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DATE
Friday, October 24, 2025 at 9 a.m. ET
CALL PARTICIPANTS
Chief Executive Officer — Robert R. Franklin
Chief Financial Officer — Paul P. Egge
Executive Chairman — Steve Reitcloff
President (of bank) — Ramon A. Vitulli
Executive Vice President and Chief Credit Officer (of bank) — Joe Letts
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RISKS
Net Charge-Offs — Management reported $3.3 million in net charge-offs for Q3 2025, primarily relating to over ten relationships, with most previously identified and reserved for.
Non-Interest Expense Increase — Non-interest expense rose to $73.1 million from $70 million in the second quarter, due in part to severance expenses for two upcoming branch closures and elevated medical insurance costs.
Loan Payoffs Outpacing Advances — The quarter saw $330 million in loan payoffs, $50 million higher than the previous quarter, with advances lagging paydowns and payments by an additional $50 million, potentially impeding near-term loan growth.
Year-to-Date Net Charge-Off Rate — Year-to-date net charge-offs totaled $3.7 million, or approximately 70 basis points annualized for the period ended in the third quarter of 2025.
TAKEAWAYS
Net Income -- $25.7 million, or $0.50 per diluted share, down from $26.4 million, or $0.51 per share, in the prior quarter.
Net Interest Income -- $100.6 million, an increase from $98.3 million in the previous quarter, attributed to larger interest-earning assets and a higher net interest margin.
Net Interest Margin (NIM) -- 4.2%, up from 4.18% in the second quarter of 2025; NIM excluding purchase accounting accretion was 4%, rising from 3.95% in the previous quarter.
Purchase Accounting Accretion -- $4.8 million in the third quarter of 2025, decreased from $5.3 million in the second quarter of 2025, with an updated fair value mark of $58.1 million remaining on the loan discount.
Provision for Loan Losses -- $305,000, primarily related to increased allowance for unfunded commitments.
Allowance for Credit Losses -- $78.9 million, or 1.1% of loans, slightly down from $83.2 million, or 1.14%, in the previous quarter.
Non-Interest Income -- $5 million in the third quarter of 2025, compared to $5.8 million earlier in 2025, with the decline mostly due to approximately $445,000 in foreclosed asset write-downs and lower other non-interest sources.
Share Repurchases -- Just under $5 million in the third quarter of 2025, bringing the year-to-date total to approximately $64 million in share repurchases.
Tangible Book Value Per Share -- Increased 9.3% year-over-year in tangible book value per share from $19.28 to $21.08 per share after dividends and share repurchases.
Deposit Growth -- 51% of new deposits were from new customers; overall gains attributed both to new client acquisition and existing relationship expansion.
Loan Originations -- Nearly $500 million originated in the third quarter of 2025, with loan originations up 62% for the first three quarters of 2025 compared to the same period in 2024.
Loan Payoffs -- Totaled $330 million in the third quarter of 2025, and 25% to competitive refinancing elsewhere year-to-date.
Total Risk-Based Capital -- 16.33% at quarter-end, compared to 15.98% at the previous quarter-end.
Subordinated Debt Repayment -- $30 million of subordinated debt paid off just after the third quarter.
Branch Closure Costs -- $5 million in severance expenses recorded in conjunction with two planned branch closures in the following quarter.
SUMMARY
Management highlighted a favorable increase in net interest income and net interest margin, driven by deposit growth and the bank's relationship-focused strategy, although a quarter-over-quarter decline in overall origination volume was noted. Non-interest expense was deemed elevated due to one-time items, with expectations to return closer to first-half levels in the subsequent quarter. Year-over-year, tangible book value per share increased 9.3% from $19.28 to $21.08 per share, despite continued share repurchases.
Management identified increased competition and heightened M&A activity within Texas as both an opportunity and a challenge, emphasizing the company's selective approach to growth and acquisitions. CFO Egge stated, "We feel great about our liquidity, capital, and overall balance sheet positioning."
