Business Overview
Financial Performance
Operating Metrics
Key operating metrics for Q4 2025 included a net interest margin of 4.21% (tax equivalent) and an efficiency ratio of 61.64%. Net interest income was $103.383 million, and total noninterest income was $5.508 million for the quarter. Provision for credit losses in the quarter was $5.131 million. Pre‑tax, pre‑provision income for the quarter was $36.733 million. The allowance for credit losses represented 1.15% of total loans, and nonperforming assets were $60.0 million.
Figure 1 — Quarterly Revenue (USD millions)
Figure 2 — 1‑Month Stock Price (USD)
Figure 3 — Revenue mix Q4 2025 (Net interest income vs Noninterest income)
Key Developments
On Jan. 28, 2026, the company disclosed a merger agreement with Prosperity Bancshares, under which Stellar shareholders will receive $11.36 in cash plus 0.3803 Prosperity shares per Stellar share. Following the announcement, the company cancelled the scheduled fourth‑quarter conference call. In Q4 the company repurchased 299,347 shares at a weighted average price of $30.44 and redeemed $30 million of subordinated debt during the year.
Risks and Constraints
Credit risk remains a principal concern given exposure to commercial real estate and commercial and industrial loans. Allowance coverage and nonperforming assets are monitored alongside loan growth. Regulatory approvals and shareholder consent are required for the proposed merger. Capital and liquidity metrics, including the company’s CET1 ratio, will be reviewed by regulators as part of any transaction review.
Outlook / Guidance
What to watch for: filings and proxy materials required for the merger, shareholder votes, and regulatory clearances. Upcoming quarterly filings will provide updates on loan growth, credit provisioning, and capital ratios. The company has not issued forward earnings guidance in the filing and provided no revised dividend policy in the announcement.
Performance Summary
Shares closed higher on the day of the announcement. Q4 revenue was $108.891 million, and net income was $26.148 million. Stellar disclosed a merger agreement with Prosperity Bancshares and repurchased shares in the quarter. Key near‑term items include shareholder and regulatory approvals and Q1 filings that will show loan and credit trends.