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Block's S&P Debut May Spark Massive Upside

Block's S&P Debut May Spark Massive Upside

Yahoo4 days ago
Block (NYSE:XYZ) popped nearly 3% in early trading after JPMorgan's Tien?tsin Huang bumped his price target from $60 to $90, eyeing a 24% gain when the stock joins the S&P 500 on July 23.
It's hard to ignore the upside when index funds are set to grab over 54 million sharesin other words, more than seven times its usual daily trading volume.
Warning! GuruFocus has detected 6 Warning Sign with XYZ.
Huang points out that this influx should juice liquidity and give the share price a lift just ahead of the rebalance.
On top of that, faster product rollouts and sharper marketing have kicked new momentum into Block's merchant tools and Cash App offerings.
His $90 target rests on a five times forward gross profit multiple, still below the seven to nine times range that many fintech peers command.
That gap suggests there's room for investors to rerate Block alongside its inclusion boost.
Wall Street expects second?quarter earnings per share of 67 cents per share, down about 28% YOY, and revenues of $6.27 billion when results land on August 7.
Despite the fundamental headwind, inclusion?driven demand often outpaces those drags in the weeks around rebalance.
For anyone watching fintech, the S&P debut and the Q2 print will be must?see events. They should set the stage for Block's next move higher.
This article first appeared on GuruFocus.
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Morning Bid: Fizzy market week turns flat
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Morning Bid: Fizzy market week turns flat

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TSX futures slip as investors await tariff deadline, trade updates
TSX futures slip as investors await tariff deadline, trade updates

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(Reuters) -Futures tied to Canada's main stock index slipped on Friday, mirroring global markets, as investors awaited trade developments ahead of President Donald Trump's tariff deadline next week. Futures on the S&P/TSX index were down 0.2% at 1,625.4 points by 06:55 a.m. ET (1055 GMT). Canada' main stock index edged lower on Thursday but was holding close to a record high. Global equities fell on Friday as investors booked profits ahead of a critical week that includes the August 1 tariff deadline. Markets are watching closely, hoping the United States will hold off on imposing steep import levies. This week, sentiment was buoyed by U.S. trade agreements with Japan, Indonesia, and the Philippines. Meanwhile, negotiations continue with the European Union and South Korea, where hopes for additional deals remain. In commodities, gold prices slipped and copper eased, and oil prices were stable on Friday. Looking ahead, investor focus will shift to several key events next week, including policy decisions from the Bank of Canada and the U.S. Federal Reserve, as well as earnings reports from several of the so-called 'Magnificent Seven' tech companies. FOR CANADIAN MARKETS NEWS, CLICK ON CODES: TSX market report [.TO] Canadian dollar and bonds report [CAD/] [CA/] Reuters global stocks poll for Canada Canadian markets directory ($1= C${CAD=;PRIMACT_1})

Stellar Bancorp, Inc. Reports Second Quarter 2025 Results
Stellar Bancorp, Inc. Reports Second Quarter 2025 Results

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Stellar Bancorp, Inc. Reports Second Quarter 2025 Results

HOUSTON, July 25, 2025--(BUSINESS WIRE)--Stellar Bancorp, Inc. (the "Company" or "Stellar") (NYSE: STEL) today reported net income of $26.4 million, or diluted earnings per share of $0.51, for the second quarter of 2025, compared to net income of $24.7 million, or diluted earnings per share of $0.46, for the first quarter of 2025. "We are pleased to report our second quarter results that reflect the efforts of our team beginning to add growth to the foundation we've built at Stellar Bank," said Robert R. Franklin, Jr., Stellar's Chief Executive Officer. "Our bankers made meaningful progress on originations during the second quarter after experiencing elevated payoff activity. We believe that the momentum we saw at the end of the second quarter will continue, which sets us up for loan and deposit growth over the remainder of the year," Mr. Franklin continued. "We