Stellar Bancorp(STEL) - 2024 Q4 - Annual Results

Financial Performance - Net income for the fourth quarter of 2024 was $27.8 million, or diluted earnings per share of $0.52, while net income for the full year 2024 was $117.6 million, or diluted earnings per share of $2.20[2] - Net income for the three months ended December 31, 2024, was $27,817,000, a decrease from $33,891,000 in the previous quarter[43] - Earnings per share (EPS), basic and diluted, for Q4 2024 was $0.52, down from $0.63 in Q4 2023, representing a decline of 17.5%[31] - The return on average assets for Q4 2024 was 1.04%, compared to 1.27% in Q4 2023, indicating a decrease of 18.1%[31] - Net income for the three months ended December 31, 2024, was $27,817,000, a decrease of 17.8% compared to $33,891,000 for the same period in 2023[31] Income and Expenses - Net interest income for 2024 decreased by $28.8 million, or 6.6%, to $408.0 million from $436.8 million in 2023, with a net interest margin of 4.24% for 2024 compared to 4.51% in 2023[6] - Noninterest income for 2024 was $23.0 million, an increase of $1.5 million, or 6.2%, compared to $24.6 million in 2023[6] - Total noninterest expense increased to $71,981 million from $71,066 million in the prior quarter[29] - The company’s total noninterest income for the year was $23,046 million, slightly down from $24,562 million in the previous year[29] Assets and Liabilities - Total assets at December 31, 2024, were $10.91 billion, an increase of $275.3 million compared to $10.63 billion at September 30, 2024[12] - Total liabilities increased to $9,294,645 thousand, up from $9,003,654 thousand, representing a growth of 3.2%[27] - Total assets increased to $10,905,110 thousand as of December 31, 2024, up from $10,629,777 thousand in the previous quarter, representing a growth of 2.6%[26] - Total deposits at December 31, 2024, increased by $385.8 million to $9.13 billion compared to $8.74 billion at September 30, 2024[14] Capital and Equity - Total risk-based capital ratio increased to 16.06% at December 31, 2024, up from 14.02% at December 31, 2023, with book value per share rising to $30.14 from $28.54[7] - Total shareholders' equity decreased to $1,610,465 thousand from $1,626,123 thousand, a decline of 1.0%[27] - Shareholders' equity rose to $1,614,791 thousand as of December 31, 2024, compared to $1,475,377 thousand a year earlier[35] Loan Performance - Nonperforming loans decreased by $2.0 million to $37.2 million at December 31, 2024, from $39.2 million at December 31, 2023[7] - Net loans held for investment decreased slightly to $7,358,796 thousand from $7,466,623 thousand, a decline of 1.4% quarter-over-quarter[26] - Nonperforming assets to total assets ratio increased to 0.36%, up from 0.33% in the previous quarter[40] - Nonperforming loans to total loans ratio increased to 0.50%, compared to 0.43% in the previous quarter[40] Credit Losses - The fourth quarter of 2024 included a provision for credit losses of $942 thousand, compared to a reversal of provision for credit losses of $6.0 million in the third quarter of 2024[16] - The allowance for credit losses on loans was $81,058 thousand, slightly down from $84,501 thousand, indicating a reduction of 5.8%[26] - Provision for credit losses was $942 million, a reversal from a provision of $(5,985) million in the previous quarter[29] Operational Efficiency - The efficiency ratio for the year ended December 31, 2024, was 66.39%, compared to 63.02% for the year ended December 31, 2023[10] - The efficiency ratio for Q4 2024 was 66.59%, slightly up from 66.18% in Q3 2024, reflecting a marginal increase in operational costs[31] Strategic Focus - The company plans to focus on growth at a more normalized organic pattern while exploring opportunities with downstream partners to increase operating leverage[3]