PARENT COMPANY ONLY FINANCIAL STATEMENTS (Tables)

12 Months Ended

Dec. 31, 2022

Condensed Financial Information Disclosure [Abstract]

STELLAR BANCORP, INC.

(PARENT COMPANY ONLY)

CONDENSED BALANCE SHEETS


	December 31,
	2022		2021
	(In thousands)
ASSETS
Cash and due from banks	$	27,407	$	58,791
Investment in subsidiary(1)	1,419,578		823,365
Other assets	7,569		4,045
TOTAL ASSETS	$	1,454,554	$	886,201
LIABILITIES AND SHAREHOLDERS’ EQUITY
LIABILITIES:
Subordinated debentures	$	69,367	$	68,971
Accrued interest payable and other liabilities	2,011		762
Total liabilities	71,378		69,733
SHAREHOLDERS’ EQUITY:
Common stock	530		289
Capital surplus	1,222,761		530,845
Retained earnings	303,146		267,092
Accumulated other comprehensive (loss) income	(143,261)		18,242
Total shareholders’ equity	1,383,176		816,468
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	1,454,554	$	886,201

(1) The increase for the year ended December 31, 2022 compared to the year ended December 31, 2021 was driven by the push down of acquisition items to the Bank.

Schedule of Condensed Income Statement

STELLAR BANCORP, INC.

(PARENT COMPANY ONLY)

CONDENSED STATEMENTS OF INCOME


	For the Years Ended December 31,
	2022		2021		2020
	(In thousands)
INCOME:
Dividends from subsidiary	$	—	$	68,000	$	13,000
Other income	35		10		16
Total income	35		68,010		13,016
EXPENSE:
Interest expense on borrowed funds	3,144		3,231		3,497
Other expenses	7,389		3,492		1,595
Total expense	10,533		6,723		5,092
(Loss) income before income tax benefit and equity in undistributed income of subsidiaries	(10,498)		61,287		7,924
Income tax benefit	2,315		1,410		1,066
(Loss) income before equity in undistributed income of subsidiaries	(8,183)		62,697		8,990
Equity in undistributed income of subsidiaries	59,615		18,856		36,544
Net income	$	51,432	$	81,553	$	45,534

Schedule of Condensed Cash Flow Statement

STELLAR BANCORP, INC.

(PARENT COMPANY ONLY)

CONDENSED STATEMENTS OF CASH FLOWS


	For the Years Ended December 31,
	2022		2021		2020
	(In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	51,432	$	81,553	$	45,534
Adjustments to reconcile net income to net cash used in operating activities:
Equity in undistributed income of subsidiaries	(59,615)		(18,856)		(36,544)
Net amortization of discount on subordinated debentures	396		393		392
Stock based compensation expense	9,042		3,979		3,425
Increase in other assets	(2,334)		(1,622)		(1,026)
Decrease (increase) in accrued interest payable and other liabilities	(2,477)		1,117		(1,038)
Net cash (used in) provided by operating activities	(3,556)		66,564		10,743
CASH FLOWS FROM INVESTING ACTIVITIES:
Net cash acquired in the merger	11,078		—		—
Net cash provided by investing activities	11,078		—		—
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from the issuance of common stock, stock option exercises and the ESPP Plan	77		3,812		2,569
Net (paydowns) increase in borrowings under credit agreement	—		(15,569)		15,000
Dividends paid to common shareholders	(15,378)		(9,697)		(8,165)
Repurchase of common stock	(23,605)		(5,659)		(18,582)
Net cash used in financing activities	(38,906)		(27,113)		(9,178)
NET CHANGE IN CASH AND CASH EQUIVALENTS	(31,384)		39,451		1,565
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD	58,791		19,340		17,775
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	27,407	$	58,791	$	19,340