- Stellar Bancorp, Inc. (STEL, Financial) reports Q1 2025 net income of $24.7 million, a slight decline from Q4 2024.
- The company highlighted a robust capital position with a risk-based capital ratio of 15.94%.
- 1.4 million shares were repurchased in Q1 2025 at $27.99 average per share.
Stellar Bancorp, Inc. (STEL) has released its financial results for the first quarter of 2025. The company reported net income of $24.7 million, or $0.46 per diluted share, slightly down from $25.2 million, or $0.47 per diluted share in the previous quarter. Despite the minor decline, the company demonstrated a solid performance with an annualized return on average assets of 0.94% and an annualized return on average equity of 6.21%.
The net interest margin on a tax-equivalent basis for the quarter was 4.20%, a minor decrease from 4.25% in the fourth quarter of 2024. Excluding purchase accounting accretion, the net interest margin would have been 3.97%, up from 3.94% in the prior quarter. These metrics reflect the effects of stabilizing interest rates and adjustments in interest-bearing liabilities.
Stellar Bancorp maintained a robust capital position, with the total risk-based capital ratio increasing to 15.94%. The book value per share rose to $30.89, compared to $30.09 at the end of 2024. Simultaneously, the tangible book value per share went up to $19.69 from $19.05 over the same period.
During the first quarter, Stellar repurchased 1.4 million shares at an average price of $27.99 per share. In addition, since the end of Q1 2025, the company repurchased 679,000 shares at an average price of $25.83 per share. The board has authorized a new share repurchase program allowing for the repurchase of up to $65 million through May 31, 2026.
Asset quality metrics showed an increase in nonperforming assets to $59.7 million, or 0.57% of total assets, compared to $38.9 million, or 0.36%, at the end of December 2024. The provision for credit losses increased significantly to $3.6 million in Q1 2025, primarily due to a rise in nonperforming loans.
Stellar Bancorp remains cautious in the current economic environment, particularly with uncertainties introduced by tariffs, but anticipates most growth to occur in the latter half of the year. CEO Robert R. Franklin, Jr. expressed optimism about future opportunities as the company builds on its foundation to expand within a dynamic market.
