8-K
Stellar Bancorp, Inc. (STEL)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________________________________
Form 8-K
____________________________________________
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event Reported): October 24, 2025
Stellar Bancorp, Inc.
(Exact Name of Registrant as Specified in Charter)
| Texas | 001-38280 | 20-8339782 |
|---|---|---|
| (State or Other Jurisdiction of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification Number) |
9 Greenway Plaza, Suite 110
Houston, Texas 77046
(Address of Principal Executive Offices) (Zip Code)
(713) 210-7600
(Registrant's telephone number, including area code)
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| £ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| £ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| £ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| £ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading<br><br>Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common stock, par value $0.01 per share | STEL | New York Stock Exchange |
| NYSE Texas |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company £
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. £
Item 2.02. Results of Operations and Financial Condition.
On October 24, 2025 Stellar Bancorp, Inc. (the “Company”) issued a press release announcing its financial results for the third quarter of 2025. A copy of the press release, as well as a copy of the accompanying earnings presentation, are furnished as Exhibit 99.1 and Exhibit 99.2 hereto, respectively, and incorporated herein by reference.
In accordance with General Instruction B.2 to Form 8-K, the information furnished in this Item 2.02, Exhibit 99.1 and Exhibit 99.2 of this Current Report on Form 8-K shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section, and such information shall not be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, (the ”Securities Act”), except as shall be expressly set forth by specific reference in such filing.
Item 7.01 Regulation FD Disclosure
On Friday, October 24, 2025, at 8:00 a.m., Central Time, the Company will host an investor conference call and webcast to review its third quarter 2025 financial results. The earnings release and earnings presentation will be posted on the Company’s website. The earnings release and presentation materials are attached hereto as Exhibit 99.1 and Exhibit 99.2, respectively, and are incorporated herein by reference.
In accordance with General Instruction B.2 to Form 8-K, the information furnished in this Item 7.01, including Exhibit 99.2 of this Current Report on Form 8-K shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section, and such information shall not be deemed incorporated by reference in any filing under the Securities Act, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 9.01. Financial Statements and Exhibits.
Exhibits. The following are furnished as exhibits to this Current Report on Form 8-K:
| Exhibit Number | Description of Exhibit |
|---|---|
| 99.1 | Q32025 Earnings Release |
| 99.2 | Q32025 Earnings Presentation |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
Forward-Looking Statements
This Current Report on Form 8-K contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the Company’s actual results, performance or achievements to be materially different from any future results, performance or achievements anticipated in such statements. Forward-looking statements speak only as of the date they are made and, except as required by law, the Company does not assume any duty to update forward-looking statements. Such forward-looking statements include, but are not limited to, statements concerning the Company’s plans, objectives, strategies, expectations, intentions and other statements that are not statements of historical fact, and may be identified by words such as “anticipates,” “believes,” “building,” “continue,” “could,” “drive,” “estimates,” “expects,” “extent,” “focus,” “forecasts,” “goal,” “guidance,” “intends,” “may,” “might,” “outlook,” “plan,” “position,” “probable,” “progressing,” “projects,” “prudent,” “seeks,” “should,” “target,” “view,” “will” or “would” or the negative of these words and phrases or similar words or phrases. For a list of factors that could cause actual results to differ materially from those set forth in the forward-looking statements, see the risk factors described in the Company’s most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q and other reports that are filed with the Securities and Exchange Commission. All forward-looking statements are qualified in their entirety by this cautionary statement.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| STELLAR BANCORP, INC. | ||
|---|---|---|
| Date: October 24, 2025 | By: | /s/ Paul P. Egge |
| Paul P. Egge | ||
| Chief Financial Officer |
Document
Exhibit 99.1
PRESS RELEASE
STELLAR BANCORP, INC. REPORTS
THIRD QUARTER 2025 RESULTS
HOUSTON, October 24, 2025 - Stellar Bancorp, Inc. (the “Company” or “Stellar”) (NYSE: STEL) today reported net income of $25.7 million, or diluted earnings per share of $0.50, for the third quarter of 2025, compared to net income of $26.4 million, or diluted earnings per share of $0.51, for the second quarter of 2025.
“We are pleased to report strong third quarter results for 2025, highlighted by improved net interest income and margin. We also saw growth in deposits and tangible book value, which further strengthened our balance sheet to support our future,” said Robert R. Franklin, Jr., Stellar’s Chief Executive Officer.
“Our team has continued to reposition the loan portfolio, reducing our exposure to non-relationship real estate commitments and moving toward a more balanced mix of C&I and real estate loans. Our real estate portfolio remains within regulatory guidance, and we intend to stay within those parameters. While loan payoffs persisted during the quarter, we believe this strategic portfolio shift will help moderate payoff activity over the longer term,” Mr. Franklin continued.
“Credit quality remains good, and the Texas markets we serve continue to perform well. Stellar is increasingly recognized as a strong, locally-managed bank focused on serving small-to-medium sized businesses, and we are well-positioned to capitalize on merger-related disruption in our markets. We remain confident in our ability to deepen customer relationships and deliver long-term value for our shareholders,” Mr. Franklin concluded.
Financial Highlights
•Strong Net Interest Margin: Tax equivalent net interest margin for the third quarter of 2025 was 4.20% compared to 4.18% for the second quarter of 2025. The tax equivalent net interest margin, excluding purchase accounting accretion (“PAA”), was 4.00%(1) for the third quarter of 2025 compared to 3.95%(1) for the second quarter of 2025.
•Solid Profitability: Net income for the third quarter of 2025 was $25.7 million, or diluted earnings per share of $0.50, which translated into an annualized return on average assets of 0.97%, an annualized return on average equity of 6.30% and an annualized return on average tangible equity of 11.45%(1).
•Strong Capital Position and Book Value Build: Total risk-based capital ratio increased to 16.33% at September 30, 2025 from 15.98% at June 30, 2025, while book value per share increased to $32.27 at September 30, 2025 from $31.20 at June 30, 2025 and tangible book value per share increased to $21.08(1) at September 30, 2025 from $19.94(1) at June 30, 2025.
•Paydown of Subordinated Debt: On October 1, 2025, the Company completed the previously announced redemption of $30 million of its $60 million of subordinated debt outstanding as of September 30, 2025.
Third Quarter 2025 Results
Net interest income in the third quarter of 2025 increased $2.3 million, or 2.3%, to $100.6 million from $98.3 million for the second quarter of 2025. The net interest margin on a tax equivalent basis increased to 4.20% for the third quarter of 2025 from 4.18% for the second quarter of 2025. The increase in net interest income from the prior quarter was primarily due to the increase in average securities, average yield on securities and deposits in other financial institutions. Net interest income for the third quarter of 2025 benefited from $4.8 million of income from PAA compared to $5.3 million in the second quarter of 2025. Excluding PAA, net interest income (tax equivalent) for the third quarter of 2025 would have been $95.9 million(1) and the tax equivalent net interest margin would have been 4.00%(1).
____________
(1) Refer to the calculation of this non-GAAP financial measure on page 10 of this earnings release. The calculation of returns on average tangible equity and the efficiency ratio have been adjusted from prior period disclosures.
Noninterest income for the third quarter of 2025 was $5.0 million, a decrease of $805 thousand, or 13.9%, compared to $5.8 million for the second quarter of 2025. Noninterest income decreased in the third quarter of 2025 compared to the second quarter of 2025 primarily due to losses on sales and write-downs on foreclosed assets recorded during the third quarter.
Noninterest expense for the third quarter of 2025 increased $3.1 million, or 4.5%, to $73.1 million compared to $70.0 million for the second quarter of 2025. The increase in noninterest expense during the third quarter of 2025 compared to the second quarter of 2025 was primarily due to an increase in salaries and employee benefits of $2.2 million, an increase in professional fees of $314 thousand and a $258 thousand increase in advertising expense. Salaries and benefits during the third quarter of 2025 included $464 thousand in severance expense related to planned upcoming branch closures.
The efficiency ratio was 63.69%(1) for the third quarter of 2025 compared to 61.87%(1) for the second quarter of 2025. Annualized returns on average assets, average equity and average tangible equity were 0.97%, 6.30% and 11.45%(1) for the third quarter of 2025, respectively, compared to 1.01%, 6.62% and 12.16%(1) for the second quarter of 2025, respectively.
Financial Condition
Total assets at September 30, 2025 were $10.63 billion, an increase of $135 million compared to $10.49 billion at June 30, 2025. The increase in total assets was largely due to an increase in interest-bearing deposits at other financial institutions and securities, all of which were funded largely by core deposit growth, partially offset by a decrease in loans.
Total loans at September 30, 2025 decreased $119.5 million to $7.17 billion compared to $7.29 billion at June 30, 2025. At September 30, 2025, the remaining balance of the PAA on loans was $58.1 million.
Total deposits at September 30, 2025 increased $143.8 million to $8.82 billion compared to $8.67 billion at June 30, 2025 primarily due to increases in money market and savings deposits.
Asset Quality
Nonperforming assets totaled $54.2 million, or 0.51% of total assets, at September 30, 2025, compared to $58.2 million, or 0.55% of total assets, at June 30, 2025. The allowance for credit losses on loans as a percentage of total loans was 1.10% at September 30, 2025 compared to 1.14% at June 30, 2025.
