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Texas-based commercial bank Stellar Bancorp reported revenue ahead of Wall Streets expectations in Q4 CY2025, but sales were flat year on year at $109 million. Its non-GAAP profit of $0.51 per share was in line with analysts’ consensus estimates.

Stellar Bancorp (STEL) Q4 CY2025 Highlights:

• Net Interest Income: $144 million vs analyst estimates of $102.1 million (39.9% year-on-year growth, 41.1% beat)
• Net Interest Margin: 4.2% vs analyst estimates of 4.2% (4.4 basis point beat)
• Revenue: $109 million vs analyst estimates of $107.9 million (flat year on year, 1% beat)
• Efficiency Ratio: 61.6% vs analyst estimates of 66.4% (478 basis point beat)
• Adjusted EPS: $0.51 vs analyst estimates of $0.51 (in line)
• Tangible Book Value per Share: $21.62 vs analyst estimates of $21.54 (13.5% year-on-year growth, in line)
• Market Capitalization: $1.67 billion

Company Overview

Created through strategic mergers to serve the growing Texas business community, Stellar Bancorp is a Texas bank holding company that provides commercial banking services primarily to small and medium-sized businesses and professionals.

Sales Growth

From lending activities to service fees, most banks build their revenue model around two income sources. Interest rate spreads between loans and deposits create the first stream, with the second coming from charges on everything from basic bank accounts to complex investment banking transactions. Over the last five years, Stellar Bancorp grew its revenue at an exceptional 18.2% compounded annual growth rate. Its growth beat the average banking company and shows its offerings resonate with customers.

Note: Quarters not shown were determined to be outliers, impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.

We at StockStory place the most emphasis on long-term growth, but within financials, a half-decade historical view may miss recent interest rate changes, market returns, and industry trends. Stellar Bancorp’s recent performance marks a sharp pivot from its five-year trend as its revenue has shown annualized declines of 4.2% over the last two years.

This quarter, Stellar Bancorp’s $109 million of revenue was flat year on year but beat Wall Street’s estimates by 1%.

Net interest income made up 97.9% of the company’s total revenue during the last five years, meaning Stellar Bancorp lives and dies by its lending activities because non-interest income barely moves the needle.

Net interest income commands greater market attention due to its reliability and consistency, whereas non-interest income is often seen as lower-quality revenue that lacks the same dependable characteristics.

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Tangible Book Value Per Share (TBVPS)

Banks operate as balance sheet businesses, with profits generated through borrowing and lending activities. Valuations reflect this reality, emphasizing balance sheet strength and long-term book value compounding ability.

When analyzing banks, tangible book value per share (TBVPS) takes precedence over many other metrics. This measure isolates genuine per-share value by removing intangible assets of debatable liquidation worth. EPS can become murky due to acquisition impacts or accounting flexibility around loan provisions, and TBVPS resists financial engineering manipulation.

Stellar Bancorp’s TBVPS declined at a 3.3% annual clip over the last five years. However, TBVPS growth has accelerated recently, growing by 12.7% annually over the last two years from $17.02 to $21.62 per share.

Over the next 12 months, Consensus estimates call for Stellar Bancorp’s TBVPS to grow by 6.7% to $23.07, lousy growth rate.

Key Takeaways from Stellar Bancorp’s Q4 Results

We were impressed by how significantly Stellar Bancorp blew past analysts’ net interest income expectations this quarter. We were also happy its revenue narrowly outperformed Wall Street’s estimates. On the other hand, its EPS was in line. Overall, this print had some key positives. The stock remained flat at $36.41 immediately following the results.

So do we think Stellar Bancorp is an attractive buy at the current price? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).