Stellar Bancorp(US:STEL)2025-04-25 11:00Financial Performance - Net income for Q1 2025 was $24.7 million, or diluted earnings per share of $0.46, compared to $25.2 million, or $0.47 per share in Q4 2024[3] - Net income for Q1 2025 was $24,702,000, a decrease of 2.02% from $25,212,000 in Q4 2024[41] - Adjusted net income for Q1 2025 was $29,085,000, compared to $29,621,000 in Q4 2024, a decrease of 1.81%[41] - Basic earnings per share for Q1 2025 were $0.46, consistent with $0.47 in Q4 2024[30] - Earnings per share (EPS) for the same period was $0.46, down from $0.47 in the previous quarter, reflecting a decline of 2.13%[32] Income and Expenses - Net interest income decreased by $3.7 million, or 3.6%, to $99.3 million in Q1 2025 from $103.0 million in Q4 2024, with a net interest margin of 4.20%[8] - Total interest income for Q1 2025 was $142.32 million, a decrease of 5.8% from $150.02 million in Q4 2024[30] - Net interest income after provision for credit losses was $95.63 million, down from $102.02 million in the previous quarter, reflecting a decrease of 6.3%[30] - Noninterest income increased by $473 thousand, or 9.4%, to $5.5 million in Q1 2025 compared to $5.0 million in Q4 2024, primarily due to a gain on asset sales[11] - Noninterest expense decreased by $5.1 million, or 6.8%, to $70.2 million in Q1 2025 from $75.3 million in Q4 2024[12] - Total noninterest expense was $70.17 million, down from $75.27 million in the previous quarter, reflecting a decrease of 6.9%[30] Assets and Liabilities - Total assets decreased by $470.9 million to $10.43 billion as of March 31, 2025, primarily due to seasonality in government deposits[13] - Total liabilities stood at $8.82 billion, down from $9.30 billion in the previous quarter, indicating a decrease of 5.1%[28] - Total deposits decreased by $565.7 million to $8.56 billion as of March 31, 2025, driven by reductions in noninterest-bearing and time deposits[15] - Total deposits decreased to $8.56 billion in Q1 2025 from $9.13 billion in Q4 2024, representing a decline of 6.3%[28] - Total loans decreased by $156.7 million to $7.28 billion as of March 31, 2025, compared to $7.44 billion at the end of Q4 2024[14] Credit Quality - Nonperforming assets increased to $59.7 million, or 0.57% of total assets, compared to $38.9 million, or 0.36%, at the end of Q4 2024[16] - The provision for credit losses was $3.6 million in Q1 2025, up from $942 thousand in Q4 2024, reflecting an increase in nonperforming loans[17] - Nonperforming loans to total loans rose to 0.75%, up from 0.50% in the prior quarter[38] - Allowance for credit losses on loans to nonperforming loans decreased to 153.61% from 217.83% in the previous quarter[38] - Net charge-offs were reported at $163 thousand, significantly lower than $2,016 thousand in the prior quarter[38] Capital Ratios - Total risk-based capital ratio increased to 15.94% as of March 31, 2025, while book value per share rose to $30.89 from $30.09 at the end of Q4 2024[9] - The estimated Tier 1 capital ratio to risk-weighted assets was 14.15%, slightly down from 14.26% in the previous quarter[32] - Tangible equity to tangible assets ratio increased to 10.42% in Q1 2025 from 9.87% in Q4 2024, showing a stronger capital position[41] Operational Efficiency - The efficiency ratio improved to 61.93% from 64.46% in the previous quarter, indicating better cost management[32] - Efficiency ratio improved to 61.93% in Q1 2025 from 64.46% in Q4 2024, indicating better operational efficiency[43] Workforce - The number of full-time equivalent employees rose to 1,054 from 1,037 in the previous quarter, indicating growth in workforce[32] Non-GAAP Measures - The company emphasizes the use of non-GAAP financial measures for performance evaluation, including pre-tax, pre-provision income and tangible book value per share[40] - Stellar's management believes non-GAAP measures provide meaningful supplemental information for assessing performance[40] - The company’s tangible equity to tangible assets ratio is a key focus for internal planning and forecasting[40]