Businesswireยท2025-10-24 11:00Core Viewpoint - Stellar Bancorp, Inc. reported a net income of $25.7 million for Q3 2025, a slight decrease from $26.4 million in Q2 2025, with diluted earnings per share of $0.50 compared to $0.51 in the previous quarter [1][15]. Financial Performance - 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% compared to 4.18% in the prior quarter [6][15]. - Noninterest income decreased by $805 thousand, or 13.9%, to $5.0 million in Q3 2025, primarily due to losses on sales and write-downs on foreclosed assets [7]. - Noninterest expense rose by $3.1 million, or 4.5%, to $73.1 million in Q3 2025, driven by increased salaries and employee benefits, professional fees, and advertising expenses [8][15]. - The efficiency ratio was 63.69% in Q3 2025, up from 61.87% in Q2 2025, indicating a decline in operational efficiency [9]. Financial Condition - Total assets increased by $135 million to $10.63 billion as of September 30, 2025, primarily due to growth in interest-bearing deposits and securities [10]. - Total loans decreased by $119.5 million to $7.17 billion, while total deposits increased by $143.8 million to $8.82 billion, mainly from money market and savings deposits [11]. - Nonperforming assets totaled $54.2 million, or 0.51% of total assets, a slight improvement from 0.55% in the previous quarter [12]. Asset Quality - The allowance for credit losses on loans was 1.10% as of September 30, 2025, down from 1.14% in the previous quarter [12]. - The provision for credit losses was $305 thousand in Q3 2025, significantly lower than $1.1 million in Q2 2025, while net charge-offs increased to $3.3 million, or 0.18% of average loans [13]. Capital Position - The total risk-based capital ratio improved to 16.33% as of September 30, 2025, from 15.98% in the previous quarter, with book value per share rising to $32.27 from $31.20 [15][26]. - The company completed the redemption of $30 million of its $60 million subordinated debt on October 1, 2025 [15].