overdraft charges |
|
183 |
|
|
291 |
|
|
418 |
|
|
|
406 |
|
|
447 |
|
|
|
1,298 |
|
|
834 |
Service charges on deposit accounts |
|
1,337 |
|
|
1,329 |
|
|
1,157 |
|
|
|
943 |
|
|
1,242 |
|
|
|
4,766 |
|
|
2,856 |
Gain (loss) on sale of assets |
|
198 |
|
|
— |
|
|
(6 |
) |
|
|
198 |
|
|
4,025 |
|
|
|
390 |
|
|
4,050 |
Bank-owned life insurance |
|
573 |
|
|
551 |
|
|
532 |
|
|
|
522 |
|
|
515 |
|
|
|
2,178 |
|
|
1,125 |
Debit card and ATM income |
|
542 |
|
|
935 |
|
|
1,821 |
|
|
|
1,698 |
|
|
1,897 |
|
|
|
4,996 |
|
|
4,465 |
Other |
|
4,053 |
|
|
1,589 |
|
|
1,561 |
|
|
|
3,731 |
|
|
2,511 |
|
|
|
10,934 |
|
|
7,024 |
Total noninterest income |
|
6,886 |
|
|
4,695 |
|
|
5,483 |
|
|
|
7,498 |
|
|
10,637 |
|
|
|
24,562 |
|
|
20,354 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
NONINTEREST EXPENSE: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Salaries and employee benefits |
|
40,464 |
|
|
39,495 |
|
|
37,300 |
|
|
|
39,775 |
|
|
40,949 |
|
|
|
157,034 |
|
|
107,554 |
Net occupancy and equipment |
|
4,572 |
|
|
4,455 |
|
|
3,817 |
|
|
|
4,088 |
|
|
3,781 |
|
|
|
16,932 |
|
|
10,335 |
Depreciation |
|
1,955 |
|
|
1,952 |
|
|
1,841 |
|
|
|
1,836 |
|
|
1,903 |
|
|
|
7,584 |
|
|
4,951 |
Data processing and software amortization |
|
5,000 |
|
|
4,798 |
|
|
4,674 |
|
|
|
5,054 |
|
|
3,776 |
|
|
|
19,526 |
|
|
11,337 |
Professional fees |
|
3,867 |
|
|
997 |
|
|
1,564 |
|
|
|
1,527 |
|
|
2,298 |
|
|
|
7,955 |
|
|
3,583 |
Regulatory assessments and FDIC insurance |
|
5,169 |
|
|
1,814 |
|
|
2,755 |
|
|
|
1,294 |
|
|
1,263 |
|
|
|
11,032 |
|
|
4,914 |
Amortization of intangibles |
|
6,247 |
|
|
6,876 |
|
|
6,881 |
|
|
|
6,879 |
|
|
7,051 |
|
|
|
26,883 |
|
|
9,303 |
Communications |
|
743 |
|
|
663 |
|
|
689 |
|
|
|
701 |
|
|
737 |
|
|
|
2,796 |
|
|
1,800 |
Advertising |
|
1,004 |
|
|
877 |
|
|
907 |
|
|
|
839 |
|
|
1,130 |
|
|
|
3,627 |
|
|
2,460 |
Acquisition and merger-related expenses |
|
3,072 |
|
|
3,421 |
|
|
2,897 |
|
|
|
6,165 |
|
|
11,469 |
|
|
|
15,555 |
|
|
24,138 |
Other |
|
5,848 |
|
|
5,400 |
|
|
5,882 |
|
|
|
4,440 |
|
|
5,267 |
|
|
|
21,570 |
|
|
15,701 |
Total noninterest expense |
|
77,941 |
|
|
70,748 |
|
|
69,207 |
|
|
|
72,598 |
|
|
79,624 |
|
|
|
290,494 |
|
|
196,076 |
INCOME BEFORE INCOME TAXES |
|
33,828 |
|
|
38,353 |
|
|
42,642 |
|
|
|
47,061 |
|
|
1,834 |
|
|
|
161,884 |
|
|
62,524 |
Provision for income taxes |
|
6,562 |
|
|
7,445 |
|
|
7,467 |
|
|
|
9,913 |
|
|
(218 |
) |
|
|
31,387 |
|
|
11,092 |
NET INCOME |
$ |
27,266 |
|
$ |
30,908 |
|
$ |
35,175 |
|
|
$ |
37,148 |
|
$ |
2,052 |
|
|
$ |
130,497 |
|
$ |
51,432 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
EARNINGS PER SHARE |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Basic |
$ |
0.51 |
|
$ |
0.58 |
|
$ |
0.66 |
|
|
$ |
0.70 |
|
$ |
0.04 |
|
|
$ |
2.45 |
|
$ |
1.48 |
Diluted |
$ |
0.51 |
|
$ |
0.58 |
|
$ |
0.66 |
|
|
$ |
0.70 |
|
$ |
0.04 |
|
|
$ |
2.45 |
|
$ |
1.47 |
Stellar Bancorp, Inc. Financial Highlights (Unaudited) |
