Stellar Bancorp, Inc. (the “Company” or “Stellar”) (NYSE: STEL)
today reported net income of $35.2 million and diluted earnings per
share of $0.66 for the second quarter 2023 compared to net income
of $37.1 million and diluted earnings per share of $0.70 for the
first quarter 2023.
“We are pleased to announce our second quarter
operating results. We remain focused on capital, credit and
liquidity and that focus is reflected in our results for the
quarter that include our continued capital build, good credit
quality and growth of loans in a measured way,” said Robert R.
Franklin, Jr., Stellar’s Chief Executive Officer.
“The Federal Reserve continues to increase interest
rates which has put pressure on deposit rates and net interest
margin across the industry and the deposit rate environment remains
very competitive. However, we’ve been able to maintain our high
percentage of noninterest-bearing deposits while staying
competitive with our interest-bearing deposit rates. Our
relationship driven model continued to provide us with a very
healthy margin. We are working to remain disciplined to position
Stellar for long-term success as we manage through the current
economic environment, thankful to be operating in what we believe
to be the best commercial banking region in the country. The
long-term future for Stellar remains bright,” concluded Mr.
Franklin.
Second Quarter 2023 Financial
Highlights
- Strong Profitability: Second quarter
2023 net income of $35.2 million and diluted earnings per share of
$0.66 translated into an annualized return on average assets of
1.31% and an annualized return on average tangible equity of
17.05%(1).
- Continued Regulatory Capital Build:
Total risk-based capital ratio increased to 13.03% at June 30, 2023
from 12.39% at December 31, 2022 and Tier 1 leverage ratio
increased to 9.51% at June 30, 2023 from 8.55% at December 31,
2022.
- Excellent Credit Performance: Net
charge-offs of $428 thousand, or 0.01%, for the year-to-date 2023,
while nonperforming assets remained stable.
- Solid Margin: Tax equivalent net
interest margin was 4.49% for the second quarter of 2023 as
compared to 4.80% in the first quarter of 2023. The tax equivalent
net interest margin, excluding purchase accounting accretion
(“PAA”), was 3.97%(1) for the second quarter of 2023 and 4.38%(1)
for the first quarter of 2023.
- Advantageous Funding Profile:
Noninterest-bearing deposit balances decreased from the first
quarter but remained a significant portion of our deposit funding
base at 42.4% at the end of the second quarter 2023 compared to
44.4% at the end of the first quarter 2023.
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 Company’s valuations of CBTX’s
assets and liabilities are preliminary and may be refined for up to
a year from the date of the Merger. 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
reflect the combined operations following the Merger for the first
and second quarters of 2023 and the fourth quarter 2022 and
stand-alone Allegiance for all periods prior to October 1,
2022._____________________(1) Refer to page 10 of this earnings
release for the calculation of this non-GAAP financial measure.
Second Quarter
2023 Results
Stellar’s net interest income in the second quarter
2023 decreased $7.5 million, or 6.5%, from $115.8 million
for the first quarter 2023. The net interest margin on a tax
equivalent basis decreased 31 basis points to 4.49% for the second
quarter 2023 from 4.80% for the first quarter 2023. 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 2023 benefited from
$12.6 million of income from purchase accounting adjustments
compared to $10.1 million in the first quarter of 2023. Excluding
purchase accounting adjustments, a non-GAAP measure that is
reconciled on page 10 of this earnings release, net interest income
for the second quarter 2023 would have been $95.9 million and the
tax equivalent net interest margin would have been 3.97%.
Noninterest income for the second quarter 2023 was
$5.5 million, a decrease of $2.0 million, or 26.9%,
compared to $7.5 million for the first quarter 2023.
Noninterest income decreased in the second quarter of 2023 compared
to the first quarter of 2023 primarily due to Small Business
Investment Company income recognized in the first quarter of
2023.
Noninterest expense for the second quarter 2023
decreased $3.4 million, or 4.7%, to $69.2 million compared to
$72.6 million for the first quarter of 2023. The decrease in
noninterest expense in the second quarter of 2023 compared to the
first quarter of 2023 was primarily due to a decrease in
acquisition and merger-related expenses which totaled $2.9 million
for the second quarter of 2023 compared to $6.2 million in the
first quarter of 2023.
Stellar’s efficiency ratio was 60.83% for the
second quarter 2023 compared to 58.96% for the first quarter 2023.
Second quarter 2023 annualized returns on average assets, average
equity and average tangible equity were 1.31%, 9.67% and 17.05%,
respectively, compared to 1.38%, 10.62% and 19.32%, respectively,
for the first quarter 2023. Return on average tangible equity is a
non-GAAP measure. Please refer to the non-GAAP reconciliation on
page 10 of this earnings release.
Financial Condition
Total loans at June 30, 2023 increased
$182.7 million to $8.07 billion compared to $7.89 billion
at March 31, 2023. At June 30, 2023, the remaining balance of the
purchase accounting adjustments on loans was $131.4 million.
Total deposits at June 30, 2023 increased
$27.5 million to $8.77 billion compared to $8.74 billion
at March 31, 2023, driven in part by increased CDs more than
offsetting decreases in noninterest-bearing and money market
balances. 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 $4.75
billion and estimated uninsured deposits net of collateralized
deposits of $936 million were $3.82 billion, or 43.5%, of total
deposits at June 30, 2023.
Total assets at June 30, 2023 were $10.78
billion, an increase of $173.6 million, compared to
$10.60 billion at March 31, 2023.
Asset Quality
Nonperforming assets totaled $43.3 million, or
0.40% of total assets, at June 30, 2023 compared to
$43.5 million, or 0.41% of total assets, at March 31, 2023.
The allowance for credit losses on loans as a percentage of total
loans was 1.24% at June 30, 2023 and 1.22% at March 31,
2023.
The provision for credit losses for the second
quarter 2023 was $1.9 million compared to $3.7 million
for the first quarter 2023. Second quarter 2023 net charge-offs
were $236 thousand, or 0.01% (annualized) of average loans,
compared to net charge-offs of $192 thousand, or 0.01%
(annualized) of average loans, for the first quarter 2023.
GAAP Reconciliation of Non-GAAP Financial
Measures
Stellar’s management uses certain non-GAAP
financial measures. 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 28, 2023 at 8:00 a.m. Central
Time (9:00 a.m. Eastern Time) to discuss second quarter 2023
results. Individuals and investment professionals may register for
the conference call at
https://register.vevent.com/register/BI2481d74e1f5a4577b2eff534eef7c8b7 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@stellarbancorpinc.com. A simultaneous audio-only webcast may be
accessed via the Investor Relations section of Stellar’s website at
https://ir.stellarbancorpinc.com/news-and-events/webcast-and-presentations.
If you are unable to participate during the live webcast, the
webcast will be accessible via the Investor Relations section of
Stellar’s website at ir.stellarbancorpinc.com.
