Stellar Bancorp, Inc. reported a net income of $25.7 million, or $0.50 per diluted share, for the third quarter of 2025, a decrease from $33.9 million, or $0.63 per diluted share, in the same period last year. The decline in profitability was attributed to a $6.3 million increase in the provision for credit losses, a $1.3 million drop in noninterest income, and a $2.1 million rise in noninterest expenses. For the nine months ending September 30, 2025, net income was $76.7 million, or $1.47 per diluted share, down from $89.8 million, or $1.68 per diluted share, for the same period in 2024. The decrease was primarily driven by an $8.8 million increase in the provision for credit losses and a $6.8 million reduction in net interest income.
Total assets for Stellar Bancorp decreased to $10.63 billion as of September 30, 2025, down from $10.91 billion at the end of 2024. The company's loan portfolio also contracted, totaling $7.17 billion, a decrease of $272 million, or 3.7%, compared to the end of the previous year. The allowance for credit losses on loans was $78.9 million, representing 1.10% of total loans, slightly down from 1.09% at the end of 2024. The company’s nonperforming assets increased to $54.2 million, or 0.51% of total assets, compared to $38.9 million, or 0.36%, at the end of 2024.
In terms of strategic developments, Stellar Bancorp has focused on enhancing its operational efficiency and customer engagement. The company reported an increase in salaries and employee benefits, which rose by $2.1 million in the third quarter, reflecting ongoing investments in human capital. Additionally, the company has been actively managing its deposit base, with total deposits decreasing to $8.82 billion, a decline of 3.4% from the previous year, driven by seasonal factors and competitive pressures in the market.
Looking ahead, Stellar Bancorp remains committed to maintaining its capital adequacy, with total shareholders' equity increasing to $1.65 billion as of September 30, 2025. The company’s capital ratios exceed the minimum requirements for being classified as "well-capitalized" under regulatory standards. Management anticipates that ongoing economic conditions and strategic initiatives will continue to shape the company’s performance, with a focus on managing credit risk and optimizing its loan portfolio. The company is also preparing for potential market fluctuations and regulatory changes that may impact its operations in the future.
About Stellar Bancorp, Inc.
Stellar Bancorp, Inc. is a Texas-based bank holding company operating Stellar Bank, which provides community-focused commercial banking services. Its core activities include small- to medium-sized business lending, deposit gathering, and offering retail banking products. The company emphasizes personalized service, local decision-making, and strategic acquisitions to foster long-term growth in Texas markets, leveraging a scalable platform and strong risk management to serve diverse customer needs.
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