Exhibit 99.1 PRESS RELEASE STELLAR BANCORP, INC. REPORTS SECOND QUARTER 2024 RESULTS HOUSTON, July 26, 2024 - Stellar Bancorp, Inc. (the "Company" or "Stellar") (NYSE: STEL) today reported net income of $29.8 million, or diluted earnings per share of $0.56, for the second quarter of 2024 compared to net income of $26.1 million, or diluted earnings per share of $0.49, for the first quarter of 2024. "We are pleased to announce our second quarter 2024 results," said Robert R. Franklin, Jr., Stellar's Chief Exe ...

Highlights PETAH TIKVA, Israel, June 17, 2024 (GLOBE NEWSWIRE) -- Gilat Satellite Networks Ltd. (Nasdaq: GILT, TASE: GILT), a worldwide leader in satellite networking technology, solutions, and services, announced today that it has signed a definitive agreement to acquire Stellar Blu Solutions LLC, which will become a core component of Gilat's IFC growth strategy. Gilat will pay an initial cash payment of $98 Million at closing, subject to customary adjustments, and up to an additional $147 Million payable ...

Financial Data and Key Metrics Changes - The company reported a first quarter net income of $26.1 million or $0.49 per diluted share, down from $27.3 million or $0.51 per diluted share in the fourth quarter of 2023, reflecting an annualized return on average assets of 0.98% compared to 1.02% in the previous quarter [14] - Net interest income decreased to $102.1 million from $105.9 million in the fourth quarter, primarily due to a decrease in purchase accounting accretion [16] - The net interest margin for the first quarter was 4.26%, down from 4.4% in the fourth quarter, while excluding purchase accounting accretion, it remained unchanged at 3.91% [17] - A credit provision of $4.1 million was recorded, significantly higher than the $1 million in the prior quarter, reflecting conservative reserving for potential problem credits [17] Business Line Data and Key Metrics Changes - The company originated approximately $335 million in new loans during the first quarter, which is consistent with prior quarters, but faced $256 million in payoffs, leading to a net decrease in loan balances [31][32] - Noninterest income was reported at $6.3 million, bolstered by a gain on asset sales and some SBIC income [18] - Noninterest expense was approximately $71.4 million, aligning with expectations and reflecting seasonal dynamics [19] Market Data and Key Metrics Changes - The Houston market experienced significant growth, with a population increase of nearly 140,000 and over 100,000 new jobs created in the previous year, positioning the company favorably in a strong market [12][24] - The company noted that its funding profile remains strong despite a decrease in noninterest-bearing deposits, which fell below the 40% threshold [23] Company Strategy and Development Direction - The company is focused on building capital, strengthening liquidity, and closely monitoring credit quality, maintaining a defensive posture regarding loan growth [10][15] - The strategic positioning in the Houston market, characterized by job growth and affordability, is expected to support the company's success in 2024 and beyond [25] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by higher interest rates affecting cash flows and loan demand, but expressed confidence in the company's ability to manage these pressures [5][34] - The management team remains optimistic about the future, citing strong capital and liquidity metrics, and a commitment to maintaining a conservative approach to underwriting [10][20] Other Important Information - The total risk-based capital ratio improved to 14.62% at the end of the first quarter, up from 14.02% at the end of 2023 [20] - The company aims to increase its securities as a percentage of assets to around 15%, currently at 14.2% [57] Q&A Session Summary Question: Drivers behind the decline in loan balances - The company originated $335 million in new loans but faced $256 million in payoffs, leading to a net decrease in loan balances. The underwriting posture and higher interest rates have contributed to slower loan growth [31][34] Question: Trends in core deposit growth - The company is onboarding new accounts successfully, although the dollar amount in noninterest-bearing deposits has decreased due to broker deposits impacting the overall mix [35][36] Question: Increase in nonaccruals and credit quality - The increase in nonaccruals was primarily due to two C&I credits facing management issues, along with some smaller construction loans encountering unexpected cost increases [38][39] Question: Core loan yields and repricing schedule - New loans were originated at a note rate of $8.49, with renewed loans averaging $8.05. The company is managing the impact of higher rates on borrowers, who are generally accepting of the changes [46][49] Question: Outlook for net interest margin - The company anticipates pressure on net interest margin in the second quarter due to rising deposit costs and an increase in nonperformers [53] Question: Investment securities portfolio - The company is focused on building liquidity through its securities portfolio, aiming for better yields moving forward [54]

