stel-20231027

Exhibit 99.1

PRESS RELEASE

STELLAR BANCORP, INC. REPORTS

THIRD QUARTER 2023 RESULTS

HOUSTON, October 27, 2023 - Stellar Bancorp, Inc. (the “Company” or “Stellar”) (NYSE: STEL) today reported net income of $30.9 million and diluted earnings per share of $0.58 for the third quarter 2023 compared to net income of $35.2 million and diluted earnings per share of $0.66 for the second quarter 2023.

“We are pleased with our results for the third quarter 2023 given the uncertainty of the economic environment. We remain steadfast in our commitment to provide and protect the qualities we think drive shareholder value; balance sheet strength; sound quality; and stable core deposits” said Robert R. Franklin, Jr., Stellar’s Chief Executive Officer.

“We continue our strategy of not fighting the actions of the Federal Reserve as it attempts to slow the economy to tamp down inflation. Raising interest rates is a blunt tool and there are consequences to the velocity at which rates have increased. We must remain vigilant as customers adjust to higher prices, the higher cost of capital and potential adjustments to asset prices,” continued Mr. Franklin.

“We will continue to build our capital base, be mindful of our liquidity position and be watchful of our credit quality. We believe that Stellar remains well positioned to have optionality as we move through this economic cycle while protecting and increasing long-term shareholder value,” concluded Mr. Franklin.

Third Quarter 2023 Financial Highlights

•Strong Profitability: Third quarter 2023 net income of $30.9 million and diluted earnings per share of $0.58 translated into an annualized return on average assets of 1.14% and an annualized return on average tangible equity of 14.47%(1).

•Continued Regulatory Capital Build: Total risk-based capital ratio increased to 13.42% at September 30, 2023 from 12.39% at December 31, 2022 and Tier 1 leverage ratio increased to 9.82% at September 30, 2023 from 8.55% at December 31, 2022.

•Solid Margin: Tax equivalent net interest margin was 4.37% for the third quarter of 2023 as compared to 4.49% in the second quarter of 2023. The tax equivalent net interest margin, excluding purchase accounting accretion (“PAA”), was 3.87%(1) for the third quarter of 2023 and 3.97%(1) for the second quarter of 2023.

•Advantageous Funding Profile: Noninterest-bearing deposit balances decreased from the second quarter but remained a significant portion of our deposit funding base at 42.1% at the end of the third quarter 2023 compared to 42.4% at the end of the second 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 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, second and third 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.

Third Quarter 2023 Results

Stellar’s net interest income in the third quarter 2023 decreased $1.6 million, or 1.4%, from $108.3 million for the second quarter 2023. The net interest margin on a tax equivalent basis decreased 12 basis points to 4.37% for the third quarter 2023 from 4.49% for the second 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 third quarter of 2023 benefited from

$12.4 million of income from purchase accounting adjustments compared to $12.6 million in the second 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 third quarter 2023 would have been $94.5 million and the tax equivalent net interest margin would have been 3.87%.

Noninterest income for the third quarter 2023 was $4.7 million, a decrease of $788 thousand, or 14.4%, compared to $5.5 million for the second quarter 2023. Noninterest income decreased in the third quarter of 2023 compared to the second quarter of 2023 primarily due to a decrease in debit card and ATM income due to the impact of the Durbin Amendment and change in the Company’s policy on charging nonsufficient funds fees.

Noninterest expense for the third quarter 2023 increased $1.5 million, or 2.2%, to $70.7 million compared to $69.2 million for the second quarter of 2023. The increase in noninterest expense in the third quarter of 2023 compared to the second quarter of 2023 was primarily due to an increase in salaries and employee benefits and acquisition and merger-related expenses which totaled $3.4 million for the third quarter of 2023 compared to $2.9 million in the second quarter of 2023.

Stellar’s efficiency ratio was 63.50% for the third quarter 2023 compared to 60.83% for the second quarter 2023. Third quarter 2023 annualized returns on average assets, average equity and average tangible equity were 1.14%, 8.34% and 14.47%, respectively, compared to 1.31%, 9.67% and 17.05%, respectively, for the second 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 September 30, 2023 decreased $64.2 million to $8.00 billion compared to $8.07 billion at June 30, 2023. At September 30, 2023, the remaining balance of the purchase accounting adjustments on loans was $118.8 million.

Total deposits at September 30, 2023 decreased $79.7 million to $8.69 billion compared to $8.77 billion at June 30, 2023, due to decreases in noninterest-bearing demand, interest-bearing demand, money market and savings balances, partially offset by increases in certificates and other time deposits. Shifts in the deposit mix were primarily driven by the current interest rate environment and an intensely competitive market for deposits. Estimated uninsured deposits totaled $4.73 billion and estimated uninsured deposits net of collateralized deposits of $865.7 million were $3.86 billion, or 44.5%, of total deposits at September 30, 2023.

Total assets at September 30, 2023 were $10.67 billion, a decrease of $112.9 million, compared to $10.78 billion at June 30, 2023.

Asset Quality

Nonperforming assets totaled $38.3 million, or 0.36% of total assets, at September 30, 2023, compared to $43.3 million, or 0.40%, of total assets, at June 30, 2023. The allowance for credit losses on loans as a percentage of total loans was 1.17% at September 30, 2023 and 1.24% at June 30, 2023.

The provision for credit losses for the third quarter 2023 was $2.3 million compared to $1.9 million for the second quarter 2023. Third quarter 2023 net charge-offs were $8.1 million, or 0.40% (annualized) of average loans, compared to net charge-offs of $236 thousand, or 0.01% (annualized) of average loans, for the second quarter 2023. Net charge-offs increased this quarter primarily due to a single commercial and industrial loan relationship that was placed on nonaccrual status at December 31, 2022 and had an allowance for credit losses of $5.1 million at June 30, 2023. During the third quarter 2023, the borrower’s financial condition further deteriorated, which prompted the charge-off of $8.0 million on the loan relationship.