The provision for credit losses was $305 thousand for the third quarter of 2025 compared to $1.1 million for the second quarter of 2025. Net charge-offs for the third quarter of 2025 were $3.3 million, or 0.18% (annualized) of average loans, compared to net charge-offs of $206 thousand, or 0.01% (annualized) of average loans, for the second quarter of 2025.
GAAP Reconciliation of Non-GAAP Financial Measures
Stellar’s management uses certain non-GAAP financial measures to evaluate its performance. Please refer to the GAAP Reconciliation and Management’s Explanation of Non-GAAP Financial Measures on page 10 of this earnings release for a reconciliation of these non-GAAP financial measures.
Conference Call
Stellar’s management team will host a conference call and webcast on Friday, October 24, 2025 at 8:00 a.m. Central Time (9:00 a.m. Eastern Time) to discuss its results for the third quarter of 2025. Participants may register for the conference call at https://registrations.events/direct/Q4I6358688 conference ID 63586 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 webcast is available at https://registrations.events/direct/Q4I6358688 and requires pre-registration. If you are unable to participate during the live webcast, the webcast will be accessible via the Investor Relations section of the Company’s website at ir.stellar.bank.
About Stellar Bancorp, Inc.
Stellar Bancorp, Inc. is a bank holding company headquartered in Houston, Texas. Stellar’s principal banking subsidiary, Stellar Bank, provides a diversified range of commercial banking services primarily to small- to medium-sized businesses and individual customers across Houston, Dallas, Beaumont and surrounding communities in Texas.
____________
(1) Refer to the calculation of this non-GAAP financial measure on page 10 of this earnings release. The calculation of returns on average tangible equity and the efficiency ratio have been adjusted from prior period disclosures.
Investor Relations
ir@stellar.bank
Forward-Looking Statements
Certain statements in this press release which are not historical in nature are intended to be, and are hereby identified as, “forward-looking statements” for purposes of the safe harbor provided by Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements include, but are not limited to, 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: changes in the interest rate environment, the value of Stellar’s assets and obligations and the availability of capital and liquidity; general competitive, economic, political and market conditions; and other factors that may affect future results of Stellar including changes in asset quality and credit risk; the inability to sustain revenue and earnings growth; changes in interest rates and capital markets; inflation; customer borrowing, repayment, investment and deposit practices; the impact, extent and timing of technological changes; capital management activities; disruptions to the economy and the U.S. banking system; risks associated with uninsured deposits and responsive measures by federal or state governments or banking regulators; legislative changes, executive orders, regulatory actions and reforms of the Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation and Texas Department of Banking.
Additional factors which could affect the Company’s future results can be found in the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, in each case filed with the SEC and available on the SEC’s website at www.sec.gov. We disclaim any obligation and do not intend to update or revise any forward-looking statements contained in this communication, which speak only as of the date hereof, whether as a result of new information, future events or otherwise, except as required by federal securities laws. As forward-looking statements involve significant risks and uncertainties, caution should be exercised against placing undue reliance on such statements.
Stellar Bancorp, Inc.
Financial Highlights
(Unaudited)
| 2025 | 2024 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| September 30 | June 30 | March 31 | December 31 | September 30 | ||||||
| (Dollars in thousands) | ||||||||||
| ASSETS: | ||||||||||
| Cash and due from banks | $ | 99,407 | $ | 136,060 | $ | 130,932 | $ | 419,967 | $ | 103,735 |
| Interest-bearing deposits at other financial institutions | 629,042 | 442,044 | 429,643 | 491,249 | 412,482 | |||||
| Total cash and cash equivalents | 728,449 | 578,104 | 560,575 | 911,216 | 516,217 | |||||
| Available for sale securities, at fair value | 1,842,268 | 1,729,684 | 1,719,371 | 1,673,016 | 1,691,752 | |||||
| Loans held for investment | 7,167,857 | 7,287,347 | 7,283,133 | 7,439,854 | 7,551,124 | |||||
| Less: allowance for credit losses on loans | (78,924) | (83,165) | (83,746) | (81,058) | (84,501) | |||||
| Loans, net | 7,088,933 | 7,204,182 | 7,199,387 | 7,358,796 | 7,466,623 | |||||
| Accrued interest receivable | 34,865 | 35,537 | 37,669 | 37,884 | 39,473 | |||||
| Premises and equipment, net | 107,803 | 108,615 | 109,750 | 111,856 | 113,742 | |||||
| Federal Reserve Bank and Federal Home Loan Bank stock | 45,437 | 47,099 | 20,902 | 8,209 | 20,123 | |||||
| Bank-owned life insurance | 109,358 | 108,726 | 108,108 | 107,498 | 106,876 | |||||
| Goodwill | 497,318 | 497,318 | 497,318 | 497,318 | 497,318 | |||||
| Core deposit intangibles, net | 75,929 | 81,468 | 87,007 | 92,546 | 98,116 | |||||
| Other assets | 97,753 | 102,277 | 94,800 | 107,451 | 79,537 | |||||
| Total assets | $ | 10,628,113 | $ | 10,493,010 | $ | 10,434,887 | $ | 10,905,790 | $ | 10,629,777 |
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||
| LIABILITIES: | ||||||||||
| Deposits: | ||||||||||
| Noninterest-bearing | $ | 3,210,948 | $ | 3,183,693 | $ | 3,205,619 | $ | 3,576,206 | $ | 3,303,048 |
| Interest-bearing | ||||||||||
| Demand | 1,960,857 | 1,941,156 | 1,863,752 | 1,845,749 | 1,571,504 | |||||
| Money market and savings | 2,489,169 | 2,393,767 | 2,248,616 | 2,253,193 | 2,280,651 | |||||
| Certificates and other time | 1,156,489 | 1,154,998 | 1,244,726 | 1,453,236 | 1,587,398 | |||||
| Total interest-bearing deposits | 5,606,515 | 5,489,921 | 5,357,094 | 5,552,178 | 5,439,553 | |||||
| Total deposits | 8,817,463 | 8,673,614 | 8,562,713 | 9,128,384 | 8,742,601 | |||||
| Accrued interest payable | 9,429 | 7,607 | 9,856 | 17,052 | 16,915 | |||||
| Borrowed funds | — | 69,925 | 119,923 | — | 60,000 | |||||
| Subordinated debt | 70,196 | 70,165 | 70,135 | 70,105 | 110,064 | |||||
| Other liabilities | 77,887 | 67,865 | 61,428 | 82,389 | 74,074 | |||||
| Total liabilities | 8,974,975 | 8,889,176 | 8,824,055 | 9,297,930 | 9,003,654 | |||||
| SHAREHOLDERS’ EQUITY: | ||||||||||
| Common stock | 512 | 514 | 521 | 534 | 535 | |||||
| Capital surplus | 1,182,781 | 1,185,048 | 1,202,628 | 1,240,050 | 1,238,619 | |||||
| Retained earnings | 547,717 | 529,216 | 510,072 | 492,640 | 474,905 | |||||
| Accumulated other comprehensive loss | (77,872) | (110,944) | (102,389) | (125,364) | (87,936) | |||||
| Total shareholders’ equity | 1,653,138 | 1,603,834 | 1,610,832 | 1,607,860 | 1,626,123 | |||||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 10,628,113 | $ | 10,493,010 | $ | 10,434,887 | $ | 10,905,790 | $ | 10,629,777 |
Stellar Bancorp, Inc.