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
relationsIR@stellarbancorpinc.com
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
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) |
|
|
|
2023 |
|
|
|
2022 |
|
|
June 30 |
|
March 31 |
|
December 31 |
|
September 30 |
|
June 30 |
|
(Dollars in thousands) |
ASSETS |
|
|
|
|
|
|
|
|
|
Cash and due from banks |
$ |
105,913 |
|
|
$ |
99,231 |
|
|
$ |
67,063 |
|
|
$ |
16,449 |
|
|
$ |
17,547 |
|
Interest-bearing deposits at
other financial institutions |
|
198,176 |
|
|
|
164,102 |
|
|
|
304,642 |
|
|
|
102,118 |
|
|
|
275,290 |
|
Total cash and cash equivalents |
|
304,089 |
|
|
|
263,333 |
|
|
|
371,705 |
|
|
|
118,567 |
|
|
|
292,837 |
|
|
|
|
|
|
|
|
|
|
|
Available for sale securities, at fair value |
|
1,478,222 |
|
|
|
1,519,175 |
|
|
|
1,807,586 |
|
|
|
1,618,995 |
|
|
|
1,709,321 |
|
|
|
|
|
|
|
|
|
|
|
Loans held for investment |
|
8,068,718 |
|
|
|
7,886,044 |
|
|
|
7,754,751 |
|
|
|
4,591,912 |
|
|
|
4,348,833 |
|
Less: allowance for credit losses on loans |
|
(100,195 |
) |
|
|
(96,188 |
) |
|
|
(93,180 |
) |
|
|
(52,147 |
) |
|
|
(50,242 |
) |
Loans, net |
|
7,968,523 |
|
|
|
7,789,856 |
|
|
|
7,661,571 |
|
|
|
4,539,765 |
|
|
|
4,298,591 |
|
|
|
|
|
|
|
|
|
|
|
Accrued interest receivable |
|
42,051 |
|
|
|
42,405 |
|
|
|
44,743 |
|
|
|
29,697 |
|
|
|
29,882 |
|
Premises and equipment, net |
|
119,142 |
|
|
|
124,723 |
|
|
|
126,803 |
|
|
|
57,837 |
|
|
|
58,482 |
|
Federal Home Loan Bank stock |
|
24,478 |
|
|
|
19,676 |
|
|
|
15,058 |
|
|
|
16,843 |
|
|
|
4,078 |
|
Bank-owned life insurance |
|
104,148 |
|
|
|
103,616 |
|
|
|
103,094 |
|
|
|
28,305 |
|
|
|
28,170 |
|
Goodwill |
|
497,260 |
|
|
|
497,260 |
|
|
|
497,260 |
|
|
|
223,642 |
|
|
|
223,642 |
|
Core deposit intangibles, net |
|
129,805 |
|
|
|
136,665 |
|
|
|
143,525 |
|
|
|
12,406 |
|
|
|
13,156 |
|
Other assets |
|
110,633 |
|
|
|
108,009 |
|
|
|
129,092 |
|
|
|
84,285 |
|
|
|
73,605 |
|
Total assets |
$ |
10,778,351 |
|
|
$ |
10,604,718 |
|
|
$ |
10,900,437 |
|
|
$ |
6,730,342 |
|
|
$ |
6,731,764 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’
EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES: |
|
|
|
|
|
|
|
|
|
Deposits: |
|
|
|
|
|
|
|
|
|
Noninterest-bearing |
$ |
3,713,536 |
|
|
$ |
3,877,859 |
|
|
$ |
4,230,169 |
|
|
$ |
2,465,839 |
|
|
$ |
2,394,719 |
|
Interest-bearing |
|
|
|
|
|
|
|
|
|
Demand |
|
1,437,509 |
|
|
|
1,394,244 |
|
|
|
1,591,828 |
|
|
|
956,920 |
|
|
|
1,016,381 |
|
Money market and savings |
|
2,174,073 |
|
|
|
2,401,840 |
|
|
|
2,575,923 |
|
|
|
1,471,690 |
|
|
|
1,510,008 |
|
Certificates and other time |
|
1,441,251 |
|
|
|
1,064,932 |
|
|
|
869,712 |
|
|
|
766,270 |
|
|
|
959,524 |
|
Total interest-bearing deposits |
|
5,052,833 |
|
|
|
4,861,016 |
|
|
|
5,037,463 |
|
|
|
3,194,880 |
|
|
|
3,485,913 |
|
Total deposits |
|
8,766,369 |
|
|
|
8,738,875 |
|
|
|
9,267,632 |
|
|
|
5,660,719 |
|
|
|
5,880,632 |
|
|
|
|
|
|
|
|
|
|
|
Accrued interest payable |
|
4,555 |
|
|
|
3,875 |
|
|
|
2,098 |
|
|
|
2,673 |
|
|
|
1,500 |
|
Borrowed funds |
|
369,963 |
|
|
|
238,944 |
|
|
|
63,925 |
|
|
|
257,000 |
|
|
|
— |
|
Subordinated debt |
|
109,566 |
|
|
|
109,420 |
|
|
|
109,367 |
|
|
|
109,241 |
|
|
|
109,109 |
|
Other liabilities |
|
69,218 |
|
|
|
67,388 |
|
|
|
74,239 |
|
|
|
44,407 |
|
|
|
35,194 |
|
Total liabilities |
|
9,319,671 |
|
|
|
9,158,502 |
|
|
|
9,517,261 |
|
|
|
6,074,040 |
|
|
|
6,026,435 |
|
|
|
|
|
|
|
|
|
|
|
SHAREHOLDERS’ EQUITY: |
|
|
|
|
|
|
|
|
|
Common stock |
|
533 |
|
|
|
533 |
|
|
|
530 |
|
|
|
281 |
|
|
|
286 |
|
Capital surplus |
|
1,228,532 |
|
|
|
1,225,596 |
|
|
|
1,222,761 |
|
|
|
511,434 |
|
|
|
524,033 |
|
Retained earnings |
|
361,619 |
|
|
|
333,368 |
|
|
|
303,146 |
|
|
|
307,975 |
|
|
|
296,477 |
|
Accumulated other
comprehensive loss |
|
(132,004 |
) |
|
|
(113,281 |
) |
|
|
(143,261 |
) |
|
|
(163,388 |
) |
|
|
(115,467 |
) |
Total shareholders’ equity |
|
1,458,680 |
|
|
|
1,446,216 |
|
|
|
1,383,176 |
|
|
|
656,302 |
|
|
|
705,329 |
|
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND
SHAREHOLDERS’ EQUITY |
$ |
10,778,351 |
|
|
$ |
10,604,718 |
|
|
$ |
10,900,437 |
|
|
$ |
6,730,342 |
|
|
$ |
6,731,764 |
|
Stellar Bancorp, Inc. |
Financial Highlights |
(Unaudited) |
|
|
Three Months Ended |
|
Six Months Ended |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
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 |
$ |
133,931 |
|
|
$ |
125,729 |
|
$ |
116,145 |
|
|
$ |