|||||||||||||||||||||||||||
|
Three Months Ended |
|
Years Ended |
||||||||||||||||||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||||||||||||||
|
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 |
$ |
27,266 |
|
|
$ |
30,908 |
|
|
$ |
35,175 |
|
|
$ |
37,148 |
|
|
$ |
2,052 |
|
|
$ |
130,497 |
|
|
$ |
51,432 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Earnings per share, basic |
$ |
0.51 |
|
|
$ |
0.58 |
|
|
$ |
0.66 |
|
|
$ |
0.70 |
|
|
$ |
0.04 |
|
|
$ |
2.45 |
|
|
$ |
1.48 |
|
Earnings per share, diluted |
$ |
0.51 |
|
|
$ |
0.58 |
|
|
$ |
0.66 |
|
|
$ |
0.70 |
|
|
$ |
0.04 |
|
|
$ |
2.45 |
|
|
$ |
1.47 |
|
Dividends per share |
$ |
0.13 |
|
|
$ |
0.13 |
|
|
$ |
0.13 |
|
|
$ |
0.13 |
|
|
$ |
0.13 |
|
|
$ |
0.52 |
|
|
$ |
0.43 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Return on average assets(A) |
|
1.02 |
% |
|
|
1.14 |
% |
|
|
1.31 |
% |
|
|
1.38 |
% |
|
|
0.07 |
% |
|
|
1.21 |
% |
|
|
0.64 |
% |
Return on average equity(A) |
|
7.33 |
% |
|
|
8.34 |
% |
|
|
9.67 |
% |
|
|
10.62 |
% |
|
|
0.60 |
% |
|
|
8.96 |
% |
|
|
5.69 |
% |
Return on average tangible equity(A)(B) |
|
12.61 |
% |
|
|
14.47 |
% |
|
|
17.05 |
% |
|
|
19.32 |
% |
|
|
1.16 |
% |
|
|
15.75 |
% |
|
|
9.16 |
% |
Net interest margin (tax equivalent)(A)(C) |
|
4.40 |
% |
|
|
4.37 |
% |
|
|
4.49 |
% |
|
|
4.80 |
% |
|
|
4.71 |
% |
|
|
4.51 |
% |
|
|
3.94 |
% |
Net interest margin (tax equivalent) excluding PAA(A)(B)(C) |
|
3.91 |
% |
|
|
3.87 |
% |
|
|
3.97 |
% |
|
|
4.38 |
% |
|
|
4.38 |
% |
|
|
4.03 |
% |
|
|
3.83 |
% |
Efficiency ratio(D) |
|
69.21 |
% |
|
|
63.50 |
% |
|
|
60.83 |
% |
|
|
58.96 |
% |
|
|
65.14 |
% |
|
|
63.02 |
% |
|
|
64.23 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Capital Ratios |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Stellar Bancorp, Inc. (Consolidated) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Equity to assets |
|
14.29 |
% |
|
|
13.70 |
% |
|
|
13.53 |
% |
|
|
13.64 |
% |
|
|
12.69 |
% |
|
|
14.29 |
% |
|
|
12.69 |
% |
Tangible equity to tangible assets(B) |
|
9.04 |
% |
|
|
8.37 |
% |
|
|
8.19 |
% |
|
|
8.15 |
% |
|
|
7.24 |
% |
|
|
9.04 |
% |
|
|
7.24 |
% |
Estimated Total capital ratio (to risk-weighted assets) |
|
14.02 |
% |
|
|
13.42 |
% |
|
|
13.03 |
% |
|
|
12.72 |
% |
|
|
12.39 |
% |
|
|
14.02 |
% |
|
|
12.39 |
% |
Estimated Common equity Tier 1 capital (to risk weighted assets) |
|
11.77 |
% |
|
|
11.14 |
% |
|
|
10.67 |
% |
|
|
10.39 |
% |
|
|
10.04 |
% |
|
|
11.77 |
% |
|
|
10.04 |
% |
Estimated Tier 1 capital (to risk-weighted assets) |
|
11.89 |
% |
|
|
11.25 |
% |
|
|
10.78 |
% |
|
|
10.50 |
% |
|
|
10.15 |
% |
|
|
11.89 |
% |
|
|
10.15 |
% |
Estimated Tier 1 leverage (to average tangible assets) |
|
10.18 |
% |
|
|
9.82 |
% |
|
|
9.51 |
% |
|
|
9.01 |
% |
|
|
8.55 |
% |
|
|
10.18 |
% |
|
|
8.55 |
% |
Stellar Bank |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Estimated Total capital ratio (to risk-weighted assets) |
|
13.65 |
% |
|
|
13.13 |
% |