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, October 27, 2023 at 8:00 a.m. Central Time (9:00 a.m. Eastern Time) to discuss third quarter 2023 results. Individuals and investment professionals may register for the conference call at https://register.vevent.com/register/BI6cc171f27f424552a720c74008bfa355 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 [email protected]. 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 relations

[email protected]

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
	September 30		June 30		March 31		December 31		September 30
	(Dollars in thousands)
ASSETS
Cash and due from banks	$	94,970	$	105,913	$	99,231	$	67,063	$	16,449
Interest-bearing deposits at other financial institutions	207,302		198,176		164,102		304,642		102,118
Total cash and cash equivalents	302,272		304,089		263,333		371,705		118,567

Available for sale securities, at fair value	1,414,952		1,478,222		1,519,175		1,807,586		1,618,995

Loans held for investment	8,004,528		8,068,718		7,886,044		7,754,751		4,591,912
Less: allowance for credit losses on loans	(93,575)		(100,195)		(96,188)		(93,180)		(52,147)
Loans, net	7,910,953		7,968,523		7,789,856		7,661,571		4,539,765

Accrued interest receivable	43,536		42,051		42,405		44,743		29,697
Premises and equipment, net	119,332		119,142		124,723		126,803		57,837
Federal Home Loan Bank stock	29,022		24,478		19,676		15,058		16,843
Bank-owned life insurance	104,699		104,148		103,616		103,094		28,305
Goodwill	497,318		497,260		497,260		497,260		223,642
Core deposit intangibles, net	122,944		129,805		136,665		143,525		12,406
Other assets	120,432		110,633		108,009		129,092		84,285
Total assets	$	10,665,460	$	10,778,351	$	10,604,718	$	10,900,437	$	6,730,342


LIABILITIES AND SHAREHOLDERS’ EQUITY

LIABILITIES:
Deposits:
Noninterest-bearing	$	3,656,288	$	3,713,536	$	3,877,859	$	4,230,169	$	2,465,839
Interest-bearing
Demand	1,397,492		1,437,509		1,394,244		1,591,828		956,920
Money market and savings	2,128,950		2,174,073		2,401,840		2,575,923		1,471,690
Certificates and other time	1,503,891		1,441,251		1,064,932		869,712		766,270
Total interest-bearing deposits	5,030,333		5,052,833		4,861,016		5,037,463		3,194,880
Total deposits	8,686,621		8,766,369		8,738,875		9,267,632		5,660,719

Accrued interest payable	7,612		4,555		3,875		2,098		2,673
Borrowed funds	323,981		369,963		238,944		63,925		257,000
Subordinated debt	109,665		109,566		109,420		109,367		109,241
Other liabilities	76,735		69,218		67,388		74,239		44,407
Total liabilities	9,204,614		9,319,671		9,158,502		9,517,261		6,074,040

SHAREHOLDERS’ EQUITY:
Common stock	533		533		533		530		281
Capital surplus	1,231,686		1,228,532		1,225,596		1,222,761		511,434
Retained earnings	385,600		361,619		333,368		303,146		307,975
Accumulated other comprehensive loss	(156,973)		(132,004)		(113,281)		(143,261)		(163,388)
Total shareholders’ equity	1,460,846		1,458,680		1,446,216		1,383,176		656,302

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	10,665,460	$	10,778,351	$	10,604,718	$	10,900,437	$	6,730,342

Stellar Bancorp, Inc.

Financial Highlights

(Unaudited)


	Three Months Ended										Nine Months Ended
	2023						2022				2023		2022
	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	$	138,948	$	133,931	$	125,729	$	116,145	$	58,025	$	398,608	$	164,230
Securities:
Taxable	9,493		9,726		9,653		9,834		6,655		28,872		17,294
Tax-exempt	437		436		1,262		3,057		2,594		2,135		7,676
Deposits in other financial institutions	2,391		2,865		3,771		2,933		608		9,027		1,825
Total interest income	151,269		146,958		140,415		131,969		67,882		438,642		191,025

INTEREST EXPENSE:
Demand, money market and savings deposits	23,557		20,708		18,037		12,406		3,527		62,302		6,733
Certificates and other time deposits	13,282		9,622		3,307		2,083		1,664		26,211		5,742
Borrowed funds	5,801		6,535		1,317		417		499		13,653		799
Subordinated debt	1,908		1,812		1,927		1,449		1,502		5,647		4,407
Total interest expense	44,548		38,677		24,588		16,355		7,192		107,813		17,681
NET INTEREST INCOME	106,721		108,281		115,827		115,614		60,690		330,829		173,344
Provision for credit losses	2,315		1,915		3,666		44,793		1,962		7,896		5,919
Net interest income after provision for credit losses	104,406		106,366		112,161		70,821		58,728		322,933		167,425

NONINTEREST INCOME:
Nonsufficient funds and overdraft charges	291		418		406		447		145		1,115		387
Service charges on deposit accounts	1,329		1,157		943		1,242		527		3,429		1,614
(Loss) gain on sale of assets	—		(6)		198		4,025		42		192		25
Bank-owned life insurance	551		532		522		515		135		1,605		610
Debit card and ATM income	935		1,821		1,698		1,897		869		4,454		2,568
Other	1,589		1,561		3,731		2,511		1,277		6,881		4,513
Total noninterest income	4,695		5,483		7,498		10,637		2,995		17,676		9,717

NONINTEREST EXPENSE:
Salaries and employee benefits	39,495		37,300		39,775		40,949		22,013		116,570		66,605
Net occupancy and equipment	4,455		3,817		4,088		3,781		2,129		12,360		6,554
Depreciation	1,952		1,841		1,836		1,903		1,003		5,629		3,048
Data processing and software amortization	4,798		4,674		5,054		3,776		2,541		14,526		7,561
Professional fees	997		1,564		1,527		2,298		485		4,088		1,285
Regulatory assessments and FDIC insurance	1,814		2,755		1,294		1,263		1,134		5,863		3,651
Amortization of intangibles	6,876		6,881		6,879		7,051		750		20,636		2,252
Communications	663		689		701		737		359		2,053		1,063
Advertising	877		907		839		1,130		385		2,623		1,330
Acquisition and merger-related expenses	3,421		2,897		6,165		11,469		10,551		12,483		12,669
Other	5,400		5,882		4,440		5,267		2,681		15,722		10,434
Total noninterest expense	70,748		69,207		72,598		79,624		44,031		212,553		116,452
INCOME BEFORE INCOME TAXES	38,353		42,642		47,061		1,834		17,692		128,056		60,690
Provision for income taxes	7,445		7,467		9,913		(218)		3,406		24,825		11,310
NET INCOME	$	30,908	$	35,175	$	37,148	$	2,052	$	14,286	$	103,231	$	49,380

EARNINGS PER SHARE
Basic	$	0.58	$	0.66	$	0.70	$	0.04	$	0.51	$	1.94	$	1.72
Diluted	$	0.58	$	0.66	$	0.70	$	0.04	$	0.50	$	1.94	$	1.71

Stellar Bancorp, Inc.