The franchise reported "little exposure to non-originated credits" according to Robert R. Franklin and only three shared national credits, all with established relationships. Deposit gains were evenly split between attracting new customers and expanding existing relationships, reflecting increased brand awareness and market penetration. Branch optimization and expense control initiatives continue as crossing the $10 billion threshold prompted operational adjustments and targeted cost reductions.
Management anticipates loan growth to manifest further as pipeline conversion improves, while recognizing that competitive market dynamics and elevated payoff activity may continue to pressure net funded balances in the near term.
INDUSTRY GLOSSARY
Purchase Accounting Accretion: Recognition of interest income resulting from the discount established at acquisition of loans, as these acquired assets are repaid or perform over time.
Net Interest Margin (NIM): The ratio of net interest income to average earning assets, reflecting the profitability of a bank's core lending and funding activities.
Tangible Book Value Per Share: The value of a bank's tangible equity available to common shareholders, divided by shares outstanding; excludes intangible assets such as goodwill.
Risk-Based Capital Ratio: A regulatory measure of a bank's capital adequacy, calculated as total qualifying capital divided by risk-weighted assets.
Allowance for Credit Losses: Reserve set aside for estimated loan losses, expressed either as a dollar amount or as a percentage of loans.
Full Conference Call Transcript
Robert R. Franklin, and CFO, Paul P. Egge. Also in attendance today are Steve Reitcloff, Executive Chairman of the company, Ramon A. Vitulli, President of the company and CEO of the bank, and Joe Letts, Executive Vice President and Chief Credit Officer of the bank. Before we begin, I need to remind everyone that some of the remarks made today constitute forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995 as amended. We intend all such statements to be covered by the Safe Harbor provisions for forward-looking statements contained in the Act.
Also note that if we give guidance about future results, that guidance is only a reflection of management's belief at the time the statement is made, and such beliefs are subject to change. We disclaim any obligation to publicly update any forward-looking statement except as may be required by law. Please see the last page of the text in this morning's earnings release, which is available on our website at iir.seller.net for additional information about the risk factors associated with forward-looking statements. At the conclusion of our remarks, we will open the line and allow time for questions. I will now turn the call over to our CEO, Robert R. Franklin.
Robert R. Franklin: Thank you, Courtney. Good morning, and welcome to the Stellar Bancorp, Inc. third quarter earnings call. I'm pleased to report that we delivered solid results, including increasing our net interest income and our net interest margin. Our balance sheet expansion was driven primarily by deposit growth, reflecting our bankers' emphasis on getting the full client relationship. Credit quality has found its way back into the headlines. While we experienced some charge-offs in the quarter, they were spread over several small credits, most of which were already identified and appropriately reserved. We feel comfortable with our present level of reserve based on our portfolio and the markets that we serve.
We have little exposure to non-originated credits and only have three shared national credits, all with long-standing and additional business ties to the bank. Overall, trends remain favorable and our markets stable. Paul will provide more detail on our expenses during the quarter, including some one-time expenses and some increased advertising spend. As we continue to strengthen our capital position, we have repurchased shares and have paid down $30 million of our subordinated debt just after quarter-end. Our well-capitalized position gives us valuable flexibility, and we remain committed to deploying capital in ways to enhance our shareholder value. We are focused on growing our company.
We believe that if we continue to be disciplined in building quality assets, protecting margins, and focusing on full balance relationships, we will drive long-term value for our shareholders. Now I'll turn the call over to Paul P. Egge, our CFO, for more content.
Paul P. Egge: Thanks, Bob, and good morning, everybody. We are pleased to report third quarter 2025 net income of $25.7 million or $0.50 per diluted share, as compared to net income of $26.4 million or $0.51 per share in the second quarter. Each represents an annualized ROAA of 0.97% and an annualized ROATCE of 11.45%. Key highlights of our third quarter performance were improvements in our net interest income and margin, incrementally larger interest-earning assets. Our balance sheet growth was driven by strong deposit growth. We feel great about our liquidity, capital, and overall balance sheet positioning.