also anticipate that the President's spending bill will provide some tail wind for the Houston economy. The Stellar message is resonating with our customer base, and we are seeing great progress with our prospects. Our pipelines are building and Stellar Bank is well-positioned to gain market share in the vibrant Texas markets we serve," Mr. Franklin concluded. Financial Highlights Solid Profitability: Net income for the second quarter of 2025 was $26.4 million, or diluted earnings per share of $0.51, which translated into an annualized return on average assets of 1.01%, an annualized return on average equity of 6.62% and an annualized return on average tangible equity of 12.16%(1). Strong Net Interest Margin: Tax equivalent net interest margin for the second quarter of 2025 was 4.18% compared to 4.20% for the first quarter of 2025. The tax equivalent net interest margin, excluding purchase accounting accretion ("PAA"), was 3.95%(1) for the second quarter of 2025 compared to 3.97%(1) for the first quarter of 2025. Strong Capital Position and Book Value Build: Total risk-based capital ratio increased to 15.98% at June 30, 2025, while book value per share increased to $31.20 at June 30, 2025 from $30.89 at March 31, 2025 and tangible book value per share increased to $19.94(1) at June 30, 2025 from $19.69(1) at March 31, 2025. Low Net Charge-offs: Net charge-offs of $370 thousand, or 0.01% of average loans, for the six months ended June 30, 2025 along with manageable asset quality, compared to $713 thousand, or 0.02% of average loans, for the six months ended June 30, 2024. Repurchase of Shares: Repurchased 791 thousand shares at a weighted average price per share of $26.08 during the second quarter of 2025. Second Quarter 2025 Results Net interest income in the second quarter of 2025 decreased $923 thousand, or 0.9%, to $98.3 million from $99.3 million for the first quarter of 2025. The net interest margin on a tax equivalent basis decreased to 4.18% for the second quarter of 2025 from 4.20% for the first quarter of 2025. The decrease in the net interest margin from the prior quarter was primarily due to the impact of increased rates on interest-bearing liabilities along with the decrease in average interest-earning assets partially offset by higher rates on loans. Net interest income for the second quarter of 2025 benefited from $5.3 million of income from PAA compared to $5.4 million in the first quarter of 2025. Excluding PAA, net interest income (tax equivalent) for the second quarter of 2025 would have been $93.1 million(1) and the tax equivalent net interest margin would have been 3.95%(1). Noninterest income for the second quarter of 2025 was $5.8 million, an increase of $286 thousand, or 5.2%, compared to $5.5 million for the first quarter of 2025. Noninterest income increased in the second quarter of 2025 compared to the first quarter of 2025 primarily due to the increase in other noninterest income partially offset by the loss on sale of assets during the second quarter. A significant driver of the increase in other noninterest income was $490 thousand in Federal Reserve Bank dividends as a result of Stellar Bank becoming a member of the Federal Reserve System effective in April 2025. Noninterest expense for the second quarter of 2025 decreased $162 thousand, or 0.2%, to $70.0 million compared to $70.2 million for the first quarter of 2025. The decrease in noninterest expense in the second quarter of 2025 compared to the first quarter of 2025 was primarily due to a decrease in salaries and employee benefits of $865 thousand along with a decrease in professional fees of $499 thousand partially offset by a $473 thousand increase in net occupancy and equipment, a $385 thousand increase in advertising expense and a $567 thousand increase in other noninterest expense. The efficiency ratio was 61.87% for the second quarter of 2025 compared to 61.93%(1) for the first quarter of 2025. Annualized returns on average assets, average equity and average tangible equity were 1.01%, 6.62% and 12.16%(1) for the second quarter of 2025, respectively, compared to 0.94%, 6.21% and 11.48%(1) for the first quarter of 2025, respectively. Financial Condition Total assets at June 30, 2025 were $10.49 billion, an increase of $58.1 million compared to $10.43 billion at March 31, 2025. The increase in total assets was largely due to an