EX-99.1 2 stel2025q1earningsreleasee.htm EX-99.1 Document


Exhibit 99.1
imagea.jpg
PRESS RELEASE                    
STELLAR BANCORP, INC. REPORTS
FIRST QUARTER 2025 RESULTS

HOUSTON, April 25, 2025 - Stellar Bancorp, Inc. (the “Company” or “Stellar”) (NYSE: STEL) today reported net income of $24.7 million or diluted earnings per share of $0.46, for the first quarter of 2025, compared to net income of $25.2 million, or diluted earnings per share of $0.47, for the fourth quarter of 2024.

“We are pleased with the great work our team is doing as we turn our efforts from building our foundation to growing our bank,” said Robert R. Franklin, Jr., Stellar’s Chief Executive Officer. “We are seeing our pipelines build while experiencing payoffs as commercial real estate is sold or refinanced. This follows our expectations as interest rates begin to stabilize and we stabilize our position under regulatory guidance,” Mr. Franklin continued.

“We cannot ignore the uncertainty that has been introduced by the administration through tariffs. We will continue to monitor the effects on the economy in general and specifically our customer base. We continue to believe that we operate in one of the most dynamic markets in the country and will continue to deliver opportunities for Stellar Bank. However, we will remain cautious around credit as we build our pipelines,” commented Mr. Franklin.

“Given the uncertainty caused in the first quarter, we expect most of our growth to come in the second half of the year, but what we have seen so far this year is encouraging. Thank you to the great Stellar Team as we build Stellar into the bank of choice in our markets,” Mr. Franklin concluded.

Financial Highlights

•Solid Profitability: Net income for the first quarter of 2025 was $24.7 million, or diluted earnings per share of $0.46, which translated into an annualized return on average assets of 0.94%, an annualized return on average equity of 6.21% and an annualized return on average tangible equity of 11.48%(1).

•Strong Net Interest Margin: Tax equivalent net interest margin for the first quarter of 2025 was 4.20% compared to 4.25% for the fourth quarter of 2024. The tax equivalent net interest margin, excluding purchase accounting accretion (“PAA”), was 3.97%(1) for the first quarter of 2025 compared to 3.94%(1) for the fourth quarter of 2024.

•Strong Capital Position and Book Value Build: Total risk-based capital ratio increased to 15.94% at March 31, 2025, while book value per share increased to $30.89 at March 31, 2025 from $30.09 at December 31, 2024 and tangible book value per share increased to $19.69(1) at March 31, 2025 from $19.05(1) at December 31, 2024.

•Repurchase of Shares: Repurchased 1.4 million shares at a weighted average price per share of $27.99 during the first quarter of 2025 and 679 thousand shares at a weighted average price of $25.83 per share since the end of the first quarter of 2025. On April 23, 2025, the Board of Directors authorized of new share repurchase program under which the Company may repurchase up to $65 million of common stock through May 31, 2026.
First Quarter 2025 Results

Net interest income in the first quarter of 2025 decreased $3.7 million, or 3.6%, to $99.3 million from $103.0 million for the fourth quarter of 2024. The net interest margin on a tax equivalent basis decreased 5 basis points to 4.20% for the first quarter of 2025 from 4.25% for the fourth quarter of 2024. The decrease in the net interest margin from the prior quarter was primarily due to the impact of lower rates on interest-earnings assets and decreased average interest-earnings assets partially offset by lower rates on interest-bearing liabilities. Net interest income for the first quarter of 2025 benefited from $5.4 million of income from PAA compared to $7.6 million in the fourth quarter of 2024. Excluding PAA, net interest income (tax equivalent) for the first quarter of 2025 would have been $94.0 million(1) and the tax equivalent net interest margin would have been 3.97%(1).
_____________________
(1)     Refer to the calculation of this non-GAAP financial measure on page 9 of this earnings release. The calculation of return on average tangible equity has been adjusted from prior period disclosures.


1


Noninterest income for the first quarter of 2025 was $5.5 million, an increase of $473 thousand, or 9.4%, compared to $5.0 million for the fourth quarter of 2024. Noninterest income increased in the first quarter of 2025 compared to the fourth quarter of 2024 primarily due to
a gain on sales of assets during the first quarter of 2025.