During the third quarter, net interest income was $100.6 million, representing an increase from the $98.3 million booked in the second quarter, largely due to higher earning assets and net interest margin for the quarter. This translated into a net interest margin of 4.2% relative to 4.18% posted in the second quarter. Purchase accounting accretion in the third quarter was $4.8 million, down from $5.3 million in the second quarter.
So if you were to exclude purchase accounting accretion, tax-equivalent net interest income increased by slightly more to $95.9 million from $93.1 million in the prior quarter, and that change in net interest margin excluding purchase accounting accretion was also greater, going from 3.95% in the prior quarter to 4% in the third quarter. We're really proud to get NIM excluding purchase accounting accretion back to a 4% level, and we continue to feel good about our ability to defend, perhaps incrementally improve, on our top-tier margin profile by focusing on staying true to our core relationship banking model.
Walking further down the income statement, we booked a provision for loan losses of $305,000 in the third quarter, which was driven primarily by an increase in our allowance for unfunded commitments and growth in that category. While we did experience $3.3 million in net charge-offs in the third quarter, relating to over 10 relationships, most of these were previously identified and already specifically reserved for, therefore not impacting our quarterly provision. For a year-to-date perspective, our net charge-offs totaled $3.7 million or approximately 70 basis points annualized.
Our allowance for credit losses on loans ended the quarter at $78.9 million or 1.1% of loans, which is down slightly from $83.2 million or 1.14% of loans at the end of the second quarter. Moving on to non-interest income, we earned $5 million in the third quarter versus $5.8 million in 2025. This third-quarter decrease was mostly due to approximately $445,000 of write-downs on foreclosed assets and lower other non-interest income during the quarter. On to non-interest expense, our expense increased to $73.1 million from $70 million in the second quarter, primarily due to an increase in salaries and benefits and, to a lesser extent, increases in professional fees and advertising.
Salary benefits expense included severance expenses recorded relating to two upcoming branch closures in the fourth quarter, which totaled about $5 million, as well as elevated medical insurance expenses relative to prior quarters. We view our third-quarter expenses as an outlier, and we expect fourth-quarter expenses to be closer to our run rate for the first half of the year. So all of this drove solid bottom-line results of $25.7 million in net income, which continues to fuel our track record of internal capital generation and our very strong capital position. Total risk-based capital was 16.33% at the end of the third quarter, relative to 15.98% at the end of the second quarter.
Year-over-year tangible book value per share increased 9.3% from $19.28 to $21.08 per share, and that is after the effect of dividends and meaningful share repurchases. I should note that our share repurchases in the third quarter were lighter than prior quarters, totaling just under $5 million relative to a total of approximately $64 million in share repurchases year-to-date. In closing, we really like where we sit, both financially and strategically. Even more so since recent M&A disruption in Texas accentuates our key differentiation among the only truly focused franchises with scale in a competitive landscape comprised of increasingly larger out-of-state competitors.
Built a strong balance sheet that can support quality growth, and with growth, we're positioned to deliver positive operating leverage through adding scale to the Stellar Bank platform while maintaining the financial flexibility to be opportunistic. Thank you. And I will now turn the call back over to Bob.
Robert R. Franklin: Thank you, Paul. And operator, we're ready for questions.
Audra: Thank you. We will now begin the question and answer session. We'll take our first question from David Feaster at Raymond James.
David Feaster: Hi, good morning everybody.
Robert R. Franklin: Morning.
David Feaster: I just wanted to start on let's start on the growth side. You know, I know somewhat of the decline is strategic, and we've talked about that given your focus on a balanced approach. But I just wanted to get a sense on first off, what's driving the payoffs and paydowns? How much of that is competition versus just asset sales and those kinds of things? And then just how you think about the growth outlook as we look forward?
