Stellar Bancorp, Inc. · NYSE:STEL
Stellar Bancorp — CBTX — Sandler O'Neill West Coast Financial Services Conference 2019
16 slides from Stellar Bancorp's conference presentation, Mar 4, 2019
Slide 1: Sandler O'Neill West Coast Financial Services Conference
Sandler O'Neill West Coast Financial Services Conference March 5, 2019 NASDAQ: CBTX
Slide 2: Non-GAAP Financial Measures and Forward Looking Statements
2 NON-GAAP FINANCIAL MEASURES This presentation contains certain non-GAAP (generally accepted accounting principles) financial measures, including tangible equity and tangible book value per share. The non-GAAP financial measures that CBTX, Inc.(the “Company”) discusses in this presentation should n
Slide 3: Company Overview
▪ Founded in 2007 ▪ Primarily a business bank, ~84% commercial loans(1) as of December 31, 2018 ▪ Seasoned executive management team ▪ History of organic growth, mergers of equals, and acquisitions ▪ Diverse and attractive loan portfolio ▪ Low-cost core funding with ~43% noninterest-bearing deposits
Slide 4: Strengths & Investment Rationale
Strengths & Investment Rationale 4 ▪ Strength of management team ▪ Significant insider ownership ▪ Relationship-based business bank with a strong credit culture ▪ Key emphasis on developing core loan and deposit relationships led by bankers who support clients through tailored financial solutions ▪
Slide 5: Fourth Quarter Highlights
5 Fourth Quarter Highlights ▪ Net income of $0.56 per diluted share for the quarter ended December 31, 2018, compared to $0.08 per diluted share, for the quarter ended December 31, 2017. ▪ Return on average assets 1.71% for the fourth quarter of 2018, compared to 0.25% for the fourth quarter of Q4 2
Slide 6: Growth & Transformation
6 Growth & Transformation 2013 2017 58.6% 41.4% Beaumont Houston Transformation of Loan Portfolio Note: Figures as of year-end 12/31. 70.1% 29.9% 2018 Asset and Earnings Growth ($000) 73.9% 26.1% $2,451 $2,629 $2,883 $2,952 $3,081 $3,279 0.7% 0.9% 0.9% 0.9% 0.9% 1.5% 0.0% 0.2% 0.4% 0.6% 0.8% 1.0% 1.
Slide 7: Attractive, Low-Cost Core Deposit Base
The Bank Built or BusinessAttractive, Low-Cost Core Deposit Base 7 Stable Core Deposit Base (1) ▪ Proven ability to generate low-cost core deposits(2) to fund loan growth ▪ 89% loan to deposit ratio as of December 31, 2018 ▪ Business banking focus combined with relationship approach results in: – ~4
Slide 8: Diversified Loan Portfolio
The Bank Built or BusinessDiversified Loan Portfolio 8 Loan Composition Over Time(1) ▪ Total Commercial loans (2) represented approximately 84% of total loans as of December 31, 2018 ▪ Core focus on lending to professionals and local small- and mid-sized businesses ▪ Key emphasis on developing core
Slide 9: Core Focus on Commercial Loans
The Bank Built or BusinessCore Focus on Commercial Loans 9 Commercial Loans Outstanding by Type ($2.052B) (1) (2) (1) Figures as of year end 12/31/2018. (2) Commercial loans defined as total loans less 1-4 family residential, consumer, agriculture and other loans. Construction & Development ($515M)
Slide 10: Construction & Development Loans
The Bank Built or BusinessConstruction & Development Loans 10 (1) Total Capital of CommunityBank of Texas, N.A., the wholly-owned subsidiary of the Company. Construction and Development Loan Components As of December 31, 2018 ($ 000) (% Capital) (1) Construction Community Development Multifamily $ 1
Slide 11: Strong Credit Culture
The Bank Built or BusinessStrong Credit Culture 11 ▪ Chief Credit Officer with 40 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
Slide 12: Revenue Growth & Efficiency
The Bank Built or BusinessRevenue Growth & Efficiency 12 ▪ Increasing net interest margin ▪ Asset sensitive, with 55% variable rate loans as of December 31, 2018 ▪ Increasing revenue and improving efficiency ratio (1) Historical Revenue and NIM (1) Improving Efficiency (1)(2) ($ in thousands) ▪ Effi
Slide 13: Growth Strategy
13 Growth Strategy ▪ Organic Growth: ‒ Continue hiring experienced bankers ‒ New Southeast Houston branch Q4 2018 ‒ Dallas LPO/DPO Q4 2018 converted to branch Q1 2019 ‒ Areas of additional expansion within certain lending verticals: ▪ Commercial and industrial ▪ SBA lending ▪ Talent recruitment and
Slide 14: Our Brand Promise
14 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
Slide 15: Appendix
Appendix
Slide 16: Non-GAAP Reconciliation
16 Non-GAAP Reconciliation (1) Excludes the dilutive effect, if any, of 232,232, 260,322, 248,314, 647,074, 575,326 and 593,812 shares of common stock issuable upon exercise of outstanding stock options as of December 31, 2018, 2017, 2016, 2015, 2014 and 2013, respectively. (2) Excludes the dilutive
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