Noninterest expense for the first quarter of 2025 decreased $5.1 million, or 6.8%, to $70.2 million compared to $75.3 million for the fourth quarter of 2024. The decrease in noninterest expense in the first quarter of 2025 compared to the fourth quarter of 2024 was primarily due to a decrease in salaries and employee benefits of $2.0 million, a decrease in professional fees of $1.6 million and an $811 thousand decrease in advertising expense.

The efficiency ratio was 61.93% for the first quarter of 2025 compared to 64.46% for the fourth quarter of 2024. Annualized returns on average assets, average equity and average tangible equity were 0.94%, 6.21% and 11.48%(1) for the first quarter of 2025, respectively, compared to 0.94%, 6.21% and 11.53%(1) for the fourth quarter of 2024, respectively.

Financial Condition

Total assets at March 31, 2025 were $10.43 billion, a decrease of $470.9 million compared to $10.91 billion at December 31, 2024. The decrease in total assets was largely due to seasonality in government deposits.

Total loans at March 31, 2025 decreased $156.7 million to $7.28 billion compared to $7.44 billion at December 31, 2024. At March 31, 2025, the remaining balance of the purchase accounting accretion on loans was $68.2 million.

Total deposits at March 31, 2025 decreased $565.7 million to $8.56 billion compared to $9.13 billion at December 31, 2024 primarily due to decreases in noninterest-bearing and certificates and other time deposits. Noninterest-bearing deposits largely decreased due to the aforementioned seasonality in government deposits while certificates and other time deposits decreased primarily due to the reduction in brokered deposits. Shifts in the deposit mix were primarily driven by the current interest rate environment and an intensely competitive market for deposits.

Asset Quality

Nonperforming assets totaled $59.7 million, or 0.57% of total assets, at March 31, 2025, compared to $38.9 million, or 0.36% of total assets, at December 31, 2024. The allowance for credit losses on loans as a percentage of total loans was 1.15% at March 31, 2025 compared to 1.09% at December 31, 2024.

The provision for credit losses was $3.6 million for the first quarter of 2025, compared to $942 thousand for the fourth quarter of 2024 primarily due to the increase in nonperforming loans. Net charge-offs for the first quarter of 2025 were $163 thousand, or 0.01% (annualized) of average loans, compared to net charge-offs of $2.0 million, or 0.11% (annualized) of average loans, for the fourth quarter of 2024.

GAAP Reconciliation of Non-GAAP Financial Measures

Stellar’s management uses certain non-GAAP financial measures to evaluate its performance. Please refer to the GAAP Reconciliation and Management’s Explanation of Non-GAAP Financial Measures on page 9 of this earnings release for a reconciliation of these non-GAAP financial measures.

Conference Call

Stellar’s management team will host a conference call and webcast on Friday, April 25, 2025 at 8:00 a.m. Central Time (9:00 a.m. Eastern Time) to discuss its results for the first quarter of 2025. Participants may register for the conference call at https://registrations.events/direct/Q4I635868 conference ID 63586 to receive the dial-in numbers and unique PIN to access the call. If you need assistance in obtaining a dial-in number, please contact ir@stellar.bank. A simultaneous webcast is available at https://registrations.events/direct/Q4I635868 and requires pre-registration. If you are unable to participate during the live webcast, the webcast will be accessible via the Investor Relations section of the Company’s website at ir.stellar.bank.

About Stellar Bancorp, Inc.

Stellar Bancorp, Inc. is a bank holding company headquartered in Houston, Texas. Stellar’s principal banking subsidiary, Stellar Bank, provides a diversified range of commercial banking services primarily to small- to medium-sized businesses and individual customers across the Houston, Dallas, Beaumont and surrounding communities in Texas.

Investor Relations
ir@stellar.bank


2

Forward-Looking Statements

Certain statements in this press release which are not historical in nature are intended to be, and are hereby identified as, “forward-looking statements” for purposes of the safe harbor provided by Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements include, but are not limited to, future financial performance and operating results, the Company’s plans, business and growth strategies, objectives, expectations and intentions, and other statements that are not historical facts, including projections of macroeconomic and industry trends, which are inherently unreliable due to the multiple factors that impact economic trends, and any such variations may be material. Forward-looking statements may be identified by terminology such as “may,” “will,” “should,” “could,” “scheduled,” “plans,” “intends,” “projects,” “anticipates,” “expects,” “believes,” “estimates,” “potential,” “would,” or “continue” or negatives of such terms or other comparable terminology.

All forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and other factors that may cause the actual results, performance or achievements of Stellar to differ materially from any results expressed or implied by such forward-looking statements. Such factors include, among others: changes in the interest rate environment, the value of Stellar’s assets and obligations and the availability of capital and liquidity; general competitive, economic, political and market conditions; and other factors that may affect future results of Stellar including changes in asset quality and credit risk; the inability to sustain revenue and earnings growth; changes in interest rates and capital markets; inflation; customer borrowing, repayment, investment and deposit practices; the impact, extent and timing of technological changes; capital management activities; disruptions to the economy and the U.S. banking system; risks associated with uninsured deposits and responsive measures by federal or state governments or banking regulators; legislative changes, executive orders, regulatory actions and reforms of the Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation and Texas Department of Banking.

Additional factors which could affect the Company’s future results can be found in the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, in each case filed with the SEC and available on the SEC’s website at https://www.sec.gov. We disclaim any obligation and do not intend to update or revise any forward-looking statements contained in this communication, which speak only as of the date hereof, whether as a result of new information, future events or otherwise, except as required by federal securities laws. As forward-looking statements involve significant risks and uncertainties, caution should be exercised against placing undue reliance on such statements.


3

Stellar Bancorp, Inc.
Financial Highlights
(Unaudited)
20252024
March 31December 31September 30June 30March 31
 (Dollars in thousands)
ASSETS:
Cash and due from banks$130,932 $419,967 $103,735 $110,341 $74,663 
Interest-bearing deposits at other financial institutions429,643 491,249 412,482 379,909 325,079 
Total cash and cash equivalents560,575 911,216 516,217 490,250 399,742 
Available for sale securities, at fair value1,719,371 1,673,016 1,691,752 1,630,971 1,523,100 
Loans held for investment7,283,133 7,439,854 7,551,124 7,713,897 7,908,111 
Less: allowance for credit losses on loans(83,746)(81,058)(84,501)(94,772)(96,285)
Loans, net7,199,387 7,358,796 7,466,623 7,619,125 7,811,826 
Accrued interest receivable37,669 37,884 39,473 43,348 45,466 
Premises and equipment, net109,750 111,856 113,742 113,984 115,698 
Federal Home Loan Bank stock20,902 8,209 20,123 15,089 16,050 
Bank-owned life insurance108,108 107,498 106,876 106,262 105,671 
Goodwill497,318 497,318 497,318 497,318 497,318 
Core deposit intangibles, net87,007 92,546 98,116 104,315 110,513 
Other assets94,800 107,451 79,537 103,001 103,838 
Total assets$10,434,887 $10,905,790 $10,629,777 $10,723,663 $10,729,222 
LIABILITIES AND SHAREHOLDERS’ EQUITY
LIABILITIES:
Deposits:
Noninterest-bearing$3,205,619 $3,576,206 $3,303,048 $3,308,441 $3,323,149 
Interest-bearing
Demand1,863,752 1,845,749 1,571,504 1,564,405 1,576,261 
Money market and savings2,248,616 2,253,193 2,280,651 2,213,031 2,203,767 
Certificates and other time1,244,726 1,453,236 1,587,398 1,639,426 1,691,539 
Total interest-bearing deposits5,357,094 5,552,178 5,439,553 5,416,862 5,471,567 
Total deposits8,562,713 9,128,384 8,742,601 8,725,303 8,794,716 
Accrued interest payable9,856 17,052 16,915 12,327 12,227 
Borrowed funds119,923 — 60,000 240,000 215,000 
Subordinated debt70,135 70,105 110,064 109,964 109,864 
Other liabilities61,428 82,389 74,074 70,274 66,717 
Total liabilities8,824,055 9,297,930 9,003,654 9,157,868 9,198,524 
SHAREHOLDERS’ EQUITY:
Common stock521 534 535 536 536 
Capital surplus1,202,628 1,240,050 1,238,619 1,238,477 1,235,221 
Retained earnings510,072 492,640 474,905 447,948 425,130 
Accumulated other comprehensive loss(102,389)(125,364)(87,936)(121,166)(130,189)
Total shareholders’ equity1,610,832 1,607,860 1,626,123 1,565,795 1,530,698 
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY$10,434,887 $10,905,790 $10,629,777 $10,723,663 $10,729,222 
4