I mean, Texas is a very competitive market on one hand and that's maybe that could be a headwind, but at the same time you talk about the disruption and that creates a ton of opportunities just given the strength of your franchise and your Just wanted to kinda taking that altogether, like, how do you think about growth and just any insights you can provide on that?
Robert R. Franklin: Sure, David. Yes, so start maybe a little bit with what's impacting the growth. As when we talk about the payoffs like you asked the color around that. So payoffs this last quarter were about $50 million more than the previous quarter. So we've talked about a run rate of around $300 million of payoffs. They were $330 million in the last quarter. And year-to-date, 44% of our payoffs are related to the sale of collateral, sale of business. But 25% is kind of that in that competitive area of refinance elsewhere.
So and those are the things that we're that we take a look at around you know, one, and as Bob already mentioned, that's remaining disappointed around full relationships. So of that, it will go away. On that refinance elsewhere, if we put our best foot forward to try to some of that. But that's some of that's some of what we're what we're faced with. On the other component of that in the waterfall is you know, we call it we've talked about it before, we call it carry, which is our advances versus our paydowns and scheduled payments. And as Paul mentioned, we had a reserve related to unfunded that continues to grow.
We're still not seeing the lift from that. So compared to the previous quarter, that was almost another $50 million of increase in payments and paydowns exceeding the advances. So that's an area where we think we will get a lift as we continue to originate loans. We're really pleased with the originations. Last quarter the third quarter we originated almost $500 million of loans compared to $640 million the previous quarter. But the real thing that I think we want to make sure communicate is just overall year-to-date compared to last year, first three quarters, we're up 62% as loan originations and the mix that we like with a little bit more C&I in that mix.
So things are heading in the right direction. We just have to continue to convert on our pipeline and pipeline remains healthy. Think a little bit of the originations that were down compared to the previous quarter were really due to in some cases, it's competitive obviously, but also just some things that are going to get pushed into the fourth quarter. But the pipeline remains healthy. And we're really pleased with where we stand there.
David Feaster: That's great. Maybe touching on the credit side a little bit. You know, concerns are ex you know, they've gotten heightened in the industry right now. I guess, first, I was hoping you could maybe touch on what are you seeing on the credit front. Is there anything that you're seeing broadly that's causing you any concern? And then secondarily, I was just hoping you could maybe touch a bit on your approach to credit. You know, collateral management, stress testing, ongoing moderate. It seems like some of those are what's, you know, maybe investors are concerned about you know, in the industry.
So just was hoping you could elaborate maybe a little bit on your process and your approach to managing credit.
Robert R. Franklin: Yeah. I think the best way to manage credit is when they come in through the front door, David. I mean so that's that's how we manage credit most of the time. However, you know, we do stress testing. We do all the things that folks do to monitor portfolios. And you know, we're we're moving our portfolio from what was two real two smaller community banks into a larger community bank. It has a different look. I think you've seen it on our balance sheet as we've gone from where we used to run our banks. Let's say, 90% to 100% loan to deposits. We're now down about in the low eighties, and feel comfortable there.
We're able to make money there. We're changing the mix a bit. To try to have a little more emphasis on stickier C&I. Credits, not we do we are very careful about how we approach C&I and how that getting monitored and what we do to make sure that we have solid results around results around C&I. But we also continue to real estate loans, and those things have been good to us over the years. We're in a market that continues to grow and so real estate continues to be a good active place for us to put money. So we're I think we would be more concerned if we were in a more a less dynamic market.
But we're in a very dynamic market All the things that are that are affecting the world for that matter tariffs and the various things that are happening today. I think are being absorbed pretty well. In Houston and Dallas and the markets that we're in. Well, not So we feel supported by our markets. And, you know, I think it's it's about decision making with them and that's kinda how we approach it.