Financial Highlights

(Unaudited)


	Three Months Ended															Nine Months Ended
	2023									2022						2023			2022
	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	$	30,908		$	35,175		$	37,148		$	2,052		$	14,286		$	103,231		$	49,380

Earnings per share, basic	$	0.58		$	0.66		$	0.70		$	0.04		$	0.51		$	1.94		$	1.72
Earnings per share, diluted	$	0.58		$	0.66		$	0.70		$	0.04		$	0.50		$	1.94		$	1.71
Dividends per share	$	0.13		$	0.13		$	0.13		$	0.13		$	0.10		$	0.39		$	0.30

Return on average assets(A)	1.14		%	1.31		%	1.38		%	0.07		%	0.84		%	1.28		%	0.94		%
Return on average equity(A)	8.34		%	9.67		%	10.62		%	0.60		%	7.90		%	9.52		%	8.74		%
Return on average tangible equity(A)(B)	14.47		%	17.05		%	19.32		%	1.16		%	11.78		%	16.86		%	12.75		%
Net interest margin (tax equivalent)(A)(C)	4.37		%	4.49		%	4.80		%	4.71		%	3.85		%	4.55		%	3.55		%
Net interest margin (tax equivalent) excluding PAA(A)(B)(C)	3.87		%	3.97		%	4.38		%	4.38		%	3.85		%	4.07		%	3.55		%
Efficiency ratio(D)	63.50		%	60.83		%	58.96		%	65.14		%	69.18		%	61.02		%	63.62		%

Capital Ratios
Stellar Bancorp, Inc. (Consolidated)
Equity to assets	13.70		%	13.53		%	13.64		%	12.69		%	9.75		%	13.70		%	9.75		%
Tangible equity to tangible assets(B)	8.37		%	8.19		%	8.15		%	7.24		%	6.47		%	8.37		%	6.47		%
Total capital ratio (to risk-weighted assets)	13.42		%	13.03		%	12.72		%	12.39		%	14.66		%	13.44		%	14.66		%
Common equity Tier 1 capital (to risk weighted assets)	11.14		%	10.67		%	10.39		%	10.04		%	11.39		%	11.14		%	11.39		%
Tier 1 capital (to risk-weighted assets)	11.25		%	10.78		%	10.50		%	10.15		%	11.58		%	11.25		%	11.58		%
Tier 1 leverage (to average tangible assets)	9.82		%	9.51		%	9.01		%	8.55		%	9.00		%	9.82		%	9.00		%

Stellar Bank
Total capital ratio (to risk-weighted assets)	13.13		%	12.80		%	12.42		%	12.02		%	14.12		%	13.16		%	14.12		%
Common equity Tier 1 capital (to risk-weighted assets)	11.63		%	11.22		%	10.87		%	10.46		%	12.20		%	11.63		%	12.20		%
Tier 1 capital (to risk-weighted assets)	11.63		%	11.22		%	10.87		%	10.46		%	12.20		%	11.63		%	12.20		%
Tier 1 leverage (to average tangible assets)	10.15		%	9.89		%	9.35		%	8.81		%	9.49		%	10.15		%	9.49		%

Other Data
Weighted average shares:
Basic	53,313			53,297			53,021			52,715			28,286			53,211			28,679
Diluted	53,380			53,375			53,138			52,973			28,530			53,300			28,901
Period end shares outstanding	53,322			53,303			53,296			52,955			28,137			53,322			28,137
Book value per share	$	27.40		$	27.37		$	27.14		$	26.12		$	23.33		$	27.40		$	23.33
Tangible book value per share(B)	$	15.76		$	15.60		$	15.24		$	14.02		$	14.94		$	15.76		$	14.94
Employees - full-time equivalents	1,008			1,004			1,055			1,025			562			1,008			562

(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
	September 30, 2023						June 30, 2023						September 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	$	8,043,706	$	138,948	6.85	%	$	7,980,856	$	133,931	6.73	%	$	4,456,174	$	58,025	5.17	%
Securities	1,471,916		9,930		2.68	%	1,502,949		10,162		2.71	%	1,709,470		9,249		2.15	%
Deposits in other financial institutions	181,931		2,391		5.21	%	209,722		2,865		5.48	%	160,340		608		1.50	%
Total interest-earning assets	9,697,553		$	151,269	6.19	%	9,693,527		$	146,958	6.08	%	6,325,984		$	67,882	4.26	%
Allowance for credit losses on loans	(99,892)						(96,414)						(50,609)
Noninterest-earning assets	1,143,634						1,143,025						442,511
Total assets	$	10,741,295					$	10,740,138					$	6,717,886

Liabilities and Shareholders' Equity
Interest-Bearing Liabilities:
Interest-bearing demand deposits	$	1,400,508	$	10,415	2.95	%	$	1,387,604	$	9,343	2.70	%	$	978,531	$	2,380	0.96	%
Money market and savings deposits	2,166,610		13,142		2.41	%	2,220,827		11,365		2.05	%	1,500,083		1,147		0.30	%
Certificates and other time deposits	1,400,367		13,282		3.76	%	1,225,834		9,622		3.15	%	877,231		1,664		0.75	%
Borrowed funds	411,212		5,801		5.60	%	479,896		6,535		5.46	%	68,752		499		2.88	%
Subordinated debt	109,608		1,908		6.91	%	109,499		1,812		6.64	%	109,177		1,502		5.46	%
Total interest-bearing liabilities	5,488,305		$	44,548	3.22	%	5,423,660		$	38,677	2.86	%	3,533,774		$	7,192	0.81	%

Noninterest-Bearing Liabilities:
Noninterest-bearing demand deposits	3,695,592						3,779,594						2,424,884
Other liabilities	86,389						78,411						41,792
Total liabilities	9,270,286						9,281,665						6,000,450
Shareholders' equity	1,471,009						1,458,473						717,436
Total liabilities and shareholders' equity	$	10,741,295					$	10,740,138					$	6,717,886

Net interest rate spread					2.97	%					3.22	%					3.45	%

Net interest income and margin			$	106,721	4.37	%			$	108,281	4.48	%			$	60,690	3.81	%

Net interest income and net interest margin (tax equivalent)			$	106,919	4.37	%			$	108,509	4.49	%			$	61,418	3.85	%

Cost of funds					1.92	%					1.69	%					0.48	%
Cost of deposits					1.69	%					1.41	%					0.36	%

Stellar Bancorp, Inc.

