HOUSTON – Stellar Bancorp, Inc. (NYSE: STEL) has announced an increase in its quarterly cash dividend from $0.13 to $0.14 per common share. The dividend is scheduled to be paid on December 31, 2024, to shareholders of record as of December 13, 2024.
The bank holding company, which is based in Houston, Texas, operates primarily through its subsidiary Stellar Bank. The bank offers commercial banking services to small and medium-sized businesses, as well as individual customers, in the Houston, Dallas, Beaumont, and other Texas communities.
The increase in dividend represents a continuation of Stellar Bancorp's commitment to returning value to its shareholders and reflects confidence in the company's financial stability and future performance. The decision to raise the dividend was made by the company's Board of Directors and marks a positive adjustment for investors.
This financial move by Stellar Bancorp comes amidst its efforts to maintain a steady growth trajectory and solidify its presence in the competitive Texas banking market. Shareholders looking forward to the enhanced dividend payout will find this news to be a sign of the company's strong position and prudent financial management.
It is important to note that the information provided in this announcement is based on a press release statement from Stellar Bancorp, Inc. The company cautions that forward-looking statements are subject to risks, uncertainties, and other factors that could affect actual results, and these statements do not guarantee future performance. These forward-looking statements should be considered in light of the risks detailed in Stellar Bancorp's regulatory filings with the Securities and Exchange Commission.
Investors are encouraged to review the company's most recent Annual Report on Form 10-K, along with subsequent Quarterly Reports on Form 10-Q, for a better understanding of the risk factors that may impact the company's financial outcomes.
In other recent news, Stellar Bancorp has disclosed strong third-quarter results for 2024, marking a significant rise in net income to $33.9 million, up from $29.8 million in the previous quarter. This increase is primarily due to a $6 million reversal of provision for credit losses, signaling a decline in non-performing loans. The company has also initiated share repurchases and plans to redeem $40 million of subordinated debt, demonstrating a strategic approach to capital management and future growth.
Furthermore, Stellar Bancorp has originated over $300 million in loans, despite a strategic reduction in CRE lending, and improved its total risk-based capital ratio to 15.91%. The bank is also exploring mergers and acquisitions opportunities to enhance its funding profiles and manage expenses.
However, there was a slight increase in loans rated as "special mention," indicating potential risks. Management also anticipates challenges in loan growth due to economic uncertainty but aims for mid-single-digit growth in 2025. These are some of the recent developments in Stellar Bancorp's financial journey.
InvestingPro Insights
Stellar Bancorp's recent decision to increase its quarterly dividend aligns well with its financial performance and market position. According to InvestingPro data, the company boasts a market capitalization of $1.57 billion and has demonstrated strong profitability with a P/E ratio of 12.72. This relatively low P/E ratio suggests that the stock may be undervalued compared to its earnings potential.
InvestingPro Tips highlight that Stellar Bancorp has shown a "Strong return over the last three months," with data confirming a 17.31% price total return over that period. This positive momentum extends further, with a notable 28.47% return over the past six months. These figures underscore the company's robust performance and may explain the Board's confidence in raising the dividend.
The company's financial health is further evidenced by its profitability over the last twelve months, as noted in another InvestingPro Tip. With an operating income margin of 42.42% for the last twelve months as of Q3 2024, Stellar Bancorp demonstrates efficient operations and strong earnings potential, supporting its ability to increase shareholder returns through higher dividends.
It's worth noting that InvestingPro offers additional insights, with 8 more tips available for Stellar Bancorp, providing investors with a comprehensive view of the company's financial landscape and market position.
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