increase in Federal Reserve Bank stock along with increases in cash and securities, all of which were funded largely by core deposit growth. Total loans at June 30, 2025 increased $4.2 million to $7.29 billion compared to $7.28 billion at March 31, 2025. At June 30, 2025, the remaining balance of the purchase accounting accretion ("PAA") on loans was $62.9 million. Total deposits at June 30, 2025 increased $110.9 million to $8.67 billion compared to $8.56 billion at March 31, 2025 primarily due to increases in demand and money market and savings deposits partially offset by decreases in certificates and other time and noninterest-bearing deposits. Certificates and other time deposits decreased primarily due to the reduction in brokered deposits. Asset Quality Nonperforming assets totaled $58.2 million, or 0.55% of total assets, at June 30, 2025, compared to $59.7 million, or 0.57% of total assets, at March 31, 2025. The allowance for credit losses on loans as a percentage of total loans was 1.14% at June 30, 2025 compared to 1.15% at March 31, 2025. The provision for credit losses was $1.1 million for the second quarter of 2025 compared to $3.6 million for the first quarter of 2025. Net charge-offs for the second quarter of 2025 were $206 thousand, or 0.01% (annualized) of average loans, compared to net charge-offs of $163 thousand, or 0.01% (annualized) of average loans, for the first quarter of 2025. GAAP Reconciliation of Non-GAAP Financial Measures Stellar's management uses certain non-GAAP financial measures to evaluate its performance. Please refer to the GAAP Reconciliation and Management's Explanation of Non-GAAP Financial Measures on page 10 of this earnings release for a reconciliation of these non-GAAP financial measures. Conference Call Stellar's management team will host a conference call and webcast on Friday, July 25, 2025 at 8:00 a.m. Central Time (9:00 a.m. Eastern Time) to discuss its results for the second quarter of 2025. Participants may register for the conference call at conference ID 63586 to receive the dial-in numbers and unique PIN to access the call. If you need assistance in obtaining a dial-in number, please contact ir@ A simultaneous webcast is available at and requires pre-registration. If you are unable to participate during the live webcast, the webcast will be accessible via the Investor Relations section of the Company's website at _____________________ (1) Refer to the calculation of this non-GAAP financial measure on page 10 of this earnings release. The calculation of returns on average tangible equity and the efficiency ratio have been adjusted from prior period disclosures. About Stellar Bancorp, Inc. Stellar Bancorp, Inc. is a bank holding company headquartered in Houston, Texas. Stellar's principal banking subsidiary, Stellar Bank, provides a diversified range of commercial banking services primarily to small- to medium-sized businesses and individual customers across Houston, Dallas, Beaumont and surrounding communities in Texas. Forward-Looking Statements Certain statements in this press release which are not historical in nature are intended to be, and are hereby identified as, "forward-looking statements" for purposes of the safe harbor provided by Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements include, but are not limited to, future financial performance and operating results, the Company's plans, business and growth strategies, objectives, expectations and intentions, and other statements that are not historical facts, including projections of macroeconomic and industry trends, which are inherently unreliable due to the multiple factors that impact economic trends, and any such variations may be material. Forward-looking statements may be identified by terminology such as "may," "will," "should," "could," "scheduled," "plans," "intends," "projects," "anticipates," "expects," "believes," "estimates," "potential," "would," or "continue" or negatives of such terms or other comparable terminology. All forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and other factors that may cause the actual results, performance or achievements of Stellar to differ materially from any results expressed or implied by such forward-looking statements. Such factors include, among others: changes in the interest rate environment, the value of Stellar's assets and obligations and the