Financial Highlights

(Unaudited)


	Nine Months Ended September 30,
	2023						2022
	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	$	7,957,911	$	398,608	6.70	%	$	4,331,288	$	164,230	5.07	%
Securities	1,525,808		31,007		2.72	%	1,774,149		24,970		1.88	%
Deposits in other financial institutions	251,475		9,027		4.80	%	498,456		1,825		0.49	%
Total interest-earning assets	9,735,194		$	438,642	6.02	%	6,603,893		$	191,025	3.87	%
Allowance for credit losses on loans	(96,570)						(49,422)
Noninterest-earning assets	1,148,847						441,767
Total assets	$	10,787,471					$	6,996,238

Liabilities and Shareholders' Equity
Interest-Bearing Liabilities:
Interest-bearing demand deposits	$	1,478,547	$	28,141	2.54	%	$	1,031,006	$	3,856	0.50	%
Money market and savings deposits	2,291,588		34,161		1.99	%	1,549,969		2,877		0.25	%
Certificates and other time deposits	1,164,572		26,211		3.01	%	1,069,011		5,742		0.72	%
Borrowed funds	333,220		13,653		5.48	%	69,492		799		1.54	%
Subordinated debt	109,508		5,647		6.89	%	109,046		4,407		5.40	%
Total interest-bearing liabilities	5,377,435		$	107,813	2.68	%	3,828,524		17,681		0.62	%

Noninterest-Bearing Liabilities:
Noninterest-bearing demand deposits	3,878,760						2,373,489
Other liabilities	81,894						39,123
Total liabilities	9,338,089						6,241,136
Shareholders' equity	1,449,382						755,102
Total liabilities and shareholders' equity	$	10,787,471					$	6,996,238

Net interest rate spread					3.34	%					3.25	%

Net interest income and margin			$	330,829	4.54	%			$	173,344	3.51	%

Net interest income and net interest margin (tax equivalent)			$	331,549	4.55	%			$	175,578	3.55	%

Cost of funds					1.56	%					0.38	%
Cost of deposits					1.34	%					0.28	%

Stellar Bancorp, Inc.

Financial Highlights

(Unaudited)


	Three Months Ended
	2023									2022
	September 30			June 30			March 31			December 31			September 30
	(Dollars in thousands)
Period-end Loan Portfolio:
Commercial and industrial	$	1,474,600		$	1,512,476		$	1,477,340		$	1,455,795		$	732,636
Paycheck Protection Program (PPP)	5,968			8,027			11,081			13,226			17,827
Real estate:
Commercial real estate (including multi-family residential)	4,076,606			4,038,487			4,014,609			3,931,480			2,407,039
Commercial real estate construction and land development	1,078,265			1,136,124			1,034,538			1,037,678			513,248
1-4 family residential (including home equity)	1,024,945			1,009,439			1,008,362			1,000,956			699,636
Residential construction	289,553			311,208			292,143			268,150			183,563
Consumer and other	54,591			52,957			47,971			47,466			37,963
Total loans held for investment	$	8,004,528		$	8,068,718		$	7,886,044		$	7,754,751		$	4,591,912

Deposits:
Noninterest-bearing	$	3,656,288		$	3,713,536		$	3,877,859		$	4,230,169		$	2,465,839
Interest-bearing
Demand	1,397,492			1,437,509			1,394,244			1,591,828			956,920
Money market and savings	2,128,950			2,174,073			2,401,840			2,575,923			1,471,690
Certificates and other time	1,503,891			1,441,251			1,064,932			869,712			766,270
Total interest-bearing deposits	5,030,333			5,052,833			4,861,016			5,037,463			3,194,880
Total deposits	$	8,686,621		$	8,766,369		$	8,738,875		$	9,267,632		$	5,660,719

Asset Quality:
Nonaccrual loans	$	38,291		$	43,349		$	43,413		$	45,048		$	21,551
Accruing loans 90 or more days past due	—			—			—			—			—
Total nonperforming loans	38,291			43,349			43,413			45,048			21,551
Other repossessed assets	—			—			124			—			—
Total nonperforming assets	$	38,291		$	43,349		$	43,537		$	45,048		$	21,551

Net charge-offs (recoveries)	$	8,116		$	236		$	192		$	5,707		$	(245)

Nonaccrual loans:
Commercial and industrial	$	14,991		$	22,968		$	23,329		$	25,402		$	6,916
Real estate:
Commercial real estate (including multi-family residential)	13,563			8,221			9,026			9,970			10,392
Commercial real estate construction and land development	170			388			27			—			241
1-4 family residential (including home equity)	8,442			10,880			10,586			9,404			3,854
Residential construction	635			665			195			—			—
Consumer and other	490			227			250			272			148
Total nonaccrual loans	$	38,291		$	43,349		$	43,413		$	45,048		$	21,551

Asset Quality Ratios:
Nonperforming assets to total assets	0.36		%	0.40		%	0.41		%	0.41		%	0.32		%
Nonperforming loans to total loans	0.48		%	0.54		%	0.55		%	0.58		%	0.47		%
Allowance for credit losses on loans to nonperforming loans	244.38		%	231.14		%	221.56		%	206.85		%	241.97		%
Allowance for credit losses on loans to total loans	1.17		%	1.24		%	1.22		%	1.20		%	1.14		%
Net charge-offs (recoveries) to average loans (annualized)	0.40		%	0.01		%	0.01		%	0.30		%	(0.02		%)

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, 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.