58,025 |
|
$ |
53,835 |
|
|
$ |
259,660 |
|
$ |
106,205 |
|
Securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable |
|
9,726 |
|
|
|
9,653 |
|
|
9,834 |
|
|
|
6,655 |
|
|
5,571 |
|
|
|
19,379 |
|
|
10,639 |
|
Tax-exempt |
|
436 |
|
|
|
1,262 |
|
|
3,057 |
|
|
|
2,594 |
|
|
2,557 |
|
|
|
1,698 |
|
|
5,082 |
|
Deposits in other financial institutions |
|
2,865 |
|
|
|
3,771 |
|
|
2,933 |
|
|
|
608 |
|
|
877 |
|
|
|
6,636 |
|
|
1,217 |
|
Total interest income |
|
146,958 |
|
|
|
140,415 |
|
|
131,969 |
|
|
|
67,882 |
|
|
62,840 |
|
|
|
287,373 |
|
|
123,143 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INTEREST EXPENSE: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand, money market and savings deposits |
|
20,708 |
|
|
|
18,037 |
|
|
12,406 |
|
|
|
3,527 |
|
|
1,859 |
|
|
|
38,745 |
|
|
3,206 |
|
Certificates and other time deposits |
|
9,622 |
|
|
|
3,307 |
|
|
2,083 |
|
|
|
1,664 |
|
|
1,922 |
|
|
|
12,929 |
|
|
4,078 |
|
Borrowed funds |
|
6,535 |
|
|
|
1,317 |
|
|
417 |
|
|
|
499 |
|
|
114 |
|
|
|
7,852 |
|
|
300 |
|
Subordinated debt |
|
1,812 |
|
|
|
1,927 |
|
|
1,449 |
|
|
|
1,502 |
|
|
1,463 |
|
|
|
3,739 |
|
|
2,905 |
|
Total interest expense |
|
38,677 |
|
|
|
24,588 |
|
|
16,355 |
|
|
|
7,192 |
|
|
5,358 |
|
|
|
63,265 |
|
|
10,489 |
|
NET INTEREST INCOME |
|
108,281 |
|
|
|
115,827 |
|
|
115,614 |
|
|
|
60,690 |
|
|
57,482 |
|
|
|
224,108 |
|
|
112,654 |
|
Provision for credit losses |
|
1,915 |
|
|
|
3,666 |
|
|
44,793 |
|
|
|
1,962 |
|
|
2,143 |
|
|
|
5,581 |
|
|
3,957 |
|
Net interest income after provision for credit losses |
|
106,366 |
|
|
|
112,161 |
|
|
70,821 |
|
|
|
58,728 |
|
|
55,339 |
|
|
|
218,527 |
|
|
108,697 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NONINTEREST INCOME: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonsufficient funds fees |
|
418 |
|
|
|
406 |
|
|
447 |
|
|
|
145 |
|
|
126 |
|
|
|
824 |
|
|
242 |
|
Service charges on deposit accounts |
|
1,157 |
|
|
|
943 |
|
|
1,242 |
|
|
|
527 |
|
|
560 |
|
|
|
2,100 |
|
|
1,087 |
|
(Loss) gain on sale of assets |
|
(6 |
) |
|
|
198 |
|
|
4,025 |
|
|
|
42 |
|
|
(17 |
) |
|
|
192 |
|
|
(17 |
) |
Bank-owned life insurance |
|
532 |
|
|
|
522 |
|
|
515 |
|
|
|
135 |
|
|
342 |
|
|
|
1,054 |
|
|
475 |
|
Debit card and ATM card income |
|
1,821 |
|
|
|
1,698 |
|
|
1,897 |
|
|
|
869 |
|
|
880 |
|
|
|
3,519 |
|
|
1,699 |
|
Other |
|
1,561 |
|
|
|
3,731 |
|
|
2,511 |
|
|
|
1,277 |
|
|
813 |
|
|
|
5,292 |
|
|
3,236 |
|
Total noninterest income |
|
5,483 |
|
|
|
7,498 |
|
|
10,637 |
|
|
|
2,995 |
|
|
2,704 |
|
|
|
12,981 |
|
|
6,722 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NONINTEREST EXPENSE: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee benefits |
|
37,300 |
|
|
|
39,775 |
|
|
40,949 |
|
|
|
22,013 |
|
|
21,864 |
|
|
|
77,075 |
|
|
44,592 |
|
Net occupancy and equipment |
|
3,817 |
|
|
|
4,088 |
|
|
3,781 |
|
|
|
2,129 |
|
|
2,220 |
|
|
|
7,905 |
|
|
4,425 |
|
Depreciation |
|
1,841 |
|
|
|
1,836 |
|
|
1,903 |
|
|
|
1,003 |
|
|
1,012 |
|
|
|
3,677 |
|
|
2,045 |
|
Data processing and software amortization |
|
4,674 |
|
|
|
5,054 |
|
|
3,776 |
|
|
|
2,541 |
|
|
2,522 |
|
|
|
9,728 |
|
|
5,020 |
|
Professional fees |
|
1,564 |
|
|
|
1,527 |
|
|
2,298 |
|
|
|
485 |
|
|
662 |
|
|
|
3,091 |
|
|
800 |
|
Regulatory assessments and FDIC insurance |
|
2,755 |
|
|
|
1,294 |
|
|
1,263 |
|
|
|
1,134 |
|
|
1,256 |
|
|
|
4,049 |
|
|
2,517 |
|
Amortization of intangibles |
|
6,881 |
|
|
|
6,879 |
|
|
7,051 |
|
|
|
750 |
|
|
751 |
|
|
|
13,760 |
|
|
1,502 |
|
Communications |
|
689 |
|
|
|
701 |
|
|
737 |
|
|
|
359 |
|
|
363 |
|
|
|
1,390 |
|
|
704 |
|
Advertising |
|
907 |
|
|
|
839 |
|
|
1,130 |
|
|
|
385 |
|
|
483 |
|
|
|
1,746 |
|
|
945 |
|
Acquisition and merger-related expenses |
|
2,897 |
|
|
|
6,165 |
|
|
11,469 |
|
|
|
10,551 |
|
|
1,667 |
|
|
|
9,062 |
|
|
2,118 |
|
Other |
|
5,882 |
|
|
|
4,440 |
|
|
5,267 |
|
|
|
2,681 |
|
|
5,104 |
|
|
|
10,322 |
|
|
7,753 |
|
Total noninterest expense |
|
69,207 |
|
|
|
72,598 |
|
|
79,624 |
|
|
|
44,031 |
|
|
37,904 |
|
|
|
141,805 |
|
|
72,421 |
|
INCOME BEFORE INCOME
TAXES |
|
42,642 |
|
|
|
47,061 |
|
|
1,834 |
|
|
|
17,692 |
|
|
20,139 |
|
|
|
89,703 |
|
|
42,998 |
|
Provision for income taxes |
|
7,467 |
|
|
|
9,913 |
|
|
(218 |
) |
|
|
3,406 |
|
|
3,702 |
|
|
|
17,380 |
|
|
7,904 |
|
NET INCOME |
$ |
35,175 |
|
|
$ |
37,148 |
|
$ |
2,052 |
|
|
$ |
14,286 |
|
$ |
16,437 |
|
|
$ |
72,323 |
|
$ |