availability of capital and liquidity; general competitive, economic, political and market conditions; and other factors that may affect future results of Stellar including changes in asset quality and credit risk; the inability to sustain revenue and earnings growth; changes in interest rates and capital markets; inflation; customer borrowing, repayment, investment and deposit practices; the impact, extent and timing of technological changes; capital management activities; disruptions to the economy and the U.S. banking system; risks associated with uninsured deposits and responsive measures by federal or state governments or banking regulators; legislative changes, executive orders, regulatory actions and reforms of the Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation and Texas Department of Banking. Additional factors which could affect the Company's future results can be found in the Company's Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, in each case filed with the SEC and available on the SEC's website at We disclaim any obligation and do not intend to update or revise any forward-looking statements contained in this communication, which speak only as of the date hereof, whether as a result of new information, future events or otherwise, except as required by federal securities laws. As forward-looking statements involve significant risks and uncertainties, caution should be exercised against placing undue reliance on such statements. Stellar Bancorp, Inc. Financial Highlights (Unaudited) 2025 2024 June 30 March 31 December 31 September 30 June 30 (Dollars in thousands) ASSETS: Cash and due from banks $ 136,060 $ 130,932 $ 419,967 $ 103,735 $ 110,341 Interest-bearing deposits at other financial institutions 442,044 429,643 491,249 412,482 379,909 Total cash and cash equivalents 578,104 560,575 911,216 516,217 490,250 Available for sale securities, at fair value 1,729,684 1,719,371 1,673,016 1,691,752 1,630,971 Loans held for investment 7,287,347 7,283,133 7,439,854 7,551,124 7,713,897 Less: allowance for credit losses on loans (83,165 ) (83,746 ) (81,058 ) (84,501 ) (94,772 ) Loans, net 7,204,182 7,199,387 7,358,796 7,466,623 7,619,125 Accrued interest receivable 35,537 37,669 37,884 39,473 43,348 Premises and equipment, net 108,615 109,750 111,856 113,742 113,984 Federal Reserve Bank and Federal Home Loan Bank stock 47,099 20,902 8,209 20,123 15,089 Bank-owned life insurance 108,726 108,108 107,498 106,876 106,262 Goodwill 497,318 497,318 497,318 497,318 497,318 Core deposit intangibles, net 81,468 87,007 92,546 98,116 104,315 Other assets 102,277 94,800 107,451 79,537 103,001 Total assets $ 10,493,010 $ 10,434,887 $ 10,905,790 $ 10,629,777 $ 10,723,663 LIABILITIES AND SHAREHOLDERS' EQUITY LIABILITIES: Deposits: Noninterest-bearing $ 3,183,693 $ 3,205,619 $ 3,576,206 $ 3,303,048 $ 3,308,441 Interest-bearing Demand 1,941,156 1,863,752 1,845,749 1,571,504 1,564,405 Money market and savings 2,393,767 2,248,616 2,253,193 2,280,651 2,213,031 Certificates and other time 1,154,998 1,244,726 1,453,236 1,587,398 1,639,426 Total interest-bearing deposits 5,489,921 5,357,094 5,552,178 5,439,553 5,416,862 Total deposits 8,673,614 8,562,713 9,128,384 8,742,601 8,725,303 Accrued interest payable 7,607 9,856 17,052 16,915 12,327 Borrowed funds 69,925 119,923 — 60,000 240,000 Subordinated debt 70,165 70,135 70,105 110,064 109,964 Other liabilities 67,865 61,428 82,389 74,074 70,274 Total liabilities 8,889,176 8,824,055 9,297,930 9,003,654 9,157,868 SHAREHOLDERS' EQUITY: Common stock 514 521 534 535 536 Capital surplus 1,185,048 1,202,628 1,240,050 1,238,619 1,238,477 Retained earnings 529,216 510,072 492,640 474,905 447,948 Accumulated other comprehensive loss (110,944 ) (102,389 ) (125,364 ) (87,936 ) (121,166 ) Total shareholders' equity 1,603,834 1,610,832 1,607,860 1,626,123 1,565,795 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 10,493,010 $ 10,434,887 $ 10,905,790 $ 10,629,777 $ 10,723,663 Stellar Bancorp, Inc. Financial Highlights (Unaudited) Three Months Ended Six Months Ended 2025 2024 2025 2024 June 30 March 31 December 31 September 30 June 30 June 30 June 30 (Dollars in thousands, except per share data) INTEREST INCOME: Loans, including fees $ 121,814 $ 120,640 $ 128,738 $ 132,372 $ 135,885 $ 242,454 $ 270,570 Securities: Taxable 15,293 16,148 14,789 13,898 11,923 31,441 21,216 Tax-exempt 810 812 814 814 