Stellar Bancorp, Inc.
Financial Highlights
(Unaudited)
Three Months Ended
20252024
March 31December 31September 30June 30March 31
(Dollars in thousands, except per share data)
INTEREST INCOME:
Loans, including fees$120,640 $128,738 $132,372 $135,885 $134,685 
Securities:
Taxable16,148 14,789 13,898 11,923 9,293 
Tax-exempt812 814 814 816 818 
Deposits in other financial institutions4,720 5,681 4,692 3,555 3,627 
Total interest income142,320 150,022 151,776 152,179 148,423 
INTEREST EXPENSE:
Demand, money market and savings deposits27,574 27,877 29,440 28,399 27,530 
Certificates and other time deposits13,527 16,830 18,073 18,758 15,084 
Borrowed funds517 235 840 1,700 1,774 
Subordinated debt1,444 2,123 1,916 1,912 1,917 
Total interest expense43,062 47,065 50,269 50,769 46,305 
NET INTEREST INCOME99,258 102,957 101,507 101,410 102,118 
Provision for (reversal of) credit losses3,632 942 (5,985)(1,935)4,098 
Net interest income after provision for credit losses95,626 102,015 107,492 103,345 98,020 
NONINTEREST INCOME:
Service charges on deposit accounts1,584 1,590 1,594 1,648 1,598 
Gain (loss) on sale of assets417 (112)432 (64)513 
Bank-owned life insurance610 622 614 591 587 
Debit card and interchange income520 570 551 543 527 
Other2,374 2,362 3,111 2,698 3,071 
Total noninterest income5,505 5,032 6,302 5,416 6,296 
NONINTEREST EXPENSE:
Salaries and employee benefits41,792 43,797 41,123 39,061 41,376 
Net occupancy and equipment3,926 4,401 4,570 4,503 4,390 
Depreciation1,995 1,984 1,911 1,948 1,964 
Data processing and software amortization5,682 5,551 5,706 5,501 4,894 
Professional fees1,786 3,428 1,714 1,620 2,662 
Regulatory assessments and FDIC insurance1,733 1,636 1,779 2,299 1,854 
Amortization of intangibles5,548 5,581 6,212 6,215 6,212 
Communications847 807 827 847 937 
Advertising782 1,593 878 891 765 
Other6,075 6,488 6,346 8,331 6,356 
Total noninterest expense70,166 75,266 71,066 71,216 71,410 
INCOME BEFORE INCOME TAXES30,965 31,781 42,728 37,545 32,906 
Provision for income taxes6,263 6,569 8,837 7,792 6,759 
NET INCOME$24,702 $25,212 $33,891 $29,753 $26,147 
EARNINGS PER SHARE
Basic$0.46 $0.47 $0.63 $0.56 $0.49 
Diluted$0.46 $0.47 $0.63 $0.56 $0.49 
5