Financial Highlights
(Unaudited)
| Three Months Ended | Nine Months Ended | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2025 | 2024 | 2025 | 2024 | |||||||||||
| September 30 | June 30 | March 31 | December 31 | September 30 | September 30 | September 30 | ||||||||
| (Dollars in thousands, except per share data) | ||||||||||||||
| INTEREST INCOME: | ||||||||||||||
| Loans, including fees | $ | 122,557 | $ | 121,814 | $ | 120,640 | $ | 128,738 | $ | 132,372 | $ | 365,011 | $ | 402,942 |
| Securities: | ||||||||||||||
| Taxable | 16,278 | 15,293 | 16,148 | 14,789 | 13,898 | 47,719 | 35,114 | |||||||
| Tax-exempt | 808 | 810 | 812 | 814 | 814 | 2,430 | 2,448 | |||||||
| Deposits in other financial institutions | 5,770 | 4,782 | 4,720 | 5,681 | 4,692 | 15,272 | 11,874 | |||||||
| Total interest income | 145,413 | 142,699 | 142,320 | 150,022 | 151,776 | 430,432 | 452,378 | |||||||
| INTEREST EXPENSE: | ||||||||||||||
| Demand, money market and savings deposits | 32,376 | 31,097 | 27,574 | 27,877 | 29,440 | 91,047 | 85,369 | |||||||
| Certificates and other time deposits | 10,920 | 11,459 | 13,527 | 16,830 | 18,073 | 35,906 | 51,915 | |||||||
| Borrowed funds | 56 | 407 | 517 | 235 | 840 | 980 | 4,314 | |||||||
| Subordinated debt | 1,417 | 1,401 | 1,444 | 2,123 | 1,916 | 4,262 | 5,745 | |||||||
| Total interest expense | 44,769 | 44,364 | 43,062 | 47,065 | 50,269 | 132,195 | 147,343 | |||||||
| NET INTEREST INCOME | 100,644 | 98,335 | 99,258 | 102,957 | 101,507 | 298,237 | 305,035 | |||||||
| Provision for (reversal of) credit losses | 305 | 1,090 | 3,632 | 942 | (5,985) | 5,027 | (3,822) | |||||||
| Net interest income after provision for credit losses | 100,339 | 97,245 | 95,626 | 102,015 | 107,492 | 293,210 | 308,857 | |||||||
| NONINTEREST INCOME: | ||||||||||||||
| Service charges on deposit accounts | 1,545 | 1,561 | 1,584 | 1,590 | 1,594 | 4,690 | 4,840 | |||||||
| (Loss) gain on sale/write-down of assets | (491) | (57) | 417 | (112) | 432 | (131) | 881 | |||||||
| Bank-owned life insurance | 632 | 618 | 610 | 622 | 614 | 1,860 | 1,792 | |||||||
| Debit card and interchange income | 572 | 566 | 520 | 570 | 551 | 1,658 | 1,621 | |||||||
| Other | 2,728 | 3,103 | 2,374 | 2,362 | 3,111 | 8,205 | 8,880 | |||||||
| Total noninterest income | 4,986 | 5,791 | 5,505 | 5,032 | 6,302 | 16,282 | 18,014 | |||||||
| NONINTEREST EXPENSE: | ||||||||||||||
| Salaries and employee benefits | 43,175 | 40,927 | 41,792 | 43,797 | 41,123 | 125,894 | 121,560 | |||||||
| Net occupancy and equipment | 4,518 | 4,399 | 3,926 | 4,401 | 4,570 | 12,843 | 13,463 | |||||||
| Depreciation | 2,015 | 1,992 | 1,995 | 1,984 | 1,911 | 6,002 | 5,823 | |||||||
| Data processing and software amortization | 5,882 | 5,620 | 5,682 | 5,551 | 5,706 | 17,184 | 16,101 | |||||||
| Professional fees | 1,601 | 1,287 | 1,786 | 3,428 | 1,714 | 4,674 | 5,996 | |||||||
| Regulatory assessments and FDIC insurance | 1,688 | 1,561 | 1,733 | 1,636 | 1,779 | 4,982 | 5,932 | |||||||
| Amortization of intangibles | 5,554 | 5,548 | 5,548 | 5,581 | 6,212 | 16,650 | 18,639 | |||||||
| Communications | 855 | 861 | 847 | 807 | 827 | 2,563 | 2,611 | |||||||
| Advertising | 1,425 | 1,167 | 782 | 1,593 | 878 | 3,374 | 2,534 | |||||||
| Other | 6,429 | 6,642 | 6,075 | 6,488 | 6,346 | 19,146 | 21,033 | |||||||
| Total noninterest expense | 73,142 | 70,004 | 70,166 | 75,266 | 71,066 | 213,312 | 213,692 | |||||||
| INCOME BEFORE INCOME TAXES | 32,183 | 33,032 | 30,965 | 31,781 | 42,728 | 96,180 | 113,179 | |||||||
| Provision for income taxes | 6,513 | 6,680 | 6,263 | 6,569 | 8,837 | 19,456 | 23,388 | |||||||
| NET INCOME | $ | 25,670 | $ | 26,352 | $ | 24,702 | $ | 25,212 | $ | 33,891 | $ | 76,724 | $ | 89,791 |
| EARNINGS PER SHARE | ||||||||||||||
| Basic | $ | 0.50 | $ | 0.51 | $ | 0.46 | $ | 0.47 | $ | 0.63 | $ | 1.48 | $ | 1.68 |
| Diluted | $ | 0.50 | $ | 0.51 | $ | 0.46 | $ | 0.47 | $ | 0.63 | $ | 1.47 | $ | 1.68 |
Stellar Bancorp, Inc.
Financial Highlights
(Unaudited)
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||
| September 30 | June 30 | March 31 | December 31 | September 30 | September 30 | September 30 | |||||||||||||||
| (Dollars and share amounts in thousands, except per share data) | |||||||||||||||||||||
| Net income | $ | 25,670 | $ | 26,352 | $ | 24,702 | $ | 25,212 | $ | 33,891 | $ | 76,724 | $ | 89,791 | |||||||
| Earnings per share, basic | $ | 0.50 | $ | 0.51 | $ | 0.46 | $ | 0.47 | $ | 0.63 | $ | 1.48 | $ | 1.68 | |||||||
| Earnings per share, diluted | $ | 0.50 | $ | 0.51 | $ | 0.46 | $ | 0.47 | $ | 0.63 | $ | 1.47 | $ | 1.68 | |||||||
| Dividends per share | $ | 0.14 | $ | 0.14 | $ | 0.14 | $ | 0.14 | $ | 0.13 | $ | 0.42 | $ | 0.39 | |||||||
| Return on average assets(A) | 0.97 | % | 1.01 | % | 0.94 | % | 0.94 | % | 1.27 | % | 0.97 | % | 1.13 | % | |||||||
| Return on average equity(A) | 6.30 | % | 6.62 | % | 6.21 | % | 6.21 | % | 8.49 | % | 6.37 | % | 7.73 | % | |||||||
| Return on average tangible equity(A)(B)(D) | 11.45 | % | 12.16 | % | 11.48 | % | 11.53 | % | 15.61 | % | 11.69 | % | 14.75 | % | |||||||
| Net interest margin (tax equivalent)(A)(C) | 4.20 | % | 4.18 | % | 4.20 | % | 4.25 | % | 4.19 | % | 4.19 | % | 4.23 | % | |||||||
| Net interest margin (tax equivalent) excluding PAA(A)(B)(C) | 4.00 | % | 3.95 | % | 3.97 | % | 3.94 | % | 3.91 | % | 3.97 | % | 3.88 | % | |||||||
| Efficiency ratio(B)(E) | 63.69 | % | 61.87 | % | 61.93 | % | 64.46 | % | 60.40 | % | 62.50 | % | 60.54 | % | |||||||
| Capital Ratios | |||||||||||||||||||||
| Stellar Bancorp, Inc. (Consolidated) | |||||||||||||||||||||
| Equity to assets | 15.55 | % | 15.28 | % | 15.44 | % | 14.74 | % | 15.30 | % | 15.55 | % | 15.30 | % | |||||||
| Tangible equity to tangible assets(B)(E) | 10.74 | % | 10.34 | % | 10.42 | % | 9.87 | % | 10.27 | % | 10.74 | % | 10.27 | % | |||||||
| Estimated Total capital ratio (to risk-weighted assets) | 16.33 | % | 15.98 | % | 15.97 | % | 16.00 | % | 15.85 | % | 16.33 | % | 15.85 | % | |||||||
| Estimated Common equity Tier 1 capital (to risk weighted assets) | 14.43 | % | 14.06 | % | 14.05 | % | 14.14 | % | 13.57 | % | 14.43 | % | 13.57 | % | |||||||
| Estimated Tier 1 capital (to risk-weighted assets) | 14.55 | % | 14.18 | % | 14.17 | % | 14.26 | % | 13.69 | % | 14.55 | % | 13.69 | % | |||||||
| Estimated Tier 1 leverage (to average tangible assets) | 11.60 | % | 11.44 | % | 11.20 | % | 11.31 | % | 11.10 | % | 11.60 | % | 11.10 | % | |||||||
| Stellar Bank | |||||||||||||||||||||
| Estimated Total capital ratio (to risk-weighted assets) | 15.45 | % | 15.39 | % | 15.40 | % | 15.28 | % | 15.02 | % | 15.45 | % | 15.02 | % | |||||||
| Estimated Common equity Tier 1 capital (to risk-weighted assets) | 14.27 | % | 14.18 | % | 14.20 | % | 14.13 | % | 13.58 | % | 14.27 | % | 13.58 | % | |||||||
| Estimated Tier 1 capital (to risk-weighted assets) | 14.27 | % | 14.18 | % | 14.20 | % | 14.13 | % | 13.58 | % | 14.27 | % | 13.58 | % | |||||||
| Estimated Tier 1 leverage (to average tangible assets) | 11.37 | % | 11.44 | % | 11.22 | % | 11.21 | % | 11.01 | % | 11.37 | % | 11.01 | % | |||||||
| Other Data | |||||||||||||||||||||
| Weighted average shares: | |||||||||||||||||||||
| Basic | 51,283 | 51,529 | 53,146 | 53,422 | 53,541 | 51,979 | 53,485 | ||||||||||||||
| Diluted | 51,356 | 51,569 | 53,197 | 53,471 | 53,580 | 52,027 | 53,531 | ||||||||||||||
| Period end shares outstanding | 51,228 | 51,398 | 52,141 | 53,429 | 53,446 | 51,228 | 53,446 | ||||||||||||||
| Book value per share | $ | 32.27 | $ | 31.20 | $ | 30.89 | $ | 30.09 | $ | 30.43 | $ | 32.27 | $ | 30.43 | |||||||
| Tangible book value per share(B) | $ | 21.08 | $ | 19.94 | $ | 19.69 | $ | 19.05 | $ | 19.28 | $ | 21.08 | $ | 19.28 | |||||||
| Employees - full-time equivalents | 1,065 | 1,062 | 1,054 | 1,037 | 1,040 | 1,065 | 1,040 |
(A)Interim periods annualized.