816 1,622 1,634 Deposits in other financial institutions 4,782 4,720 5,681 4,692 3,555 9,502 7,182 Total interest income 142,699 142,320 150,022 151,776 152,179 285,019 300,602 INTEREST EXPENSE: Demand, money market and savings deposits 31,097 27,574 27,877 29,440 28,399 58,671 55,929 Certificates and other time deposits 11,459 13,527 16,830 18,073 18,758 24,986 33,842 Borrowed funds 407 517 235 840 1,700 924 3,474 Subordinated debt 1,401 1,444 2,123 1,916 1,912 2,845 3,829 Total interest expense 44,364 43,062 47,065 50,269 50,769 87,426 97,074 NET INTEREST INCOME 98,335 99,258 102,957 101,507 101,410 197,593 203,528 Provision for (reversal of) credit losses 1,090 3,632 942 (5,985 ) (1,935 ) 4,722 2,163 Net interest income after provision for credit losses 97,245 95,626 102,015 107,492 103,345 192,871 201,365 NONINTEREST INCOME: Service charges on deposit accounts 1,561 1,584 1,590 1,594 1,648 3,145 3,246 (Loss) gain on sale of assets (57 ) 417 (112 ) 432 (64 ) 360 449 Bank-owned life insurance 618 610 622 614 591 1,228 1,178 Debit card and interchange income 566 520 570 551 543 1,086 1,070 Other 3,103 2,374 2,362 3,111 2,698 5,477 5,769 Total noninterest income 5,791 5,505 5,032 6,302 5,416 11,296 11,712 NONINTEREST EXPENSE: Salaries and employee benefits 40,927 41,792 43,797 41,123 39,061 82,719 80,437 Net occupancy and equipment 4,399 3,926 4,401 4,570 4,503 8,325 8,893 Depreciation 1,992 1,995 1,984 1,911 1,948 3,987 3,912 Data processing and software amortization 5,620 5,682 5,551 5,706 5,501 11,302 10,395 Professional fees 1,287 1,786 3,428 1,714 1,620 3,073 4,282 Regulatory assessments and FDIC insurance 1,561 1,733 1,636 1,779 2,299 3,294 4,153 Amortization of intangibles 5,548 5,548 5,581 6,212 6,215 11,096 12,427 Communications 861 847 807 827 847 1,708 1,784 Advertising 1,167 782 1,593 878 891 1,949 1,656 Other 6,642 6,075 6,488 6,346 8,331 12,717 14,687 Total noninterest expense 70,004 70,166 75,266 71,066 71,216 140,170 142,626 INCOME BEFORE INCOME TAXES 33,032 30,965 31,781 42,728 37,545 63,997 70,451 Provision for income taxes 6,680 6,263 6,569 8,837 7,792 12,943 14,551 NET INCOME $ 26,352 $ 24,702 $ 25,212 $ 33,891 $ 29,753 $ 51,054 $ 55,900 EARNINGS PER SHARE Basic $ 0.51 $ 0.46 $ 0.47 $ 0.63 $ 0.56 $ 0.98 $ 1.05 Diluted $ 0.51 $ 0.46 $ 0.47 $ 0.63 $ 0.56 $ 0.97 $ 1.04 Stellar Bancorp, Inc. Financial Highlights (Unaudited) Three Months Ended Six Months Ended 2025 2024 2025 2024 June 30 March 31 December 31 September 30 June 30 June 30 June 30 (Dollars and share amounts in thousands, except per share data) Net income $ 26,352 $ 24,702 $ 25,212 $ 33,891 $ 29,753 $ 51,054 $ 55,900 Earnings per share, basic $ 0.51 $ 0.46 $ 0.47 $ 0.63 $ 0.56 $ 0.98 $ 1.05 Earnings per share, diluted $ 0.51 $ 0.46 $ 0.47 $ 0.63 $ 0.56 $ 0.97 $ 1.04 Dividends per share $ 0.14 $ 0.14 $ 0.14 $ 0.13 $ 0.13 $ 0.28 $ 0.26 Return on average assets(A) 1.01 % 0.94 % 0.94 % 1.27 % 1.13 % 0.98 % 1.06 % Return on average equity(A) 6.62 % 6.21 % 6.21 % 8.49 % 7.78 % 6.42 % 7.33 % Return on average tangible equity(A)(B)(D) 12.16 % 11.48 % 11.53 % 15.61 % 14.94 % 11.82 % 14.28 % Net interest margin (tax equivalent)(A)(C) 4.18 % 4.20 % 4.25 % 4.19 % 4.24 % 4.19 % 4.25 % Net interest margin (tax equivalent) excluding PAA(A)(B)(C) 3.95 % 3.97 % 3.94 % 3.91 % 3.82 % 3.96 % 3.86 % Efficiency ratio(B)(E) 61.87 % 61.93 % 64.46 % 60.40 % 60.81 % 61.90 % 60.62 % Capital Ratios Stellar Bancorp, Inc. (Consolidated) Equity to assets 15.28 % 15.44 % 14.74 % 15.30 % 14.60 % 15.28 % 14.60 % Tangible equity to tangible assets(B)(E) 10.34 % 10.42 % 9.87 % 10.27 % 9.53 % 10.34 % 9.53 % Estimated Total capital ratio (to risk-weighted assets) 15.98 % 15.97 % 16.00 % 15.85 % 15.30 % 15.98 % 15.30 % Estimated Common equity Tier 1 capital (to risk weighted assets) 14.06 % 14.05 % 14.14 % 13.57 % 12.95 % 14.06 % 12.95 % Estimated Tier 1 capital (to risk-weighted assets) 14.18 % 14.17 % 14.26 % 13.69 % 13.06 % 14.18 % 13.06 % Estimated Tier 1 leverage (to average tangible assets) 11.44 % 11.20 % 11.31 % 11.10 % 10.77 % 11.44 % 10.77 % Stellar Bank Estimated Total capital ratio (to risk-weighted assets) 15.39 % 15.40 % 15.28 % 15.02 % 14.61 % 15.39 % 14.61 % Estimated Common equity Tier 1 capital (to risk-weighted assets) 14.18 % 14.20 % 14.13 % 13.58 % 13.08 % 14.18 % 13.08 % Estimated Tier 1 capital (to risk-weighted assets) 14.18 % 14.20 % 14.13 % 13.58 % 13.08 % 14.18 % 13.08 % Estimated Tier 1 leverage (to average tangible assets) 11.44 % 11.22 % 11.21 % 11.01 % 10.78 % 11.44 % 10.78 % Other Data Weighted average shares: Basic 51,529 53,146 53,422 53,541 53,572 52,333 53,457 Diluted 51,569 53,197 53,471 53,580 53,608 52,376 53,506 Period end shares outstanding 51,398 52,141 53,429 53,446 53,564 51,398 53,564 Book value per share $ 31.20 $ 30.89 $ 30.09 $ 30.43 $ 29.23 $ 31.20 $ 29.23 Tangible book value per share(B) $ 19.94 $ 19.69 $ 19.05 $ 19.28 $ 18.00 $ 19.94 $ 18.00 Employees - full-time equivalents 1,062 1,054 1,037 1,040 1,045 1,062 1,045 (A) Interim periods annualized. (B) Refer to the calculation of these non-GAAP financial measures on page 10 of this Earnings Release. (C) Net interest margin represents net interest income divided by average interest-earning assets. (D) The calculation of return on average tangible equity has been adjusted from prior period disclosures. All periods presented above have been recalculated and disclosed under the same calculation. (E) The calculation of the efficiency ratio has been adjusted from prior period disclosures. All periods presented above have been recalculated and disclosed under the same calculation. Stellar Bancorp, Inc. Financial Highlights (Unaudited) Three Months Ended June 30, 2025 March 31, 2025 June 30, 2024 AverageBalance InterestEarned/InterestPaid AverageYield/Rate AverageBalance InterestEarned/InterestPaid AverageYield/Rate AverageBalance InterestEarned/InterestPaid AverageYield/Rate (Dollars in thousands) Assets Interest-Earning Assets: Loans $ 7,282,609 $ 121,814 6.71 % $ 7,344,298 $ 120,640 6.66 % $ 7,808,320 $ 135,885 7.00 % Securities 1,729,384 16,103 3.73 % 1,817,286 16,960 3.78 % 1,549,638 12,739 3.31 % Deposits in other financial institutions 436,596 4,782 4.39 % 430,621 4,720 4.45 % 258,916 3,555 5.52 % Total interest-earning assets 9,448,589 $ 142,699 6.06 % 9,592,205 $ 142,320 6.02 % 9,616,874 $ 152,179 6.36 % Allowance for credit losses on loans (83,700 ) (81,166 ) (96,306 ) Noninterest-earning assets 1,099,268 1,100,652 1,103,297 Total assets $ 10,464,157 $ 10,611,691 $ 10,623,865 Liabilities and Shareholders' Equity Interest-Bearing Liabilities: Interest-bearing demand deposits $ 1,952,004 $ 14,399 2.96 % $ 1,911,625 $ 12,392 2.63 % $ 1,545,096 $ 12,213 3.18 % Money market and savings deposits 2,371,221 16,698 2.82 % 2,234,571 15,182 2.76 % 2,227,393 16,186 2.92 % Certificates and other time deposits 1,201,903 11,459 3.82 % 1,296,972 13,527 4.23 % 1,694,536 18,758 4.45 % Borrowed funds 34,427 407 4.74 % 45,795 517 4.58 % 112,187 1,700 6.09 % Subordinated debt 70,151 1,401 8.01 % 70,121 1,444 8.35 % 109,910 1,912 7.00 % Total interest-bearing liabilities 5,629,706 $ 44,364 3.16 % 5,559,084 $ 43,062 3.14 % 5,689,122 $ 50,769 3.59 % Noninterest-Bearing Liabilities: Noninterest-bearing demand deposits 3,160,791 3,346,066 3,308,633 Other liabilities 78,120 92,299 87,986 Total liabilities 8,868,617 8,997,449 9,085,741 Shareholders' equity 1,595,540 1,614,242 1,538,124 Total liabilities and shareholders' equity $ 10,464,157 $ 10,611,691 $ 10,623,865 Net interest rate spread 2.90 % 2.88 % 2.77 % Net interest income and margin $ 98,335 4.17 % $ 99,258 4.20 % $ 101,410 4.24 % Net interest income and margin (tax equivalent) $ 98,427 4.18 % $ 99,353 4.20 % $ 101,482 4.24 % Cost of funds 2.02 % 1.96 % 2.27 % Cost of deposits 1.97 % 1.90 % 2.16 % Stellar Bancorp, Inc. Financial Highlights (Unaudited) Six Months Ended June 30, 2025 2024 AverageBalance InterestEarned/Interest Paid AverageYield/Rate AverageBalance InterestEarned/ Interest Paid AverageYield/Rate (Dollars in thousands) Assets Interest-Earning Assets: Loans $ 7,313,283 $ 242,454 6.69 % $ 7,873,572 $ 270,570 6.91 % Securities 1,773,092 33,063 3.76 % 1,495,726 22,850 3.07 % Deposits in other financial institutions 433,625 9,502 4.42 % 261,911 7,182 5.51 % Total interest-earning assets 9,520,000 $ 285,019 6.04 % 9,631,209 $ 300,602 6.28 % Allowance for credit losses on loans (82,440 ) (93,959 ) Noninterest-earning assets 1,099,956 1,118,077 Total assets $ 10,537,516 $ 10,655,327 Liabilities and Shareholders' Equity Interest-Bearing Liabilities: Interest-bearing demand deposits $ 1,931,926 $ 26,791 2.80 % $ 1,621,154 $ 24,491 3.04 % Money market and savings deposits 2,303,273 31,880 2.79 % 2,189,099 31,438 2.89 % Certificates and other time deposits 1,249,175 24,986 