Income Sources - The company generates most of its income from interest income on loans, investments in securities, and service charges on customer accounts[115]. - Net interest income is the largest source of revenue, influenced by changes in interest-earning assets and interest-bearing liabilities[115]. - The company monitors net interest spread and net interest margin to evaluate net interest income[115]. - Interest income increased by $8.0 million, or 5.7%, to $148.4 million in Q1 2024, driven by higher-yielding loans and increased average loans outstanding[138]. - Noninterest income totaled $6.3 million in Q1 2024, a decrease of $1.2 million, or 16.0%, compared to $7.5 million in Q1 2023, mainly due to reduced debit card and ATM income[150]. Financial Performance - Net income for Q1 2024 was $26.1 million, or $0.49 per diluted share, down from $37.1 million, or $0.70 per diluted share in Q1 2023, primarily due to a $13.7 million decrease in net interest income[135]. - Net interest income before provision for credit losses decreased by $13.7 million, or 11.8%, to $102.1 million in Q1 2024 compared to $115.8 million in Q1 2023[137]. - The efficiency ratio improved to 66.18% in Q1 2024 from 58.96% in Q1 2023, indicating better management of noninterest expenses relative to income[136]. - Noninterest expense decreased by $1.2 million, or 1.6%, to $71.4 million for the three months ended March 31, 2024, primarily due to a decrease in acquisition and merger-related expenses[152]. Credit Losses and Reserves - The allowance for credit losses is based on expected losses, historical loss experience, and qualitative factors, with management considering it the most critical accounting estimate[119]. - The provision for credit losses was $4.1 million in Q1 2024, up from $3.7 million in Q1 2023, reflecting changes to specific reserves[147]. - The allowance for credit losses on loans was $96.3 million as of March 31, 2024, compared to $91.7 million as of December 31, 2023[160]. - The provision for credit losses on loans for the first quarter of 2024 was $5,315 thousand, compared to $3,200 thousand in the same period of 2023, indicating a 66% increase[176]. Asset Quality - Nonperforming assets totaled $57.1 million, or 0.53% of total assets, at March 31, 2024, compared to $39.2 million, or 0.37% of total assets, at December 31, 2023[172]. - The allowance for credit losses on loans to nonperforming loans ratio was 168.54% as of March 31, 2024, down from 221.56%[176]. - Total charge-offs for all loan types in Q1 2024 were $841 thousand, compared to $434 thousand in Q1 2023, reflecting a 94% increase[176]. Deposits and Borrowings - Total deposits as of March 31, 2024, were $8.79 billion, a decrease of $78.8 million, or 0.9%, from $8.87 billion at December 31, 2023[188]. - Noninterest-bearing deposits decreased by $223.7 million, or 6.3%, to $3.32 billion, while interest-bearing deposits increased by $144.9 million, or 2.7%, to $5.47 billion[188]. - Total immediate contingent funding sources were $4.31 billion, or 49.0% of total deposits at March 31, 2024, potentially increasing to approximately $5.29 billion, or 60.2% of deposits, with policy-driven capacity for brokered deposits[209]. Capital and Liquidity - Total shareholders' equity increased to $1.53 billion at March 31, 2024, compared to $1.52 billion at December 31, 2023, primarily due to net income of $26.1 million[215]. - The Bank is well-capitalized, meeting all capital adequacy requirements imposed by the Federal Reserve and FDIC[213]. - The liquidity position is continuously monitored, with stress scenarios incorporated into the contingency funding plan to assess potential liquidity outflows[206]. Interest Rate Risk Management - The company uses an interest rate risk simulation model to assess the sensitivity of net interest income and the balance sheet, incorporating various attributes such as reset dates and prepayment assumptions[222]. - The company’s asset liability management policy aims to minimize interest rate risk while maximizing income, with regular reviews conducted by the Asset Liability Committee (ALCO)[221]. - The assumptions used in the interest rate risk model are inherently uncertain, leading to potential discrepancies between simulated and actual results due to market conditions[222]. Economic Conditions and Market Impact - Economic uncertainty and market volatility have led to a decrease in the company's stock price and market capitalization, triggering an interim goodwill impairment analysis[128]. - Changes in economic conditions, competitive landscape, and loan portfolio composition affect the company's net interest income[116]. - The company faces risks related to uninsured deposits, economic conditions, and changes in interest rates that could impact future performance[112].