35,094 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EARNINGS PER SHARE |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.66 |
|
|
$ |
0.70 |
|
$ |
0.04 |
|
|
$ |
0.51 |
|
$ |
0.57 |
|
|
$ |
1.36 |
|
$ |
1.22 |
|
Diluted |
$ |
0.66 |
|
|
$ |
0.70 |
|
$ |
0.04 |
|
|
$ |
0.50 |
|
$ |
0.56 |
|
|
$ |
1.36 |
|
$ |
1.21 |
|
Stellar Bancorp, Inc. |
Financial Highlights |
(Unaudited) |
|
|
Three Months Ended |
|
Six Months Ended |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
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 |
$ |
35,175 |
|
|
$ |
37,148 |
|
|
$ |
2,052 |
|
|
$ |
14,286 |
|
|
$ |
16,437 |
|
|
$ |
72,323 |
|
|
$ |
35,094 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share, basic |
$ |
0.66 |
|
|
$ |
0.70 |
|
|
$ |
0.04 |
|
|
$ |
0.51 |
|
|
$ |
0.57 |
|
|
$ |
1.36 |
|
|
$ |
1.22 |
|
Earnings per share, diluted |
$ |
0.66 |
|
|
$ |
0.70 |
|
|
$ |
0.04 |
|
|
$ |
0.50 |
|
|
$ |
0.56 |
|
|
$ |
1.36 |
|
|
$ |
1.21 |
|
Dividends per share |
$ |
0.13 |
|
|
$ |
0.13 |
|
|
$ |
0.13 |
|
|
$ |
0.10 |
|
|
$ |
0.10 |
|
|
$ |
0.26 |
|
|
$ |
0.20 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average assets(A) |
|
1.31 |
% |
|
|
1.38 |
% |
|
|
0.07 |
% |
|
|
0.84 |
% |
|
|
0.94 |
% |
|
|
1.35 |
% |
|
|
0.99 |
% |
Return on average equity(A) |
|
9.67 |
% |
|
|
10.62 |
% |
|
|
0.60 |
% |
|
|
7.90 |
% |
|
|
8.86 |
% |
|
|
10.14 |
% |
|
|
9.14 |
% |
Return on average tangible equity(A)(B) |
|
17.05 |
% |
|
|
19.32 |
% |
|
|
1.16 |
% |
|
|
11.78 |
% |
|
|
13.00 |
% |
|
|
18.14 |
% |
|
|
13.19 |
% |
Net interest margin (tax equivalent)(A)(C) |
|
4.49 |
% |
|
|
4.80 |
% |
|
|
4.71 |
% |
|
|
3.85 |
% |
|
|
3.53 |
% |
|
|
4.64 |
% |
|
|
3.41 |
% |
Net interest margin (tax equivalent) excluding PAA(A)(B)(C) |
|
3.97 |
% |
|
|
4.38 |
% |
|
|
4.38 |
% |
|
|
3.85 |
% |
|
|
3.52 |
% |
|
|
4.18 |
% |
|
|
3.41 |
% |
Efficiency ratio(D) |
|
60.83 |
% |
|
|
58.96 |
% |
|
|
65.14 |
% |
|
|
69.18 |
% |
|
|
62.96 |
% |
|
|
59.86 |
% |
|
|
60.66 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital Ratios |
|
|
|
|
|
|
|
|
|
|
|
|
|
Stellar Bancorp, Inc. (Consolidated) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity to assets |
|
13.53 |
% |
|
|
13.64 |
% |
|
|
12.69 |
% |
|
|
9.75 |
% |
|
|
10.48 |
% |
|
|
13.53 |
% |
|
|
10.48 |
% |
Tangible equity to tangible assets(B) |
|
8.19 |
% |
|
|
8.15 |
% |
|
|
7.24 |
% |
|
|
6.47 |
% |
|
|
7.21 |
% |
|
|
8.19 |
% |
|
|
7.21 |
% |
Total capital ratio (to risk-weighted assets) |
|
13.03 |
% |
|
|
12.72 |
% |
|
|
12.39 |
% |
|
|
14.66 |
% |
|
|
15.47 |
% |
|
|
13.03 |
% |
|
|
15.47 |
% |
Common equity Tier 1 capital (to risk weighted assets) |
|
10.67 |
% |
|
|
10.39 |
% |
|
|
10.04 |
% |
|
|
11.39 |
% |
|
|
12.06 |
% |
|
|
10.67 |
% |
|
|
12.06 |
% |
Tier 1 capital (to risk-weighted assets) |
|
10.78 |
% |
|
|
10.50 |
% |
|
|
10.15 |
% |
|
|
11.58 |
% |
|
|
12.26 |
% |
|
|
10.78 |
% |
|
|
12.26 |
% |
Tier 1 leverage (to average tangible assets) |
|
9.51 |
% |
|
|
9.01 |
% |
|
|
8.55 |
% |
|
|
9.00 |
% |
|
|
8.65 |
% |
|
|
9.51 |
% |
|
|
8.65 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stellar Bank |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total capital ratio (to risk-weighted assets) |
|
12.80 |
% |
|
|
12.42 |
% |
|
|
12.02 |
% |
|
|
14.12 |
% |
|
|
14.50 |
% |
|
|
12.80 |
% |
|
|
14.50 |
% |
Common equity Tier 1 capital (to risk-weighted assets) |
|
11.22 |
% |
|
|
10.87 |
% |
|
|
10.46 |
% |
|
|
12.20 |
% |
|
|
12.51 |
% |
|
|
11.22 |
% |
|
|
12.51 |
% |
Tier 1 capital (to risk-weighted assets) |
|
11.22 |
% |
|
|
10.87 |
% |
|
|
10.46 |
% |
|
|
12.20 |
% |
|
|
12.51 |
% |
|
|
11.22 |
% |
|
|
12.51 |
% |
Tier 1 leverage (to average tangible assets) |
|
9.89 |
% |
|
|
9.35 |
% |
|
|
8.81 |
% |
|
|
9.49 |
% |
|
|
8.83 |
% |
|
|
9.89 |
% |
|
|
8.83 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Data |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
53,297 |
|
|
|
53,021 |
|
|
|
52,715 |
|
|
|
28,286 |
|
|
|
28,874 |
|
|
|
53,160 |
|
|
|
28,879 |
|
Diluted |
|
53,375 |
|
|
|
53,138 |
|
|
|
52,973 |
|
|
|
28,529 |
|
|
|
29,120 |
|
|
|
53,261 |
|
|
|
29,108 |
|
Period end shares outstanding |
|
53,303 |
|
|
|
53,296 |
|
|
|
52,955 |
|
|
|
28,137 |
|
|
|
28,586 |
|
|
|
53,303 |
|
|
|
28,586 |
|
Book value per share |
$ |
27.37 |
|
|
$ |
27.14 |
|
|
$ |
26.12 |
|
|
$ |
23.33 |
|
|
$ |
24.67 |
|
|
$ |
27.37 |
|
|
$ |
24.67 |
|
Tangible book value per share(B) |
$ |
15.60 |
|
|
$ |
15.24 |
|
|
$ |
14.02 |
|
|
$ |
14.94 |
|
|
$ |
16.39 |
|
|
$ |
15.60 |
|
