Stellar Bancorp (STEL) investor relations material

Executive summary

• Net income for Q3 2025 was $25.7 million ($0.50 per diluted share), down from $26.4 million in Q2 and $33.9 million in Q3 2024, mainly due to higher credit loss provisions, lower noninterest income, and increased expenses.

• Net interest income increased to $100.6 million, with net interest margin rising to 4.20% from 4.18% in Q2; excluding purchase accounting, margin was 4.00%.

• Credit quality remained stable, with nonperforming assets declining and allowance for credit losses at $78.9 million (1.10% of loans).

• Deposit growth and higher tangible book value further strengthened the balance sheet.

• Completed redemption of $30 million in subordinated debt on October 1, 2025.

Financial highlights

• Total assets at September 30, 2025 were $10.63 billion; total loans $7.17 billion; total deposits $8.82 billion.

• Net interest income was $100.6 million, up from $98.3 million in Q2; noninterest income fell to $5 million due to asset write-downs.

• Noninterest expense increased to $73.1 million, mainly from higher salaries, severance, and advertising.

• Efficiency ratio rose to 63.69% from 61.87% in Q2 and 60.40% in Q3 2024.

• Book value per share was $32.27; tangible book value per share $21.08, up 9.3% year-over-year.

Outlook and guidance

• Management expects Q4 expenses to return closer to the first half run rate, below Q3 levels.

• Optimistic about defending or improving the 4% net interest margin, even as rates change.

• Loan growth expected to improve as originations remain strong and payoffs stabilize, with a positive outlook for 2026.

• Focus on credit performance, risk management, and leveraging a scalable operating platform for growth.

• No material changes in risk factors or forward-looking statements for the quarter.