Q3 2024 Stellar Bancorp Inc Earnings Call Transcript
Key Points
- Stellar Bancorp Inc (STEL) reported a strong third quarter net income of $33.9 million, or 63 cents per diluted share, marking an increase from the previous quarter.
- The company successfully reduced its loan deposit ratio from approximately 92% a year ago to about 86%, indicating improved liquidity management.
- Stellar Bancorp Inc (STEL) achieved a significant decrease in non-performing loans, which dropped nearly 37% from $50.9 million to $32.1 million during the third quarter.
- The bank's capital base is strong, with total risk-based capital at 15.91% at the end of the third quarter, reflecting consistent growth since the merger.
- The company initiated a share repurchase program, buying back 108,000 shares at an average price of $26.10, demonstrating a commitment to returning capital to shareholders.
- Net charge-offs were elevated in the third quarter, totaling $3.9 million, although most had been previously reserved for.
- The net interest margin slightly decreased to 4.19% in the third quarter from 4.24% in the second quarter, indicating pressure on interest income.
- Purchase accounting accretion decreased from $10.1 million in the second quarter to $6.8 million in the third quarter, impacting net interest income.
- The company experienced a decline in loan balances, with loans declining more than expected due to strategic shifts and weaker demand.
- Non-interest expenses remained high, with the quarterly run rate slightly above the targeted $70 million, indicating challenges in cost management.
Greetings and welcome to the Stellar Bancorp third quarter earnings release conference call at this time. All participants are in listen-only mode. A brief question and answer session will follow after the formal presentation. If you would like to ask a question at that time, please press start followed by number one on your telephone keypad. Thank you. I will now turn the call over to Courtney Courtney Theriot, Chief Accounting Officer. You may now begin.
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 third quarter of 2024. This morning's earnings call will be led by our CEO Robert R. Franklin and CFO Paul P. Egge Also in attendance today are Steven F. Retzloff, executive Chairman of the company Raman A. Vitulli III President of the company and CEO of the bank and Joe E. Penland, senior Executive Vice President and Chief Credit Officer of the bank.
Before we begin, I need to remind
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