|
$ |
16.39 |
|
Employees - full-time equivalents |
|
1,004 |
|
|
|
1,055 |
|
|
|
1,025 |
|
|
|
562 |
|
|
|
578 |
|
|
|
1,004 |
|
|
|
578 |
|
(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, 2023 |
|
March 31, 2023 |
|
June 30, 2022 |
|
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 |
$ |
7,980,856 |
|
|
$ |
133,931 |
|
6.73 |
% |
|
$ |
7,847,011 |
|
|
$ |
125,729 |
|
6.50 |
% |
|
$ |
4,303,714 |
|
|
$ |
53,835 |
|
5.02 |
% |
Securities |
|
1,502,949 |
|
|
|
10,162 |
|
2.71 |
% |
|
|
1,604,011 |
|
|
|
10,915 |
|
2.76 |
% |
|
|
1,778,745 |
|
|
|
8,128 |
|
1.83 |
% |
Deposits in other financial
institutions |
|
209,722 |
|
|
|
2,865 |
|
5.48 |
% |
|
|
364,781 |
|
|
|
3,771 |
|
4.19 |
% |
|
|
535,546 |
|
|
|
877 |
|
0.66 |
% |
Total interest-earning assets |
|
9,693,527 |
|
|
$ |
146,958 |
|
6.08 |
% |
|
|
9,815,803 |
|
|
$ |
140,415 |
|
5.80 |
% |
|
|
6,618,005 |
|
|
$ |
62,840 |
|
3.81 |
% |
Allowance for credit losses on
loans |
|
(96,414 |
) |
|
|
|
|
|
|
(93,331 |
) |
|
|
|
|
|
|
(49,290 |
) |
|
|
|
|
Noninterest-earning
assets |
|
1,143,025 |
|
|
|
|
|
|
|
1,160,061 |
|
|
|
|
|
|
|
450,584 |
|
|
|
|
|
Total assets |
$ |
10,740,138 |
|
|
|
|
|
|
$ |
10,882,533 |
|
|
|
|
|
|
$ |
7,019,299 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
and Shareholders' Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-Bearing
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing demand
deposits |
$ |
1,387,604 |
|
|
$ |
9,343 |
|
2.70 |
% |
|
$ |
1,650,273 |
|
|
$ |
8,382 |
|
2.06 |
% |
|
$ |
1,044,493 |
|
|
$ |
927 |
|
0.36 |
% |
Money market and savings
deposits |
|
2,220,827 |
|
|
|
11,365 |
|
2.05 |
% |
|
|
2,490,889 |
|
|
|
9,655 |
|
1.57 |
% |
|
|
1,566,376 |
|
|
|
932 |
|
0.24 |
% |
Certificates and other time
deposits |
|
1,225,834 |
|
|
|
9,622 |
|
3.15 |
% |
|
|
861,595 |
|
|
|
3,307 |
|
1.56 |
% |
|
|
1,088,664 |
|
|
|
1,922 |
|
0.71 |
% |
Borrowed funds |
|
479,896 |
|
|
|
6,535 |
|
5.46 |
% |
|
|
105,191 |
|
|
|
1,317 |
|
5.08 |
% |
|
|
50,116 |
|
|
|
114 |
|
0.91 |
% |
Subordinated debt |
|
109,499 |
|
|
|
1,812 |
|
6.64 |
% |
|
|
109,415 |
|
|
|
1,927 |
|
7.14 |
% |
|
|
109,045 |
|
|
|
1,463 |
|
5.38 |
% |
Total interest-bearing liabilities |
|
5,423,660 |
|
|
$ |
38,677 |
|
2.86 |
% |
|
|
5,217,363 |
|
|
$ |
24,588 |
|
1.91 |
% |
|
|
3,858,694 |
|
|
$ |
5,358 |
|
0.56 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-Bearing
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing demand
deposits |
|
3,779,594 |
|
|
|
|
|
|
|
4,166,265 |
|
|
|
|
|
|
|
2,382,230 |
|
|
|
|
|
Other liabilities |
|
78,411 |
|
|
|
|
|
|
|
80,823 |
|
|
|
|
|
|
|
34,249 |
|
|
|
|
|
Total liabilities |
|
9,281,665 |
|
|
|
|
|
|
|
9,464,451 |
|
|
|
|
|
|
|
6,275,173 |
|
|
|
|
|
Shareholders' equity |
|
1,458,473 |
|
|
|
|
|
|
|
1,418,082 |
|
|
|
|
|
|
|
744,126 |
|
|
|
|
|
Total liabilities and shareholders' equity |
$ |
10,740,138 |
|
|
|
|
|
|
$ |
10,882,533 |
|
|
|
|
|
|
$ |
7,019,299 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest rate spread |
|
|
|
|
3.22 |
% |
|
|
|
|
|
3.89 |
% |
|
|
|
|
|
3.25 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income and
margin |
|
|
$ |
108,281 |
|
4.48 |
% |
|
|
|
$ |
115,827 |
|
4.79 |
% |
|
|
|
$ |
57,482 |
|
3.48 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income and net
interest margin (tax equivalent) |
|
|
$ |
108,509 |
|
4.49 |
% |
|
|
|
$ |
116,119 |
|
4.80 |
% |
|
|
|
$ |
58,238 |
|
3.53 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of funds |
|
|
|
|
1.69 |
% |
|
|
|
|
|
1.06 |
% |
|
|
|
|
|
0.34 |
% |
Cost of deposits |
|
|
|
|
1.41 |
% |
|
|
|
|
|
0.94 |
% |
|
|
|
|
|
0.25 |
% |
Stellar Bancorp, Inc. |
Financial Highlights |
(Unaudited) |
|
|
Six Months Ended June 30, |
|
|
2023 |
|
|
|
2022 |
|
|
Average Balance |
|
Interest Earned/ Interest
Paid |
|
AverageYield/Rate |
|
Average Balance |
|
Interest Earned/ Interest
Paid |
|
Average Yield/Rate |
|
(Dollars in thousands) |
Assets |
|
|
|
|
|
|
|
|
|
|
|
Interest-Earning Assets: |
|
|
|
|
|
|
|
|
|
|
|
Loans |
$ |
7,914,303 |
|
|
$ |
259,660 |
|
6.62 |
% |
|
$ |
4,267,810 |
|
|
$ |
106,205 |
|
5.02 |
% |
Securities |
|
1,553,200 |
|
|
|
21,077 |
|
2.74 |
% |
|
|
1,807,024 |
|
|
|
15,721 |
|
1.75 |
% |
Deposits in other financial
institutions |
|
286,823 |
|
|
|
6,636 |
|
4.67 |
% |
|
|
670,316 |
|
|
|
1,217 |
|
0.37 |
% |
Total interest-earning assets |
|
9,754,326 |
|
|
$ |
287,373 |
|
5.94 |
% |
|
|
6,745,150 |
|
|
$ |
123,143 |
|
3.68 |
% |
