Table of Contents 21UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K S ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2023 OR £ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO COMMISSION FILE NUMBER: 001-38280 Stellar Bancorp, Inc. (Exact name of registrant as specified in its charter) Texas 20-8339782 (State or other jurisdi ...

Forward-Looking Statements and Non-GAAP Financial Measures 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. GAAP Reconciliation of Non-GAAP Financial Measures Stellar Bancorp, Inc. - Snapshot Strong core earnings power and capital posit ...

Stellar Bancorp, Inc. (NYSE:STEL) Q4 2023 Earnings Conference Call January 26, 2024 9:00 AM ET Company Participants Courtney Theriot - Chief Accounting Officer Robert Franklin - CEO Paul Egge - CFO Ramon Vitulli - President & CEO of the Bank Conference Call Participants David Feaster - Raymond James Matt Olney - Stephens John Rodis - Janney Operator Good morning. My name is Crista, and I'll be your conference operator today. At this times, I would like to welcome everyone to the Stellar Bancorp Fourth Quart ...

Merger and Acquisition - The merger of Allegiance Bancshares, Inc. and CBTX, Inc. resulted in Stellar Bancorp, Inc. becoming one of the largest banks based in Houston, Texas [130]. - The company recorded $273.6 million of goodwill from the merger, reflecting the fair value of acquired assets and liabilities [139]. - The company completed the final tax returns related to CBTX's business, resulting in an increase of $58 thousand in income tax balances and goodwill [131]. - The merger was accounted for as a reverse merger, with Allegiance as the accounting acquirer and CBTX as the legal acquirer [131]. - The company’s financial results for periods after the merger are not comparable to those prior to the merger due to significant impacts on all aspects of financial statements [132]. - Goodwill increased by $58 thousand during Q3 2023, finalizing all purchase accounting adjustments related to the Merger [145]. - Acquisition and merger-related expenses totaled $3.4 million for Q3 2023, down from $10.6 million in Q3 2022 [154]. - The company engaged an independent third-party service provider for fair value determination as of September 30, 2023, due to a decrease in stock price and market capitalization [147]. Financial Performance - Net income for Q3 2023 was $30.9 million, or $0.58 per diluted share, compared to $14.3 million, or $0.50 per diluted share in Q3 2022, driven by a $46.0 million increase in net interest income [154]. - Net interest income before provision for credit losses for Q3 2023 was $106.7 million, an increase of $46.0 million, or 75.8%, from $60.7 million in Q3 2022, primarily due to the Merger [158]. - Interest income for Q3 2023 was $151.3 million, an increase of $83.4 million, or 122.8%, compared to $67.9 million in Q3 2022, attributed to the Merger and increased interest rates [159]. - Average interest-earning assets increased by $3.37 billion, or 53.3%, for Q3 2023 compared to Q3 2022, primarily due to the increase in loans from the Merger [159]. - Interest expense for Q3 2023 was $44.5 million, an increase of $37.4 million, or 519.4%, compared to $7.2 million in Q3 2022, driven by higher funding costs due to increased interest rates [160]. - Tax equivalent net interest margin for Q3 2023 was 4.37%, an increase of 52 basis points from 3.85% in Q3 2022, primarily due to the Merger and increased yield on interest-earning assets [161]. - Annualized return on average assets for the nine months ended September 30, 2023, was 1.28%, compared to 0.94% for the same period in 2022 [157]. - For the nine months ended September 30, 2023, net interest income before the provision for credit losses was $330.8 million, an increase of $157.5 million, or 90.9%, compared to $173.3 million for the same period in 2022 [166]. - Interest income for the nine months ended September 30, 2023, was $438.6 million, up $247.6 million, or 129.6%, from $191.0 million in the same period of 2022, primarily due to the Merger [167]. - Average interest-earning assets increased by $3.13 billion, or 47.4%, for the nine months ended September 30, 2023, compared to the same period in 2022 [167]. - Interest expense for the nine months ended September 30, 2023, was $107.8 million, an increase of $90.1 million, or 509.8%, compared to $17.7 million for the same period in 2022 [168]. - The tax equivalent net interest margin for the nine months ended September 30, 2023, was 4.55%, an increase of 100 basis points compared to 3.55% for the same period in 2022 [169]. - The average yield on interest-earning assets was 6.02% for the nine months ended September 30, 2023, an increase of 215 basis points over the same period in 2022 [169]. - The company reported a net interest rate spread of 2.97% for the three months ended September 30, 2023, compared to 3.45% for the same period in 2022 [164]. - Net interest income