|
|
12.80 |
% |
|
|
12.42 |
% |
|
|
12.02 |
% |
|
|
13.65 |
% |
|
|
12.02 |
% |
Estimated Common equity Tier 1 capital (to risk-weighted assets) |
|
12.20 |
% |
|
|
11.63 |
% |
|
|
11.22 |
% |
|
|
10.87 |
% |
|
|
10.46 |
% |
|
|
12.20 |
% |
|
|
10.46 |
% |
Estimated Tier 1 capital (to risk-weighted assets) |
|
12.20 |
% |
|
|
11.63 |
% |
|
|
11.22 |
% |
|
|
10.87 |
% |
|
|
10.46 |
% |
|
|
12.20 |
% |
|
|
10.46 |
% |
Estimated Tier 1 leverage (to average tangible assets) |
|
10.44 |
% |
|
|
10.15 |
% |
|
|
9.89 |
% |
|
|
9.35 |
% |
|
|
8.81 |
% |
|
|
10.44 |
% |
|
|
8.81 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Other Data |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Weighted average shares: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Basic |
|
53,282 |
|
|
|
53,313 |
|
|
|
53,297 |
|
|
|
53,021 |
|
|
|
52,715 |
|
|
|
53,229 |
|
|
|
34,738 |
|
Diluted |
|
53,350 |
|
|
|
53,380 |
|
|
|
53,375 |
|
|
|
53,138 |
|
|
|
52,973 |
|
|
|
53,313 |
|
|
|
35,007 |
|
Period end shares outstanding |
|
53,291 |
|
|
|
53,322 |
|
|
|
53,303 |
|
|
|
53,296 |
|
|
|
52,955 |
|
|
|
53,291 |
|
|
|
52,955 |
|
Book value per share |
$ |
28.54 |
|
|
$ |
27.40 |
|
|
$ |
27.37 |
|
|
$ |
27.14 |
|
|
$ |
26.12 |
|
|
$ |
28.54 |
|
|
$ |
26.12 |
|
Tangible book value per share(B) |
$ |
17.02 |
|
|
$ |
15.76 |
|
|
$ |
15.60 |
|
|
$ |
15.24 |
|
|
$ |
14.02 |
|
|
$ |
17.02 |
|
|
$ |
14.02 |
|
Employees - full-time equivalents |
|
998 |
|
|
|
1,008 |
|
|
|
1,004 |
|
|
|
1,055 |
|
|
|
1,025 |
|
|
|
998 |
|
|
|
1,025 |
|
| (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 |
||||||||||||||||||||||||||||
|
December 31, 2023 |
|
September 30, 2023 |
|
December 31, 2022 |
||||||||||||||||||||||||
|
Average
|
|
Interest
|
|
Average
|
|
Average
|
|
Interest
|
|
Average
|
|
Average
|
|
Interest
|
|
Average
|
||||||||||||
|
(Dollars in thousands) |
||||||||||||||||||||||||||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest-Earning Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Loans |
$ |
7,973,780 |
|
|
$ |
139,114 |
|
6.92 |
% |
|
$ |
8,043,706 |
|
|
$ |
138,948 |
|
6.85 |
% |
|
$ |
7,666,502 |
|
|
$ |
116,145 |
|
6.01 |
% |
Securities |
|
1,386,079 |
|
|
|
10,040 |
|
2.87 |
% |
|
|
1,471,916 |
|
|
|
9,930 |
|
2.68 |
% |
|
|
1,795,082 |
|
|
|
12,891 |
|
2.85 |
% |
Deposits in other financial institutions |
|
217,068 |
|
|
|
3,021 |
|
5.52 |
% |
|
|
181,931 |
|
|
|
2,391 |
|
5.21 |
% |
|
|
354,117 |
|
|
|
2,933 |
|
3.29 |
% |
Total interest-earning assets |
|
9,576,927 |
|
|
$ |
152,175 |
|
6.30 |
% |
|
|
9,697,553 |
|
|
$ |
151,269 |
|
6.19 |
% |
|
|
9,815,701 |
|
|
$ |
131,969 |
|
5.33 |
% |
Allowance for credit losses on loans |
|
(92,992 |
) |
|
|
|
|
|
|
(99,892 |
) |
|
|
|
|
|
|
(88,150 |
) |
|
|
|
|
||||||
Noninterest-earning assets |
|
1,142,438 |
|
|
|
|
|
|
|
1,143,634 |
|
|
|
|
|
|
|
1,218,458 |
|
|
|
|
|
||||||
Total assets |
$ |
10,626,373 |
|
|
|
|
|
|
$ |
10,741,295 |
|
|
|
|
|
|
$ |
10,946,009 |