Allowance for credit losses on loans |
|
(94,881 |
) |
|
|
|
|
|
|
(48,819 |
) |
|
|
|
|
Noninterest-earning assets |
|
1,151,497 |
|
|
|
|
|
|
|
441,390 |
|
|
|
|
|
Total assets |
$ |
10,810,942 |
|
|
|
|
|
|
$ |
7,137,721 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders' Equity |
|
|
|
|
|
|
|
|
|
|
|
Interest-Bearing Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing demand deposits |
$ |
1,518,213 |
|
|
$ |
17,725 |
|
2.35 |
% |
|
$ |
1,057,678 |
|
|
$ |
1,476 |
|
0.28 |
% |
Money market and savings deposits |
|
2,355,112 |
|
|
|
21,020 |
|
1.80 |
% |
|
|
1,575,325 |
|
|
|
1,730 |
|
0.22 |
% |
Certificates and other time deposits |
|
1,044,721 |
|
|
|
12,929 |
|
2.50 |
% |
|
|
1,166,490 |
|
|
|
4,078 |
|
0.70 |
% |
Borrowed funds |
|
293,578 |
|
|
|
7,852 |
|
5.39 |
% |
|
|
69,868 |
|
|
|
300 |
|
0.87 |
% |
Subordinated debt |
|
109,458 |
|
|
|
3,739 |
|
6.89 |
% |
|
|
108,979 |
|
|
|
2,905 |
|
5.38 |
% |
Total interest-bearing liabilities |
|
5,321,082 |
|
|
$ |
63,265 |
|
2.40 |
% |
|
|
3,978,340 |
|
|
|
10,489 |
|
0.53 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-Bearing Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing demand deposits |
|
3,971,862 |
|
|
|
|
|
|
|
2,347,366 |
|
|
|
|
|
Other liabilities |
|
79,609 |
|
|
|
|
|
|
|
37,767 |
|
|
|
|
|
Total liabilities |
|
9,372,553 |
|
|
|
|
|
|
|
6,363,473 |
|
|
|
|
|
Shareholders' equity |
|
1,438,389 |
|
|
|
|
|
|
|
774,248 |
|
|
|
|
|
Total liabilities and shareholders' equity |
$ |
10,810,942 |
|
|
|
|
|
|
$ |
7,137,721 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest rate spread |
|
|
|
|
3.54 |
% |
|
|
|
|
|
3.15 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income and
margin |
|
|
$ |
224,108 |
|
4.63 |
% |
|
|
|
$ |
112,654 |
|
3.37 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income and net
interest margin (tax equivalent) |
|
|
$ |
224,628 |
|
4.64 |
% |
|
|
|
$ |
114,160 |
|
3.41 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of funds |
|
|
|
|
1.37 |
% |
|
|
|
|
|
0.33 |
% |
Cost of deposits |
|
|
|
|
1.17 |
% |
|
|
|
|
|
0.24 |
% |
Stellar Bancorp, Inc. |
Financial Highlights |
(Unaudited) |
|
|
Three Months Ended |
|
|
2023 |
|
|
|
2022 |
|
|
June 30 |
|
March 31 |
|
December 31 |
|
September 30 |
|
June 30 |
|
(Dollars in thousands) |
Period-end Loan Portfolio: |
|
|
|
|
|
|
|
|
|
Commercial and industrial |
$ |
1,512,476 |
|
|
$ |
1,477,340 |
|
|
$ |
1,455,795 |
|
|
$ |
732,636 |
|
|
$ |
727,068 |
|
Paycheck Protection Program (PPP) |
|
8,027 |
|
|
|
11,081 |
|
|
|
13,226 |
|
|
|
17,827 |
|
|
|
31,855 |
|
Real estate: |
|
|
|
|
|
|
|
|
|
Commercial real estate (including multi-family residential) |
|
4,038,487 |
|
|
|
4,014,609 |
|
|
|
3,931,480 |
|
|
|
2,407,039 |
|
|
|
2,265,155 |
|
Commercial real estate construction and land development |
|
1,136,124 |
|
|
|
1,034,538 |
|
|
|
1,037,678 |
|
|
|
513,248 |
|
|
|
450,694 |
|
1-4 family residential (including home equity) |
|
1,009,439 |
|
|
|
1,008,362 |
|
|
|
1,000,956 |
|
|
|
699,636 |
|
|
|
682,066 |
|
Residential construction |
|
311,208 |
|
|
|
292,143 |
|
|
|
268,150 |
|
|
|
183,563 |
|
|
|
155,017 |
|
Consumer and other |
|
52,957 |
|
|
|
47,971 |
|
|
|
47,466 |
|
|
|
37,963 |
|
|
|
36,978 |
|
Total loans held for investment |
$ |
8,068,718 |
|
|
$ |
7,886,044 |
|
|
$ |
7,754,751 |
|
|
$ |
4,591,912 |
|
|
$ |
4,348,833 |
|
|
|
|
|
|
|
|
|
|
|
Deposits: |
|
|
|
|
|
|
|
|
|
Noninterest-bearing |
$ |
3,713,536 |
|
|
$ |
3,877,859 |
|
|
$ |
4,230,169 |
|
|
$ |
2,465,839 |
|
|
$ |
2,394,719 |
|
Interest-bearing |
|
|
|
|
|
|
|
|
|
Demand |
|
1,437,509 |
|
|
|
1,394,244 |
|
|
|
1,591,828 |
|
|
|
956,920 |
|
|
|
1,016,381 |
|
Money market and savings |
|
2,174,073 |
|
|
|
2,401,840 |
|
|
|
2,575,923 |
|
|
|
1,471,690 |
|
|
|
1,510,008 |
|
Certificates and other time |
|
1,441,251 |
|
|
|
1,064,932 |
|
|
|
869,712 |
|
|
|
766,270 |
|
|
|
959,524 |
|
Total interest-bearing deposits |
|
5,052,833 |
|
|
|
4,861,016 |
|
|
|
5,037,463 |
|
|
|
3,194,880 |
|
|
|
3,485,913 |
|
Total deposits |
$ |
8,766,369 |
|
|
$ |
8,738,875 |
|
|
$ |
9,267,632 |
|
|
$ |
5,660,719 |
|
|
$ |
5,880,632 |
|
|
|
|
|
|
|
|
|
|
|
Asset Quality: |
|
|
|
|
|
|
|
|
|
Nonaccrual loans |
$ |
43,349 |
|
|
$ |
43,413 |
|
|
$ |
45,048 |
|
|
$ |
21,551 |
|
|
$ |
28,225 |
|
Accruing loans 90 or more days past due |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Total nonperforming loans |
|
43,349 |
|
|
|
43,413 |
|
|
|
45,048 |
|
|
|
21,551 |
|
|
|
28,225 |
|
