Stellar Bancorp(STEL) - 2025 Q3 - Quarterly Results

Financial Performance - Net income for Q3 2025 was $25.7 million, or diluted earnings per share of $0.50, compared to $26.4 million, or $0.51 per share in Q2 2025[3]. - Noninterest income for Q3 2025 was $5.0 million, a decrease of $805 thousand, or 13.9%, compared to Q2 2025[11]. - Noninterest expense increased by $3.1 million, or 4.5%, to $73.1 million in Q3 2025, driven by higher salaries and employee benefits[12]. - Net income for the three months ended September 30, 2025, was $25,670,000, compared to $26,352,000 in the previous quarter[29]. - Earnings per share (basic) for the three months ended September 30, 2025, was $0.50, a decrease from $0.51 in the previous quarter[29]. - Net income for the three months ended September 30, 2025, was $25,670,000, a decrease of 2.6% from $26,352,000 in the previous quarter[31]. - Adjusted net income for the nine months ended September 30, 2025, was $89,878,000, compared to $104,516,000 in the same period of 2024, a decrease of 14.1%[43]. Asset and Liability Management - Total assets increased by $135 million to $10.63 billion at September 30, 2025, primarily due to growth in interest-bearing deposits and securities[13]. - Total loans decreased by $119.5 million to $7.17 billion at September 30, 2025, while total deposits increased by $143.8 million to $8.82 billion[14]. - Total assets increased to $10,628,113 thousand as of September 30, 2025, up from $10,493,010 thousand in the previous quarter, representing a growth of 1.29%[27]. - Total deposits rose to $8,817,463 thousand, an increase of 1.66% from $8,673,614 thousand in the previous quarter[27]. - Loans held for investment decreased slightly to $7,167,857 thousand from $7,287,347 thousand, reflecting a decline of 1.64%[27]. - Total interest-earning assets for the three months ended September 30, 2025, were $9,525,017 thousand, with a net interest income of $100,644 thousand and a margin of 4.19%[36]. - Interest-bearing liabilities totaled $5,612,068 thousand, with interest paid of $132,195 thousand and a yield of 3.15% for the nine months ended September 30, 2025[38]. Capital and Equity - Total risk-based capital ratio rose to 16.33% at September 30, 2025, up from 15.98% at June 30, 2025, while book value per share increased to $32.27[9]. - Total shareholders' equity increased to $1,653,138 thousand, up from $1,603,834 thousand, marking a growth of 3.07%[27]. - Book value per share increased to $32.27 from $31.20 in the previous quarter, reflecting a growth of 3.4%[31]. - Tangible book value per share rose to $21.08, up from $19.94 in the prior quarter, marking an increase of 5.7%[31]. - Shareholders' equity stood at $1,609,110 thousand as of September 30, 2025[38]. Credit Quality - Nonperforming assets totaled $54.2 million, or 0.51% of total assets, at September 30, 2025, down from $58.2 million, or 0.55%, at June 30, 2025[15]. - The provision for credit losses was $305 thousand in Q3 2025, significantly lower than $1.1 million in Q2 2025[16]. - The allowance for credit losses on loans was $78,924 thousand, slightly down from $83,165 thousand, indicating a decrease of 5.43%[27]. - Nonperforming loans to total loans ratio decreased to 0.65% in September 2025, down from 0.69% in June 2025[40]. - The allowance for credit losses on loans to nonperforming loans ratio was 170.65% in September 2025, an increase from 164.67% in June 2025[40]. - Net charge-offs increased to $3,323 thousand in September 2025 from $206 thousand in June 2025, indicating a significant rise[40]. Efficiency and Cost Management - The efficiency ratio for Q3 2025 was 63.69%, compared to 61.87% in Q2 2025[13]. - The efficiency ratio improved to 63.69% from 61.87% in the previous quarter, indicating better cost management[31]. - Noninterest expense for the three months ended September 30, 2025, was $73,142,000, compared to $70,004,000 in the previous quarter, indicating an increase of 3.1%[44]. Interest Income and Margin - Net interest income increased by $2.3 million, or 2.3%, to $100.6 million in Q3 2025 from $98.3 million in Q2 2025, with a net interest margin of 4.20%[8]. - Total interest income for the three months ended September 30, 2025, was $145,413,000, a slight increase from $142,699,000 in the previous quarter[29]. - Net interest income after provision for credit losses was $100,339,000 for the three months ended September 30, 2025, compared to $97,245,000 in the previous quarter[29]. - The net interest margin (tax equivalent) was 4.20%, slightly up from 4.18% in the previous quarter[31].