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It's like a Texas-based version of Comerica Bank, focused on commercial clients.

A community-oriented PNC Bank or Fifth Third Bank, but concentrated on small and mid-sized businesses in Texas.

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• Deposit Accounts: The company offers various types of deposit accounts including demand, money market, savings, time deposit accounts, and certificates of deposit.
• Commercial and Industrial Loans: These loans are provided to small and mid-sized businesses for their operational and growth needs.
• Commercial Real Estate Loans: Financing for the acquisition, development, and refinancing of commercial properties.
• Construction and Development Loans: Loans specifically for funding construction projects and property development.
• Residential Mortgage Loans: Offers mortgage financing for 1-4 family residential properties.
• Multi-family Residential Loans: Provides financing for multi-family residential properties, such as apartment complexes.
• Consumer Loans: Loans extended to individuals for personal use.
• Agricultural Loans: Financial assistance provided to support agricultural operations.
• Treasury Services: A suite of services designed to help businesses manage their cash flow and financial operations efficiently.
• Online Banking Services: Digital platforms and tools enabling customers to manage their accounts and conduct banking transactions remotely.

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Stellar Bancorp (STEL) primarily serves a diverse customer base through its banking operations rather than having a few "major customers" in the traditional sense. Based on the description of its predecessor company, CBTX, Inc., the company focuses on providing banking products and services to the following categories of customers:

• Small and Mid-sized Businesses: These businesses are offered commercial and industrial loans, commercial real estate loans, construction and development loans, and various deposit accounts (demand, money market, savings, time deposit accounts), as well as treasury and online banking services.
• Professionals: Individuals in professional fields are served with commercial banking products and services tailored to their needs, which may include loans for their practices, residential mortgages, and various deposit accounts.
• Individuals: The bank also provides services to individuals, including 1-4 family residential mortgage loans, multi-family residential loans, and consumer loans.

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Robert R. Franklin, Jr., Chief Executive Officer

Mr. Franklin was appointed Chief Executive Officer of Stellar Bancorp in October 2022. He previously served as Chairman, President, and Chief Executive Officer of CBTX, Inc. from 2013–2022, leading its growth which culminated in the 2022 merger of equals with Allegiance Bancshares, Inc. to form Stellar Bancorp. Prior to CBTX, he held the roles of Chairman, President, and CEO of VB Texas, Inc. from 2006–2013, which subsequently merged with CBTX in 2013. Mr. Franklin also led the operations of Horizon Capital Bank until its sale to Cullen/Frost Bankers, Inc. in 2005, and American Bank until its sale to Whitney Holding Corp. in early 2001. He possesses over 40 years of banking experience in Houston.

Paul P. Egge, Senior Executive Vice President and Chief Financial Officer

Mr. Egge serves as Senior Executive Vice President and Chief Financial Officer of Stellar Bancorp, Inc. and Stellar Bank. He joined Allegiance Bank/Allegiance Bancshares, Inc. in 2016 as Executive Vice President and Chief Financial Officer, continuing in the CFO role after the October 1, 2022 merger that formed Stellar Bank. With over 20 years of financial services experience, his background is predominantly in investment banking, providing strategic and capital markets advisory services to banks and specialty finance companies. Before joining Allegiance, he was the Director of Capital Planning and Corporate Development for Cadence Bank.

Ramon A. Vitulli, III, President

Mr. Vitulli is the President of Stellar Bancorp, Inc. and Chief Executive Officer of Stellar Bank. Before the merger, he served as Chief Executive Officer of Allegiance Bank and President of Allegiance Bancshares, Inc. from 2007 until October 1, 2022. He joined Allegiance prior to its opening and guided the franchise through to the merger that established Stellar Bank. Mr. Vitulli has over 30 years of banking experience, having started his career as a loan review examiner at Charter National Bank in Houston, then moving to Sterling Bank before joining Allegiance Bank in 2007.

Steven F. Retzloff, Executive Chairman

Mr. Retzloff holds the position of Executive Chairman of Stellar Bancorp, Inc. and Senior Executive Chairman of Stellar Bank. He was one of the organizers of Allegiance Bank and previously served as its Chairman and CEO of Allegiance Bancshares, Inc. Mr. Retzloff has more than 30 years of banking experience in Houston, and over 43 years of overall business experience. His past professional experience includes roles at General Motors, Bristol Myers, Retzloff Capital Corporation, and as CEO of Travis Body & Trailer, Inc. He has also served as a director and twice as Chairman of a publicly traded multi-billion dollar financial institution.