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Liabilities and Shareholders' Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest-Bearing Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest-bearing demand deposits |
$ |
1,420,892 |
|
|
$ |
10,548 |
|
2.95 |
% |
|
$ |
1,400,508 |
|
|
$ |
10,415 |
|
2.95 |
% |
|
$ |
1,465,711 |
|
|
$ |
5,422 |
|
1.47 |
% |
Money market and savings deposits |
|
2,163,348 |
|
|
|
14,485 |
|
2.66 |
% |
|
|
2,166,610 |
|
|
|
13,142 |
|
2.41 |
% |
|
|
2,705,984 |
|
|
|
6,984 |
|
1.02 |
% |
Certificates and other time deposits |
|
1,461,227 |
|
|
|
15,075 |
|
4.09 |
% |
|
|
1,400,367 |
|
|
|
13,282 |
|
3.76 |
% |
|
|
932,058 |
|
|
|
2,083 |
|
0.89 |
% |
Borrowed funds |
|
275,694 |
|
|
|
4,154 |
|
5.98 |
% |
|
|
411,212 |
|
|
|
5,801 |
|
5.60 |
% |
|
|
37,824 |
|
|
|
417 |
|
4.37 |
% |
Subordinated debt |
|
109,713 |
|
|
|
1,983 |
|
7.17 |
% |
|
|
109,608 |
|
|
|
1,908 |
|
6.91 |
% |
|
|
109,307 |
|
|
|
1,449 |
|
5.26 |
% |
Total interest-bearing liabilities |
|
5,430,874 |
|
|
$ |
46,245 |
|
3.38 |
% |
|
|
5,488,305 |
|
|
$ |
44,548 |
|
3.22 |
% |
|
|
5,250,884 |
|
|
$ |
16,355 |
|
1.24 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Noninterest-Bearing Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Noninterest-bearing demand deposits |
|
3,624,417 |
|
|
|
|
|
|
|
3,695,592 |
|
|
|
|
|
|
|
4,199,982 |
|
|
|
|
|
||||||
Other liabilities |
|
95,705 |
|
|
|
|
|
|
|
86,389 |
|
|
|
|
|
|
|
147,205 |
|
|
|
|
|
||||||
Total liabilities |
|
9,150,996 |
|
|
|
|
|
|
|
9,270,286 |
|
|
|
|
|
|
|
9,598,071 |
|
|
|
|
|
||||||
Shareholders' equity |
|
1,475,377 |
|
|
|
|
|
|
|
1,471,009 |
|
|
|
|
|
|
|
1,347,938 |
|
|
|
|
|
||||||
Total liabilities and shareholders' equity |
$ |
10,626,373 |
|
|
|
|
|
|
$ |
10,741,295 |
|
|
|
|
|
|
$ |
10,946,009 |
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net interest rate spread |
|
|
|
|
2.92 |
% |
|
|
|
|
|
2.97 |
% |
|
|
|
|
|
4.09 |
% |
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net interest income and margin |
|
|
$ |
105,930 |
|
4.39 |
% |
|
|
|
$ |
106,721 |
|
4.37 |
% |
|
|
|
$ |
115,614 |
|
4.67 |
% |
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net interest income and net interest margin (tax equivalent) |
|
|
$ |
106,121 |
|
4.40 |
% |
|
|
|
$ |
106,919 |
|
4.37 |
% |
|
|
|
$ |
116,574 |
|
4.71 |
% |
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cost of funds |
|
|
|
|
2.03 |
% |
|
|
|
|
|
1.92 |
% |
|
|
|
|
|
0.69 |
% |
|||||||||
Cost of deposits |
|
|
|
|
1.84 |
% |
|
|
|
|
|
1.69 |
% |
|
|
|
|
|
0.62 |
% |
|||||||||
Stellar Bancorp, Inc. Financial Highlights (Unaudited) |
|||||||||||||||||||
|
Years Ended December 31, |
||||||||||||||||||
|
2023 |
|
2022 |
||||||||||||||||
|
Average
|
|
Interest
|
|
Average
|
|
Average
|
|
Interest
|
|
Average
|
||||||||
|
(Dollars in thousands) |
||||||||||||||||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Interest-Earning Assets: |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Loans |
