Stellar Bancorp, Inc. (STEL, Financial) has unveiled a new share repurchase initiative, permitting the company to buy back up to $65 million worth of its common stock. This program is set to run until May 31, 2026.
This new authorization succeeds the previously established program, which began in May 2024 and allowed for the repurchase of up to $60 million of common stock through May 31, 2025. The former program concluded upon the initiation of the 2025-2026 repurchase plan.
Prior to the termination of the 2024-2025 program, Stellar Bancorp had completed repurchases totaling 108,900 shares at a weighted average price of $26.10 during the third quarter of 2024. Additionally, the company bought back 1,378,962 shares at an average price of $27.99 in the first quarter of 2025. Further acquisitions included 679,331 shares at a weighted average price of $25.83 after the first quarter of 2025, leading up to the end of the prior repurchase program.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 5 analysts, the average target price for Stellar Bancorp Inc (STEL, Financial) is $30.20 with a high estimate of $31.00 and a low estimate of $29.00. The average target implies an upside of 13.36% from the current price of $26.64. More detailed estimate data can be found on the Stellar Bancorp Inc (STEL) Forecast page.
Based on the consensus recommendation from 5 brokerage firms, Stellar Bancorp Inc's (STEL, Financial) average brokerage recommendation is currently 2.8, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Stellar Bancorp Inc (STEL, Financial) in one year is $25.11, suggesting a downside of 5.74% from the current price of $26.64. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Stellar Bancorp Inc (STEL) Summary page.
STEL Key Business Developments
Release Date: January 31, 2025
- Net Income (Q4 2024): $27.8 million or $0.52 per diluted share.
- Net Income (Full Year 2024): $117.6 million or $2.20 per diluted share.
- Return on Average Assets (ROAA) (Q4 2024): 1.04%.
- Return on Average Tangible Common Equity (ROATCE) (Q4 2024): 10.82%.
- Net Interest Income (Q4 2024): $103 million.
- Net Interest Margin (Q4 2024): 4.25%.
- Provision for Credit Losses (Q4 2024): $942,000.
- Allowance for Credit Losses on Loans (Q4 2024): $81.1 million or 1.09% of loans.
- Non-Interest Income (Q4 2024): $5 million.
- Non-Interest Expense (Q4 2024): $72 million.
- Non-Interest Expense (Full Year 2024): $285.7 million.
- Total Risk-Based Capital (End of Q4 2024): 16.06%.
- Tangible Book Value Per Share (End of Q4 2024): $19.10 per share.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Stellar Bancorp Inc (STEL, Financial) reported a strong fourth quarter net income of $27.8 million, translating to $0.52 per diluted share.
- The company achieved an annualized ROAA of 1.04% and an annualized ROATCE of 10.82% for the fourth quarter.
- Net interest margin improved to 4.25% in the fourth quarter from 4.19% in the third quarter, indicating better profitability.
- Stellar Bancorp Inc (STEL) has a robust capital base and a strong balance sheet, supporting future growth and potential share repurchases or increased dividends.
- The company has seen strong loan originations, with the fourth quarter being the highest in six quarters, indicating positive momentum going into 2025.
Negative Points
- Non-interest income decreased to $5 million in the fourth quarter from $6.3 million in the third quarter, partly due to the absence of lumpy SBIC income and asset sale gains.
- Non-interest expense for the full year 2024 was higher than initial guidance, reaching $285.7 million compared to the expected $280 million.
- The company expects modest growth in non-interest expenses in 2025, aligning with inflation, which could pressure operating leverage.
- Stellar Bancorp Inc (STEL) did not repurchase any shares in the fourth quarter, despite having the capital flexibility to do so.
- The securities portfolio is expected to remain around 15% to 16% of the balance sheet, limiting potential yield improvements from this asset class.