	Three Months Ended															Nine Months Ended
	2023									2022						2023			2022
	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	$	30,908		$	35,175		$	37,148		$	2,052		$	14,286		$	103,231		$	49,380
Add: Provision for credit losses	2,315			1,915			3,666			44,793			1,962			7,896			5,919
Add: Provision for income taxes	7,445			7,467			9,913			(218)			3,406			24,825			11,310
Pre-tax, pre-provision income	$	40,668		$	44,557		$	50,727		$	46,627		$	19,654		$	135,952		$	66,609

Total average assets	$	10,741,295		$	10,740,138		$	10,882,533		$	10,946,009		$	6,717,886		$	10,787,471		$	6,996,238

Pre-tax, pre-provision return on average assets(B)	1.50		%	1.66		%	1.89		%	1.69		%	1.16		%	1.68		%	1.27		%

Pre-tax, pre-provision income	$	40,668		$	44,557		$	50,727		$	46,627		$	19,654		$	135,952		$	66,609
Add: Acquisition and merger-related expenses	3,421			2,897			6,165			11,469			10,551			12,483			12,669
Add: Amortization of intangibles	6,876			6,881			6,879			7,051			750			20,636			2,252
Less: Purchase accounting accretion	12,400			12,572			10,104			8,160			40			35,076			210
Less: (Loss) gain on sale of assets	—			(6)			198			4,025			42			192			25
Adjusted pre-tax, pre-provision income	$	38,565		$	41,769		$	53,469		$	52,962		$	30,873		$	133,803		$	81,295

Adjusted pre-tax, pre-provision return on average assets(B)	1.42		%	1.56		%	1.99		%	1.92		%	1.82		%	1.66		%	1.55		%

Total noninterest expense	$	70,748		$	69,207		$	72,598		$	79,624		$	44,031		$	212,553		$	116,452
Less: Acquisition and merger-related expenses	3,421			2,897			6,165			11,469			10,551			12,483			12,669
Less: Amortization of intangibles	6,876			6,881			6,879			7,051			750			20,636			2,252
Net interest income	106,721			108,281			115,827			115,614			60,690			330,829			173,344
Less: Purchase accounting accretion	12,400			12,572			10,104			8,160			40			35,076			210
Total noninterest income	4,695			5,483			7,498			10,637			2,995			17,676			9,717
Less: (Loss) gain on sale of assets	—			(6)			198			4,025			42			192			25
Adjusted efficiency ratio(A)	61.05%			58.73%			52.69%			53.57%			51.46%			57.28%			55.53%

Total shareholders' equity	$	1,460,846		$	1,458,680		$	1,446,216		$	1,383,176		$	656,302		$	1,460,846		$	656,302
Less: Goodwill and core deposit intangibles, net	620,262			627,065			633,925			640,785			236,048			620,262			236,048
Tangible shareholders’ equity	$	840,584		$	831,615		$	812,291		$	742,391		$	420,254		$	840,584		$	420,254

Shares outstanding at end of period	53,322			53,303			53,296			52,955			28,137			53,322			28,137

Tangible book value per share	$	15.76		$	15.60		$	15.24		$	14.02		$	14.94		$	15.76		$	14.94

Average shareholders' equity	$	1,471,009		$	1,458,473		$	1,418,082		$	1,347,938		$	717,436		$	1,449,382		$	755,102
Less: Average goodwill and core deposit intangibles, net	623,864			630,854			638,110			658,107			236,399			630,890			237,153
Average tangible shareholders’ equity	$	847,145		$	827,619		$	779,972		$	689,831		$	481,037		$	818,492		$	517,949

Return on average tangible equity(B)	14.47		%	17.05		%	19.32		%	1.18		%	11.78		%	16.86		%	12.75		%

Total assets	$	10,665,460		$	10,778,351		$	10,604,718		$	10,900,437		$	6,730,342		$	10,665,460		$	6,730,342
Less: Goodwill and core deposit intangibles, net	620,262			627,065			633,925			640,785			236,048			620,262			236,048
Tangible assets	$	10,045,198		$	10,151,286		$	9,970,793		$	10,259,652		$	6,494,294		$	10,045,198		$	6,494,294

Tangible equity to tangible assets	8.37		%	8.19		%	8.15		%	7.24		%	6.47		%	8.37		%	6.47		%

Net interest income (tax equivalent)	$	106,919		$	108,509		$	116,119		$	116,574		$	61,418		$	331,549		$	175,578
Less: Purchase accounting accretion	12,400			12,572			10,104			8,160			40			35,076			210
Adjusted net interest income (tax equivalent)	$	94,519		$	95,937		$	106,015		$	108,414		$	61,378		$	296,473		$	175,368

Average earning assets	$	9,697,553		$	9,693,527		$	9,815,803		$	9,815,701		$	6,325,984		$	9,735,194		$	6,603,893
Net interest margin (tax equivalent) excluding PAA	3.87		%	3.97		%	4.38		%	4.38		%	3.85		%	4.07		%	3.55		%

(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.

Third Quarter 2023 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 the benefits of the merger of equals (the “Merger”) between Allegiance Bancshares, Inc. and CBTX, Inc. which became effective on October 1, 2022, 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 Bancorp, Inc. (“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. 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; adjusted pre-tax, pre-provision income; adjusted pre-tax, pre-provision ROAA; adjusted efficiency ratio; the ratio of tangible equity to tangible assets; net interest margin (tax equivalent) excluding purchase accounting adjustments; and loan yield excluding accretion for internal planning and forecasting purposes. The Company has included in this presentation 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.