Justin M. Long, Senior Executive Vice President, General Counsel and Corporate Secretary

Mr. Long serves as Senior Executive Vice President, General Counsel and Corporate Secretary for Stellar Bancorp, Inc. and Stellar Bank, a role he commenced on April 1, 2019.

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The key risks to Stellar Bancorp's business include those related to its pending merger, its concentration in commercial real estate and small to mid-sized businesses, and the broader impact of interest rate fluctuations and general economic conditions.

1. Risks Related to the Pending Merger with Prosperity Bancshares

   Stellar Bancorp entered into an Agreement and Plan of Merger with Prosperity Bancshares on January 27, 2026. This pending merger presents significant risks, including the possibility that the transaction may not be completed, which could lead to substantial disruption to Stellar Bancorp's business operations, customer relationships, and employee morale. If the merger agreement is terminated under certain circumstances, Stellar Bancorp may be required to pay a termination fee of $78 million. While the merger is pending, Stellar's business activities are restricted, requiring it to operate in the ordinary course of business and obtain Prosperity's consent for many actions, potentially hindering its ability to respond to market changes or pursue new opportunities.

2. Concentration in Commercial Real Estate and Small to Mid-Sized Businesses, and Geographic Concentration

   Stellar Bancorp has a significant portion of its loan portfolio concentrated in commercial real estate, construction, and land development loans. This concentration makes the company more vulnerable to the cyclical nature of the real estate market compared to larger, more diversified financial institutions. Furthermore, the company primarily serves small and mid-sized businesses, which can be more susceptible to economic downturns. The business is also largely dependent upon the economic conditions and continued growth in its primary markets of Houston and Beaumont, Texas, making it susceptible to localized economic fluctuations and natural disasters.

3. Interest Rate Risk and General Economic Conditions

   As a financial institution, Stellar Bancorp's business, financial condition, and results of operations are significantly affected by changes in interest rates and general economic conditions. Recent trends indicate a decrease in non-interest-bearing deposits and an increase in interest-bearing deposits, which means the bank is paying more to retain customer funds, impacting its net interest income. The company's investment in securities available for sale also exposes it to market fluctuations. Adverse economic conditions, including inflationary pressures and rising interest rates, can affect the ability of customers to repay their loans and the value of collateral, thereby impacting the company's asset quality and profitability.

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The clear emerging threat for Stellar Bancorp is the continued unbundling of traditional commercial banking services by specialized financial technology (fintech) platforms. These platforms offer digitally native and often more streamlined alternatives for services such as small business lending, payment processing, and treasury management. This trend fragments the long-standing, holistic banking relationships that institutions like Stellar Bancorp typically cultivate with small and mid-sized businesses and professionals, potentially siphoning off specific revenue streams and reducing the overall demand for traditional bank products.

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United States Market

• The overall U.S. commercial banking market is estimated at approximately $765.53 billion in 2026 and is projected to grow to $954.48 billion by 2031.
• As of February 25, 2026, total U.S. bank loans outstanding were $10,420 billion. This includes:
  • Commercial loans: $2,785 billion
  • Real estate loans: $5,762 billion
  • Consumer loans: $1,873 billion

Texas Market

• The Commercial Banking industry in Texas has been experiencing significant growth, with an average annual rate of 7.2% from 2020 to 2025. This growth is expected to surpass national growth rates through 2031.
• Texas community banks account for approximately 47% of loans and 34% of deposits held by banks in the state.
• By early 2025, Texans carried an estimated $28–$30 billion in unsecured personal loan debt.
• In the first quarter of 2024, Commercial Real Estate (CRE) loans constituted 55% of all Texas community bank loans.
• As of December 31, 2024, Texas state-chartered banks held $452.3 billion in total assets. Total loans and leases for state thrifts in Texas increased to $57.9 billion as of the same date.

