Stellar Bancorp Reports $24.7 Million Net Income in Q1 2025, Down from $26.1 Million in Q1 2024

Stellar Bancorp, Inc. reported a net income of $24.7 million, or $0.46 per diluted share, for the first quarter of 2025, a decrease from $26.1 million, or $0.49 per diluted share, in the same period of 2024. The decline in profitability was attributed to a $2.9 million drop in net interest income and a $791,000 reduction in noninterest income, which were partially offset by a decrease in noninterest expenses and income tax provisions. The annualized return on average assets was 0.94%, while the return on average equity was 6.21%, compared to 0.98% and 6.88%, respectively, in the prior year.

Total assets decreased to $10.43 billion as of March 31, 2025, down from $10.91 billion at the end of 2024. This decline was primarily driven by a reduction in cash and cash equivalents, which fell to $560.6 million from $911.2 million. Total loans also decreased by 2.1% to $7.28 billion, with notable declines in commercial real estate construction and land development loans, which dropped by 14.7%. The allowance for credit losses on loans increased to $83.7 million, representing 1.15% of total loans, up from 1.09% at the end of 2024.

In terms of strategic developments, Stellar Bancorp continued its focus on maintaining a strong capital position, with total shareholders' equity at $1.61 billion as of March 31, 2025. The company has been actively managing its capital through a share repurchase program, having repurchased 679,331 shares at an average price of $25.83 per share between April 1 and April 23, 2025. Additionally, the company announced a new share repurchase program authorizing up to $65 million in stock buybacks through May 31, 2026.

Operationally, the company reported a decrease in total deposits to $8.56 billion, a 6.2% decline from the previous quarter, driven by seasonal factors and competitive pressures in the deposit market. Noninterest-bearing deposits fell by 10.4%, while interest-bearing deposits decreased by 3.5%. The company’s efficiency ratio increased to 61.93%, indicating a slight decline in operational efficiency compared to the previous year.

Looking ahead, Stellar Bancorp remains focused on navigating the current economic landscape, which includes managing interest rate risks and maintaining asset quality. The company is committed to enhancing its loan portfolio while ensuring compliance with regulatory capital requirements. Management anticipates that ongoing economic conditions and market dynamics will continue to influence its financial performance in the upcoming quarters.