3 (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. Stellar Bancorp, Inc. - Snapshot Houston’s largest regionally-focused bank  Valuable franchise in one of the best markets in the U.S.  Strong core earnings power and capital position  Principal banking subsidiary renamed Stellar Bank upon successful system conversion in February  Combination delivered scale, growth opportunities, and talent depth  Merger-of-equals between CBTX, Inc. and Allegiance Bancshares, Inc. became effective October 1, 2022 (NYSE: STEL) 9/30/2023 6/30/2023 Total assets 10,665,460$ 10,778,351$ Total loans 8,004,528 8,068,718 Total deposits 8,686,621 8,766,369 Total loans to total deposits 92.15% 92.04% Equity to assets 13.70% 13.53% Tangible equity to tangible assets (1) 8.37% 8.19% (Dollars in thousands)

$1.9 $1.9 $2.1 $2.5 $2.6 $3.0 $3.1 $5.5 $5.7 $6.7 $7.6 $7.8 $8.6 $10.2 $12.0 $27.2 $29.8 $157.3 Texas Independent BOK Regions Texas Capital Truist Comerica Third Coast Woodforest Prosperity Capital One Frost Cadence Stellar PNC Zions BofA Wells Fargo JPMorgan Focused on Serving the Houston Region 4 Note: Deposit market share based on FDIC data as of June 30, 2023. 1) Houston Region defined as the Houston-Pasadena-The Woodlands and Beaumont-Port Arthur MSAs; Excludes non-retail branches. Source: S&P Capital IQ Pro, Houston.org, Texas Medical Center, and Wallet Hub. Stel a Houston Region Market Share(1) Deposits ($B) Houston Percent of Houston T otal Assets Region Com pany Region Market Nam e ($B) Deposits ($B) Deposits (%) Share (%) JPMorgan 3,868 157.3 6.6 48.2 Wells Fargo 1,876 29.8 2.2 9.1 BofA 3,123 27.2 1.4 8.3 Zions 87.2 12.0 16.2 3.7 PNC 558 10.2 2.4 3.1 Stellar 10.8 8.6 97.7 2.6 Cadence 48.8 7.8 20.1 2.4 Frost 48.6 7.6 18.8 2.3 Capital One 468 6.7 1.9 2.0 Prosperity 39.9 5.7 20.9 1.8 Woodforest 9.6 5.5 69.7 1.7 Third Coast 4.0 3.1 90.9 0.9 Comerica 91.0 3.0 4.5 0.9 Truist 555 2.6 0.6 0.8 Texas Capital 29.0 2.5 10.7 0.8 Regions 156 2.1 1.6 0.6 BOK 49.2 1.9 5.7 0.6 Texas Independent 2.2 1.9 100.0 0.6 (1)

5 Third Quarter Financial 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. (2) Adjusted results exclude acquisition and merger-related expenses, core deposit intangible amortization, purchase accounting adjustments and gains and losses on the sale of assets. (3) Annualized. (4) Represents total noninterest expense divided by the sum of net interest income and noninterest income, excluding gains and losses on the sale of assets.  Reported third quarter 2023 net income of $30.9 million, or $0.58 per diluted share, as compared to net income of $35.2 million, or $0.66 per share, for the second quarter 2023. The third and second quarter 2023 results reflect significant nonrecurring items related to the Merger.  Core Earnings Power: Return on average assets (“ROAA”) of 1.14% and pre-tax, pre-provision (“PTPP”) ROAA of 1.50%.(1)(4)  Adjusted for merger and nonrecurring adjustments, PTPP ROAA would have been 1.42%.(1)(2)(4)  Net Interest Margin (“NIM”): 4.37% and NIM excluding purchase accounting adjustments (“PAA”) of 3.87%.(1)  Core Funding: 42.1% noninterest-bearing deposits, 1.69% cost of deposits and 1.92% cost of funds.  Regulatory Capital Build: Consolidated total risk based capital ratio increased to 13.42% at September 30, 2023 from 12.39% at December 31, 2022 and Tier 1 leverage ratio increased to 9.82% at September 30, 2023 from 8.55% at December 31, 2022. Q3 2023 Q2 2023 Actual Adjusted(1) Adjusted(1) Net interest margin (tax equivalent)(3) 4.37% 3.87% 4.49% 3.97% Pre-tax, pre-provision income 40,668$ (1) 38,565$ (2) 44,557$ (1) 41,769$ (2) Pre-tax, pre-provision ROAA(3) 1.50% (1) 1.42% (2) 1.66% (1) 1.56% (2) Eff iciency ratio(4) 63.50% 61.05% (2) 60.83% 58.73% (2) Actual (Dollars in thousands)

Third Quarter Deposit Summary 6 Deposit Mix Deposits (in millions) Maintaining Discipline Navigating Competitive Deposit Market As of September 30, 2023: • Retained favorable mix: 42.1% noninterest-bearing deposits • Estimated uninsured deposits, net of collateralized deposits: 44.5% • Average account size of $86 thousand, excluding collateralized deposits • 92.2% loan to deposit ratio • Brokered deposits increased to $579.0 million from $537.8 million at September 30, 2023 from June 30, 2023 . (1) NIB 42.1% IB Demand 16.1% MMDA & Sav. 24.5% CD's 17.3% Q3 2023 Q2 2023 Noninterest-bearing ("NIB") 3,656,288$ 3,713,536$ Interest-bearing demand ("IB Demand") 1,397,492 1,437,509 Money market and savings ("MMDA & Sav") 2,128,950 2,174,073 Certificates and other time ("CDs") 1,503,891 1,441,251 Total deposits 8,686,621$ 8,766,369$ Cost of deposits 1.69% 1.41% Cost of interest-bearing deposits 2.94% 2.52% (Dollars in thousands)

Third Quarter 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) Average Yield / Rate Excl. PAA(1) Average Yield / Rate Excl. PAA(1) Interest-Earning Assets: Loans 8,043,706$ 138,948$ 6.85% 6.24% 7,980,856$ 133,931$ 6.73% 6.10% Securities 1,471,916 9,930 2.68% 1,502,949 10,162 2.71% Deposits in other financial institutions 181,931 2,391 5.21% 209,722 2,865 5.48% Total interest-earning assets 9,697,553$ 151,269$ 6.19% 5.68% 9,693,527$ 146,958$ 6.08% 5.56% (Dollars in thousands) Q3 2023 Q2 2023 Average Outstanding Balance Interest Earned / Interest Paid Average Outstanding Balance Interest Earned / Interest Paid 1-4 Family 12.8% Multifamily RE 5.7% Resi. C&D 3.6% CRE C&D 13.4% CRE 21.6% OO CRE 23.6% C&I 18.6% Consumer & Other 0.7%Q3 2023 Q2 2023 Commercial and Industrial (“C&I”) 1,480,568$ 1,520,503$ Commercial Real Estate (“CRE”) 1,731,467 1,756,289 Owner-occupied CRE (“OO CRE") 1,891,794 1,850,862 Multifamily Real Estate 453,345 431,336 Total Commercial Real Estate 4,076,606 4,038,487 CRE Construction & Development (“CRE C&D”) 1,078,265 1,136,124 1-4 Family Residential ("1-4 Family") 1,024,945 1,009,439 Residential Construction (“Resi. C&D”) 289,553 311,208 Consumer and other 54,591 52,957 Total 8,004,528$ 8,068,718$ (Dollars in thousands)