David Feaster: Okay. That's helpful. And then just wanted to maybe switch gears to the to the deposit side. I mean, growth was really strong this quarter. Cost declined. Just wanted to get a sense of some of the drivers behind that How much of that is new clients versus you know, increasing the liquidity or relationships with existing clients? And then just, you know, again, with the liquidity build, I mean, even after paying down borrowings, and buying a little bit of securities, just kinda curious what your plans are for some of that excess liquidity going forward.
Robert R. Franklin: Yeah. They did. I'll touch up well, let me touch real quick. Here on the deposits. On the deposit growth piece. So real really pleased there is as we've already mentioned. So you know, of our new of our new deposits that were onboarded in the quarter, 51% were to new customers that had not been here before. And we've seen that kind of hover in that 40 to 50% all year, which we really like and we think that's really a reflection of continued brand awareness of Stellar. Our bankers that are really having good success with market share gains.
You know, we've had improvement in our net promoter score, really getting into, like, a best in class area there. Customer satisfaction is all heading in the right direction. I think that just points to the fact that we continue to bring new customers to the bank as well as this expansion of our existing customer base, which, you know, represents that other 50%. But really the growth is really around those new accounts and deposits that associated in that. They're that are well exceeding. In dollar amount, the closed accounts and are carried. It was nice and gave us a little lift.
David Feaster: Yeah. David, we just feel very strongly that low-cost deposits is the is something that everyone's gonna be fighting over and something we put a big emphasis on in any relationship that we have. And so we're gonna continue to do that. I think we've seen some success as we did this quarter and hopefully, we'll continue to see that as we keep the push on that. Going forward. We are building some liquidity, and I think deploying that both in loans and securities is something that we intend to do in the in the future. But we're we wanna grow the loan portfolio. We wanna that's where we grow customers. And that's how we continue to grow the bank.
And it's important to us to continue on that lock. A lot of turmoil in our markets a lot of M&A going on, a lot of so it's giving us opportunity for customers. It's giving us opportunity for new employees and people to join our company. Which is which is great. I think it's but it's also had some negatives to it and that you have new players in that wanna buy the market, and you're seeing some interesting things around not only pricing, but covenant packages and sort of credit light. And we're not gonna join that party. That one doesn't doesn't fit us, and we have to retreat a little bit. We'll do it.
But we've we've been operating in a competitive market for a long time. We feel like we know how to do that. We'll get our share And if we continue to do the right things, which I think we are, a customer acquisition standpoint, we'll continue to we will grow the bank. So that's that's kinda how we're approaching it.
David Feaster: That's helpful. Thanks, everybody.
Audra: We'll move next to Stephen Scouten at Piper Sandler.
Stephen Scouten: Hey. Good morning, everyone. Just following up on the deposits quickly. You've tended to have some seasonal strength in the fourth quarter. Is that something you would expect here this coming quarter as well?
Robert R. Franklin: We talk about that all the time because we do have seasonal strength with some of our government banking deposits. In fact, the last year we had $200 million deposit that came in on the last day of 2024. Kinda hard to predict as it relates to that. We'll keep you guys abreast if there's anything that majorly kinda creates a meaningful deviation from norm. As we did, I think, last year. And, Tanya, checked how much represents what we would call seasonal excess. So we'll we'll note that when we report the third quarter. Fourth quarter, I should say. If and when some of that tax revenue seasonality comes in before year-end.
A lot of it really hits in January and February. And it's kinda gone by March. But sometimes and last year was a great example where sometimes it comes in right before the end of the year. But that's not reflected in this quarter's deposit. Right? It doesn't happen until late in the fourth quarter.
Stephen Scouten: Perfect. Great. That's great color. When you were talking a little bit about the saying it looked like, you know, this was maybe a bit of an outlier this quarter and could get back to that $70 million level. What makes this quarter more of an outlier I know there was the severance payment in there. In size. But what makes this an outlier? And do you think that kind 70 million range is the level you can hang around in '26 Or should we see just some kind of general inflation build from here?
