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Stellar Bancorp (STEL)
NYSE:STEL
US Market

Stellar Bancorp (STEL) AI Stock Analysis

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Stellar Bancorp

(NYSE:STEL)

Rating:77Outperform
Price Target:
$30.00
▲(2.46%Upside)
Stellar Bancorp's strong financial performance and positive earnings call sentiment are significant strengths, supported by reasonable valuation metrics. Technical analysis shows neutral momentum, while corporate events add a minor positive influence. Economic uncertainties and slight declines in TTM metrics are risks to monitor.

Stellar Bancorp (STEL) vs. SPDR S&P 500 ETF (SPY)

Stellar Bancorp Business Overview & Revenue Model

Company DescriptionStellar Bancorp (STEL) is a financial services holding company that operates primarily in the banking sector. It provides a wide range of banking products and services tailored to meet the needs of individuals, small to medium-sized businesses, and commercial entities. The company offers traditional banking services such as checking and savings accounts, loans, credit and debit cards, as well as more specialized financial services including wealth management and investment advisory. Stellar Bancorp is committed to fostering strong community relationships and supporting local economic growth.
How the Company Makes MoneyStellar Bancorp makes money primarily through interest income earned on loans and other interest-earning assets. This includes various types of loans such as personal, commercial, and real estate loans. The company also generates revenue from non-interest income sources, which include fees for services such as account maintenance, transaction processing, and investment advisory services. Additionally, Stellar Bancorp may engage in investment activities, earning returns from securities and other financial investments. Significant partnerships with local businesses and financial institutions can enhance its service offerings and expand its customer base, contributing to revenue growth.

Stellar Bancorp Earnings Call Summary

Earnings Call Date:Apr 25, 2025
(Q1-2025)
|
% Change Since: 9.01%|
Next Earnings Date:Jul 25, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strong financial results, including significant net income, reduced expenses, and successful share repurchases, contributing to a positive outlook. However, challenges such as decreased net interest income, economic uncertainties, and elevated loan payoffs suggest some caution. The bank remains optimistic about future growth, particularly in the later half of the year.
Q1-2025 Updates
Positive Updates
Strong First Quarter Net Income
First quarter 2025 net income of $24.7 million or $0.46 per diluted share, with an annualized return on average assets of 94 basis points and an annualized return on average tangible common equity of 11.48%.
Reduction in Noninterest Expenses
Noninterest expense for the quarter was down $5.1 million to $70.2 million from $75.3 million in the fourth quarter, reflecting timing-driven dynamics and focus on expense management.
Successful Share Repurchases
Repurchased 1.4 million shares at a weighted average price of $27.99 per share during the first quarter and an additional 679,000 shares at $25.83 per share since the end of the first quarter.
Improvement in Deposit Cost
14 basis point improvement in the cost of funds, driven by a 21 basis point improvement in the cost of interest-bearing liabilities.
Regulatory Capital Ratios Growth
Total risk-based capital was 15.94% at the end of the first quarter. Year over year, tangible book value per share increased by 14.3% from $17.23 to $19.69 per share.
Negative Updates
Decrease in Net Interest Income
Net interest income for the quarter was $99.3 million, a decrease from $103 million in the fourth quarter due to lower purchasing accounting accretion and two fewer days to earn interest.
Economic Uncertainty and Loan Growth Delay
Economic uncertainty and new tariff policies have introduced challenges, with growth expected to be pushed to the third and fourth quarters of the year.
Loan Portfolio Challenges
Loan payoffs and paydowns remain elevated, impacting loan growth; $275 to $300 million per quarter in payoffs.
Slight Increase in Provision for Loan Losses
Provision for loan losses in the first quarter was $3.6 million, with an increase in allowance for credit losses on loans to $83.7 million or 1.15% of loans.
Company Guidance
During the Stellar Bancorp, Inc. first quarter 2025 earnings call, the company provided guidance indicating cautious optimism for future growth, likely to accelerate in the latter half of the year. The first quarter net income was $24.7 million, or $0.46 per diluted share, with an annualized return on average assets of 94 basis points and an annualized return on average tangible common equity of 11.48%. Net interest income for the quarter was $99.3 million, down from $103 million in the previous quarter, resulting in a net interest margin of 4.2%. The company highlighted a reduction in noninterest expenses and significant share repurchases, amounting to 1.4 million shares at an average price of $27.99 per share. The allowance for credit losses increased to $83.7 million, or 1.15% of loans. Total risk-based capital stood at 15.94%, and tangible book value per share rose by 14.3% year-over-year to $19.69. Despite broader economic uncertainties, Stellar Bancorp is well-positioned for incremental growth and continues to focus on core operations and capital optimization strategies, including a new share repurchase program of up to $65 million.