Third Quarter Asset Quality Summary 8 Nonperforming Loans by Type (1) Combined represents the simple addition of legacy balances for 2022; estimated. Nonperforming assets decreased during the quarter Allowance for credit losses on loans: • As of September 30, 2023, was $93.6 million, or 1.17% of total loans compared to $100.2 million, or 1.24% of total loans as of June 30, 2023 Allowance for credit losses on loans to nonperforming loans: • As of September 30, 2023, was 244.38% compared to 231.14% as of June 30, 2023 C&I 39.2% CRE 35.4% C&D 0.4% 1-4 Family 22.1% Other 2.9% Nonaccrual Loans with No Related Allowance Nonaccrual Loans with Related Allowance Total Nonaccrual Loans Commercial and industrial 10,337$ 4,634$ 14,971$ Paycheck protection program (PPP) 20 — 20 Commercial real estate (including multi-family residential) 10,820 2,743 13,563 Commercial real estate construction and land development 170 — 170 1-4 family residential (including equity) 6,849 1,593 8,442 Residential construction 635 — 635 Consumer and other 81 409 490 28,912$ 9,379$ 38,291$ (Dollars in thousands) Q3 2023 Q2 2023 Total nonperforming loans 38,291$ 43,349$ Nonperforming loans to total loans 0.48% 0.54% Total nonperforming assets 38,291$ 43,349$ Nonperforming assets to total 0.36% 0.40% Net charge-offs 8,116$ 236$ Net charge-offs to average loans 0.40% 0.01% (Dollars in thousands)

Regulatory Capital Ratios 9 (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. Year-to-date regulatory capital ratios have grown meaningfully Minimum Required Plus Capital Conservation Buffer Consolidated Capital Ratios Total Capital Ratio (to risk-weighted assets) 13.42% 12.39% 10.50% Common Equity Tier 1 Capital Ratio (to risk-weighted assets) 11.14% 10.04% 7.00% Tier 1 Capital Ratio (to risk-weighted assets) 11.25% 10.15% 8.50% Tier 1 Leverage Ratio (to average tangible assets) 9.82% 8.55% 4.00% Tangible equity to tangible assets (1) 8.37% 7.24% N/A Bank Capital Ratios Total Capital Ratio (to risk-weighted assets) 13.13% 12.02% 10.50% Common Equity Tier 1 Capital Ratio (to risk-weighted assets) 11.63% 10.46% 7.00% Tier 1 Capital Ratio (to risk-weighted assets) 11.63% 10.46% 8.50% Tier 1 Leverage Ratio (to average tangible assets) 10.15% 8.81% 4.00% Q3 2023 Q4 2022

10 Strong Liquidity Profile Stellar is well-positioned to manage through current environment Sources of Liquidity at September 30, 2023 Sources of Liquidity Estimated Uninsured Deposits at September 30, 2023 (1) Brokered deposit capacity is governed by internal policy limits. (Dollars in millions) Cash 302$ Unpledged securities 703 Total on-balance sheet 1,005 FHLB available capacity 2,276 Discount window available capacity 824 Total immediate available liquidity 4,105 Available brokered deposit capacity(1) 1,162 Total available liquidity 5,267$ Amount 106.3% 136.4% Immediate available liquidity coverage of estimated uninsured deposits, net of collateralized deposits Total available liquidity coverage of estimated uninsured deposits, net of collateralized deposits (Dollars in millions) Total deposits 8,687$ Estimated uninsured deposits 4,727 Less: collateralized deposits (866) Estimated uninsured, net of collateralized deposits 3,861$ Percent of total deposits 44.5% Amount

11 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 rapid capital-build to continue

4.8% 4.1% 2.1% Houston MSA Texas USA 5.0% 4.4% 2.4% Houston MSA Texas USA 29.8 27.2 12.0 10.2 8.6 7.8 7.6 6.7 5.7 JP Morgan Wells Fargo BofA Zions PNC Stellar Cadence Frost Capital One Prosperity Diverse and Strong Markets of Operation 12 Houston is Diverse, with Significant Economic TailwindsGreater Houston Market  Houston is the #1 most diverse city in the U.S. based on socioeconomic factors, according to Wallet Hub  26th largest economy in the world – if ranked as a country − 15th largest population in the U.S – if ranked as a state  Port Houston is the largest Gulf Coast container port, 1st in foreign tonnage for 26 consecutive years  Houston is home to the Texas Medical Center, the world's largest medical complex, which has 10 million annual patient encounters  Business friendly: #3 among U.S. metro areas in Fortune 500 headquarters (26)  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, 2023. 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, Texas Medical Center, and Wallet Hub. $157 Est. Population Growth ’23-’28 Est. Number of Households Growth ’23-’28 Population Change (’18-’23) Median Household Income (’23) Significant Deposit Share Houston MSA: 5.5% Texas: 5.4% / U.S: 2.4% Houston MSA: $74,325 Texas: $71,347 / U.S: $73,503 Stellar has over $8.6 billion in deposits in the Houston region(1) Houston HQ Bank

Professional and Business Services 17% Government 13% Education and Health Services 13% Leisure and Hospitality 10% Retail Trade 9% Manufacturing 7% Construction 6% Transportation, Warehousing, and Utilities 6% Financial Activities 6% Wholesale Trade 5% Other Services 4% Mining and Logging 2% Information 1% 4.6% 5.4% 4.0% 3.2% 2.6% 0.9% 4.7% 6.1% 2.8% 2.9% 2.9% (3.9)% 2.2% (0.6)% Mining and Logging Private Education and Health Services Financial Activities Leisure and Hospitality Professional and Business Services Information Wholesale Trade Transportation, Warehousing, and Utilities Government Total Nonfarm Manufacturing Construction Retail Trade Other Services Diversified and Growing Economy 13 1) Data is preliminary as of September 2023, from the U.S. Bureau of Labor Statistics Source: U.S. Bureau of Labor Statistics Houston vs. U.S. Job Change by Industry (Sept ‘22 – Sept. ‘23)(1) Diversified Economy by Job Sector(1) Commentary  Houston’s economy has become much more diversified over the years, while remaining the energy capital of the United States  Houston's largest job sector, professional and business services, recovered faster than U.S. and has shown sector growth  Financial activities showed a large gain over the last year versus the United States United States Houston MSA