(B)Refer to the calculation of these non-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)The calculation of return on average tangible equity has been adjusted from prior period disclosures and all periods presented above have been recalculated and disclosed under the same calculation.
(E)The calculation of the efficiency ratio represents total noninterest expense less amortization of core deposits, divided by the sum of net interest income and noninterest income, excluding net gains and losses on the sale/write-down of assets. This calculation has been adjusted from prior period disclosures and all periods presented above have been recalculated and disclosed under the same calculation.
Stellar Bancorp, Inc.
Financial Highlights
(Unaudited)
| Three Months Ended | ||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| September 30, 2025 | June 30, 2025 | September 30, 2024 | ||||||||||||||||
| Average Balance | Interest Earned/ <br>Interest Paid | Average Yield/Rate | Average Balance | Interest Earned/ <br>Interest Paid | Average Yield/Rate | Average Balance | Interest Earned/<br>Interest Paid | Average Yield/Rate | ||||||||||
| (Dollars in thousands) | ||||||||||||||||||
| Assets | ||||||||||||||||||
| Interest-earning assets: | ||||||||||||||||||
| Loans | $ | 7,228,778 | $ | 122,557 | 6.73 | % | $ | 7,282,609 | $ | 121,814 | 6.71 | % | $ | 7,627,522 | $ | 132,372 | 6.90 | % |
| Securities | 1,790,897 | 17,086 | 3.79 | % | 1,729,384 | 16,103 | 3.73 | % | 1,676,614 | 14,712 | 3.49 | % | ||||||
| Deposits in other financial institutions | 505,342 | 5,770 | 4.53 | % | 436,596 | 4,782 | 4.39 | % | 339,493 | 4,692 | 5.50 | % | ||||||
| Total interest-earning assets | 9,525,017 | $ | 145,413 | 6.06 | % | 9,448,589 | $ | 142,699 | 6.06 | % | 9,643,629 | $ | 151,776 | 6.26 | % | |||
| Allowance for credit losses on loans | (82,983) | (83,700) | (94,785) | |||||||||||||||
| Noninterest-earning assets | 1,076,831 | 1,099,268 | 1,077,422 | |||||||||||||||
| Total assets | $ | 10,518,865 | $ | 10,464,157 | $ | 10,626,266 | ||||||||||||
| Liabilities and Shareholders' Equity | ||||||||||||||||||
| Interest-bearing liabilities: | ||||||||||||||||||
| Interest-bearing demand deposits | $ | 1,935,203 | $ | 14,356 | 2.94 | % | $ | 1,952,004 | $ | 14,399 | 2.96 | % | $ | 1,606,736 | $ | 12,458 | 3.08 | % |
| Money market and savings deposits | 2,475,306 | 18,020 | 2.89 | % | 2,371,221 | 16,698 | 2.82 | % | 2,254,767 | 16,982 | 3.00 | % | ||||||
| Certificates and other time deposits | 1,162,461 | 10,920 | 3.73 | % | 1,201,903 | 11,459 | 3.82 | % | 1,620,908 | 18,073 | 4.44 | % | ||||||
| Borrowed funds | 3,156 | 56 | 7.04 | % | 34,427 | 407 | 4.74 | % | 49,077 | 840 | 6.81 | % | ||||||
| Subordinated debt | 70,181 | 1,417 | 8.01 | % | 70,151 | 1,401 | 8.01 | % | 110,007 | 1,916 | 6.93 | % | ||||||
| Total interest-bearing liabilities | 5,646,307 | $ | 44,769 | 3.15 | % | 5,629,706 | $ | 44,364 | 3.16 | % | 5,641,495 | $ | 50,269 | 3.54 | % | |||
| Noninterest-bearing liabilities: | ||||||||||||||||||
| Noninterest-bearing demand deposits | 3,172,054 | 3,160,791 | 3,303,726 | |||||||||||||||
| Other liabilities | 82,993 | 78,120 | 93,127 | |||||||||||||||
| Total liabilities | 8,901,354 | 8,868,617 | 9,038,348 | |||||||||||||||
| Shareholders’ equity | 1,617,511 | 1,595,540 | 1,587,918 | |||||||||||||||
| Total liabilities and shareholders’ equity | $ | 10,518,865 | $ | 10,464,157 | $ | 10,626,266 | ||||||||||||
| Net interest rate spread | 2.91 | % | 2.90 | % | 2.72 | % | ||||||||||||
| Net interest income and margin | $ | 100,644 | 4.19 | % | $ | 98,335 | 4.17 | % | $ | 101,507 | 4.19 | % | ||||||
| Net interest income and margin (tax equivalent) | $ | 100,739 | 4.20 | % | $ | 98,427 | 4.18 | % | $ | 101,578 | 4.19 | % | ||||||
| Cost of funds | 2.01 | % | 2.02 | % | 2.24 | % | ||||||||||||
| Cost of deposits | 1.96 | % | 1.97 | % | 2.15 | % |
Stellar Bancorp, Inc.
Financial Highlights
(Unaudited)
| Nine Months Ended September 30, | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2025 | 2024 | |||||||||||
| Average Balance | Interest Earned/ <br>Interest Paid | Average Yield/Rate | Average Balance | Interest Earned/ <br>Interest Paid | Average Yield/Rate | |||||||
| (Dollars in thousands) | ||||||||||||
| Assets | ||||||||||||
| Interest-earning assets: | ||||||||||||
| Loans | $ | 7,284,805 | $ | 365,011 | 6.70 | % | $ | 7,790,957 | $ | 402,942 | 6.91 | % |
| Securities | 1,779,093 | 50,149 | 3.77 | % | 1,556,462 | 37,562 | 3.22 | % | ||||
| Deposits in other financial institutions | 457,794 | 15,272 | 4.46 | % | 287,960 | 11,874 | 5.51 | % | ||||
| Total interest-earning assets | 9,521,692 | $ | 430,432 | 6.04 | % | 9,635,379 | $ | 452,378 | 6.27 | % | ||
| Allowance for credit losses on loans | (82,623) | (94,236) | ||||||||||
| Noninterest-earning assets | 1,092,163 | 1,104,426 | ||||||||||
| Total assets | $ | 10,531,232 | $ | 10,645,569 | ||||||||
| Liabilities and Shareholders' Equity | ||||||||||||
| Interest-bearing liabilities: | ||||||||||||
| Interest-bearing demand deposits | $ | 1,933,030 | $ | 41,148 | 2.85 | % | $ | 1,616,313 | $ | 36,949 | 3.05 | % |
| Money market and savings deposits | 2,361,247 | 49,899 | 2.83 | % | 2,211,148 | 48,420 | 2.93 | % | ||||
| Certificates and other time deposits | 1,219,953 | 35,906 | 3.94 | % | 1,586,623 | 51,915 | 4.37 | % | ||||
| Borrowed funds | 27,687 | 980 | 4.73 | % | 98,374 | 4,314 | 5.86 | % | ||||
| Subordinated debt | 70,151 | 4,262 | 8.12 | % | 109,909 | 5,745 | 6.98 | % | ||||
| Total interest-bearing liabilities | 5,612,068 | $ | 132,195 | 3.15 | % | 5,622,367 | $ | 147,343 | 3.50 | % | ||
| Noninterest-bearing liabilities: | ||||||||||||
| Noninterest-bearing demand deposits | 3,225,666 | 3,379,096 | ||||||||||
| Other liabilities | 84,388 | 92,527 | ||||||||||
| Total liabilities | 8,922,122 | 9,093,990 | ||||||||||
| Shareholders' equity | 1,609,110 | 1,551,579 | ||||||||||
| Total liabilities and shareholders' equity | $ | 10,531,232 | $ | 10,645,569 | ||||||||
| Net interest rate spread | 2.89 | % | 2.77 | % | ||||||||
| Net interest income and margin | $ | 298,237 | 4.19 | % | $ | 305,035 | 4.23 | % | ||||
| Net interest income and margin (tax equivalent) | $ | 298,519 | 4.19 | % | $ | 305,266 | 4.23 | % | ||||
| Cost of funds | 2.00 | % | 2.19 | % | ||||||||
| Cost of deposits | 1.94 | % | 2.09 | % |
Stellar Bancorp, Inc.