Stellar Bancorp, Inc.
Financial Highlights
(Unaudited)
Three Months Ended
20252024
March 31December 31September 30June 30March 31
(Dollars and share amounts in thousands, except per share data)
Net income$24,702$25,212$33,891$29,753$26,147
Earnings per share, basic$0.46$0.47$0.63$0.56$0.49
Earnings per share, diluted$0.46$0.47$0.63$0.56$0.49
Dividends per share$0.14$0.14$0.13$0.13$0.13
Return on average assets(A)
0.94 %0.94 %1.27 %1.13 %0.98 %
Return on average equity(A)
6.21 %6.21 %8.49 %7.78 %6.88 %
Return on average tangible equity(A)(B)(D)
11.48 %11.53 %15.61 %14.94 %13.62 %
Net interest margin (tax equivalent)(A)(C)
4.20 %4.25 %4.19 %4.24 %4.26 %
Net interest margin (tax equivalent) excluding PAA(A)(B)(C)
3.97 %3.94 %3.91 %3.82 %3.91 %
Efficiency ratio(B)(E)
61.93 %64.46 %60.40 %60.81 %60.42 %
Capital Ratios
Stellar Bancorp, Inc. (Consolidated)
Equity to assets15.44 %14.74 %15.30 %14.60 %14.27 %
Tangible equity to tangible assets(B)(E)
10.42 %9.87 %10.27 %9.53 %9.12 %
Estimated Total capital ratio (to risk-weighted assets)15.94 %16.00 %15.85 %15.30 %14.62 %
Estimated Common equity Tier 1 capital (to risk weighted assets)
14.03 %14.14 %13.57 %12.95 %12.29 %
Estimated Tier 1 capital (to risk-weighted assets)
14.15 %14.26 %13.69 %13.06 %12.41 %
Estimated Tier 1 leverage (to average tangible assets)
11.20 %11.31 %11.10 %10.77 %10.55 %
Stellar Bank
Estimated Total capital ratio (to risk-weighted assets)15.38 %15.28 %15.02 %14.61 %14.13 %
Estimated Common equity Tier 1 capital (to risk-weighted assets)
14.18 %14.13 %13.58 %13.08 %12.61 %
Estimated Tier 1 capital (to risk-weighted assets)
14.18 %14.13 %13.58 %13.08 %12.61 %
Estimated Tier 1 leverage (to average tangible assets)
11.22 %11.21 %11.01 %10.78 %10.72 %
Other Data
Weighted average shares:
Basic53,14653,42253,54153,57253,343
Diluted53,19753,47153,58053,60853,406
Period end shares outstanding52,14153,42953,44653,56453,551
Book value per share$30.89$30.09$30.43$29.23$28.58
Tangible book value per share(B)
$19.69$19.05$19.28$18.00$17.23
Employees - full-time equivalents1,0541,0371,0401,0451,007
(A)Interim periods annualized.
(B)Refer to the calculation of these non-GAAP financial measures on page 9 of this Earnings Release.
(C)Net interest margin represents net interest income divided by average interest-earning assets.
(D)The calculation of return on average tangible equity has been adjusted from prior period disclosures. All periods presented above have been recalculated and disclosed under the same calculation.
(E)The calculation of the efficiency ratio has been adjusted from prior period disclosures. All periods presented above have been recalculated and disclosed under the same calculation.


    
6

Stellar Bancorp, Inc.
Financial Highlights
(Unaudited)
Three Months Ended
March 31, 2025December 31, 2024March 31, 2024
Average BalanceInterest Earned/
Interest Paid		Average Yield/RateAverage BalanceInterest Earned/
Interest Paid		Average Yield/RateAverage BalanceInterest Earned/
Interest Paid		Average Yield/Rate
(Dollars in thousands)
Assets
Interest-Earning Assets:
Loans$7,344,298 $120,640 6.66 %$7,477,332 $128,738 6.85 %$7,938,824 $134,685 6.82 %
Securities1,817,286 16,960 3.78 %1,702,111 15,603 3.65 %1,441,814 10,111 2.82 %
Deposits in other financial institutions430,621 4,720 4.45 %473,719 5,681 4.77 %264,906 3,627 5.51 %
Total interest-earning assets9,592,205 $142,320 6.02 %9,653,162 $150,022 6.18 %9,645,544 $148,423 6.19 %
Allowance for credit losses on loans(81,166)(84,423)(91,612)
Noninterest-earning assets1,100,652 1,080,436 1,132,857 
Total assets$10,611,691 $10,649,175 $10,686,789 
Liabilities and Shareholders' Equity
Interest-Bearing Liabilities:
Interest-bearing demand deposits$1,911,625 $12,392 2.63 %$1,623,867 $11,341 2.78 %$1,697,211 $12,278 2.91 %
Money market and savings deposits2,234,571 15,182 2.76 %2,312,711 16,536 2.84 %2,150,805 15,252 2.85 %
Certificates and other time deposits1,296,972 13,527 4.23 %1,538,785 16,830 4.35 %1,444,048 15,084 4.20 %
Borrowed funds45,795 517 4.58 %15,978 235 5.85 %134,400 1,774 5.31 %
Subordinated debt70,121 1,444 8.35 %101,394 2,123 8.33 %109,808 1,917 7.02 %
Total interest-bearing liabilities5,559,084 $43,062 3.14 %5,592,735 $47,065 3.35 %5,536,272 $46,305 3.36 %
Noninterest-Bearing Liabilities:
Noninterest-bearing demand deposits3,346,066 3,342,636 3,525,758 
Other liabilities92,299 99,041 96,461 
Total liabilities8,997,449 9,034,413 9,158,491 
Shareholders’ equity1,614,242 1,614,762 1,528,298 
Total liabilities and shareholders’ equity$10,611,691 $10,649,175 $10,686,789 
Net interest rate spread2.88 %2.83 %2.83 %
Net interest income and margin$99,258 4.20 %$102,957 4.24 %$102,118 4.26 %
Net interest income and margin (tax equivalent)$99,353 4.20 %$103,039 4.25 %$102,207 4.26 %
Cost of funds1.96 %2.10 %2.06 %
Cost of deposits1.90 %2.02 %1.94 %
7