Exhibit 99.1 PRESS RELEASE STELLAR BANCORP, INC. REPORTS FIRST QUARTER 2024 RESULTS HOUSTON, April 26, 2024 - Stellar Bancorp, Inc. (the "Company" or "Stellar") (NYSE: STEL) today reported net income of $26.1 million, or diluted earnings per share of $0.49, for the first quarter of 2024 compared to net income of $27.3 million, or diluted earnings per share of $0.51, for the fourth quarter of 2023. "We are pleased to announce our first quarter 2024 results that reflect our continued focus on building capital ...

Part I [Business](index=3&type=section&id=Item%201.%20Business) Stellar Bancorp, Inc. is a Houston-based bank holding company providing commercial banking services to small- to medium-sized businesses, operating 54 centers with **$10.65 billion** in assets as of December 31, 2023 - On October 1, 2022, Allegiance Bancshares, Inc. and CBTX, Inc. completed a merger of equals, with CBTX as the legal survivor, renamed **Stellar Bancorp, Inc. (STEL)**, and Allegiance Bank as the surviving bank entity, later renamed **Stellar Bank**[13](index=13&type=chunk)[14](index=14&type=chunk) - The merger was accounted for as a reverse merger, with Allegiance as the accounting acquirer, making financial results after October 1, 2022, not directly comparable to prior periods which only reflect Allegiance's historical results[15](index=15&type=chunk)[261](index=261&type=chunk) - The company operates **54 full-service banking centers**, primarily concentrated in the Houston MSA (**37 centers**) and the Beaumont MSA (**16 centers**), with one in Dallas[16](index=16&type=chunk) - The business strategy is centered on a community banking model that emphasizes local decision-making and strong customer relationships, combined with a disciplined approach to strategic acquisitions to expand its presence in Texas[19](index=19&type=chunk)[20](index=20&type=chunk)[21](index=21&type=chunk) Key Financial Metrics as of December 31, 2023 | Metric | Value (Billions) | | :--- | :--- | | Total Assets | $10.65 | | Total Loans | $7.93 | | Total Deposits | $8.87 | | Total Shareholders' Equity | $1.52 | [Human Capital](index=6&type=section&id=Human%20Capital) The company employed 980 individuals as of December 31, 2023, emphasizing diversity and inclusion through development programs and competitive compensation Workforce Demographics (as of Dec 31, 2023) | Metric | Value | | :--- | :--- | | Total Employees | 980 | | Non-White Employees | 48% | | Women Employees | 71% | - The company launched "The Stellar Odyssey," a cultural foundation program, and a revised Officer Development Program in 2023 to support employee engagement and career development[39](index=39&type=chunk) [Regulation and Supervision](index=7&type=section&id=Regulation%20and%20Supervision) Operating in a highly regulated environment, the company and its bank subsidiary met all regulatory capital requirements as of December 31, 2023, with the bank classified as "well capitalized" - Stellar Bancorp, Inc. is regulated as a bank holding company by the **Federal Reserve**, while Stellar Bank is supervised by the **Texas Department of Banking (TDB)** and the **FDIC**[47](index=47&type=chunk)[48](index=48&type=chunk) - As of December 31, 2023, Stellar Bank met the requirements to be classified as "**well capitalized**" under prompt corrective action regulations[69](index=69&type=chunk) - The company is subject to the **Durbin Amendment**, which limits interchange fees, as its assets exceed the **$10 billion** threshold[52](index=52&type=chunk) Regulatory Capital Ratios as of December 31, 2023 (Company) | Ratio | Actual | Minimum Required (with Buffer) | | :--- | :--- | :--- | | CET1 to risk-weighted assets | 11.77% | 7.00% | | Tier 1 capital to risk-weighted assets | 11.89% | 8.50% | | Total capital to risk-weighted assets | 14.02% | 10.50% | | Tier 1 capital to average tangible assets | 10.18% | 4.00% | [Risk Factors](index=18&type=section&id=Item%201A.