Stellar Bancorp, Inc. · NYSE:STEL

Stellar Bancorp — CBTX — Sandler O'Neill West Coast Financial Services Conference March 2018

17 slides from Stellar Bancorp's conference presentation, Mar 6, 2018

  1. Slide 1: Sandler O'Neill West Coast Financial Services Conference March 2018

    V20180226 (1) NASDAQ: CBTX Sandler O'Neill West Coast Financial Services Conference March 2018

  2. Slide 2: Safe Harbor Statement

    SAFE HARBOR STATEMENT NO OFFER OR SOLICITATION This communication does not constitute an offer to sell, a solicitation of an offer to sell, the solicitation or an offer to buy any securities or a solicitation or any vote or approval. There will be no sale of securities in any jurisdiction in which s

  3. Slide 3: IPO Summary

    IPO Summary Issuer: CBTX, Inc. Exchange / Ticker: Nasdaq: CBTX Shares Offered: 2.76 million shares (including overallotment) IPO Price: $26.00 per share Offering Size: $71.76 million Offering Structure: 100% Primary IPO Shares as % Total Outstanding: ~11% Effective Date: Market Cap: November 7, 2017

  4. Slide 4: Company Overview

    Company Overview    Founded in 2007 Completed IPO in November 2017 Primarily a business bank, ~85% commercial loans(1) as of December 31, 2017 Seasoned executive management team History of organic growth, mergers of equals, and acquisitions Diverse and attractive loan portfolio Low-cost core fund

  5. Slide 5: Company Highlights

    Company Highlights Bob Franklin, Chairman of the Board, CEO and 36-year banking veteran, leads a 10 person executive committee with an average of 38 years of banking experience 33 strategically located branches give our bank a material presence in the expansive Houston and Beaumont markets Sophistic

  6. Slide 6: Franchise Expansion

    Franchise Expansion 2009 2011 2013 2015 6 County Acquisition (6) Non-Acquired/De Novo (14) Crosby Acquisition (6) VB Texas MOE (6) MC Bancshares Acquisition (2) Closed/Sold Branches (6) Ju VB Texas, Inc. (Vista Bank Texas) • • • : s Bank, SSB m in assets of ed February 2015: MC Bancshares, Inc. (Mem

  7. Slide 7: Growth & Transformation

    Growth & Transformation Total Assets ROAA (%) 0.94% 0.93% 0.90% 0.85% 2009 2010 2011 2012 2013 2014 2015 2016 2017 Beaumont Houston 29.9% 25.8% 41.4% 58.6% 74.2% 70.1% 2009 Note: Figures as of year-end 12/31 2013 2017 7 Transformation of Loan Portfolio $3,081 0.74%0.65% $2,883 $2,952 $2,629 0.59%0.6

  8. Slide 8: Attractive, Low-Cost Core Deposit Base

    Attractive, Low-Cost Core Deposit Base  Proven ability to generate low-cost core deposits to fund loan growth – 89% loan to deposit ratio  Business banking focus combined with relationship approach results in: – – 43% noninterest-bearing demand deposits 93% core deposits(1) with minimal reliance o

  9. Slide 9: Diversified Loan Portfolio

    Diversified Loan Portfolio  Commercial loans (2) represented approximately 85% of total loans as of December 31, 2017  Core focus on lending to professionals and local small and mid-sized businesses 2012 2013 2014 2015 2016 2017  Key emphasis on developing core relationships Total Commercial Loan

  10. Slide 10: Core Focus on Commercial Loans

    Core Focus on Commercial Loans  Industrial Construction/Equipment Rental ‒ Provide operating lines of credit, fixed asset financing and real estate loans to numerous industrial companies involved in the construction, modification, support and maintenance of petrochemical plants Industrial Construct

  11. Slide 11: Strong Credit Culture

    Strong Credit Culture  Chief Credit Officer with 39 years of experience ‒ Seasoned Regional Credit Officers located in Houston and Beaumont  Centralized underwriting, tiered approval requirements based on aggregate relationship size: ‒ ‒ Officer credit authority, credit executive committee, and di

  12. Slide 12: Revenue Growth & Efficiency

    Revenue Growth & Efficiency  Stable net interest margin  Efficiency efforts: – Lender efficiency project – increasing average loan portfolio per lender since 2012 Branch rationalization effort – successful and ongoing Investments in people, technology and systems over past two years Infrastructure

  13. Slide 13: Growth Strategy

    Growth Strategy  Organic Growth: ‒ ‒ Continue hiring experienced bankers Areas of additional expansion within certain lending verticals:    Commercial and industrial (new team in place) Medical SBA lending (additional staff hired) – ‒ Talent recruitment and retention efforts benefit from being p

  14. Slide 14: Strengths & Investment Rationale

    Strengths & Investment Rationale  Strength of management team  Significant insider ownership  Relationship-based business bank with a strong credit culture  Strength of operating markets  Platform and team with significant scalability  Track record of growth and expansion  Disciplined approac

  15. Slide 15: Our Brand Promise

    Our Brand Promise Our Vision Here to Serve. Our Positioning To experienced business owners, CommunityBank of Texas, N.A. is the financial partner that delivers a better banking experience. Our Personality Resourceful, Trustworthy, Friendly Responsive, Strong 15

  16. Slide 16: Appendix

    Appendix

  17. Slide 17: Non-GAAP Reconciliations

    Non-GAAP Reconciliations Tangible Book Val ue Per Share Total Shareholders' Equity $ 446,214 $ 357,637 $ 344,313 $ 329,252 $ 311,139 Adjustments: Goodwill Other Intangibles 80,950 6,770 80,950 7,791 80,950 8,879 59,049 8,903 59,049 10,225 Tangible Equity $ 358,494 $ 268,896 $ 254,484 $ 261,300 $ 241

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