Paul P. Egge: There I'll I'll say to be more specific, I said that we'll see fourth-quarter earnings closer to our first quarter or first half run rate than what we posted in the third quarter. So it might not be just as great as the $70 million per quarter we were posting in the first half year, but definitely closer to that than the $73 million we posted in the third quarter. Separately, we'll see some inflation. I mean, as you guys know, we've been focused on holding the line where we can and really being focused on just that.
We feel great about how we've been able to kind of stop the creep expenses, particularly as it relates to a lot of what we had to build in crossing over the $10 billion threshold. In optimization mode on a go forward, and we've been really pleased at how we've been able to do just that while remixing kind of with attrition and things along those lines in our So we feel really good about where we sit, and you know, the goal is to continue optimizing and holding the line as much as we can going into 2026 and beyond.
Audra: Next, we'll move to Will Jones at KBW.
Will Jones: Hey, great. Thanks. Good morning, guys. Hey. So, Paul, maybe we could just stick with you and move to the margin discussion. I mean, if you exclude purchase accounting, we kinda hit that 4% and those on. That felt like kind of the overarching, you know, near-term target for you guys. And I go back to your comments on the call about feel feeling good about the ability just to defend that level, if not even improve from here.
But as we think about this next period of fed easing, will that ability to defend will that really be more of just some tailwinds from fixed repricing, or do you do you intend to be, you know, relatively aggressive lowering deposit costs from here?
Paul P. Egge: You know, we're gonna be focused on lowering deposit costs where we can. Predominantly gonna be on more your specials and exception level pricing. That's what we've got some index pricing for certain deposit products. That we're gonna get immediate benefit from. When rates change. So we feel really good about kind of the initial repricing dynamics. And then separately, there is some tail trends that are helping us in how our securities and loans reprice. So we're still in a in a kind of a pretty good backdrop to defend that margin. You know, at the deck gets reshuffled at every rate cut, they're they're could be some timing distinction.
But we feel like we've got the benefits are likely to efficiently mitigate the drawbacks of how those repricing go on. So we're we're feeling good about the penny. Actually, I were pleasantly surprised to have gotten the 4% NIM excluding purchase accounting accretion as at fast as we get certainly did not promise that to the market, and do not expect it necessarily to materialize as quick, but we're really pleased that we were able to do that. Notwithstanding being a little less loaned up than what our budget forecast are in our plans. To drive some of those. Really are.
Will Jones: Yeah. I mean I mean, well done there. And could you just remind us, is there a kind of a terminal interest bearing deposit beta that you guys are trying to manage through this cycle? Maybe you should just as you look at what you what you were able to accomplish on the upgrade cycle.
Paul P. Egge: We don't necessarily think of it in terminal basis. We're trying to gain as much ground as we can where we can. So just like on the upswing where we didn't we weren't as meeting as aggressive in necessarily moving a lot of our base sheet rates. And we're more focused on, okay, how do we manage this exception population and what we and this index population? How do you really manage your most price-sensitive customers on the deposit side? And we're gonna continue to do that on the way down. And it's a nuanced approach. We feel like we've approaching it with more discipline than we really ever have.
And having a game plan for every rate cut and being ready to manage all those conversations and really get the highest beta out of our most out of our largest absolute value exception customers, and that's all the reasonable ask And it's so far has functioned pretty well. In the September rate cut. So we'll follow the same game plan as we go forward.
Will Jones: Yeah. Okay. And then maybe to follow-up as, you know, we've talked about deposits and the growth that's happened there and any kind of the excess liquidity that you have as a result. You know, if we do, you know, continue to you know, find the pay down bug a little bit and to the extent loans, you know, don't you know, really ramp up in growth, meaningfully in here in the near term, could you look to be a little more, you know, opportunistic adding to the bond book? From here?