%20Risk%20Factors) The company faces diverse risks including financial industry instability, economic downturns, geographic concentration, merger integration challenges, credit quality, liquidity, interest rate fluctuations, cybersecurity, and regulatory compliance - **Market & Economic Risks**: The company is exposed to risks from financial industry instability (e.g., 2023 bank failures), economic downturns, inflation, and its geographic concentration in the Houston and Beaumont MSAs, which are influenced by the energy sector[116](index=116&type=chunk)[119](index=119&type=chunk)[125](index=125&type=chunk) - **Merger & Growth Risks**: There are risks that the anticipated benefits and cost savings from the merger with CBTX may not be fully realized, and future growth through acquisitions also carries risks related to integration, due diligence, and potential goodwill impairment[136](index=136&type=chunk)[139](index=139&type=chunk)[143](index=143&type=chunk) - **Credit & Lending Risks**: A significant portion of the loan portfolio consists of real estate loans (**81.3% of total loans**), including commercial real estate and construction loans, which carry greater credit risk, and the focus on small- to medium-sized businesses also presents risk as these borrowers may be more vulnerable to economic downturns[149](index=149&type=chunk)[151](index=151&type=chunk)[155](index=155&type=chunk) - **Liquidity & Interest Rate Risks**: The company is subject to liquidity risk, with a notable concentration of deposits from municipalities (**$1.17 billion**) that can be more volatile, and fluctuations in interest rates can significantly impact net interest income and the value of its securities portfolio[160](index=160&type=chunk)[164](index=164&type=chunk)[166](index=166&type=chunk) - **Cybersecurity & Regulatory Risks**: The company depends on third-party technology and faces threats from cybersecurity attacks, and as a bank with over **$10 billion** in assets, it is subject to heightened regulatory scrutiny, including supervision by the CFPB and increased FDIC insurance premiums[169](index=169&type=chunk)[170](index=170&type=chunk)[187](index=187&type=chunk) [Unresolved Staff Comments](index=38&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the SEC - None[221](index=221&type=chunk) [Cybersecurity](index=38&type=section&id=Item%201C.%20Cybersecurity) The company's cybersecurity program, overseen by the Board and led by the CISO, integrates into ERM, focusing on safeguards, incident response, and training, with no material threats identified - Cybersecurity risk management is overseen by the **Board**, the **Risk Committee**, and the **Technology Committee**, which receive regular reports from the Chief Risk Officer (CRO) and CISO[223](index=223&type=chunk)[227](index=227&type=chunk) - The company's strategy includes technical safeguards, a comprehensive incident response plan, engagement with outside experts, robust third-party risk management, and mandatory employee training[223](index=223&type=chunk) - The company has recently enhanced its cybersecurity leadership by adding a **Director of Information Security Officer (DISO)** with over seven years of experience as a regulator in information security[228](index=228&type=chunk) - During the fiscal year, the company has not identified any cybersecurity risks or incidents that have materially affected or are reasonably expected to materially affect the business[226](index=226&type=chunk) [Properties](index=40&type=section&id=Item%202.%20Properties) The company operates 54 banking centers, 34 owned and 20 leased, primarily in the Houston and Beaumont MSAs, with its principal executive office in Houston - As of December 31, 2023, the company operated **54 banking centers**: **37** in the Houston MSA, **16** in the Beaumont MSA, and **one** in Dallas[231](index=231&type=chunk) - The company owns **34** of its banking centers and leases the remaining **20**, in addition to its executive office[231](index=231&type=chunk) [Legal Proceedings](index=40&type=section&id=Item%203.%20Legal%20Proceedings) The company is subject to ordinary course legal proceedings, none of which are expected to have a material adverse effect on its financial condition or operations - Management does not believe any current legal proceedings will have a material adverse effect on the company's business, financial condition, or results of operation[234](index=234&type=chunk) [Mine Safety Disclosures](index=40&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[235](index=235&type=chunk) Part II [Market for Registrant's Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities](index=41&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Shareholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Stellar