In This Article:
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Net Income: $24.7 million or $0.46 per diluted share.
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Return on Average Assets: 94 basis points annualized.
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Return on Average Tangible Common Equity: 11.48% annualized.
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Net Interest Income: $99.3 million, down from $103 million in the previous quarter.
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Net Interest Margin: 4.2%, compared to 4.25% in the fourth quarter of 2024.
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Purchase Accounting Accretion: $5.4 million, down from $7.6 million in the previous quarter.
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Provision for Loan Losses: $3.6 million.
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Allowance for Credit Losses on Loans: $83.7 million or 1.15% of loans.
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Noninterest Income: $5.5 million, up from $5 million in the previous quarter.
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Noninterest Expense: $70.2 million, down from $75.3 million in the previous quarter.
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Total Risk-Based Capital: 15.94% at the end of the first quarter.
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Tangible Book Value Per Share: Increased 14.3% year over year to $19.69 per share.
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Share Repurchases: 1.4 million shares at an average price of $27.99 per share during the first quarter.
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New Share Repurchase Program: Authorized up to $65 million in shares through May 2026.
Release Date: April 25, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Stellar Bancorp Inc (NYSE:STEL) reported a first-quarter net income of $24.7 million, translating to $0.46 per diluted share.
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The company executed meaningful share repurchases, buying back 1.4 million shares at an average price of $27.99 per share, demonstrating strong capital management.
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Noninterest expenses decreased by $5.1 million to $70.2 million, reflecting effective cost management.
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The company maintained a strong proportion of noninterest-bearing deposits, representing over 37% of the deposit base.
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Stellar Bancorp Inc (NYSE:STEL) achieved a 14.3% year-over-year increase in tangible book value per share, reaching $19.69.
Negative Points
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Net interest income decreased to $99.3 million from $103 million in the previous quarter, impacted by lower purchase accounting accretion and fewer days to earn interest.
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The balance sheet shrunk due to seasonal outflows of government banking deposits and cash balances.
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The company booked a provision for loan losses of $3.6 million, indicating potential credit risk concerns.
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Economic uncertainty and new tariff policies introduce challenges, potentially impacting customer sentiment and loan growth.
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The intensely competitive deposit market poses challenges for core deposit growth and optimizing funding costs.
Q & A Highlights
Q: Could you discuss the current sentiment among your clients and how the loan pipeline is trending, considering the economic uncertainty? A: Robert Franklin, CEO, explained that the company is focused on reconfiguring its loan portfolio to resemble that of a larger bank, moving away from reliance on smaller real estate loans. Ramon Vitulli, President, added that loan originations have been strong, with a positive pipeline indicating potential growth in the second half of the year. The company is seeing elevated payoffs but expects growth as new originations fund.