Stellar Bancorp, Inc.
Financial Highlights
(Unaudited)

Three Months Ended
20252024
 March 31  December 31  September 30  June 30  March 31
(Dollars in thousands)
Period-end Loan Portfolio:
Commercial and industrial$1,362,266$1,362,260$1,350,753$1,396,064$1,455,755
Real estate:
Commercial real estate (including multi-family residential)3,854,6073,868,2183,976,2964,029,6714,049,885
Commercial real estate construction and land development721,488845,494890,316922,8051,039,443
1-4 family residential (including home equity)1,125,8371,115,4841,112,2351,098,6811,049,316
Residential construction141,283157,977161,494200,134252,573
Consumer and other77,65290,42160,03066,54261,139
Total loans held for investment$7,283,133$7,439,854$7,551,124$7,713,897$7,908,111
Deposits:
Noninterest-bearing$3,205,619$3,576,206$3,303,048$3,308,441$3,323,149
Interest-bearing
Demand1,863,7521,845,7491,571,5041,564,4051,576,261
Money market and savings2,248,6162,253,1932,280,6512,213,0312,203,767
Certificates and other time1,244,7261,453,2361,587,3981,639,4261,691,539
Total interest-bearing deposits5,357,0945,552,1785,439,5535,416,8625,471,567
Total deposits$8,562,713$9,128,384$8,742,601$8,725,303$8,794,716
Asset Quality:
Nonaccrual loans$54,518$37,212$32,140$50,906$57,129
Accruing loans 90 or more days past due—————
Total nonperforming loans54,51837,21232,14050,90657,129
Foreclosed assets5,1541,7082,9842,548—
Total nonperforming assets$59,672$38,920$35,124$53,454$57,129
Net charge-offs (recoveries) $163$2,016$3,933$(1)$714
Nonaccrual loans:
Commercial and industrial$11,471$8,500$9,718$18,451$15,465
Real estate:
Commercial real estate (including multi-family residential)26,38316,45910,69518,09421,268
Commercial real estate construction and land development2,0273,0614,1831,6418,406
1-4 family residential (including home equity)14,5509,0567,25912,45410,368
Residential construction——1211551,410
Consumer and other87136164111212
Total nonaccrual loans$54,518$37,212$32,140$50,906$57,129
Asset Quality Ratios:
Nonperforming assets to total assets0.57 %0.36 %0.33 %0.50 %0.53 %
Nonperforming loans to total loans0.75 %0.50 %0.43 %0.66 %0.72 %
Allowance for credit losses on loans to nonperforming loans153.61 %217.83 %262.92 %186.17 %168.54 %
Allowance for credit losses on loans to total loans1.15 %1.09 %1.12 %1.23 %1.22 %
Net charge-offs to average loans (annualized)0.01 %0.11 %0.21 %0.00 %0.04 %