Bancorp's common stock trades on the NYSE under 'STEL', with the company paying quarterly dividends and expanding its share repurchase program in 2023 - The company's common stock is listed on the **NYSE** under the symbol "**STEL**" and as of February 26, 2024, there were **53,297,191 shares outstanding**[237](index=237&type=chunk)[4](index=4&type=chunk) - During 2023, the company paid four quarterly cash dividends of **$0.13 per share**[238](index=238&type=chunk) - The Board of Directors expanded the share repurchase program to **$60 million**, effective through May 31, 2024[241](index=241&type=chunk) Stock Performance Comparison (2018-2023) | Index | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Stellar Bancorp, Inc. | 100.00 | 107.28 | 89.75 | 103.92 | 107.46 | 103.67 | | Russell 2000 | 100.00 | 125.52 | 150.58 | 172.90 | 137.56 | 160.85 | | S&P 600 Banks | 100.00 | 120.57 | 106.04 | 143.94 | 132.60 | 130.34 | | NASDAQ Composite | 100.00 | 136.69 | 198.10 | 242.03 | 163.28 | 236.17 | | NASDAQ Bank | 100.00 | 117.98 | 107.14 | 151.35 | 126.88 | 135.67 | [Reserved]](index=43&type=section&id=Item%206.%20%5BReserved%5D) This item is reserved [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=44&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Net income significantly increased to **$130.5 million** in 2023 due to the full-year impact of the 2022 merger, with strong net interest income growth, stable asset quality, and robust capital ratios Key Performance Metrics | Metric | 2023 | 2022 | | :--- | :--- | :--- | | Net Income | $130.5 million | $51.4 million | | Diluted EPS | $2.45 | $1.47 | | Return on Average Assets (ROA) | 1.21% | 0.64% | | Return on Average Equity (ROE) | 8.96% | 5.69% | | Efficiency Ratio | 63.02% | 64.23% | - The significant increase in net income for 2023 is primarily attributed to the full-year operational results following the merger with CBTX on October 1, 2022, making year-over-year comparisons less direct[282](index=282&type=chunk)[283](index=283&type=chunk) [Results of Operations](index=49&type=section&id=Results%20of%20Operations) Net income for 2023 increased to **$130.5 million**, driven by higher net interest income and a reduced provision for credit losses, while noninterest expenses rose due to merger-related scale Year-Over-Year Changes in Key Income Statement Items (2023 vs 2022) | Item | 2023 ($M) | 2022 ($M) | Change ($M) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Net Interest Income | 436.8 | 289.0 | 147.8 | 51.1% | | Provision for Credit Losses | 8.9 | 50.7 | (41.8) | (82.4)% | | Noninterest Income | 24.6 | 20.4 | 4.2 | 20.7% | | Noninterest Expense | 290.5 | 196.1 | 94.4 | 48.2% | | Net Income | 130.5 | 51.4 | 79.1 | 153.7% | - The provision for credit losses decreased significantly in 2023 as the 2022 provision included a one-time **$28.2 million** provision for acquired non-PCD loans from the merger[296](index=296&type=chunk) - The increase in noninterest expense was primarily due to higher salaries and benefits, and amortization of intangibles resulting from the merger, partially offset by an **$8.6 million** decrease in merger-related expenses[302](index=302&type=chunk)[307](index=307&type=chunk) [Financial Condition](index=54&type=section&id=Financial%20Condition) As of December 31, 2023, total assets were **$10.65 billion**, with loans growing to **$7.93 billion**, deposits decreasing to **$8.87 billion**, and asset quality remaining stable with strong capital Loan Portfolio Composition (December 31, 2023) | Loan Type | Amount ($B) | Percent of Total | | :--- | :--- | :--- | | Commercial real estate | 4.07 | 51.3% | | Commercial and industrial | 1.41 | 17.8% | | Commercial RE construction & land dev. | 1.06 | 13.4% | | 1-4 family residential | 1.05 | 13.2% | | Residential construction | 0.27 | 3.4% | | Other | 0.07 | 0.9% | | **Total Loans** | **7.93** | **100.0%** | - Total deposits decreased by **$394.2 million (4.3%)** to **$8.87 billion** at year-end 2023, driven by a **$683.4 million (16.2%)** decrease in noninterest-bearing deposits[345](index=345&type=chunk) Asset Quality Metrics | Metric | Dec 31, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Nonperforming Assets / Total Assets | 0.37% | 0.41% | | Nonperforming Loans / Total Loans | 0.49% | 0.58% | | Allowance for Credit Losses / Total Loans | 