$ |
7,961,911 |
|
|
$ |
537,722 |
|
6.75 |
% |
|
$ |
5,171,944 |
|
|
$ |
280,375 |
|
5.42 |
% |
Securities |
|
1,490,588 |
|
|
|
41,047 |
|
2.75 |
% |
|
|
1,779,425 |
|
|
|
37,861 |
|
2.13 |
% |
Deposits in other financial institutions |
|
242,803 |
|
|
|
12,048 |
|
4.96 |
% |
|
|
462,075 |
|
|
|
4,758 |
|
1.03 |
% |
Total interest-earning assets |
|
9,695,302 |
|
|
$ |
590,817 |
|
6.09 |
% |
|
|
7,413,444 |
|
|
$ |
322,994 |
|
4.36 |
% |
Allowance for credit losses on loans |
|
(95,668 |
) |
|
|
|
|
|
|
(59,099 |
) |
|
|
|
|
||||
Noninterest-earning assets |
|
1,147,232 |
|
|
|
|
|
|
|
633,928 |
|
|
|
|
|
||||
Total assets |
$ |
10,746,866 |
|
|
|
|
|
|
$ |
7,988,273 |
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities and Shareholders' Equity |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Interest-Bearing Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Interest-bearing demand deposits |
$ |
1,464,015 |
|
|
$ |
38,689 |
|
2.64 |
% |
|
$ |
1,140,575 |
|
|
$ |
9,278 |
|
0.81 |
% |
Money market and savings deposits |
|
2,259,264 |
|
|
|
48,646 |
|
2.15 |
% |
|
|
1,841,348 |
|
|
|
9,861 |
|
0.54 |
% |
Certificates and other time deposits |
|
1,239,345 |
|
|
|
41,286 |
|
3.33 |
% |
|
|
1,034,491 |
|
|
|
7,825 |
|
0.76 |
% |
Borrowed funds |
|
318,721 |
|
|
|
17,807 |
|
5.59 |
% |
|
|
61,773 |
|
|
|
1,216 |
|
1.97 |
% |
Subordinated debt |
|
109,560 |
|
|
|
7,630 |
|
6.96 |
% |
|
|
109,111 |
|
|
|
5,856 |
|
5.37 |
% |
Total interest-bearing liabilities |
|
5,390,905 |
|
|
$ |
154,058 |
|
2.86 |
% |
|
|
4,187,298 |
|
|
|
34,036 |
|
0.81 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Noninterest-Bearing Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Noninterest-bearing demand deposits |
|
3,814,651 |
|
|
|
|
|
|
|
2,833,865 |
|
|
|
|
|
||||
Other liabilities |
|
85,376 |
|
|
|
|
|
|
|
62,581 |
|
|
|
|
|
||||
Total liabilities |
|
9,290,932 |
|
|
|
|
|
|
|
7,083,744 |
|
|
|
|
|
||||
Shareholders' equity |
|
1,455,934 |
|
|
|
|
|
|
|
904,529 |
|
|
|
|
|
||||
Total liabilities and shareholders' equity |
$ |
10,746,866 |
|
|
|
|
|
|
$ |
7,988,273 |
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net interest rate spread |
|
|
|
|
3.23 |
% |
|
|
|
|
|
3.55 |
% |
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net interest income and margin |
|
|
$ |
436,759 |
|
4.50 |
% |
|
|
|
$ |
288,958 |
|
3.90 |
% |
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net interest income and net interest margin (tax equivalent) |
|
|
$ |
437,670 |
|
4.51 |
% |
|
|
|
$ |
292,152 |
|
3.94 |
% |
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Cost of funds |
|
|
|
|
1.67 |
% |
|
|
|
|
|
0.48 |
% |
||||||
Cost of deposits |
|
|
|
|
1.47 |
% |
|
|
|
|
|
0.39 |
% |
||||||
Stellar Bancorp, Inc. Financial Highlights (Unaudited) |
|||||||||||||||||||
|
Three Months Ended |
||||||||||||||||||
|
2023 |
|
2022 |
||||||||||||||||
|
December 31 |
|
September 30 |
|
June 30 |
|
March 31 |
|
December 31 |
||||||||||
|