8
Stellar Bancorp, Inc.
GAAP Reconciliation and Management’s Explanation of Non-GAAP Financial Measures
(Unaudited)




Stellar’s management uses certain non-GAAP (generally accepted accounting principles) financial measures to evaluate its performance. Stellar believes that these non-GAAP financial measures provide meaningful supplemental information regarding its performance and that management and investors benefit from referring to these non-GAAP financial measures in assessing Stellar’s performance and when planning, forecasting, analyzing and comparing past, present and future periods. Specifically, Stellar reviews pre-tax, pre-provision income, pre-tax pre-provision ROAA, tangible book value per share, return on average tangible equity, tangible equity to tangible assets and net interest margin (tax equivalent) excluding PAA for internal planning and forecasting purposes. Stellar has included in this earnings release information relating to these non-GAAP financial measures for the applicable periods presented. These non-GAAP measures should not be considered in isolation or as a substitute for the most directly comparable or other financial measures calculated in accordance with GAAP. Moreover, the manner in which Stellar calculates the non-GAAP financial measures may differ from that of other companies reporting measures with similar names.
Three Months Ended
20252024
 March 31  December 31  September 30  June 30  March 31
(Dollars and share amounts in thousands, except per share data)
Net income$24,702$25,212$33,891$29,753$26,147
Add: Provision for (reversal of) credit losses3,632942(5,985)(1,935)4,098
Add: Provision for income taxes6,2636,5698,8377,7926,759
Pre-tax, pre-provision income$34,597$32,723$36,743$35,610$37,004
Total average assets$10,611,691$10,649,175$10,626,266$10,623,865$10,686,789
Pre-tax, pre-provision return on average assets(A)
1.32 %1.22 %1.38 %1.35 %1.39 %
Total shareholders’ equity$1,610,832$1,607,860$1,626,123$1,565,795$1,530,698
Less: Goodwill and core deposit intangibles, net584,325589,864595,434601,633607,831
Tangible shareholders’ equity$1,026,507$1,017,996$1,030,689$964,162$922,867
Shares outstanding at end of period52,14153,42953,44653,56453,551
Tangible book value per share$19.69$19.05$19.28$18.00$17.23
Average shareholders’ equity$1,614,242$1,614,762$1,587,918$1,538,124$1,528,298
Less: Average goodwill and core deposit intangibles, net586,895592,471598,866604,722611,149
Average tangible shareholders’ equity$1,027,347$1,022,291$989,052$933,402$917,149
Net income$24,702$25,212$33,891$29,753$26,147
Add: Core deposit intangibles amortization, net of tax4,3834,4094,9074,9104,907
Adjusted net income$29,085$29,621$38,798$34,663$31,054
Return on average tangible equity(A)(B)
11.48 %11.53 %15.61 %14.94 %13.62 %
Total assets$10,434,887$10,905,790$10,629,777$10,723,663$10,729,222
Less: Goodwill and core deposit intangibles, net584,325589,864595,434601,633607,831
Tangible assets$9,850,562$10,315,926$10,034,343$10,122,030$10,121,391
Tangible equity to tangible assets10.42 %9.87 %10.27 %9.53 %9.12 %
Net interest income (tax equivalent)$99,353$103,039$101,578$101,482$102,207
Less: Purchase accounting accretion5,3977,5556,79510,0988,551
Adjusted net interest income (tax equivalent)$93,956$95,484$94,783$91,384$93,656
Average earning assets$9,592,205$9,653,162$9,643,629$9,616,874$9,645,544
Net interest margin (tax equivalent) excluding PAA(A)
3.97 %3.94 %3.91 %3.82 %3.91 %
Noninterest expense$70,166$75,266$71,066$71,216$71,410
Less: Core deposit intangibles amortization5,5485,5816,2126,2156,212
Adjusted noninterest expense$64,618$69,685$64,854$65,001$65,198
Net interest income$99,258$102,957$101,507$101,410$102,118
Noninterest income5,5055,0326,3025,4166,296
Less: Gain (loss) on sale of assets417(112)432(64)513
Adjusted noninterest income$5,088$5,144$5,870$5,480$5,783
Net interest income plus adjusted noninterest income$104,346$108,101$107,377$106,890$107,901
Efficiency ratio(C)
61.93 %64.46 %60.40 %60.81 %60.42 %
(A)Interim periods annualized.
(B)The calculation of return on average tangible equity has been adjusted from prior period disclosures. All periods presented above have been recalculated and disclosed under the same calculation.
(C)The calculation of the efficiency ratio has been adjusted from prior period disclosures. All periods presented above have been recalculated and disclosed under the same calculation.
9