increased by $40.5 million, or 46.0%, for the three months ended September 30, 2023, compared to the same period in 2022, reaching a total of $126.6 million [176]. Credit Losses and Allowances - The provision for credit losses for the three and nine months ended September 30, 2023, was influenced by a less favorable outlook on macroeconomic variables such as interest rates, GDP, and unemployment [138]. - The allowance for credit losses is based on estimates of expected losses in various segments of performing loans, specifically identified losses, and qualitative factors related to economic conditions [134]. - The company’s estimates of credit losses are subject to significant management judgment and may be affected by downturns in loan quality and economic conditions [137]. - Provision for credit losses was recorded at $2.3 million for the three months ended September 30, 2023, compared to $2.0 million for the same period in 2022, reflecting a less favorable macroeconomic outlook [177]. - The allowance for credit losses on loans was $93.6 million, or 1.17% of total loans, as of September 30, 2023, compared to $93.2 million, or 1.20% of total loans, as of December 31, 2022 [210]. - The net charge-offs for all loan types were $8.5 million for the period ending September 30, 2023 [210]. - Nonperforming assets totaled $38.3 million, or 0.48% of total assets, at September 30, 2023, down from $45.0 million, or 0.41% of total assets, at December 31, 2022 [205]. - The allowance for credit losses on unfunded commitments was $10.9 million, down from $12.0 million at December 31, 2022 [212]. Loans and Deposits - Total loans reached $8.00 billion as of September 30, 2023, an increase of $249.8 million, or 3.2%, compared to December 31, 2022 [193]. - The commercial and industrial loan portfolio rose by $18.8 million, or 1.3%, to $1,474.6 million as of September 30, 2023 [195]. - The commercial real estate loan portfolio increased by $145.1 million, or 3.7%, to $4,076.6 million as of September 30, 2023 [197]. - The residential construction loan portfolio increased by $21.4 million, or 8.0%, to $289.6 million as of September 30, 2023 [202]. - The consumer and other loan portfolio increased by $7.1 million, or 15.0%, to $54.6 million as of September 30, 2023 [203]. - The commercial real estate construction and land development loans increased by $40.6 million, or 3.9%, to $1,078.3 million as of September 30, 2023 [199]. - The average loans outstanding were $7,957.9 million for the period ending September 30, 2023 [210]. - Total deposits at September 30, 2023, were $8.69 billion, a decrease of $581.0 million, or 6.3%, from $9.27 billion at December 31, 2022 [222]. - Noninterest-bearing deposits decreased by $573.9 million, or 13.6%, to $3.66 billion at September 30, 2023, compared to $4.23 billion at December 31, 2022 [222]. - Interest-bearing deposits were $5.03 billion at September 30, 2023, a slight decrease of $7.1 million, or 0.1%, from $5.04 billion at December 31, 2022 [222]. - Estimated uninsured deposits totaled $4.73 billion, with uninsured deposits net of collateralized deposits at $3.86 billion, or 44.5% of total deposits [222]. - The total amount of time deposits exceeding the FDIC insurance limit of $250,000 was $560.2 million as of September 30, 2023 [223]. Capital and Funding - Total shareholders' equity increased to $1.46 billion as of September 30, 2023, up from $1.38 billion at December 31, 2022, representing an increase of $77.7 million [247]. - The Bank's total capital to risk-weighted assets ratio was 13.42% as of September 30, 2023, compared to 12.39% at December 31, 2022 [248]. - Common Equity Tier 1 capital to risk-weighted assets ratio improved to 11.14% as of September 30, 2023, from 10.04% at December 31, 2022 [248]. - The Bank's Tier 1 Leverage ratio increased to 9.82% as of September 30, 2023, compared to 8.55% at December 31, 2022 [248]. - The company had a total borrowing capacity of $3.82 billion, with $2.28 billion available and $1.54 billion outstanding in FHLB advances and letters of credit [224]. - The company had $324.0 million of FHLB short-term advances outstanding at a weighted-average rate of 5.62% as of September 30, 2023 [224]. - The company is subject to capital adequacy requirements imposed by the Federal Reserve and FDIC, with a minimum total capital ratio of 8.0% [244]. Interest Rate Risk - Interest rate risk simulations indicated a potential decrease in net interest income of 3.7% with a +300 basis point change in interest rates as of September 30, 2023 [255]. - The economic value of equity could decrease by 6.1% with a +300 basis point change in interest rates as of September 30, 2023 [255]. - During the nine months ended September 30, 2023, there was a decrease in noninterest bearing deposits and certain interest bearing deposits, alongside an increase in loans [256]. - The transition away from LIBOR has been completed successfully [257].