(Dollars in thousands) |
||||||||||||||||||
Period-end Loan Portfolio: |
|
|
|
|
|
|
|
|
|
||||||||||
Commercial and industrial |
$ |
1,409,002 |
|
|
$ |
1,474,600 |
|
|
$ |
1,512,476 |
|
|
$ |
1,477,340 |
|
|
$ |
1,455,795 |
|
Paycheck Protection Program (PPP) |
|
5,100 |
|
|
|
5,968 |
|
|
|
8,027 |
|
|
|
11,081 |
|
|
|
13,226 |
|
Real estate: |
|
|
|
|
|
|
|
|
|
||||||||||
Commercial real estate (including multi-family residential) |
|
4,071,807 |
|
|
|
4,076,606 |
|
|
|
4,038,487 |
|
|
|
4,014,609 |
|
|
|
3,931,480 |
|
Commercial real estate construction and land development |
|
1,060,406 |
|
|
|
1,078,265 |
|
|
|
1,136,124 |
|
|
|
1,034,538 |
|
|
|
1,037,678 |
|
1-4 family residential (including home equity) |
|
1,047,174 |
|
|
|
1,024,945 |
|
|
|
1,009,439 |
|
|
|
1,008,362 |
|
|
|
1,000,956 |
|
Residential construction |
|
267,357 |
|
|
|
289,553 |
|
|
|
311,208 |
|
|
|
292,143 |
|
|
|
268,150 |
|
Consumer and other |
|
64,287 |
|
|
|
54,591 |
|
|
|
52,957 |
|
|
|
47,971 |
|
|
|
47,466 |
|
Total loans held for investment |
$ |
7,925,133 |
|
|
$ |
8,004,528 |
|
|
$ |
8,068,718 |
|
|
$ |
7,886,044 |
|
|
$ |
7,754,751 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Deposits: |
|
|
|
|
|
|
|
|
|
||||||||||
Noninterest-bearing |
$ |
3,546,815 |
|
|
$ |
3,656,288 |
|
|
$ |
3,713,536 |
|
|
$ |
3,877,859 |
|
|
$ |
4,230,169 |
|
Interest-bearing |
|
|
|
|
|
|
|
|
|
||||||||||
Demand |
|
1,659,999 |
|
|
|
1,397,492 |
|
|
|
1,437,509 |
|
|
|
1,394,244 |
|
|
|
1,591,828 |
|
Money market and savings |
|
2,136,777 |
|
|
|
2,128,950 |
|
|
|
2,174,073 |
|
|
|
2,401,840 |
|
|
|
2,575,923 |
|
Certificates and other time |
|
1,529,876 |
|
|
|
1,503,891 |
|
|
|
1,441,251 |
|
|
|
1,064,932 |
|
|
|
869,712 |
|
Total interest-bearing deposits |
|
5,326,652 |
|
|
|
5,030,333 |
|
|
|
5,052,833 |
|
|
|
4,861,016 |
|
|
|
5,037,463 |
|
Total deposits |
$ |
8,873,467 |
|
|
$ |
8,686,621 |
|
|
$ |
8,766,369 |
|
|
$ |
8,738,875 |
|
|
$ |
9,267,632 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Asset Quality: |
|
|
|
|
|
|
|
|
|
||||||||||
Nonaccrual loans |
$ |
39,191 |
|
|
$ |
38,291 |
|
|
$ |
43,349 |
|
|
$ |
43,413 |
|
|
$ |
45,048 |
|
Accruing loans 90 or more days past due |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Total nonperforming loans |
|
39,191 |
|
|
|
38,291 |
|
|
|
43,349 |
|
|
|
43,413 |
|
|
|
45,048 |
|
Other repossessed assets |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
124 |
|
|
|
— |
|
Total nonperforming assets |
$ |
39,191 |
|
|
$ |
38,291 |
|
|
$ |
43,349 |
|
|
$ |
43,537 |
|
|
$ |
45,048 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net charge-offs |
$ |
2,577 |
|
|
$ |
8,116 |
|
|
$ |
236 |
|
|
$ |
192 |
|
|
$ |
5,707 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Nonaccrual loans: |
|
|
|
|
|
|
|
|
|
||||||||||
Commercial and industrial |
$ |
5,048 |
|
|
$ |
14,991 |
|
|
$ |
22,968 |
|
|
$ |
23,329 |
|
|
$ |
25,402 |
|
Real estate: |
|
|
|
|
|
|
|
|
|
||||||||||
