Stellar Bancorp (STEL) Q4 2025 earnings summary

Executive summary

• Reported net income of $26.1 million ($0.51 diluted EPS) for Q4 2025 and $102.9 million ($1.99 diluted EPS) for full year 2025, with annualized ROAA of 0.97% and ROAE of 6.34% for the year.

• Book value per share rose to $32.78 at year-end, and tangible book value per share increased to $21.62.

• Repurchased 299,347 shares in Q4 2025 and redeemed $30 million of subordinated debt.

• Entered into a merger agreement with Prosperity Bancshares, Inc., leading to the cancellation of the Q4 earnings call.

Financial highlights

• Net interest income for Q4 2025 was $103.4 million, up 2.7% sequentially; full year 2025 net interest income was $401.6 million, down 1.6% year-over-year.

• Tax equivalent net interest margin (excluding PAA) was 4.06% for Q4 2025, up from 4.00% in Q3 2025; full year 2025 margin was 3.99%, up from 3.89% in 2024.

• Noninterest income for 2025 was $21.8 million, down 5.4% year-over-year, mainly due to losses on foreclosed assets.

• Noninterest expense for 2025 decreased 1.2% to $285.5 million, driven by lower professional fees, amortization of intangibles, and regulatory assessments.

• Efficiency ratio for 2025 was 62.28%, up from 61.53% in 2024.

Outlook and guidance

• Forward-looking statements highlight risks from interest rate changes, asset quality, credit risk, and regulatory actions, especially in light of the pending merger.