Paul P. Egge: It's definitely an option. And it's something that we talk about every day. Really, what is the right size of the bond book? How do we manage our balance sheet best? We feel awesome about the fact that we're building an even more fortress-like balance sheet with strong capital, strong liquidity, and a really nice foundation to grow upon. So we think that flexibility can allow us to be opportunistic when you know, more meaningful loan growth presents itself or when other strategic opportunities can present themselves. So we are very pleased to be having a very healthy and strong balance sheet.
Will Jones: Yeah. Okay. Fair enough. That's it for me, guys. Thank you.
Audra: As a reminder, if you would like to ask a question, please press 1. We'll go next to Matt Olney at Stephens.
Matt Olney: Thanks. Good morning. I wanna circle back on the loan growth discussion. And, you know, we talked about the elevated payoffs two minutes ago. I'm just curious, when do you expect this to slow? I mean, we're we're seeing rates move lower in the fourth quarter and I expectation that continues now for a little bit more. I would think that would just create more payoffs, not less. But just curious what your expectations are as when we could see this pressure ease up. Thanks.
Ramon A. Vitulli: Hey, Matt. So one of the things that we will get a lift we will get a lift from our advances exceeding our paydowns and payments, and that's and we when we go back and look at our history of when we were getting a lift, it patterns kind of it of it matches up with our loan origination. So as I said, we've loan originations are up 62%. We will get some lift there, whether that's maybe a couple quarters away from that helping us and not taking away from loan growth. So that's kind of in the good news category.
I think we're gonna have to manage through the fact that we've got the way the portfolio the nature of the portfolio of this you know, 300 to 350 million of payoffs. That we have. And we'll do our best to try to limit that through some of those loans that we're financing elsewhere to put our best foot forward. But the real story is gonna be on that side. It's gonna be the funded portion of the new ones that we originate. So our pipeline again, our pipeline is healthy.
If we're in this you know, like, last quarter, $600 million of origination, that's getting us closer to where that will get the fundings even with the payoffs to get us As you know, last quarter, we were we had a slight gain and or slight increase in net funded loan balances. So just it's a matter of delivering on our on that pipeline and continuing on the path that we've seen in the last couple of quarters and really year to date. You know, we said before that we thought growth would manifest in the second half of the year.
Of course, we saw the fourth quarter, but going into '26, we feel good that we will pivot to that.
Matt Olney: Okay. Appreciate that. Ray. And also wanna get the updated thoughts around M&A. We're definitely seeing more M&A deal announcements in your backyard. Curious about the conversations you're having with strategic partners and expectations for finding a partner for Stellar Bank. Thanks.
Ramon A. Vitulli: Yeah, man. We continue to have conversations We talk to a lot of folks. You know, I think it seems some transactions that we'd have some interest in and some not. But it's I think the thing to remember and the thing that we wanna everyone to understand is that we're we're very protective of the balance sheet that we built and the deposit base that we built. And as we look at partners out there and how they've structured their funding, It would be would not believe us to join somebody that takes away from the funding base that we have just to just to be larger.
So I think we wanna do is make sure that we find the right partners to think about the world the same way we do and find themselves in a similar fashion. So we continue to have conversations I think there's a possibility we could be active in this space. But we're gonna be careful about how we approach
Matt Olney: Okay. Thanks for the commentary, and agree it's a it's a high-class problem to have protecting the balance sheet. And just lastly for me, I guess, over to Paul. Paul, I heard you mention the purchase accounting accretion in prepared remarks. Looking for the updated fair value mark on that on that portfolio.
Paul P. Egge: I believe that's $58.1 million what's left of the loan discount.
Matt Olney: Perfect. Okay, guys. Thanks for your help.
Audra: And that concludes our Q&A. I will now turn the conference back over to Bob Franklin for closing remarks.
Robert R. Franklin: Thank you very much for joining our call today. With that, we are adjourned.
Audra: And this concludes today's conference call. Thank you for your participation. You may now disconnect.