Houston Metropolitan Area Market

• Stellar Bank was expected to hold the 6th largest deposit market share in Houston upon the completion of its merger.
• As of June 30, 2023, banks across the Houston Metropolitan Assessment Area held a substantial amount of deposits. For context, JPMorgan Chase held 50.3% of the deposit market share, and Wells Fargo had $33.52 billion in local deposits as of June 2022. Based on these figures, the total deposit market in the Houston Metropolitan Area could be estimated to be in the hundreds of billions of dollars.
• In 2022, 900 institutions originated or purchased 156,023 Home Mortgage Disclosure Act (HMDA)-reportable loans in the Houston Metropolitan Assessment Area.

Dallas-Fort Worth Metropolitan Area Market

• Banks in the Dallas-Fort Worth region held a cumulative total of $714.7 billion in deposits as of June 30, 2023.

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Stellar Bancorp (STEL) is undergoing a significant transformation through its merger with Prosperity Bancshares, Inc., which is expected to close in the second quarter of 2026 and integrate by the first quarter of 2027. The drivers of future revenue growth for Stellar Bancorp over the next 2-3 years will primarily stem from the strategic benefits and expanded capabilities of this combined entity.

The key drivers of future revenue growth are:

1. Expanded Market Presence and Scale: The merger with Prosperity Bancshares will create the second-largest bank by assets headquartered in Texas, significantly enhancing its market position. Specifically, the combined bank is projected to elevate its Houston deposit rank from ninth to fifth, establishing it as the largest Texas-based bank in that market. This increased scale and broader geographic footprint are expected to drive revenue growth by attracting a wider customer base across Texas.
2. Enhanced Product and Service Offerings: The unified banking platform will provide more locations, greater convenience, and an expanded suite of products and services, including wealth management capabilities. These enriched offerings are anticipated to attract new clients and deepen relationships with existing ones, leading to higher fee income and increased loan volumes.
3. Optimized Funding Profile and Deposit Growth: Stellar Bancorp contributes a strong mix of non-interest-bearing deposits and a healthy net interest margin (approximately 4.2% compared to Prosperity's standalone 3.5%) to the combined organization. Continued growth and strategic management of this low-cost deposit base will provide stable and cost-effective funding for lending activities, thereby bolstering net interest income. Stellar Bancorp had already experienced deposit growth contributing to balance sheet expansion in Q2 2025.
4. Growth in Interest-Earning Assets through Loan Originations: Stellar Bancorp demonstrated strong new loan originations in the second quarter of 2025, indicating a robust lending pipeline. The combined entity, benefiting from a larger capital base and expanded market reach, is well-positioned to pursue disciplined loan growth, particularly in its target segments of small to mid-sized businesses and commercial real estate, which will drive net interest income. The merger is also expected to add approximately $100 million more in interest-earning assets entering 2026.

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Share Repurchases

• Stellar Bancorp authorized a new share repurchase program in April 2025, allowing for the repurchase of up to $65 million of its common stock through May 31, 2026.
• Prior to this, a $60 million share repurchase program was authorized in May 2024, which terminated upon the approval of the subsequent program.
• During the fourth quarter of 2025, Stellar Bancorp repurchased 299,347 shares at a weighted average price of $30.44 per share. Significant repurchases also occurred in Q2 2025 (791,000 shares at $26.08/share) and Q1 2025 (1,378,962 shares at $27.99/share).

Share Issuance

• In May 2025, shareholders approved an amendment to the 2022 Omnibus Incentive Plan, increasing the number of shares available for issuance to officers and employees by 1,100,000, from 2,000,000 to 3,100,000 shares.
• In March 2026, the CFO was granted new stock awards totaling 9,142 shares of common stock, which included restricted shares and performance share units subject to vesting conditions.

Outbound Investments

• In January 2026, Stellar Bancorp announced a definitive merger agreement to be acquired by Prosperity Bancshares, Inc. in a cash and stock transaction valued at approximately $2 billion.
• Under the terms of the agreement, Stellar shareholders will receive 0.3803 shares of Prosperity common stock and $11.36 in cash for each outstanding share of Stellar common stock, implying a value of $39.08 per Stellar share based on Prosperity's closing price on January 27, 2026.
• The merger is anticipated to close during the second quarter of 2026, pending regulatory and shareholder approvals.

Capital Expenditures

• Stellar Bancorp Inc. invested $1.3 million in capital expenditures during the fourth quarter of 2025, reflecting an 11.1% increase from the preceding quarter.
• The company's SEC filings for 2024 mention contractual obligations related to capital expenditures of a material nature in the ordinary course of business.