4.03 % 1,569,292 33,842 4.34 % Borrowed funds 40,079 924 4.65 % 123,293 3,474 5.67 % Subordinated debt 70,136 2,845 8.18 % 109,859 3,829 7.01 % Total interest-bearing liabilities 5,594,589 $ 87,426 3.15 % 5,612,697 $ 97,074 3.48 % Noninterest-Bearing Liabilities: Noninterest-bearing demand deposits 3,252,917 3,417,196 Other liabilities 85,171 92,223 Total liabilities 8,932,677 9,122,116 Shareholders' equity 1,604,839 1,533,211 Total liabilities and shareholders' equity $ 10,537,516 $ 10,655,327 Net interest rate spread 2.89 % 2.80 % Net interest income and margin $ 197,593 4.19 % $ 203,528 4.25 % Net interest income and margin (tax equivalent) $ 197,780 4.19 % $ 203,688 4.25 % Cost of funds 1.99 % 2.16 % Cost of deposits 1.93 % 2.05 % Stellar Bancorp, Inc. Financial Highlights (Unaudited) Three Months Ended 2025 2024 June 30 March 31 December 31 September 30 June 30 (Dollars in thousands) Period-end Loan Portfolio: Commercial and industrial $ 1,346,744 $ 1,362,266 $ 1,362,260 $ 1,350,753 $ 1,396,064 Real estate: Commercial real estate (including multi-family residential) 3,840,981 3,854,607 3,868,218 3,976,296 4,029,671 Commercial real estate construction and land development 762,911 721,488 845,494 890,316 922,805 1-4 family residential (including home equity) 1,126,523 1,125,837 1,115,484 1,112,235 1,098,681 Residential construction 137,855 141,283 157,977 161,494 200,134 Consumer and other 72,333 77,652 90,421 60,030 66,542 Total loans held for investment $ 7,287,347 $ 7,283,133 $ 7,439,854 $ 7,551,124 $ 7,713,897 Deposits: Noninterest-bearing $ 3,183,693 $ 3,205,619 $ 3,576,206 $ 3,303,048 $ 3,308,441 Interest-bearing Demand 1,941,156 1,863,752 1,845,749 1,571,504 1,564,405 Money market and savings 2,393,767 2,248,616 2,253,193 2,280,651 2,213,031 Certificates and other time 1,154,998 1,244,726 1,453,236 1,587,398 1,639,426 Total interest-bearing deposits 5,489,921 5,357,094 5,552,178 5,439,553 5,416,862 Total deposits $ 8,673,614 $ 8,562,713 $ 9,128,384 $ 8,742,601 $ 8,725,303 Asset Quality: Nonaccrual loans $ 50,505 $ 54,518 $ 37,212 $ 32,140 $ 50,906 Accruing loans 90 or more days past due — — — — — Total nonperforming loans 50,505 54,518 37,212 32,140 50,906 Foreclosed assets 7,652 5,154 1,734 2,984 2,548 Total nonperforming assets $ 58,157 $ 59,672 $ 38,946 $ 35,124 $ 53,454 Net charge-offs (recoveries) $ 206 $ 163 $ 2,016 $ 3,933 $ (1 ) Nonaccrual loans: Commercial and industrial $ 13,395 $ 11,471 $ 8,500 $ 9,718 $ 18,451 Real estate: Commercial real estate (including multi-family residential) 23,359 26,383 16,459 10,695 18,094 Commercial real estate construction and land development 3,412 2,027 3,061 4,183 1,641 1-4 family residential (including home equity) 9,965 14,550 9,056 7,259 12,454 Residential construction 176 — — 121 155 Consumer and other 198 87 136 164 111 Total nonaccrual loans $ 50,505 $ 54,518 $ 37,212 $ 32,140 $ 50,906 Asset Quality Ratios: Nonperforming assets to total assets 0.55 % 0.57 % 0.36 % 0.33 % 0.50 % Nonperforming loans to total loans 0.69 % 0.75 % 0.50 % 0.43 % 0.66 % Allowance for credit losses on loans to nonperforming loans 164.67 % 153.61 % 217.83 % 262.92 % 186.17 % Allowance for credit losses on loans to total loans 1.14 % 1.15 % 1.09 % 1.12 % 1.23 % Net charge-offs to average loans (annualized) 0.01 % 0.01 % 0.11 % 0.21 % 0.00 % Stellar Bancorp, Inc. GAAP Reconciliation and Management's Explanation of Non-GAAP Financial Measures (Unaudited) Stellar's management uses certain non-GAAP (generally accepted accounting principles) financial measures to evaluate its performance. Stellar believes that these non-GAAP financial measures provide meaningful supplemental information regarding its performance and that management and investors benefit from referring to these non-GAAP financial measures in assessing Stellar's performance and when planning, forecasting, analyzing and comparing past, present and future periods. Specifically, Stellar reviews pre-tax, pre-provision income, pre-tax pre-provision ROAA, tangible book value per share, return on average tangible equity, tangible equity to tangible assets and net interest margin (tax equivalent) excluding PAA for internal planning and forecasting purposes. Stellar has included in this earnings release information relating to these non-GAAP financial measures for the applicable periods presented. These non-GAAP measures should not be considered