Commercial real estate (including multi-family residential) |
|
16,699 |
|
|
|
13,563 |
|
|
|
8,221 |
|
|
|
9,026 |
|
|
|
9,970 |
|
Commercial real estate construction and land development |
|
5,043 |
|
|
|
170 |
|
|
|
388 |
|
|
|
27 |
|
|
|
— |
|
1-4 family residential (including home equity) |
|
8,874 |
|
|
|
8,442 |
|
|
|
10,880 |
|
|
|
10,586 |
|
|
|
9,404 |
|
Residential construction |
|
3,288 |
|
|
|
635 |
|
|
|
665 |
|
|
|
195 |
|
|
|
— |
|
Consumer and other |
|
239 |
|
|
|
490 |
|
|
|
227 |
|
|
|
250 |
|
|
|
272 |
|
Total nonaccrual loans |
$ |
39,191 |
|
|
$ |
38,291 |
|
|
$ |
43,349 |
|
|
$ |
43,413 |
|
|
$ |
45,048 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Asset Quality Ratios: |
|
|
|
|
|
|
|
|
|
||||||||||
Nonperforming assets to total assets |
|
0.37 |
% |
|
|
0.36 |
% |
|
|
0.40 |
% |
|
|
0.41 |
% |
|
|
0.41 |
% |
Nonperforming loans to total loans |
|
0.49 |
% |
|
|
0.48 |
% |
|
|
0.54 |
% |
|
|
0.55 |
% |
|
|
0.58 |
% |
Allowance for credit losses on loans to nonperforming loans |
|
233.94 |
% |
|
|
244.38 |
% |
|
|
231.14 |
% |
|
|
221.56 |
% |
|
|
206.85 |
% |
Allowance for credit losses on loans to total loans |
|
1.16 |
% |
|
|
1.17 |
% |
|
|
1.24 |
% |
|
|
1.22 |
% |
|
|
1.20 |
% |
Net charge-offs to average loans (annualized) |
|
0.13 |
% |
|
|
0.40 |
% |
|
|
0.01 |
% |
|
|
0.01 |
% |
|
|
0.30 |
% |
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 |
|
Years Ended |
||||||||||||||||||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||||||||||||||
|
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 |
$ |
27,266 |
|
|
$ |
30,908 |
|
|
$ |
35,175 |
|
|
$ |
37,148 |
|
|
$ |
2,052 |
|
|
$ |
130,497 |
|
|
$ |
51,432 |
|
Add: Provision for credit losses |
|
1,047 |
|
|
|
2,315 |
|
|
|
1,915 |
|
|
|
3,666 |
|
|
|
44,793 |
|
|
|
8,943 |
|
|
|
50,712 |
|
Add: Provision for income taxes |
|
6,562 |
|
|
|
7,445 |
|
|
|
7,467 |
|
|
|
9,913 |
|
|
|
(218 |
) |
|
|
31,387 |
|
|
|
11,092 |
|
Pre-tax, pre-provision income |
$ |
34,875 |
|
|
$ |
40,668 |
|
|
$ |
44,557 |
|
|
$ |
50,727 |
|
|
$ |
46,627 |
|
|
$ |
170,827 |
|
|
$ |
113,236 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Total average assets |
$ |
10,626,373 |
|
|
$ |
10,741,295 |
|
|
$ |
10,740,138 |
|
|
$ |
10,882,533 |
|
|
$ |
10,946,009 |
|
|
$ |
10,746,866 |
|
|
$ |
7,988,273 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Pre-tax, pre-provision return on average assets(B) |
|
1.30 |
% |
|
|
1.50 |
% |
|
|
1.66 |
% |
|
|
1.89 |
% |
|
|
1.69 |
% |
|
|
1.59 |
% |
|
|
1.42 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Total shareholders' equity |
$ |
1,521,018 |
|
|
$ |
1,460,846 |
|
|
$ |
1,458,680 |
|
|
$ |
1,446,216 |
|
|
$ |
1,383,176 |
|
|
$ |
1,521,018 |
|
|
$ |
1,383,176 |
|
Less: Goodwill and core deposit intangibles, net |
|
614,030 |
|
|
|
620,262 |
|
|
|
627,065 |
|
|
|
633,925 |
|
|
|
640,785 |
|
|
|
614,030 |
|
|
|
640,785 |
|
Tangible shareholders’ equity |
$ |
906,988 |
|
|
$ |
840,584 |
|
|
$ |
831,615 |
|
|
$ |
812,291 |
|
