Q3 2025 Stellar Bancorp Inc Earnings Call Transcript
Key Points
- Stellar Bancorp Inc (STEL) reported a solid increase in net interest income and net interest margin, driven by deposit growth.
- The company maintained a strong capital position, repurchasing shares and paying down $30 million of subordinated debt.
- Credit quality trends remain favorable, with minimal exposure to non-originated credits and stable markets.
- The company achieved a net interest margin of 4.2%, with improvements in net interest income and margin on larger interest-earning assets.
- Stellar Bancorp Inc (STEL) experienced strong deposit growth, with 51% of new deposits coming from new customers, indicating successful market share gains.
- The company experienced $3.3 million in net charge-offs during the third quarter, affecting over 10 relationships.
- Non-interest income decreased to $5 million from $5.8 million in the previous quarter, due to write-downs on foreclosed assets.
- Non-interest expenses increased to $73.1 million, primarily due to higher salaries, benefits, and professional fees.
- The allowance for credit losses on loans decreased slightly, indicating potential concerns about future credit quality.
- Loan growth was impacted by elevated payoffs and paydowns, with $330 million in payoffs during the last quarter.
Good morning. My name is Audra, and I will be your conference operator today. At this time, I would like to welcome everyone to the Stellar Bank third quarter earnings call. (Operator Instructions)
At this time, I would like to turn the conference over to Courtney Theriot, Chief Accounting Officer. Please go ahead.
Thank you, operator, and thank you to all who have joined our call today. Good morning. Our team would like to welcome you to our earnings call for the third quarter of 2025. This morning's earnings call will be led by our CEO Bob Franklin and CFO Paul Egge.
Also in attendance today are Steve Reitcloff, Executive Chairman of the company, Ramon Vitulli, President of the company and CEO of the bank, and Joe Lett, senior executive Vice President and Chief Credit Officer of the bank.
Before we begin, I need to remind everyone that some of the remarks made today constitute forward-looking statements as defined in the Private Securities Limitation Reform Act of 1,995 as
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