in isolation or as a substitute for the most directly comparable or other financial measures calculated in accordance with GAAP. Moreover, the manner in which Stellar calculates the non-GAAP financial measures may differ from that of other companies reporting measures with similar names. Three Months Ended Six Months Ended 2025 2024 2025 2024 June 30 March 31 December 31 September 30 June 30 June 30 June 30 (Dollars and share amounts in thousands, except per share data) Net income $ 26,352 $ 24,702 $ 25,212 $ 33,891 $ 29,753 $ 51,054 $ 55,900 Add: Provision for (reversal of) credit losses 1,090 3,632 942 (5,985 ) (1,935 ) 4,722 2,163 Add: Provision for income taxes 6,680 6,263 6,569 8,837 7,792 12,943 14,551 Pre-tax, pre-provision income $ 34,122 $ 34,597 $ 32,723 $ 36,743 $ 35,610 $ 68,719 $ 72,614 Total average assets $ 10,464,157 $ 10,611,691 $ 10,649,175 $ 10,626,266 $ 10,623,865 $ 10,537,516 $ 10,655,327 Pre-tax, pre-provision return on average assets(A) 1.31 % 1.32 % 1.22 % 1.38 % 1.35 % 1.32 % 1.37 % Total shareholders' equity $ 1,603,834 $ 1,610,832 $ 1,607,860 $ 1,626,123 $ 1,565,795 $ 1,603,834 $ 1,565,795 Less: Goodwill and core deposit intangibles, net 578,786 584,325 589,864 595,434 601,633 578,786 601,633 Tangible shareholders' equity $ 1,025,048 $ 1,026,507 $ 1,017,996 $ 1,030,689 $ 964,162 $ 1,025,048 $ 964,162 Shares outstanding at end of period 51,398 52,141 53,429 53,446 53,564 51,398 53,564 Tangible book value per share $ 19.94 $ 19.69 $ 19.05 $ 19.28 $ 18.00 $ 19.94 $ 18.00 Average shareholders' equity $ 1,595,540 $ 1,614,242 $ 1,614,762 $ 1,587,918 $ 1,538,124 $ 1,604,839 $ 1,533,211 Less: Average goodwill and core deposit intangibles, net 581,438 586,895 592,471 598,866 604,722 584,152 607,935 Average tangible shareholders' equity $ 1,014,102 $ 1,027,347 $ 1,022,291 $ 989,052 $ 933,402 $ 1,020,687 $ 925,276 Net income $ 26,352 $ 24,702 $ 25,212 $ 33,891 $ 29,753 $ 51,054 $ 55,900 Add: Core deposit intangibles amortization, net of tax 4,383 4,383 4,409 4,907 4,910 8,766 9,817 Adjusted net income $ 30,735 $ 29,085 $ 29,621 $ 38,798 $ 34,663 $ 59,820 $ 65,717 Return on average tangible equity(A)(B) 12.16 % 11.48 % 11.53 % 15.61 % 14.94 % 11.82 % 14.28 % Total assets $ 10,493,010 $ 10,434,887 $ 10,905,790 $ 10,629,777 $ 10,723,663 $ 10,493,010 $ 10,723,663 Less: Goodwill and core deposit intangibles, net 578,786 584,325 589,864 595,434 601,633 578,786 601,633 Tangible assets $ 9,914,224 $ 9,850,562 $ 10,315,926 $ 10,034,343 $ 10,122,030 $ 9,914,224 $ 10,122,030 Tangible equity to tangible assets 10.34 % 10.42 % 9.87 % 10.27 % 9.53 % 10.34 % 9.53 % Net interest income (tax equivalent) $ 98,427 $ 99,353 $ 103,039 $ 101,578 $ 101,482 $ 197,780 $ 203,688 Less: Purchase accounting accretion 5,344 5,397 7,555 6,795 10,098 10,741 18,649 Adjusted net interest income (tax equivalent) $ 93,083 $ 93,956 $ 95,484 $ 94,783 $ 91,384 $ 187,039 $ 185,039 Average earning assets $ 9,448,589 $ 9,592,205 $ 9,653,162 $ 9,643,629 $ 9,616,874 $ 9,520,000 $ 9,631,209 Net interest margin (tax equivalent) excluding PAA(A) 3.95 % 3.97 % 3.94 % 3.91 % 3.82 % 3.96 % 3.86 % Noninterest expense $ 70,004 $ 70,166 $ 75,266 $ 71,066 $ 71,216 $ 140,170 $ 142,626 Less: Core deposit intangibles amortization 5,548 5,548 5,581 6,212 6,215 11,096 12,427 Adjusted noninterest expense $ 64,456 $ 64,618 $ 69,685 $ 64,854 $ 65,001 $ 129,074 $ 130,199 Net interest income $ 98,335 $ 99,258 $ 102,957 $ 101,507 $ 101,410 $ 197,593 $ 203,528 Noninterest income 5,791 5,505 5,032 6,302 5,416 11,296 11,712 Less: (Loss) gain on sale of assets (57 ) 417 (112 ) 432 (64 ) 360 449 Adjusted noninterest income 5,848 5,088 5,144 5,870 5,480 10,936 11,263 Net interest income plus adjusted noninterest income $ 104,183 $ 104,346 $ 108,101 $ 107,377 $ 106,890 $ 208,529 $ 214,791 Efficiency ratio(C) 61.87 % 61.93 % 64.46 % 60.40 % 60.81 % 61.90 % 60.62 % (A) Interim periods annualized. (B) The calculation of return on average tangible equity has been adjusted from prior period disclosures. All periods presented above have been recalculated and disclosed under the same calculation. (C) The calculation of the efficiency ratio has been adjusted from prior period disclosures. All periods presented above have been recalculated and disclosed under the same calculation. View source version on Contacts Investor Relations ir@

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