|
$ |
742,391 |
|
|
$ |
906,988 |
|
|
$ |
742,391 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Shares outstanding at end of period |
|
53,291 |
|
|
|
53,322 |
|
|
|
53,303 |
|
|
|
53,296 |
|
|
|
52,955 |
|
|
|
53,291 |
|
|
|
52,955 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Tangible book value per share |
$ |
17.02 |
|
|
$ |
15.76 |
|
|
$ |
15.60 |
|
|
$ |
15.24 |
|
|
$ |
14.02 |
|
|
$ |
17.02 |
|
|
$ |
14.02 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Average shareholders' equity |
$ |
1,475,377 |
|
|
$ |
1,471,009 |
|
|
$ |
1,458,473 |
|
|
$ |
1,418,082 |
|
|
$ |
1,347,938 |
|
|
$ |
1,455,934 |
|
|
$ |
904,529 |
|
Less: Average goodwill and core deposit intangibles, net |
|
617,236 |
|
|
|
623,864 |
|
|
|
630,854 |
|
|
|
638,110 |
|
|
|
658,107 |
|
|
|
627,449 |
|
|
|
343,257 |
|
Average tangible shareholders’ equity |
$ |
858,141 |
|
|
$ |
847,145 |
|
|
$ |
827,619 |
|
|
$ |
779,972 |
|
|
$ |
689,831 |
|
|
$ |
828,485 |
|
|
$ |
561,272 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Return on average tangible equity(B) |
|
12.61 |
% |
|
|
14.47 |
% |
|
|
17.05 |
% |
|
|
19.32 |
% |
|
|
1.18 |
% |
|
|
15.75 |
% |
|
|
9.16 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Total assets |
$ |
10,647,139 |
|
|
$ |
10,665,460 |
|
|
$ |
10,778,351 |
|
|
$ |
10,604,718 |
|
|
$ |
10,900,437 |
|
|
$ |
10,647,139 |
|
|
$ |
10,900,437 |
|
Less: Goodwill and core deposit intangibles, net |
|
614,030 |
|
|
|
620,262 |
|
|
|
627,065 |
|
|
|
633,925 |
|
|
|
640,785 |
|
|
|
614,030 |
|
|
|
640,785 |
|
Tangible assets |
$ |
10,033,109 |
|
|
$ |
10,045,198 |
|
|
$ |
10,151,286 |
|
|
$ |
9,970,793 |
|
|
$ |
10,259,652 |
|
|
$ |
10,033,109 |
|
|
$ |
10,259,652 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Tangible equity to tangible assets |
|
9.04 |
% |
|
|
8.37 |
% |
|
|
8.19 |
% |
|
|
8.15 |
% |
|
|
7.24 |
% |
|
|
9.04 |
% |
|
|
7.24 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net interest income (tax equivalent) |
$ |
106,121 |
|
|
$ |
106,919 |
|
|
$ |
108,509 |
|
|
$ |
116,119 |
|
|
$ |
116,574 |
|
|
$ |
437,670 |
|
|
$ |
292,152 |
|
Less: Purchase accounting accretion |
|
11,726 |
|
|
|
12,400 |
|
|
|
12,572 |
|
|
|
10,104 |
|
|
|
8,160 |
|
|
|
46,802 |
|
|
|
8,370 |
|
Adjusted net interest income (tax equivalent) |
$ |
94,395 |
|
|
$ |
94,519 |
|
|
$ |
95,937 |
|
|
$ |
106,015 |
|
|
$ |
108,414 |
|
|
$ |
390,868 |
|
|
$ |
283,782 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Average earning assets |
$ |
9,576,927 |
|
|
$ |
9,697,553 |
|
|
$ |
9,693,527 |
|
|
$ |
9,815,803 |
|
|
$ |
9,815,701 |
|
|
$ |
9,695,302 |
|
|
$ |
7,413,444 |
|
Net interest margin (tax equivalent) excluding PAA |
|
3.91 |
% |
|
|
3.87 |
% |
|
|
3.97 |
% |
|
|
4.38 |
% |
|
|
4.38 |
% |
|
|
4.03 |
% |
|
|
3.83 |
% |
| (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/20240126435458/en/
Investor relations
IR@stellar.bank
Source: Stellar Bancorp, Inc.
FAQ
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