Stellar Bancorp Financial Statement Overview

Summary
Stellar Bancorp exhibits a strong financial position with impressive growth in revenue and profitability. The balance sheet is robust, characterized by no debt, substantial equity, and effective capital management. Cash flows are generally positive, though fluctuations in investing and financing activities could warrant closer monitoring.
Income Statement
82
Very Positive
Stellar Bancorp has shown strong revenue growth with a consistent increase in total revenue over the years. The net profit margin is solid, indicating efficient cost management. The company has managed to maintain a healthy EBIT margin, although the lack of EBITDA data in recent years could limit a full analysis of operational efficiency.
Balance Sheet
85
Very Positive
The balance sheet indicates strong financial stability with no total debt and a high equity ratio, reflecting a well-capitalized position. The return on equity remains robust, showcasing effective utilization of shareholder funds. The increasing stockholders' equity further highlights the company's financial health.
Cash Flow
78
Positive
Stellar Bancorp's cash flow statements depict a stable operating cash flow, with free cash flow remaining positive. There's a noticeable fluctuation in investing and financing cash flows, which may suggest varying capital allocation strategies. The operating cash flow to net income ratio is healthy, supporting the company's profitability.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue618.55M625.45M615.38M343.35M261.75M249.92M
Gross Profit430.73M433.92M452.38M258.60M239.45M183.47M
EBITDA174.41M176.99M196.35M76.78M107.44M63.61M
Net Income113.56M115.00M130.50M51.43M81.55M45.53M
Balance Sheet
Total Assets10.43B10.91B10.65B10.90B7.10B3.95B
Cash, Cash Equivalents and Short-Term Investments1.72B2.10B1.79B2.18B2.53B738.69M
Total Debt190.06M70.11M159.76M173.29M212.94M66.45M
Total Liabilities8.82B9.30B9.13B9.52B6.29B3.40B
Stockholders Equity1.61B1.61B1.52B1.38B816.47M546.45M
Cash Flow
Free Cash Flow90.97M127.96M161.36M105.25M104.45M53.88M
Operating Cash Flow95.84M132.62M168.22M109.07M107.38M61.06M
Investing Cash Flow503.10M246.09M295.25M73.76M-754.82M-961.10M
Financing Cash Flow-438.11M133.27M-435.94M-568.63M982.19M976.56M

Stellar Bancorp Technical Analysis

Technical Analysis Sentiment
Positive
Last Price29.28
Price Trends
50DMA
26.85
Positive
100DMA
27.05
Positive
200DMA
27.41
Positive
Market Momentum
MACD
0.50
Negative
RSI
70.55
Negative
STOCH
88.34
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For STEL, the sentiment is Positive. The current price of 29.28 is above the 20-day moving average (MA) of 27.49, above the 50-day MA of 26.85, and above the 200-day MA of 27.41, indicating a bullish trend. The MACD of 0.50 indicates Negative momentum. The RSI at 70.55 is Negative, neither overbought nor oversold. The STOCH value of 88.34 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for STEL.

Stellar Bancorp Risk Analysis

Stellar Bancorp disclosed 57 risk factors in its most recent earnings report. Stellar Bancorp reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Stellar Bancorp Peers Comparison

Overall Rating
UnderperformOutperform
Sector (70)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
79
Outperform
$1.51B16.178.85%2.88%16.91%-12.55%
77
Outperform
$1.49B13.317.40%1.91%-0.58%-3.02%
77
Outperform
$1.51B11.359.84%3.46%1.26%-1.92%
75
Outperform
$1.49B13.488.68%3.08%1.63%-16.82%
74
Outperform
$2.04B16.228.14%-5.67%-44.11%
72
Outperform
$1.60B11.3212.84%2.33%9.30%15.19%
70
Neutral
€21.69B27.5410.92%4.79%4.57%1.35%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
STEL
Stellar Bancorp
29.28
7.53
34.62%
SRCE
1St Source
65.09
14.05
27.53%
GABC
German American Bancorp
40.21
7.19
21.77%
STBA
S&T Bancorp
39.35
7.94
25.28%
CUBI
Customers Bancorp
64.55
16.51
34.37%
NBHC
National Bank Holdings
39.39
2.29
6.17%

Stellar Bancorp Corporate Events

Executive/Board Changes
Stellar Bancorp Director William Wilson Resigns
Neutral
Jun 16, 2025

On June 12, 2025, William E. Wilson, Jr., a member of the Board of Directors of Stellar Bancorp, Inc., resigned from his position, effective immediately. Mr. Wilson, who had been a director since 2017 and served on the Audit Committee, left without any disagreements with the company’s operations or policies. The Board and management expressed their gratitude for his contributions to the company and its predecessor, CBTX, Inc.

The most recent analyst rating on (STEL) stock is a Hold with a $28.00 price target. To see the full list of analyst forecasts on Stellar Bancorp stock, see the STEL Stock Forecast page.

Shareholder MeetingsDividends
Stellar Bancorp Increases Quarterly Cash Dividend
Positive
May 22, 2025

On May 21, 2025, Stellar Bancorp, Inc. adopted an Executive Severance Plan, offering severance benefits to eligible executives upon qualifying terminations of employment. This plan includes salary continuation payments, pro-rata bonuses, and benefit payments, with provisions to comply with tax regulations and company policies. Additionally, on the same date, the company held its Annual Meeting of Shareholders, where five Class III directors were elected, and several proposals were voted on, including the approval of the Amended and Restated 2022 Omnibus Incentive Plan and the ratification of Crowe LLP as the independent registered public accounting firm. On May 22, 2025, the company announced an increase in its quarterly cash dividend to $0.14 per share, payable on June 30, 2025.

The most recent analyst rating on (STEL) stock is a Hold with a $28.00 price target. To see the full list of analyst forecasts on Stellar Bancorp stock, see the STEL Stock Forecast page.

Stock BuybackBusiness Operations and StrategyFinancial Disclosures
Stellar Bancorp Reports Q1 2025 Financial Results
Neutral
Apr 25, 2025

Stellar Bancorp reported its first quarter 2025 financial results, showing a slight decrease in net income to $24.7 million compared to the previous quarter. The company is focusing on growth and adapting to market conditions, despite uncertainties introduced by tariffs. Stellar Bancorp’s financial highlights include a solid net interest margin and a strong capital position, although total assets and deposits decreased due to seasonal factors and competitive market conditions. The company also repurchased shares and announced a new share repurchase program. Nonperforming assets increased, leading to a higher provision for credit losses.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jun 21, 2025