Stellar Bancorp, Inc. (NYSE:STEL) posted second-quarter 2025 results on Friday that topped Wall Street earnings expectations, bolstered by stable margins and modest balance sheet growth, though revenue came in just shy of estimates.
The Houston-based bank reported net income of $26.4 million, or $0.51 per diluted share, beating analyst projections by $0.06. This marked an improvement from the first quarter’s $24.7 million, or $0.46 per share. Revenue reached $104.13 million—slightly under the $104.92 million consensus and nearly unchanged from the same quarter a year ago.
“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., the company’s Chief Executive Officer. “Our bankers made meaningful progress on originations during the second quarter after experiencing elevated payoff activity.”
Stellar maintained a strong net interest margin at 4.18%, just below the 4.20% posted in Q1. Excluding the effects of purchase accounting accretion, the margin stood at 3.95%.
The bank’s total loans edged up by $4.2 million to $7.29 billion, while deposits climbed $110.9 million to $8.67 billion, showing steady growth. Asset quality also improved, with nonperforming assets declining to $58.2 million, or 0.55% of total assets—down slightly from 0.57% in the prior quarter.
Credit performance strengthened as the provision for credit losses dropped to $1.1 million from $3.6 million in the first quarter. Stellar continued to demonstrate capital strength with a total risk-based capital ratio of 15.98%.
During the quarter, the company repurchased 791,000 shares of its common stock at an average price of $26.08 as part of its ongoing share buyback program.
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