2.0 3.0 4.0 5.0 6.0 7.0 2.0 2.5 3.0 3.5 2007 2009 2011 2013 2015 2017 2019 2021 2023 Houston is a Resilient Market 14  Since the Great Recession, Houston has proven its resiliency, weathering economic cycles and natural disasters − Houston welcomed 2.1 million new residents and created over 905 thousand jobs since 2007 P op u lation (M ) O il Pr ic e D ec lin e G re at R ec es si on Ik e H ar ve y C O V ID -1 9 E m p lo ym en t ( M ) Employment Population1) Data is preliminary as of September 2023, from the U.S. Bureau of Labor Statistics Source: U.S. Bureau of Labor Statistics, Texas Workforce Commission

302,570 (300,000) (200,000) (100,000) 0 100,000 200,000 300,000 400,000 H ou st on D al la s N ew Y or k A tla nt a Ph oe ni x M ia m i Ta m pa Se at tl e R iv er si de B os to n D en ve r W as hi ng to n Sa n Fr an ci sc o M in ne ap ol is Ph ila de lp hi a Sa n D ie go B al ti m or e D et ro it Lo s A ng el es C hi ca go Houston’s Growth Projected to Continue 15 Source: S&P Capital IQ Pro as of June 30, 2022; Oxford Economics, December 2022, CBRE Research. 2010-2023 Population Change (%) Houston has the highest projected net migration 20 most populated metros 5.20% 1.35% 0.46% 24.61% 24.45% 19.57% 8.34% 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 growth is not expected to stop any time soon either, as it is projected to see the largest net migration compared to the top 30 most populated metros • The continued growth of the Houston metro will strengthen and diversify the greater economy, benefiting the businesses and constituents Houston is projected to add over 302,000 people by net migration in the next 5 years – a 60,500/year average

$92,662 $86,611 $83,193 $81,625 $74,325 $71,347 $73,503 New York MSA Los Angeles MSA Chicago MSA Dallas MSA Houston MSA Texas U.S. $787,500 $978,000 $335,000 $385,000 $330,000 $341,700 $400,528 New York MSA Los Angeles MSA Chicago MSA Dallas MSA Houston MSA Texas U.S. 8.5x 11.3x 4.0x 4.7x 4.4x 4.8x 5.4x New York MSA Los Angeles MSA Chicago MSA Dallas MSA Houston MSA Texas U.S. Housing Market and Cost of Living 16 • Cost of living in Houston is 8.3% less than that of the U.S. market average while the median household income is above the U.S. median • Houston is #2 in U.S. annual new home starts and closing, only behind Dallas 2 0 2 3 M ed ia n H o u se h o ld I n co m e 2 0 2 3 M ed ia n H o m e P ri ce H H I to M ed ia n H o m e P ri ce R at io

Appendix: Non-GAAP Reconciliation(1) 17 (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) Annualized. Net income $ 30,908 $ 35,175 (+) Provision for credit losses 2,315 1,915 (+) Provision for income taxes 7,445 7,467 Pre-tax, pre-provision Income $ 40,668 $ 44,557 Total average assets $ 10,741,295 $ 10,740,138 Pre-tax, pre-provision return on average assets(2) 1.50% 1.66% Pre-tax, pre-provision income $ 40,668 $ 44,557 (+) Acquisition and merger-related expenses 3,421 2,897 (+) Amortization of intangibles 6,876 6,881 (-) Purchase accounting accretion 12,400 12,572 (-) (Loss) gain on sale of assets - (6) Adjusted pre-tax, pre-provision net income $ 38,565 $ 41,769 Adjusted pre-tax, pre-provision return on average assets(2) 1.42% 1.56% Total noninterest expense $ 70,748 $ 69,207 (+) Acquisition and merger-related expenses 3,421 2,897 (+) Amortization of intangibles 6,876 6,881 Net interest income 106,721 108,281 (-) Purchase accounting accretion 12,400 12,572 Total noninterest income 4,695 5,483 (-) (Loss) gain on sale of assets - (6) Adjusted efficiency ratio 61.05% 58.73% Q3 2023 Q2 2023 (Dollars in thousands) Total shareholders' equity $ 1,460,846 $ 1,458,680 (-) Goodw ill and core deposit intangibles, net 620,262 627,065 Tangible shareholders' equity $ 840,584 $ 831,615 Total assets $ 10,665,460 $ 10,778,351 (-) Goodw ill and core deposit intangibles, net 620,262 627,065 Tangible assets $ 10,045,198 $ 10,151,286 Tangible equity to tangible assets 8.37% 8.19% Net interest income (tax equivalent) $ 106,919 $ 108,509 (-) Purchase accounting accretion 12,400 12,572 Adjusted net interest income (tax equivalent) $ 94,519 $ 95,937 Average earning assets $ 9,697,553 $ 9,693,527 Net interest margin (tax equivalent)(2) 4.37% 4.49% Net interest margin (tax equivalent) excluding PAA(2) 3.87% 3.97% Interest on loans, as reported $ 138,948 $ 133,931 (-) Purchase accounting accretion (loans) 12,400 12,572 Interest on loans w ithout loan discount accretion $ 126,548 $ 121,359 Average loans $ 8,043,706 $ 7,980,856 Loan yield, as reported 6.85% 6.73% Loan yield, w ithout discount accretion 6.24% 6.10% Q3 2023 Q2 2023 (Dollars in thousands)

18 NYSE: STEL


Texas	001-38280	20-8339782
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(I.R.S. Employer Identification Number)


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£			Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

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Exhibit Number			Description of Exhibit
99.1			Press Release issued dated October 2 7 , 2023
99.2			Third Quarter 2023 Earnings Presentation dated October 2 7 , 2023
104			Cover Page Interactive Data File (embedded within the Inline XBRL document)


	STELLAR BANCORP, INC.

Date: October 27, 2023	By:	/s/ Paul P. Egge
		Paul P. Egge
		Chief Financial Officer