Stellar Bancorp Inc (NYSE:STEL) Reports Mixed Q3 2025 Results, Stock Rises on Operational Strength

Stellar Bancorp Inc (NYSE:STEL) has announced its financial results for the third quarter of 2025, presenting a mixed performance against Wall Street's expectations. The Texas-based commercial bank reported figures that largely aligned with analyst projections on profitability but revealed a slight divergence in top-line revenue, contributing to a measured market response.

Earnings and Revenue Versus Estimates

The company's performance in relation to analyst forecasts provides a clear picture of its quarterly standing.

• Earnings Per Share (EPS): Stellar reported a GAAP profit of $0.50 per diluted share. This figure came in just shy of the analyst consensus estimate of $0.5035, representing a near miss but remaining largely in line with market expectations.
• Revenue: Total revenue for the quarter was $105.6 million. This result fell approximately 2% short of the estimated $108.0 million, indicating a slight top-line weakness compared to what the market had anticipated.

The immediate market reaction has been cautiously positive. The stock has seen a notable uptick in pre-market trading, suggesting that investors are focusing on the bank's underlying operational strengths and strategic positioning, potentially overlooking the minor earnings and revenue shortfall.

Third Quarter 2025 Financial and Operational Summary

Beyond the headline earnings figures, the earnings release detailed several key financial and operational highlights that paint a picture of a stable institution navigating a complex economic environment. The company reported net income of $25.7 million, a slight decrease from the $26.4 million earned in the previous quarter.

• Net Interest Income and Margin: A bright spot was the growth in net interest income, which increased by 2.3% to $100.6 million. The tax-equivalent net interest margin also improved, rising to 4.20% from 4.18% in the second quarter. Even when excluding purchase accounting accretion, the core margin expanded to 4.00%.
• Balance Sheet and Capital: The company strengthened its balance sheet, with total assets growing to $10.63 billion. Notably, total deposits increased by $143.8 million to $8.82 billion, primarily driven by growth in core money market and savings accounts. The total risk-based capital ratio improved to a robust 16.33%, and tangible book value per share saw a significant increase to $21.08.
• Loan Portfolio and Credit Quality: Management highlighted a strategic repositioning of the loan portfolio, reducing exposure to non-relationship real estate and shifting toward a more balanced mix. While total loans decreased by $119.5 million due to payoffs, credit quality remained sound. Nonperforming assets declined to 0.51% of total assets, and the provision for credit losses was a modest $305 thousand.

Looking Ahead

The press release did not include a specific quantitative financial outlook for the coming quarters or the full year. Consequently, the market's reaction is not being driven by forward-looking guidance from the company. Investors are instead left to compare the bank's current trajectory with existing analyst estimates, which project sales of $109.3 million and earnings per share of approximately $0.50 for the fourth quarter of 2025.

For a more detailed breakdown of past and future earnings estimates for Stellar Bancorp Inc, you can review the data here.

Disclaimer: This article is for informational purposes only and does not constitute investment advice, financial analysis, or a recommendation to buy or sell any security. The information presented is based on publicly available sources and should not be relied upon as the sole basis for an investment decision.