Other repossessed assets |
|
— |
|
|
|
124 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Total nonperforming assets |
$ |
43,349 |
|
|
$ |
43,537 |
|
|
$ |
45,048 |
|
|
$ |
21,551 |
|
|
$ |
28,225 |
|
|
|
|
|
|
|
|
|
|
|
Net charge-offs (recoveries) |
$ |
236 |
|
|
$ |
192 |
|
|
$ |
5,707 |
|
|
$ |
(245 |
) |
|
$ |
571 |
|
|
|
|
|
|
|
|
|
|
|
Nonaccrual loans: |
|
|
|
|
|
|
|
|
|
Commercial and industrial |
$ |
22,968 |
|
|
$ |
23,329 |
|
|
$ |
25,402 |
|
|
$ |
6,916 |
|
|
$ |
9,145 |
|
Real estate: |
|
|
|
|
|
|
|
|
|
Commercial real estate (including multi-family residential) |
|
8,221 |
|
|
|
9,026 |
|
|
|
9,970 |
|
|
|
10,392 |
|
|
|
14,409 |
|
Commercial real estate construction and land development |
|
388 |
|
|
|
27 |
|
|
|
— |
|
|
|
241 |
|
|
|
1,511 |
|
1-4 family residential (including home equity) |
|
10,880 |
|
|
|
10,586 |
|
|
|
9,404 |
|
|
|
3,854 |
|
|
|
3,040 |
|
Residential construction |
|
665 |
|
|
|
195 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Consumer and other |
|
227 |
|
|
|
250 |
|
|
|
272 |
|
|
|
148 |
|
|
|
120 |
|
Total nonaccrual loans |
$ |
43,349 |
|
|
$ |
43,413 |
|
|
$ |
45,048 |
|
|
$ |
21,551 |
|
|
$ |
28,225 |
|
|
|
|
|
|
|
|
|
|
|
Asset Quality Ratios: |
|
|
|
|
|
|
|
|
|
Nonperforming assets to total assets |
|
0.40 |
% |
|
|
0.41 |
% |
|
|
0.41 |
% |
|
|
0.32 |
% |
|
|
0.42 |
% |
Nonperforming loans to total loans |
|
0.54 |
% |
|
|
0.55 |
% |
|
|
0.58 |
% |
|
|
0.47 |
% |
|
|
0.65 |
% |
Allowance for credit losses on
loans to nonperforming loans |
|
231.14 |
% |
|
|
221.56 |
% |
|
|
206.85 |
% |
|
|
241.97 |
% |
|
|
178.01 |
% |
Allowance for credit losses on
loans to total loans |
|
1.24 |
% |
|
|
1.22 |
% |
|
|
1.20 |
% |
|
|
1.14 |
% |
|
|
1.16 |
% |
Net charge-offs (recoveries)
to average loans (annualized) |
|
0.01 |
% |
|
|
0.01 |
% |
|
|
0.30 |
% |
|
|
(0.02 |
%) |
|
|
0.05 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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,
adjusted pre-tax, pre-provision income, adjusted pre-tax,
pre-provision ROAA, adjusted efficiency ratio, 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.
Stellar Bancorp, Inc. |
GAAP Reconciliation and Management’s Explanation of
Non-GAAP Financial Measures |
(Unaudited) |
|
|
Three Months Ended |
|
Six Months Ended |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
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 |
$ |
35,175 |
|
|
$ |
37,148 |
|
|
$ |
2,052 |
|
|
$ |
14,286 |
|
|
$ |
16,437 |
|
|
$ |
72,323 |
|
|
$ |
35,094 |
|
Add: Provision for credit
losses |
|
1,915 |
|
|
|
3,666 |
|
|
|
44,793 |
|
|
|
1,962 |
|
|
|
2,143 |
|
|
|
5,581 |
|
|
|
3,957 |
|
Add: Provision for income taxes |
|
7,467 |
|
|
|
9,913 |
|
|
|
(218 |
) |
|
|
3,406 |
|
|
|
3,702 |
|
|
|
17,380 |
|
|
|
7,904 |
|
Pre-tax, pre-provision income |
$ |
44,557 |
|
|
$ |
50,727 |
|
|
$ |
46,627 |
|
|
$ |
19,654 |
|
|
$ |
22,282 |
|
|
$ |
95,284 |
|
|
$ |
46,955 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total average assets |
$ |
10,740,138 |
|
|
$ |
10,882,533 |
|
|
$ |
10,946,009 |
|
|
$ |
6,717,886 |
|
|
$ |
7,019,299 |
|
|
$ |
10,810,942 |
|
|
$ |
7,137,721 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax, pre-provision
return on average assets(B) |
|
1.66 |
% |
|
|
1.89 |
% |
|
|
1.69 |
% |
|
|
1.16 |
% |
|
|
1.27 |
% |
|
|
1.78 |
% |
|
|
1.33 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax, pre-provision income |
$ |
44,557 |
|
|
$ |
50,727 |
|
|
$ |
46,627 |
|
|
$ |
19,654 |
|
|
$ |
22,282 |
|
|
$ |
95,284 |
|
|
$ |
46,955 |
|
Add: Acquisition and
merger-related expenses |
|
2,897 |
|
|
|
6,165 |
|
|
|
11,469 |
|
|
|
10,551 |
|
|
|
1,667 |
|
|
|
9,062 |
|
|
|
2,118 |
|
Add: Amortization of
intangibles |
|
6,881 |
|
|
|
6,879 |
|
|
|
7,051 |
|
|
|
750 |
|
|
|
751 |
|
|
|
13,760 |
|
|
|
1,502 |
|
Less: Purchase accounting
accretion |
|
12,572 |
|
|
|
10,104 |
|
|
|
8,160 |
|
|
|
40 |
|
|
|
77 |
|
|
|
22,676 |
|
|
|
170 |
|
Less: (Loss) gain on sale of
assets |
|
(6 |
) |
|
|
198 |
|
|
|
4,025 |
|
|
|
42 |
|
|
|
(17 |
) |
|
|
192 |
|
|
|
(17 |
) |
Adjusted pre-tax,
pre-provision income |
$ |
41,769 |
|
|
$ |
53,469 |
|
|
$ |
52,962 |
|
|
$ |
30,873 |
|
|
$ |
24,640 |
|
|
$ |
95,238 |
|
|
$ |
50,422 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted pre-tax,
pre-provision return on average
assets(B) |
|
1.56 |
% |
|
|
1.99 |
% |
|
|
1.92 |
% |
|
|
1.82 |
% |
|
|
1.41 |
% |
|
|
1.78 |
% |
|
|
1.42 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total noninterest expense |
