Q4 2024 Stellar Bancorp Inc Earnings Call Transcript
Key Points
- Stellar Bancorp Inc (STEL) 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.
- 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.
Good morning, and welcome, everyone, to Stellar Bank Q4 earnings release. (Operator Instructions) I would now like to turn the call over to Courtney Theriot. Please go ahead.
Thank you, operator, and thank you to all who have joined our call today. Good morning. Our team would like to welcome you to our earnings call for the fourth quarter of 2024. This morning's earnings call will be led by our CEO, Bob Franklin; and CFO, Paul Egge. Also in attendance today are Steve Retzloff, Executive Chairman of the company; Ray Vitulli, President of the company and CEO of the bank; and Joe West, Senior Executive Vice President and Chief Credit Officer of the bank.
Before we begin, I need to remind everyone that some of the remarks made today constitute forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995 as amended. We intend all such statements to be covered by the Safe Harbor provisions for forward-looking
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