Financial Highlights
(Unaudited)
| Three Months Ended | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2025 | 2024 | |||||||||||||
| September 30 | June 30 | March 31 | December 31 | September 30 | ||||||||||
| (Dollars in thousands) | ||||||||||||||
| Loan Portfolio: | ||||||||||||||
| Commercial and industrial | $ | 1,332,795 | $ | 1,346,744 | $ | 1,362,266 | $ | 1,362,260 | $ | 1,350,753 | ||||
| Real estate: | ||||||||||||||
| Commercial real estate (including multi-family residential) | 3,733,293 | 3,840,981 | 3,854,607 | 3,868,218 | 3,976,296 | |||||||||
| Commercial real estate construction and land development | 753,381 | 762,911 | 721,488 | 845,494 | 890,316 | |||||||||
| 1-4 family residential (including home equity) | 1,142,614 | 1,126,523 | 1,125,837 | 1,115,484 | 1,112,235 | |||||||||
| Residential construction | 121,197 | 137,855 | 141,283 | 157,977 | 161,494 | |||||||||
| Consumer and other | 84,577 | 72,333 | 77,652 | 90,421 | 60,030 | |||||||||
| Total loans held for investment | $ | 7,167,857 | $ | 7,287,347 | $ | 7,283,133 | $ | 7,439,854 | $ | 7,551,124 | ||||
| Deposits: | ||||||||||||||
| Noninterest-bearing | $ | 3,210,948 | $ | 3,183,693 | $ | 3,205,619 | $ | 3,576,206 | $ | 3,303,048 | ||||
| Interest-bearing | ||||||||||||||
| Demand | 1,960,857 | 1,941,156 | 1,863,752 | 1,845,749 | 1,571,504 | |||||||||
| Money market and savings | 2,489,169 | 2,393,767 | 2,248,616 | 2,253,193 | 2,280,651 | |||||||||
| Certificates and other time | 1,156,489 | 1,154,998 | 1,244,726 | 1,453,236 | 1,587,398 | |||||||||
| Total interest-bearing deposits | 5,606,515 | 5,489,921 | 5,357,094 | 5,552,178 | 5,439,553 | |||||||||
| Total deposits | $ | 8,817,463 | $ | 8,673,614 | $ | 8,562,713 | $ | 9,128,384 | $ | 8,742,601 | ||||
| Asset Quality: | ||||||||||||||
| Nonaccrual loans | $ | 46,250 | $ | 50,505 | $ | 54,518 | $ | 37,212 | $ | 32,140 | ||||
| Accruing loans 90 or more days past due | — | — | — | — | — | |||||||||
| Total nonperforming loans | 46,250 | 50,505 | 54,518 | 37,212 | 32,140 | |||||||||
| Foreclosed assets | 7,939 | 7,652 | 5,154 | 1,734 | 2,984 | |||||||||
| Total nonperforming assets | $ | 54,189 | $ | 58,157 | $ | 59,672 | $ | 38,946 | $ | 35,124 | ||||
| Net charge-offs (recoveries) | $ | 3,323 | $ | 206 | $ | 163 | $ | 2,016 | $ | 3,933 | ||||
| Nonaccrual loans: | ||||||||||||||
| Commercial and industrial | $ | 5,594 | $ | 13,395 | $ | 11,471 | $ | 8,500 | $ | 9,718 | ||||
| Real estate: | ||||||||||||||
| Commercial real estate (including multi-family residential) | 25,156 | 23,359 | 26,383 | 16,459 | 10,695 | |||||||||
| Commercial real estate construction and land development | 2,899 | 3,412 | 2,027 | 3,061 | 4,183 | |||||||||
| 1-4 family residential (including home equity) | 12,083 | 9,965 | 14,550 | 9,056 | 7,259 | |||||||||
| Residential construction | 457 | 176 | — | — | 121 | |||||||||
| Consumer and other | 61 | 198 | 87 | 136 | 164 | |||||||||
| Total nonaccrual loans | $ | 46,250 | $ | 50,505 | $ | 54,518 | $ | 37,212 | $ | 32,140 | ||||
| Asset Quality Ratios: | ||||||||||||||
| Nonperforming assets to total assets | 0.51 | % | 0.55 | % | 0.57 | % | 0.36 | % | 0.33% | |||||
| Nonperforming loans to total loans | 0.65 | % | 0.69 | % | 0.75 | % | 0.50 | % | 0.43% | |||||
| Allowance for credit losses on loans to nonperforming loans | 170.65 | % | 164.67 | % | 153.61 | % | 217.83 | % | 262.92% | |||||
| Allowance for credit losses on loans to total loans | 1.10 | % | 1.14 | % | 1.15 | % | 1.09 | % | 1.12% | |||||
| Net charge-offs to average loans (annualized) | 0.18 | % | 0.01 | % | 0.01 | % | 0.11 | % | 0.21% |
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 | Nine Months Ended | ||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||
| September 30 | June 30 | March 31 | December 31 | September 30 | September 30 | September 30 | |||||||||||||||
| (Dollars and share amounts in thousands, except per share data) | |||||||||||||||||||||
| Net income | $ | 25,670 | $ | 26,352 | $ | 24,702 | $ | 25,212 | $ | 33,891 | $ | 76,724 | $ | 89,791 | |||||||
| Add: Provision for (reversal of) credit losses | 305 | 1,090 | 3,632 | 942 | (5,985) | 5,027 | (3,822) | ||||||||||||||
| Add: Provision for income taxes | 6,513 | 6,680 | 6,263 | 6,569 | 8,837 | 19,456 | 23,388 | ||||||||||||||
| Pre-tax, pre-provision income | $ | 32,488 | $ | 34,122 | $ | 34,597 | $ | 32,723 | $ | 36,743 | $ | 101,207 | $ | 109,357 | |||||||
| Total average assets | $ | 10,518,865 | $ | 10,464,157 | $ | 10,611,691 | $ | 10,649,175 | $ | 10,626,266 | $ | 10,531,232 | $ | 10,645,569 | |||||||
| Pre-tax, pre-provision return on average assets(A) | 1.23 | % | 1.31 | % | 1.32 | % | 1.22 | % | 1.38 | % | 1.28 | % | 1.37 | % | |||||||
| Total shareholders’ equity | $ | 1,653,138 | $ | 1,603,834 | $ | 1,610,832 | $ | 1,607,860 | $ | 1,626,123 | $ | 1,653,138 | $ | 1,626,123 | |||||||
| Less: Goodwill and core deposit intangibles, net | 573,247 | 578,786 | 584,325 | 589,864 | 595,434 | 573,247 | 595,434 | ||||||||||||||
| Tangible shareholders’ equity | $ | 1,079,891 | $ | 1,025,048 | $ | 1,026,507 | $ | 1,017,996 | $ | 1,030,689 | $ | 1,079,891 | $ | 1,030,689 | |||||||
| Shares outstanding at end of period | 51,228 | 51,398 | 52,141 | 53,429 | 53,446 | 51,228 | 53,446 | ||||||||||||||
| Tangible book value per share | $ | 21.08 | $ | 19.94 | $ | 19.69 | $ | 19.05 | $ | 19.28 | $ | 21.08 | $ | 19.28 | |||||||
| Average shareholders’ equity | $ | 1,617,511 | $ | 1,595,540 | $ | 1,614,242 | $ | 1,614,762 | $ | 1,587,918 | $ | 1,609,110 | $ | 1,551,579 | |||||||
| Less: Average goodwill and core deposit intangibles, net | 575,836 | 581,438 | 586,895 | 592,471 | 598,866 | 581,349 | 604,890 | ||||||||||||||
| Average tangible shareholders’ equity | $ | 1,041,675 | $ | 1,014,102 | $ | 1,027,347 | $ | 1,022,291 | $ | 989,052 | $ | 1,027,761 | $ | 946,689 | |||||||
| Net income | $ | 25,670 | $ | 26,352 | $ | 24,702 | $ | 25,212 | $ | 33,891 | $ | 76,724 | $ | 89,791 | |||||||
| Add: Core deposit intangibles amortization, net of tax | 4,388 | 4,383 | 4,383 | 4,409 | 4,907 | 13,154 | 14,725 | ||||||||||||||
| Adjusted net income | $ | 30,058 | $ | 30,735 | $ | 29,085 | $ | 29,621 | $ | 38,798 | $ | 89,878 | $ | 104,516 | |||||||
| Return on average tangible equity(A)(B) | 11.45 | % | 12.16 | % | 11.48 | % | 11.53 | % | 15.61 | % | 11.69 | % | 14.75 | % | |||||||
| Total assets | $ | 10,628,113 | $ | 10,493,010 | $ | 10,434,887 | $ | 10,905,790 | $ | 10,629,777 | $ | 10,628,113 | $ | 10,629,777 | |||||||
| Less: Goodwill and core deposit intangibles, net | 573,247 | 578,786 | 584,325 | 589,864 | 595,434 | 573,247 | 595,434 | ||||||||||||||
| Tangible assets | $ | 10,054,866 | $ | 9,914,224 | $ | 9,850,562 | $ | 10,315,926 | $ | 10,034,343 | $ | 10,054,866 | $ | 10,034,343 | |||||||
| Tangible equity to tangible assets | 10.74 | % | 10.34 | % | 10.42 | % | 9.87 | % | 10.27 | % | 10.74 | % | 10.27 | % | |||||||
| Net interest income (tax equivalent) | $ | 100,739 | $ | 98,427 | $ | 99,353 | $ | 103,039 | $ | 101,578 | $ | 298,519 | $ | 305,266 | |||||||
| Less: Purchase accounting accretion | 4,800 | 5,344 | 5,397 | 7,555 | 6,795 | 15,541 | 25,444 | ||||||||||||||
| Adjusted net interest income (tax equivalent) | $ | 95,939 | $ | 93,083 | $ | 93,956 | $ | 95,484 | $ | 94,783 | $ | 282,978 | $ | 279,822 | |||||||
| Average earning assets | $ | 9,525,017 | $ | 9,448,589 | $ | 9,592,205 | $ | 9,653,162 | $ | 9,643,629 | $ | 9,521,692 | $ | 9,635,379 | |||||||
| Net interest margin (tax equivalent) excluding PAA(A) | 4.00 | % | 3.95 | % | 3.97 | % | 3.94 | % | 3.91 | % | 3.97 | % | 3.88 | % | |||||||
| Noninterest expense | $ | 73,142 | $ | 70,004 | $ | 70,166 | $ | 75,266 | $ | 71,066 | $ | 213,312 | $ | 213,692 | |||||||
| Less: Core deposit intangibles amortization | 5,554 | 5,548 | 5,548 | 5,581 | 6,212 | 16,650 | 18,639 | ||||||||||||||
| Adjusted noninterest expense | $ | 67,588 | $ | 64,456 | $ | 64,618 | $ | 69,685 | $ | 64,854 | $ | 196,662 | $ | 195,053 | |||||||
| Net interest income | $ | 100,644 | $ | 98,335 | $ | 99,258 | $ | 102,957 | $ | 101,507 | $ | 298,237 | $ | 305,035 | |||||||
| Noninterest income | 4,986 | 5,791 | 5,505 | 5,032 | 6,302 | 16,282 | 18,014 | ||||||||||||||
| Less: (Loss) gain on sale of assets | (491) | (57) | 417 | (112) | 432 | (131) | 881 | ||||||||||||||
| Adjusted noninterest income | 5,477 | 5,848 | 5,088 | 5,144 | 5,870 | 16,413 | 17,133 | ||||||||||||||
| Net interest income plus adjusted noninterest income | $ | 106,121 | $ | 104,183 | $ | 104,346 | $ | 108,101 | $ | 107,377 | $ | 314,650 | $ | 322,168 | |||||||
| Efficiency ratio(C) | 63.69 | % | 61.87 | % | 61.93 | % | 64.46 | % | 60.40 | % | 62.50 | % | 60.54 | % |
(A)Interim periods annualized.
