Stellar Bancorp, Inc. · NYSE:STEL
Stellar Bancorp — Q1 2023 Earnings Presentation
19 slides from Stellar Bancorp's earnings presentation, Apr 28, 2023
Slide 1: First Quarter 2023 Earnings Presentation
First Quarter 2023 Earnings Presentation Exhibit 99.2
Slide 2: Forward-Looking Statements and Non-GAAP Financial Measures
Forward-Looking Statements and Non-GAAP Financial Measures 2 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 193
Slide 3: Stellar Bancorp, Inc. - Snapshot
3 (1) Refer to the calculation of this non-GAAP financial measure and a reconciliation to its most directly comparable GAAP financial measure in the appendix. Stellar Bancorp, Inc. - Snapshot Combination of the Houston region’s two largest regionally-focused banks Combination delivers scale, growt
Slide 4: Unparalleled Focus on Houston Region
Unparalleled Focus on Houston Region Total Assets Houston Region(1) Percent of Company Name ($B) Deposits ($B) Deposits (%) JPMorgan $3,841 $188.0 7.6% Wells Fargo 1,881 34.3 2.4% BofA 3,112 29.7 1.5% Zions 87.8 14.1 17.8% PNC 541 11.9 2.7% Stellar 11.1 9.5 98.1% Frost 51.8 8.4 18.4% Capital One 440
Slide 5: First Quarter Financial Highlights
5 First Quarter Financial Highlights (1) Refer to the calculation of these non-GAAP financial measures and a reconciliation to their most directly comparable GAAP financial measures in the append. (2) Adjusted results exclude acquisition and merger-related expenses, core deposit intangible amortizat
Slide 6: Core PTPP Earnings Power
Core PTPP Earnings Power 6 (1) Adjusted results exclude the impact of acquisition and merger-related expenses, core deposit intangibles amortization, purchase accounting adjustments and gains and losses on sale of assets for the period presented. (2) Non-GAAP financial measure. (3) Annualized. After
Slide 7: Strong Liquidity Profile
7 Strong Liquidity Profile(1) Stellar is well-positioned to manage through current environment Sources of Liquidity Sources of Liquidity Estimated Uninsured Deposits (1) As of March 31, 2023. (2) Brokered deposit capacity is governed by internal policy limits. (Dollars in millions) Cash 263$ Unpledg
Slide 8: First Quarter Deposit Summary
First Quarter Deposit Summary 8 Deposit Mix Deposits (in millions) Maintaining Discipline Navigating Competitive Deposit Market As of March 31, 2023: • Retained favorable mix: 44.4% noninterest bearing deposits • Estimated uninsured deposits, net of collateralized municipal deposits: 46.4% • Average
Slide 9: First Quarter Loan Summary
First Quarter Loan Summary 9 (1) Refer to the calculation of these non-GAAP financial measures and a reconciliation to their most directly comparable GAAP financial measures in the appendix. . Loan Portfolio Composition Quality Loan Portfolio • 55.4% of Commercial Real Estate (“CRE”) exposure is own
Slide 10: First Quarter Asset Quality Summary
First Quarter Asset Quality Summary 10 Nonperforming Loans by Type (1) Combined represents the simple addition of legacy balances for 2022; estimated. Nonperforming assets decreased and net charge-offs were minimal in Q1 Allowance for credit losses on loans: • As of March 31, 2023, was $96.2 million
Slide 11: Regulatory Capital Ratios
Regulatory Capital Ratios 11 (1) Estimated. (2) Refer to the calculation of this non-GAAP financial measure and a reconciliation to its most directly comparable GAAP financial measure in the appendix. Minimum Required Plus Capital Convservation Buffer Bank Capital Ratios Total Capital Ratio 12.42% 1
Slide 12: Key Takeaways
12 Key Takeaways Excellent core funding profile Merger scale brings strong combined earnings power and franchise value in one of the best markets in the U.S. Key success factor for 2023: Credit performance and risk management Significant financial flexibility Positioned for rapid capital-build
Slide 13: Diverse and Strong Markets
4.8% 4.1% 2.1% Houston MSA Texas USA 34.3 29.7 14.1 11.9 9.5 8.4 8.0 7.6 6.8 JP Morgan Wells Fargo BofA Zions PNC Stellar Frost Capital One Cadence Prosperity Diverse and Strong Markets 13 Houston is Diverse, with Significant Economic TailwindsGreater Houston Market Houston is the #1 most diverse
Slide 14: Diversified and Growing Economy
Professional and Business Services 17% Government 14% Education and Health Services 13% Leisure and Hospitality 10% Retail Trade 9% Manufacturing 7% Construction 7% Transportation and Utilities 6% Financial Activities 6% Wholesale Trade 5% Other Services 4% Mining and Logging 2% Information 1% 7.4%
Slide 15: Houston's Resilience and Growth
2.0 3.0 4.0 5.0 6.0 7.0 2.0 2.5 3.0 3.5 2007 2009 2011 2013 2015 2017 2019 2021 2023 Houston’s Resilience and Growth 15 Since the Great Recession, Houston has proven its resiliency, weathering economic cycles and natural disasters − Houston welcomed 2.1 million new residents and created over 870 t
Slide 16: Houston's Growth Projected to Continue
302,570 (300,000) (200,000) (100,000) 0 100,000 200,000 300,000 400,000 H ou st on D al la s N ew Y or k A tl an ta Ph oe ni x M ia m i Ta m pa Se at tl e R iv er si de B os to n D en ve r W as hi ng to n Sa n Fr an ci sc o M in ne ap ol is Ph ila de lp hi a Sa n D ie go B al ti m or e D et ro it Lo
Slide 17: Housing Market and Cost of Living
$92,662 $86,611 $83,193 $81,625 $74,325 $71,347 $73,503 New York MSA Los Angeles MSA Chicago MSA Dallas MSA Houston MSA Texas U.S. $787,500 $978,000 $335,000 $385,000 $330,000 $341,700 $400,528 New York MSA Los Angeles MSA Chicago MSA Dallas MSA Houston MSA Texas U.S. 8.5x 11.3x 4.0x 4.7x 4.4x 4.8x
Slide 18: Appendix: Non-GAAP Reconciliation
Appendix: Non-GAAP Reconciliation(1) 18 (1) See the disclosure under the heading “GAAP Reconciliation of Non-GAAP Financial Measures” on slide 2 regarding the use of non-GAAP financial measures. (2) Annualized. Net income $ 37,148 $ 2,052 (+) Provision for credit losses 3,666 44,793 (+) Provision fo
Slide 19: Be Stellar.
ol, Be Stellar. NASDAQ: STEL stellar BANCORP, INC. 19