Stellar Bancorp, Inc. (NYSE:STEL) Q3 2023 Earnings Conference Call October 27, 2023 9:00 AM ET Company Participants Courtney Theriot - Chief Accounting Officer Bob Franklin - Chief Executive Officer Paul Egge - Chief Financial Officer Ray Vitulli - President and Chief Executive Officer of the Bank Conference Call Participants Eric Spector - Raymond James Will Jones - KBW Graham Dick - Piper Sandler John Rodis - Janney Matt Olney - Stephens Operator Good day, and thank you for standing by. Welcome to the Ste ...

Second Quarter 2023 Earnings Presentation Forward-Looking Statements and Non-GAAP Financial Measures 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 me ...

Financial Data and Key Metrics Changes - The company reported a net income of $35.2 million for Q2 2023, with diluted earnings per share of $0.66, a slight decrease from $37.1 million or $0.70 in Q1 2023, primarily due to rising funding costs [7][9] - The annualized return on average assets (ROAA) was 1.31% and return on tangible common equity was 17.05% [7] - Net interest margin (NIM) contracted from 4.80% in Q1 to 4.49% in Q2, and from 4.38% to 3.97% when excluding purchase accounting accretion [9] Business Line Data and Key Metrics Changes - The company experienced modest loan growth of just over $182 million, with an allowance for credit losses to total loans at 1.24% [11] - Non-interest income normalized to a lower level, while non-interest expenses decreased due to lower merger expenses [20] Market Data and Key Metrics Changes - The company maintained a strong base of non-interest bearing deposits at around 43% of total deposits, which helped manage funding costs [8] - Wholesale funding sources increased significantly, with FHLB advances rising from $239 million to $370 million and brokered CDs from $203 million to $538 million in Q2 [21] Company Strategy and Development Direction - The company aims to concentrate on capital, liquidity, and credit management, tightening credit underwriting while still achieving modest loan growth [5] - The management believes the industry will continue to consolidate, and the company intends to position itself to benefit from this trend [19] Management's Comments on Operating Environment and Future Outlook - The management acknowledged challenges from rising interest rates and economic uncertainty but expressed optimism about stabilizing deposit costs and attracting new deposits [4][5] - The company is focused on efficiencies through technology and expense control as it integrates operations post-merger [17] Other Important Information - Total risk-based capital increased from 12.39% at year-end 2022 to 13.03% at June 30 [10] - The company is optimistic about its future prospects, citing a strong team and successful rebranding efforts [12] Q&A Session Summary Question: Trends in deposits and stabilization - Management noted that most deposit migration occurred earlier in the quarter, with encouraging signs of net new core deposits being attracted [33] Question: Loan growth outlook - The company expects moderate loan growth, focusing on good margins and safe loans, with a cautious approach to commercial real estate [68][70] Question: Capital priorities and M&A - The management indicated a focus on building capital for potential M&A opportunities while balancing dividends and share repurchases [113][114] Question: Tax rate expectations - The weighted average tax rate year-to-date is expected to be more reflective of future performance [122]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ______________________________________________ FORM 10-Q _______________________________________________ S QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2023 OR £ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO COMMISSION FILE NUMBER: 001-38280 ____________________ ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ______________________________________________ FORM 10-Q _______________________________________________ S QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2023 OR £ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO COMMISSION FILE NUMBER: 001-38280 ___________________ ...

First Quarter 2023 Earnings Presentation 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 industr ...