(B)The calculation of return on average tangible equity has been adjusted from prior period disclosures and all periods presented above have been recalculated and disclosed under the same calculation.
(C)The calculation of the efficiency ratio has been adjusted from prior period disclosures and all periods presented above have been recalculated and disclosed under the same calculation.
10
stellarinvestorpresentat
Third Quarter 2025 Earnings Presentation Exhibit 99.2
Forward-Looking Statements and Non-GAAP Financial Measures 2 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 future financial performance of Stellar Bancorp, Inc. (the “Company”), operating results, 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 the Company. Such factors include, among others: changes in the interest rate environment, the value of the Company’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 the Company including changes in asset quality and credit risk; the inability to sustain revenue and earnings growth; changes in interest rates and capital markets; inflation; customer borrowing, repayment, investment and deposit practices; the impact, extent and timing of technological changes; capital management activities; disruptions to the economy and the U.S. banking system; risks associated with uninsured deposits and responsive measures by federal or state governments or banking regulators; legislative changes, executive orders, regulatory actions and reforms of the Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation and Texas Department of Banking. Additional factors which could affect the Company’s future results can be found in the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, in each case filed with the SEC and available on the SEC’s website at www.sec.gov. We disclaim any obligation and do not intend to update or revise any forward-looking statements contained in this communication, which speak only as of the date hereof, whether as a result of new information, future events or otherwise, except as required by federal securities laws. As forward-looking statements involve significant risks and uncertainties, caution should be exercised against placing undue reliance on such statements. GAAP Reconciliation of Non-GAAP Financial Measures The Company’s management uses certain non-GAAP (generally accepted accounting principles) financial measures to evaluate its performance. The Company 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 the Company’s performance and when planning, forecasting, analyzing and comparing past, present and future periods. Specifically, the Company 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. The Company 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 the Company calculates the non-GAAP financial measures may differ from that of other companies reporting measures with similar names.
3 (1) Deposit market share based on FDIC data as of June 30, 2025. (2) Houston Region defined as the Houston-Pasadena-The Woodlands and Beaumont-Port Arthur MSAs; Excludes non-retail branches. (3) Purchase accounting accretion (“PAA”). Refer to the calculation of this non-GAAP financial measure and a reconciliation to its most directly comparable GAAP financial measure in the appendix. Houston’s Largest Regionally Focused Bank Valuable franchise in one of the best markets in the U.S. • 6th in deposit market share for Houston region(1)(2) • 1st in deposit market share for Texas-based banks in the Houston region(1)(2) • 9th in deposit market share for Texas-based banks in the State of Texas(1) • Noninterest-bearing deposits to total deposits of 36.4% at September 30, 2025 Strong core earnings power and capital position for third quarter 2025 • Net interest margin (tax equivalent) of 4.20% • Net interest margin (tax equivalent) excluding purchase accounting adjustments of 4.00%(3) • Total capital ratio (to risk weighted-assets) of 16.33% Banking Centers Banking Centers 9/30/2025 6/30/2025 10,628,113$ 10,493,010$ 7,167,857 7,287,347 8,817,463 8,673,614 81.29% 84.02% 4.20% 4.18% 4.00% 3.95% 36.42% 36.71% 16.33% 15.98%Estimated Total capital ratio (to risk-weighted assets) Net interest margin (tax equivalent) Net interest margin (tax equivalent) excluding PAA(3) Noninterest-bearing deposits to total deposits (Dollars in thousands) Total assets Total loans Total deposits Total loans to total deposits
$177.0 $31.6 $24.6 $12.9 $10.3 $8.4 $8.0 $7.5 $5.9 $5.7 $5.0 $3.7 $3.2 $3.2 $3.1 $2.4 $2.4 $2.3 JPMorgan Wells Fargo BofA Zions PNC Frost Cadence Woodforest Prosperity Capital One Third Coast Truist Comerica East West Texas Capital Regions BOK Focused on Serving the Houston Region 4 Stellar Houston Percent of Houston Total Assets Region(1) Company Region Market Name ($B) Deposits ($B) Deposits (%) Share (%) JPMorgan 4,552 177.0 6.9 50.1 Wells Fargo 1,981 31.6 2.4 8.9 BofA 3,441 24.6 1.2 7.0 Zions 89 12.9 17.5 3.7 PNC 559 10.3 2.4 2.9 Stellar 10 8.4 96.9 2.4 Frost 51 8.0 19.2 2.3 Cadence 50 7.5 18.4 2.1 Woodforest 10 5.9 71.4 1.7 Prosperity 38 5.7 20.9 1.6 Capital One 659 5.0 1.1 1.4 Third Coast 5 3.7 86.6 1.0 Truist 544 3.2 0.8 0.9 Comerica 78 3.2 5.3 0.9 East West 78 3.1 4.8 0.9 Texas Capital 32 2.4 9.3 0.7 Regions 159 2.4 1.8 0.7 BOK 51 2.3 5.9 0.6 Houston Region Market Share(1) Note: Deposit market share based on FDIC data as of June 30, 2025. 1) Houston Region defined as the Houston-Pasadena-The Woodlands and Beaumont-Port Arthur MSAs; Excludes non-retail branches. Source: S&P Capital IQ Pro Deposits (dollars in billions)
5 Third Quarter 2025 Highlights (1) Refer to the calculation of these non-GAAP financial measures and a reconciliation to their most directly comparable GAAP financial measures in the appendix. The calculation of return on average tangible equity has been adjusted from prior period disclosures. Strong Net Interest Margin: Tax equivalent net interest margin for the third quarter of 2025 was 4.20% compared to 4.18% for the second quarter of 2025. The tax equivalent net interest margin, excluding PAA, was 4.00%(1) for the third quarter of 2025 compared to 3.95%(1) for the second quarter of 2025. Solid Profitability: Net income for the third quarter of 2025 was $25.7 million, or diluted earnings per share of $0.50, which translated into an annualized return on average assets of 0.97%, an annualized return on average equity of 6.30% and an annualized return on average tangible equity of 11.45%(1). Strong Capital Position and Book Value Build: Total risk-based capital ratio increased to 16.33% at September 30, 2025 from 15.98% at June 30, 2025, while book value per share increased to $32.27 at September 30, 2025 from $31.20 at June 30, 2025 and tangible book value per share increased to $21.08(1) at September 30, 2025 from $19.94(1) at June 30, 2025. Paydown of Subordinated Debt: On October 1, 2025, the Company completed the previously announced redemption of $30 million of its $60 million of subordinated debt outstanding as of September 30, 2025. Tangible Book Value Per Share(1) Total Capital Ratio $14.02 $17.02 $19.05 $21.08 12/31/2022 12/31/2023 12/31/2024 9/30/2025 12.39% 14.02% 16.00% 16.33% 12/31/2022 12/31/2023 12/31/2024 9/30/2025
Deposit Summary 6 Deposit Portfolio Composition Deposits (in millions)(1) Maintaining Discipline Navigating Competitive Deposit Market As of September 30, 2025: • Noninterest-bearing deposits to total deposits: 36.4% • Cost of deposits: 1.96% • Cost of funds: 2.01% • Loan to deposit ratio: 81.29% • Brokered deposits: $150.2 million at September 30, 2025 down from $163.2 million at June 30, 2025 . (1) (1) Other includes changes in IB Demand and MMDA & Sav. deposits. Q3 2025 Q2 2025 Noninterest-bearing ("NIB") 3,210,948$ 3,183,693$ Interest-bearing demand ("IB Demand") 1,960,857 1,941,156 Money market and savings ("MMDA & Sav.") 2,489,169 2,393,767 Certificates and other time ("CD's") 1,156,489 1,154,998 Total deposits 8,817,463$ 8,673,614$ (Dollars in thousands) NIB 36.4% IB Demand 22.3% MMDA & Sav. 28.2% CD's 13.1% $8,674 $27 $1 $115 $8,817 6/30/2025 Change in NIB Change in CD's Change in Other 9/30/2025