1.16% | 1.20% | Interest Rate Sensitivity Analysis (as of Dec 31, 2023) | Change in Interest Rates (bps) | % Change in Net Interest Income | % Change in Economic Value of Equity | | :--- | :--- | :--- | | +300 | (0.9)% | (0.9)% | | +200 | (0.6)% | 1.8% | | +100 | 0.1% | 3.4% | | -100 | 0.5% | 1.0% | | -200 | 0.2% | (3.6)% | [Quantitative and Qualitative Disclosures about Market Risk](index=67&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's primary market risk is interest rate volatility, managed by ALCO and detailed in Item 7 - The company's primary market risk is interest rate volatility, with detailed disclosures provided in Item 7 under "Asset/Liability Management and Interest Rate Risk"[379](index=379&type=chunk) [Financial Statements and Supplementary Data](index=67&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section refers to the consolidated financial statements, accompanying notes, and supplementary data beginning on page 72 - This item provides a reference to the location of the company's audited financial statements within the Form 10-K[380](index=380&type=chunk) [Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](index=67&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None[381](index=381&type=chunk) [Controls and Procedures](index=67&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were effective as of December 31, 2023, with no material changes during the year - The CEO and CFO concluded that the company's disclosure controls and procedures were **effective** as of the end of the period[382](index=382&type=chunk) - Management determined that the company maintained **effective internal control over financial reporting** as of December 31, 2023, based on the COSO 2013 framework[386](index=386&type=chunk) [Other Information](index=68&type=section&id=Item%209B.%20Other%20Information) The company reports no other information for this item - None[388](index=388&type=chunk) [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=68&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This item is not applicable to the company - Not applicable[389](index=389&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=69&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information regarding directors, executive officers, and corporate governance is incorporated by reference from the 2024 Proxy Statement - Information is incorporated by reference from the **2024 Proxy Statement**[392](index=392&type=chunk) [Executive Compensation](index=69&type=section&id=Item%2011.%20Executive%20Compensation) Information regarding executive compensation is incorporated by reference from the 2024 Proxy Statement - Information is incorporated by reference from the **2024 Proxy Statement**[393](index=393&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters](index=69&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Shareholder%20Matters) Information on security ownership and related shareholder matters is incorporated by reference from the 2024 Proxy Statement - Information is incorporated by reference from the **2024 Proxy Statement**[394](index=394&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=69&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information on certain relationships, related transactions, and director independence is incorporated by reference from the 2024 Proxy Statement - Information is incorporated by reference from the **2024 Proxy Statement**[395](index=395&type=chunk) [Principal Accounting Fees and Services](index=69&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Information on principal accounting fees and services is incorporated by reference from the 2024 Proxy Statement - Information is incorporated by reference from the **2024 Proxy Statement**[396](index=396&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=70&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists all documents filed as part of the Annual Report on Form 10-K, including consolidated financial statements and various exhibits - This item lists all financial statements, schedules, and exhibits filed with the Form 10-K[398](index=398&type=chunk) [Form 10-K Summary](index=72&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company reports no summary for this item - None[404](index=404&type=chunk)

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 ...