$ |
69,207 |
|
|
$ |
72,598 |
|
|
$ |
79,624 |
|
|
$ |
44,031 |
|
|
$ |
37,904 |
|
|
$ |
141,805 |
|
|
$ |
72,421 |
|
Less: Acquisition and
merger-related expenses |
|
2,897 |
|
|
|
6,165 |
|
|
|
11,469 |
|
|
|
10,551 |
|
|
|
1,667 |
|
|
|
9,062 |
|
|
|
2,118 |
|
Less: Amortization of
intangibles |
|
6,881 |
|
|
|
6,879 |
|
|
|
7,051 |
|
|
|
750 |
|
|
|
751 |
|
|
|
13,760 |
|
|
|
1,502 |
|
Net interest income |
|
108,281 |
|
|
|
115,827 |
|
|
|
115,614 |
|
|
|
60,690 |
|
|
|
57,482 |
|
|
|
224,108 |
|
|
|
112,654 |
|
Less: Purchase accounting
accretion |
|
12,572 |
|
|
|
10,104 |
|
|
|
8,160 |
|
|
|
40 |
|
|
|
77 |
|
|
|
22,676 |
|
|
|
170 |
|
Total noninterest income |
|
5,483 |
|
|
|
7,498 |
|
|
|
10,637 |
|
|
|
2,995 |
|
|
|
2,704 |
|
|
|
12,981 |
|
|
|
6,722 |
|
Less: (Loss) gain on sale of
assets |
|
(6 |
) |
|
|
198 |
|
|
|
4,025 |
|
|
|
42 |
|
|
|
(17 |
) |
|
|
192 |
|
|
|
(17 |
) |
Adjusted efficiency ratio(A) |
|
58.73 |
% |
|
|
52.69 |
% |
|
|
53.57 |
% |
|
|
51.46 |
% |
|
|
59.02 |
% |
|
|
55.54 |
% |
|
|
57.71 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total shareholders' equity |
$ |
1,458,680 |
|
|
$ |
1,446,216 |
|
|
$ |
1,383,176 |
|
|
$ |
656,302 |
|
|
$ |
705,329 |
|
|
$ |
1,458,680 |
|
|
$ |
705,329 |
|
Less: Goodwill and core
deposit intangibles, net |
|
627,065 |
|
|
|
633,925 |
|
|
|
640,785 |
|
|
|
236,048 |
|
|
|
236,798 |
|
|
|
627,065 |
|
|
|
236,798 |
|
Tangible shareholders’ equity |
$ |
831,615 |
|
|
$ |
812,291 |
|
|
$ |
742,391 |
|
|
$ |
420,254 |
|
|
$ |
468,531 |
|
|
$ |
831,615 |
|
|
$ |
468,531 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares outstanding at end of
period |
|
53,303 |
|
|
|
53,296 |
|
|
|
52,955 |
|
|
|
28,137 |
|
|
|
28,586 |
|
|
|
53,303 |
|
|
|
28,586 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tangible book value per share |
$ |
15.60 |
|
|
$ |
15.24 |
|
|
$ |
14.02 |
|
|
$ |
14.94 |
|
|
$ |
16.39 |
|
|
$ |
15.60 |
|
|
$ |
16.39 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average shareholders' equity |
$ |
1,458,473 |
|
|
$ |
1,418,082 |
|
|
$ |
1,347,938 |
|
|
$ |
717,436 |
|
|
$ |
744,126 |
|
|
$ |
1,438,389 |
|
|
$ |
774,248 |
|
Less: Average goodwill
and core deposit intangibles, net |
|
630,854 |
|
|
|
638,110 |
|
|
|
658,107 |
|
|
|
236,399 |
|
|
|
237,153 |
|
|
|
634,462 |
|
|
|
237,537 |
|
Average tangible shareholders’
equity |
$ |
827,619 |
|
|
$ |
779,972 |
|
|
$ |
689,831 |
|
|
$ |
481,037 |
|
|
$ |
506,973 |
|
|
$ |
803,927 |
|
|
$ |
536,711 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average
tangible equity(B) |
|
17.05 |
% |
|
|
19.32 |
% |
|
|
1.18 |
% |
|
|
11.78 |
% |
|
|
13.00 |
% |
|
|
18.14 |
% |
|
|
13.19 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
$ |
10,778,351 |
|
|
$ |
10,604,718 |
|
|
$ |
10,900,437 |
|
|
$ |
6,730,342 |
|
|
$ |
6,731,764 |
|
|
$ |
10,778,351 |
|
|
$ |
6,731,764 |
|
Less: Goodwill and core
deposit intangibles, net |
|
627,065 |
|
|
|
633,925 |
|
|
|
640,785 |
|
|
|
236,048 |
|
|
|
236,798 |
|
|
|
627,065 |
|
|
|
236,798 |
|
Tangible assets |
$ |
10,151,286 |
|
|
$ |
9,970,793 |
|
|
$ |
10,259,652 |
|
|
$ |
6,494,294 |
|
|
$ |
6,494,966 |
|
|
$ |
10,151,286 |
|
|
$ |
6,494,966 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tangible equity to
tangible assets |
|
8.19 |
% |
|
|
8.15 |
% |
|
|
7.24 |
% |
|
|
6.47 |
% |
|
|
7.21 |
% |
|
|
8.19 |
% |
|
|
7.21 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income (tax equivalent) |
$ |
108,509 |
|
|
$ |
116,119 |
|
|
$ |
116,574 |
|
|
$ |
61,418 |
|
|
$ |
58,238 |
|
|
$ |
224,628 |
|
|
$ |
114,160 |
|
Less: Purchase accounting
accretion |
|
12,572 |
|
|
|
10,104 |
|
|
|
8,160 |
|
|
|
40 |
|
|
|
77 |
|
|
|
22,676 |
|
|
|
170 |
|
Adjusted net interest income (tax equivalent) |
$ |
95,937 |
|
|
$ |
106,015 |
|
|
$ |
108,414 |
|
|
$ |
61,378 |
|
|
$ |
58,161 |
|
|
$ |
201,952 |
|
|
$ |
113,990 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average earning assets |
$ |
9,693,527 |
|
|
$ |
9,815,803 |
|
|
$ |
9,815,701 |
|
|
$ |
6,325,984 |
|
|
$ |
6,618,005 |
|
|
$ |
9,754,326 |
|
|
$ |
6,745,150 |
|
Net interest margin
(tax equivalent) excluding PAA |
|
3.97 |
% |
|
|
4.38 |
% |
|
|
4.38 |
% |
|
|
3.85 |
% |
|
|
3.52 |
% |
|
|
4.18 |
% |
|
|
3.41 |
% |
(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.
Stellar Bancorp (NYSE:STEL)
Historical Stock Chart
From Aug 2024 to Sep 2024
Stellar Bancorp (NYSE:STEL)
Historical Stock Chart
From Sep 2023 to Sep 2024