Loan Summary 7 (1) Refer to the calculation of these non-GAAP financial measures and a reconciliation to their most directly comparable GAAP financial measures in the appendix. . Loan Portfolio Composition (1) (1) Q3 2025 Q2 2025 Commercial and Industrial (“C&I”) 1,332,795$ 1,346,744$ Nonowner-occupied Commercial Real Estate (“NOO CRE”) 1,513,338 1,579,848 Owner-occupied CRE (“OO CRE”) 1,782,405 1,805,487 Multifamily Real Estate (“MF”) 437,550 455,646 Total Commercial Real Estate 3,733,293 3,840,981 CRE Construction & Development (“CRE C&D”) 753,381 762,911 1-4 Family Residential (“1-4 Family”) 1,142,614 1,126,523 Residential Construction (“Resi. C&D”) 121,197 137,855 Consumer and other ("Other") 84,577 72,333 Total 7,167,857$ 7,287,347$ (In thousands) 1-4 Family 15.9% MF 6.1% Resi. C&D 1.7% Other 1.2% CRE C&D 10.5% NOO CRE 21.1% OO CRE 24.9% C&I 18.6% Average Yield Excl. PAA(1) Average Yield Excl. PAA(1) Interest-Earning Assets: Loans 7,228,778$ 122,557$ 6.73% 6.46% 7,282,609$ 121,814$ 6.71% 6.41% Securities 1,790,897 17,086 3.79% 1,729,384 16,103 3.73% Deposits in other financial institutions 505,342 5,770 4.53% 436,596 4,782 4.39% Total interest-earning assets 9,525,017$ 145,413$ 6.06% 5.86% 9,448,589$ 142,699$ 6.06% 5.83% Q3 2025 Q2 2025 (Dollars in thousands) Average Outstanding Balance Interest Earned Average Outstanding Balance Interest Earned
CRE and Office Detail: Q3 2025 8 (1) (1) CRE (incl. multifamily) by Property Type CRE - Office Retail 586,164$ 1,266$ 15.7% Warehouse 582,559 797 15.6% Multi-family 437,550 2,145 11.7% Convenience Store ("C-Store") 388,543 1,340 10.4% Office 382,291 798 10.3% Industrial 184,939 1,796 5.0% Restaurant / Bar 149,352 1,059 4.0% Church 131,713 948 3.5% Auto Sales / Repair 119,922 674 3.2% Healthcare 105,093 1,106 2.8% Hotel / Motel 94,704 3,266 2.5% Other 570,463 1,199 15.3% Total 3,733,293$ 1,122 100.0% (Dollars in thousands) Property Type Balance Average Loan Size % of Total Owner- occupied 43.8%Non-owner occupied 56.2% Retail 15.7% Office 10.3% Warehouse 15.6% C-Store 10.4% Multi-family 11.7%Industrial 5.0% Hotel / Motel 2.5% Restaurant / Bar 4.0% Auto Sales / Repair 3.2% Church 3.5% Healthcare 2.8% Other 15.3% Multi-Story Office Building 127 216,488$ 55.8% 1,705$ Single Story Office Building 284 122,822 32.4% 432 Flex Office Space 68 42,981 11.8% 632 Total 479 382,291$ 100.0% 798 0 - 12 months 86 51,733$ 13.5% 602$ 13 - 24 months 95 112,461 29.4% 1,184 25 - 36 months 36 21,372 5.6% 594 37 - 48 months 23 15,217 4.0% 662 49 + months 239 181,508 47.5% 759 Total 479 382,291$ 100.0% 798 Average Loan Size (Dollars in thousands) (Dollars in thousands) CRE - Office - Maturity Number BalanceCRE - Office - Collateral Type Number Balance % of Total % of Total Average Loan Size
9 Loans – Repricing and Maturity: Q3 2025 (1) Rates are as of September 30, 2025 and do not include purchase accounting accretion or fee income on loans. Floating-21.82% WA Rate-8.41% Variable-27.01% WA Rate-6.54% Fixed-51.18% WA Rate-6.08% Commercial and industrial 724,406$ 104,006$ 210,094$ 206,068$ 60,201$ 28,020$ -$ 1,332,795$ Real Estate: Commercial real estate (including multi-family residential) 964,217 505,609 1,403,064 479,667 217,660 148,323 14,753 3,733,293 Commercial real estate construction and land development 415,545 96,826 136,249 83,362 10,685 10,714 - 753,381 1-4 family residential (including home equity) 109,946 122,184 248,238 279,033 79,263 25,335 278,615 1,142,614 Residential construction 69,106 13,705 2,095 12,411 23,671 209 - 121,197 Consumer and other 24,949 31,947 13,089 12,468 2,114 - 10 84,577 Total Loans 2,308,169$ 874,277$ 2,012,829$ 1,073,009$ 393,594$ 212,601$ 293,378$ 7,167,857$ % Total Loans 32.20% 12.20% 28.08% 14.97% 5.49% 2.97% 4.09% 100.00% Wtg Avg Rate 7.98% 6.19% 5.75% 7.24% 5.56% 5.17% 5.59% 6.31% Commercial and industrial 526,351$ 255,963$ 550,481$ 1,332,795$ Real Estate: Commercial real estate construction and land development 629,598 1,137,939 1,965,756 3,733,293 Commercial real estate (including multi-family residential) 259,047 164,752 329,582 753,381 1-4 family residential (including home equity) 70,022 342,586 730,006 1,142,614 Residential construction 63,903 34,702 22,592 121,197 Consumer and other 14,757 - 69,820 84,577 Total Loans 1,563,678$ 1,935,942$ 3,668,237$ 7,167,857$ Over 15 Years Total (Dollars in thousands) (In thousands) Repricing Term 3 Months or Less 3-12 Months 1-3 Years 3-5 Years 5-10 Years 10-15 Years Total Rate Structure Floating Rate Variable Rate Fixed Rate
CRE Construction and Development: Q3 2025 10 (1) (1) • Total committed exposure for CRE construction loans was $1.23 billion at September 30, 2025 and $1.24 billion at June 30, 2025. • The largest category of CRE construction loans was Land – Commercial at $276.1 million outstanding, or 36.6%, of CRE construction loans at September 30, 2025. • Owner-occupied CRE construction loans were 16.8% of CRE construction loans at September 30, 2025. (1) Includes loans that are secured by commercial properties that are in some stage of construction, land with improvements but valued as and only with intent to remove and construct new structures in the future and raw land. (2) Multi-family community development loans (“Multi-family - CD”). CRE Construction Lending Highlights Number Balance Number Balance Land - Commercial(1) 366 276,051$ 754$ 391 280,812$ 718$ Multi-family - CD(2) 14 134,217 9,587 15 137,320 9,155 Other 87 93,700 1,077 87 92,540 1,064 Multi-family - Market Rate 8 64,948 8,119 9 62,518 6,946 Warehouse 28 63,877 2,281 30 71,448 2,382 Land - Residential Lot 210 63,182 301 215 47,969 223 Retail 15 31,601 2,107 13 37,384 2,876 Commercial Development 7 7,704 1,101 6 12,134 2,022 Residential Subdivision 8 18,101 2,263 9 20,786 2,310 Total 743 753,381$ 1,014 775 762,911$ 984 (Dollars in thousands) (Dollars in thousands) Loan Type Q3 2025 Q2 2025 Average Loan Size Average Loan Size Land - Commercial 36.6% Warehouse 8.5%Multi-family - CD 17.8% Multi-family - Market Rate 8.6% Residential Subdivision 2.4% Land - Residential Lot 8.4% Commercial Development 1.0% Retail 4.2% Other 12.5%
Asset Quality Summary 11 Nonperforming Loans by Type (1) Combined represents the simple addition of legacy balances for 2022; estimated. Nonperforming loans to total loans: • 0.65% at September 30, 2025 compared to 0.69% as of June 30, 2025 Allowance for credit losses on loans to nonperforming loans: • 170.65% at September 30, 2025 compared to 164.67% as of June 30, 2025 Allowance for credit losses on loans: • $78.9 million, or 1.10% of total loans, at September 30, 2025, compared to $83.2 million, or 1.14% of total loans, as of June 30, 2025 Q3 2025 Q2 2025 Total nonperforming loans 46,250$ 50,505$ Nonperforming loans to total loans 0.65% 0.69% Total nonperforming assets 54,189$ 58,157$ 0.51% 0.55% Net charge-offs (recoveries) 3,323$ 206$ 0.18% 0.01% (Dollars in thousands) Nonperforming assets to total assets Net charge-offs to average loans (annualized) Nonaccrual Loans with No Related Allowance Nonaccrual Loans with Related Allowance Total Nonaccrual Loans Commercial and industrial 2,387$ 3,207$ 5,594$ Commercial real estate (including multi-family residential) 15,388 9,768 25,156 Commercial real estate construction and land development 2,622 277 2,899 1-4 family residential (including equity) 8,997 3,086 12,083 Residential construction 457 — 457 Consumer and other — 61 61 Total 29,851$ 16,399$ 46,250$ (In thousands) C&I 12.1% Other 1.1% CRE 54.4% CRE C&D 6.3% 1-4 Family 26.1%
Regulatory Capital Ratios 12 (1) Refer to the calculation of this non-GAAP financial measure and a reconciliation to its most directly comparable GAAP financial measure in the appendix. Minimum Required Plus Capital Conservation Buffer Consolidated Capital Ratios Estimated Total Capital Ratio (to risk-weighted assets) 16.33% 15.98% 10.50% Estimated Common Equity Tier 1 Capital Ratio (to risk-weighted assets) 14.43% 14.06% 7.00% Estimated Tier 1 Capital Ratio (to risk-weighted assets) 14.55% 14.18% 8.50% Estimated Tier 1 Leverage Ratio (to average tangible assets) 11.60% 11.44% 4.00% Tangible Equity to Tangible Assets (1) 10.74% 10.34% N/A Bank Capital Ratios Estimated Total Capital Ratio (to risk-weighted assets) 15.45% 15.39% 10.50% Estimated Common Equity Tier 1 Capital Ratio (to risk-weighted assets) 14.27% 14.18% 7.00% Estimated Tier 1 Capital Ratio (to risk-weighted assets) 14.27% 14.18% 8.50% Estimated Tier 1 Leverage Ratio (to average tangible assets) 11.37% 11.44% 4.00% September 30, 2025 June 30, 2025
13 Key Takeaways Excellent core funding profile Strong earnings power and franchise value in one of the best markets in the U.S. Key success factors: Credit performance and risk management Significant financial flexibility Positioned for continued strong internal capital generation
$5.7 $5.9 $7.5 $8.0 $8.4 $10.3 $12.9 $24.6 $31.6 $177.0 Prosperity Woodforest Cadence Frost Stellar PNC Zions BofA Wells Fargo JP Morgan 6.1% 5.6% 2.4% Houston MSA Texas USA 6.4% 6.0% 2.7% Houston MSA Texas USA Diverse and Strong Markets of Operation 14 Houston is Diverse, with Significant Economic TailwindsGreater Houston Market Houston’s GDP has grown at a 2.3% CAGR since ‘18 Houston has the 3rd lowest cost of living out of the top 20 most populous U.S. metro areas 23rd largest economy in the world – if ranked as a country − Ranked as the nation’s 4th most populous city Port Houston is the busiest Gulf Coast container port, the Houston Ship Channel is #1 ranked U.S. port in total foreign and domestic waterborne tonnage Houston is home to the Texas Medical Center, the world's largest medical complex, which has over 10 million annual patient encounters Business friendly: 26 Fortune 500 companies call Houston home Major business clusters in Beaumont-Port Arthur area include chemical and petroleum manufacturing, materials manufacturing and transportation Top 10 Bank by Deposits in Houston Region(1) ($B) Note: Deposit market share based on FDIC data as of June 30, 2025. 1) Houston Region defined as the Houston-Pasadena-The Woodlands and Beaumont-Port Arthur MSAs; Excludes non-retail branches. Source: S&P Capital IQ Pro, Houston.org, IMF, and Texas Medical Center. Est. Population Growth ’25-’30 Est. Number of Households Growth ’25-’30 Population Change (’20-’25) Median Household Income (’25) Significant Deposit Share Houston MSA: 7.7% Texas: 7.2% / U.S: 1.9% Houston MSA: $78,845 Texas: $76,585 / U.S: $78,770 Stellar has over $8.4 billion in deposits in the Houston region(1) Houston HQ Bank
2.0 3.0 4.0 5.0 6.0 7.0 2.0 2.5 3.0 3.5 4.0 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 Houston is a Resilient Market 15 Since the Great Recession, Houston has proven its resiliency, weathering economic cycles and natural disasters − Houston welcomed 2.3 million new residents and created over 1.15 million jobs since 2007 Population (M ) O il Pr ic e D ec lin e G re at R ec es si on H ur ri ca ne I ke H ur ri ca ne H ar ve y C O VI D -1 9 Em pl oy m en t ( M ) Employment Population1) Data is preliminary as of August 2025 not seasonally adjusted, from the U.S. Bureau of Labor Statistics. Source: U.S. Bureau of Labor Statistics, Texas Workforce Commission.
197,171 0 50,000 100,000 150,000 200,000 250,000 N ew Y or k H ou st on D al la s M ia m i W as hi ng to n Ph oe ni x O rla nd o At la nt a C hi ca go Se at tle Houston’s Growth Projected to Continue 16 Source: S&P Capital IQ Pro; U.S. Census Bureau. 2010-2025 Population Change (%) Houston had the second highest net migration in 2024 10 most populated metros 2.44% -0.43% -2.55% 31.40% 30.06% 24.26% 9.36% New York MSA Los Angeles MSA Chicago MSA Dallas MSA Houston MSA Texas U.S. • Houston has seen tremendous growth over the past ten years, aided by the relocation of multiple Fortune 500 companies • The continued growth of the Houston metro will strengthen and diversify the greater economy, benefiting the businesses and constituents Houston added ~198,000 people by net migration in 2024, second only to New York
$94,960 $91,380 $86,627 $88,783 $78,845 $76,585 $78,770 New York MSA Los Angeles MSA Chicago MSA Dallas MSA Houston MSA Texas U.S. $850,000 $1,072,000 $350,000 $395,000 $314,900 $334,900 $418,284 New York Los Angeles Chicago Dallas Houston Texas U.S. 9.0x 11.7x 4.0x 4.4x 4.0x 4.4x 5.3x New York MSA Los Angeles MSA Chicago MSA Dallas MSA Houston MSA Texas U.S. Housing Market and Cost of Living 17 • Cost of living in Houston is 5.3% less than that of the U.S. market average while the median household income is in line with U.S. median • Houston is #1 in U.S. annual new home construction 20 25 M ed ia n H ou se ho ld In co m e 20 25 M ed ia n H om e Pr ic e (1 ) M ed ia n H om e P ri ce to H H I R at io (1) Home price shown for each respective city. Source: S&P Capital IQ Pro; Redfin (March 2025); Houston.org.
Appendix: Non-GAAP Reconciliation(1) 18 (1) See the disclosure under the heading “GAAP Reconciliation of Non-GAAP Financial Measures” on slide 2 regarding the use of non-GAAP financial measures. (2) Interim periods annualized. (3) The calculation of return on average tangible equity has been adjusted from prior period disclosures. The periods presented above have been recalculated and disclosed under the same calculation. Total shareholders’ equity $ 1,653,138 $ 1,603,834 Less: Goodw ill and core deposit intangibles, net 573,247 578,786 Tangible shareholders’ equity $ 1,079,891 $ 1,025,048 Shares outstanding at end of period 51,228 51,398 Tangible book value per share $ 21.08 $ 19.94 Average shareholders’equity $ 1,617,511 $ 1,595,540 Less: Average goodw ill and core deposit intangibles, net 575,836 581,438 Average tangible shareholders’equity $ 1,041,675 $ 1,014,102 Net income $ 25,670 $ 26,352 Add:Core deposit amortization, net of tax 4,388 4,383 Adjusted net income $ 30,058 $ 30,735 Return on average tangible equity(2)(3) 11.45% 12.16% Total assets $ 10,628,113 $ 10,493,010 Less: Goodw ill and core deposit intangibles, net 573,247 578,786 Tangible assets $ 10,054,866 $ 9,914,224 Tangible equity to tangible assets 10.74% 10.34% Net interest income (tax equivalent) $ 100,739 $ 98,427 Less: Purchase accounting accretion 4,800 5,344 Adjusted net interest income (tax equivalent) $ 95,939 $ 93,083 Average earning assets $ 9,525,017 $ 9,448,589 Net interest margin (tax equivalent)(2) 4.20% 4.18% Net interest margin (tax equivalent) excluding PAA(2) 4.00% 3.95% Interest on loans, as reported $ 122,557 $ 121,814 Less: Purchase accounting accretion 4,800 5,344 Interest on loans w ithout loan accretion $ 117,757 $ 116,470 Average loans $ 7,228,778 $ 7,282,609 Loan yield, as reported 6.73% 6.71% Loan yield, w ithout loan accretion 6.46% 6.41% Interest on interest-earning assets, as reported $ 145,413 $ 142,699 Less: Purchase accounting accretion 4,800 5,344 Interest on interest-earnings assets w ithout loan accretion $ 140,613 $ 137,355 Average interest-earning assets $ 9,525,017 $ 9,448,589 Yield on interest-earnings assets, as reported 6.06% 6.06% Yield on interest-earnings assets, w ithout loan accretion 5.86% 5.83% Q3 2025 Q2 2025 (Dollars in thousands)
19 NYSE: STEL